As filed with the U.S. Securities and Exchange Commission on October 4, 2001
Registration No. 333-_____
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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THE NASDAQ STOCK MARKET, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 51-1165937
(State of Incorporation) (I.R.S. Employer Identification No.)
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One Liberty Plaza
New York, New York 10006
(212) 858-4750
(Address of Principal Executive Offices) (Zip Code)
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The Nasdaq Stock Market, Inc. Equity Incentive Plan
(Full Title of the Plan)
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Edward S. Knight, Esq.
The Nasdaq Stock Market, Inc.
One Liberty Plaza
New York, New York 10006
(212) 858-4750
(Name, Address and Telephone Number, Including Area Code, of Agent for Service)
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With Copies To:
Matthew J. Mallow, Esq.
Eric J. Friedman, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
(212) 735-3000
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CALCULATION OF REGISTRATION FEE
Proposed Maximum Proposed Maximum Amount of
Title of Securities Amount to be Offering Price Aggregate Offering Registration
to be Registered Registered (1) Per Share Price Fee
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Common Stock, par value $.01 per
share: Shares subject to outstanding 8,931,934 $13 $116,115,142 (2) $29,029
options under The Nasdaq Stock
Market, Inc. Equity Incentive Plan
(the "Equity Incentive Plan")
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Common Stock, par value $.01 per
share: Shares available for future 10,539,816 $3.90 $41,102,942 (3) $10,276
grants under the Equity Incentive
Plan
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Common Stock, par value $.01 per
share: Shares granted as restricted 528,850 $3.90 $2,062,515 (3) $516
stock under the Equity Incentive
Plan
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Total 20,000,000 N/A $159,280,599 $39,821
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(1) The shares of Common Stock, par value $.01 per share, of The Nasdaq
Stock Market, Inc. Inc. shown in the table above consists of shares of
Common Stock issuable pursuant to the Equity Incentive Plan. The maximum
number of shares which may be issued under the Equity Incentive Plan is
subject to adjustment upon the occurrence of certain events pursuant to the
Equity Incentive Plan. Accordingly, pursuant to Rule 416 under the
Securities Act of 1933, as amended (the "Securities Act"), this
registration statement includes, in addition to the number of shares stated
above, an indeterminate number of shares which may be subject to grant or
otherwise issuable after the occurrence of any such corporate transaction
or event.
(2) Computed in accordance with Rule 457(h) under the Securities Act. Such
computation is based on the exercise price of $13 per share covering
8,931,934 outstanding options.
(3) Computed in accordance with the Rule 457 (h) under the Securities Act.
Such computation is based on the book value of the Common Stock as of August 31,
2001, the latest practicable date.
EXPLANATORY NOTE
The Nasdaq Stock Market, Inc. ("Nasdaq" or the "Company") has
prepared this registration statement (this "Registration Statement") in
accordance with the requirements of Form S-8 under the Securities Act of
1933, as amended (the "Securities Act"), to register shares of its Common
Stock, par value $.01 per share (the "Common Stock"), that were issued and
sold, or may be issued and sold, pursuant to The Nasdaq Stock Market, Inc.
Equity Incentive Plan (the "Equity Incentive Plan").
This Registration Statement contains two parts. The first part
contains a prospectus prepared in accordance with Part I of Form S-8 (in
accordance with Instruction C of the General Instructions to Form S-8)
which covers reoffers and resales of shares of the Common Stock issued
pursuant to the Equity Incentive Plan. The second part contains information
required in the Registration Statement pursuant to Part II of Form S-8.
Information required by Part I of Form S-8, to be contained in the Section
10(a) prospectus, is omitted from this Registration Statement in accordance
with Rule 428 under the Securities Act and the Note to Part I of Form S-8;
however the Company will send or give the documents containing the
information specified in Part I of Form S-8 to employees as specified by
Rule 428 under the Securities Act.
REOFFER PROSPECTUS
528,850 SHARES OF COMMON STOCK OF
THE NASDAQ STOCK MARKET, INC.
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The shares of common stock, $0.01 par value per share (the
"Shares"), of The Nasdaq Stock Market, Inc. ("Nasdaq" or the "Company")
covered by this reoffer prospectus, may be offered and sold to the public
by certain stockholders of the Company (collectively, the "Selling
Securityholders"). The Selling Securityholders have acquired the shares
through grants of restricted stock or their exercise of options granted to
them under The Nasdaq Stock Market, Inc. Equity Incentive Plan (the "Equity
Incentive Plan").
The Selling Securityholders may sell their shares directly or
indirectly in one or more transactions on any stock exchange or stock
market on which the shares may be listed at the time of sale, in privately
negotiated transactions, or through a combination of such methods. These
sales may be at fixed prices (which may be changed), at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices.
The shares of Common Stock are "restricted securities" under the
Securities Act of 1933, as amended (the "Securities Act") before their sale
under the prospectus. This reoffer prospectus has been prepared for the
purpose of registering the shares under the Securities Act to allow for
future sales by the Selling Securityholders to the public. The Selling
Securityholders may sell shares through one or more agents, brokers or
dealers or directly to purchasers. Such brokers or dealers may receive
compensation in the form of commissions, discounts or concessions from the
Selling Securityholders and/or purchasers of the shares, or both (which
compensation as to a particular broker or dealer may be in excess of
customary commissions). In connection with such sales, the Selling
Securityholders and any participating broker or dealer may be deemed to be
"underwriters" within the meaning of the Securities Act, and any
commissions they receive and the proceeds of any sale of shares may be
deemed to be underwriting discounts and commissions under the Securities
Act. The Company will not receive any proceeds from the sale of the shares
by the Selling Securityholders.
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This investment involves a high degree of risk. Please see "Risk
Factors" beginning on page 7.
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Neither the U.S. Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or
determined whether this reoffer prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
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The date of this reoffer prospectus is October 4, 2001
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TABLE OF CONTENTS
Page
Additional Information................................................. 2
Incorporation of Certain Documents by Reference........................ 3
The Company............................................................. 4
Risk Factors........................................................... 5
Special Note Regarding Forward-Looking Statements.......................12
Use of Proceeds........................................................ 13
Selling Securityholders................................................ 14
Plan of Distribution................................................... 16
Legal Matters.......................................................... 16
Experts................................................................ 16
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You should rely only on the information contained in this reoffer
prospectus or any supplement. We have not authorized anyone to provide you
with information different from that which is contained in or incorporated
by reference to this reoffer prospectus. We are offering to sell shares of
common stock and seeking offers to buy shares of common stock only in
jurisdictions where offers and sales are permitted. The information
contained in this reoffer prospectus is accurate only as of the date of
this reoffer prospectus, regardless of the time of delivery of this reoffer
prospectus or of any sale of the common stock.
ADDITIONAL INFORMATION
The Company has filed with the U.S. Securities and Exchange
Commission (the "SEC") a registration statement on Form S-8 under the
Securities Act with respect to the shares of Common Stock offered hereby.
This reoffer prospectus does not contain all of the information set forth
in the registration statement and the exhibits thereto. For further
information with respect to the Company and the Common Stock offered
hereby, reference is made to the registration statement and the exhibits
thereto. Statements contained in this reoffer prospectus regarding the
contents of any contract or any other document to which reference is made
are not necessarily complete, and, in each instance where a copy of such
contract or other document has been filed as an exhibit to the registration
statement, reference is made to the copy so filed, each such statement
being qualified in all respects by such reference.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports and other information with the SEC. The
Registration Statement, including exhibits, and the reports and other
information filed by the Company can be inspected without charge at the
public reference facilities maintained by the SEC at the SEC's principal
office at 450 Fifth Street, N.W., Room 1024, Washington, D.C., 20549, and
at the Regional Offices of the SEC located at 233 Broadway, New York, New
York 10013, and Northwestern Atrium Center, 500 West Madison Street,
Chicago, Illinois 60661. Copies of such material can be obtained from such
offices at fees prescribed by the SEC. The public may obtain information on
the operation of the Public Reference room by calling the SEC at
1-800-SEC-0330. The SEC maintains a World Wide Web site that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the SEC. The address of this site
is http://www.sec.gov.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following information filed with the SEC is incorporated by
reference herein: (i) the Company's Registration Statement on Form 10 (File
No. 000-32651) filed with the SEC on April 30, 2001, including any
amendment or report thereto subsequently filed by the Company for the
purpose of updating that registration statement pursuant to the Securities
Act, (ii) the Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 2001 and June 30, 2001, and (iii) the Company's Current
Report on Form 8-K filed July 27, 2001.
All documents filed by the Company pursuant to Section 13(a),
13(c), 14 and 15(d) of the Exchange Act prior to and subsequent to the date
hereof and prior to the termination of the offering shall be deemed to be
incorporated by reference into this Registration Statement and to be a part
hereof from the date of filing of such documents. Any statement contained
in a document incorporated or deemed to be incorporated herein by reference
shall be deemed to be modified or superseded for purposes of this reoffer
prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement.
The Company will provide without charge to any person to whom this
reoffer prospectus is delivered, upon written or oral request of such
person, a copy of each document incorporated by reference in the
Registration Statement (other than exhibits to such documents unless such
exhibits are specifically incorporated by reference into this reoffer
prospectus). Requests should be directed to The Office of General Counsel
at The Nasdaq Stock Market, Inc., One Liberty Plaza, New York, New York
10006. The Company's telephone number is (212) 858-4750.
THE COMPANY
The Company operates The Nasdaq Stock Market(R), which is the
world's largest electronic, screen-based equity securities market and the
largest equity securities market in the world based on dollar volume. Since
its inception in 1971, Nasdaq has been a leader in utilizing technology to
enhance the securities markets.
The Nasdaq Stock Market is the flagship market of the Company and
consists of two tiers of listed companies: The Nasdaq National Market,
which included 3,567 listed companies as of June 30, 2001, and the Nasdaq
SmallCap Market, with 811 smaller, emerging growth companies. As of June
30, 2001, Nasdaq was home to the highest percentage of publicly-traded
technology and service companies in the U.S., including 78% of computer
hardware and peripherals companies, 96% of computer networking companies,
85% of computer software and data processing companies, 87% of
semiconductor companies, 71% of telecommunications and electric companies,
and 82% of biotechnology and health care companies. In addition, as of
June 30, 2001, there were over 460 foreign companies listed on Nasdaq, more
than any other U.S. equities market.
The Company provides products and services in three principal
categories: (i) issuer services, (ii) transaction services and (iii) market
information services. Issuer services consists of the provision of
information services and products to Nasdaq-listed companies as well as
efforts to obtain new listings. Transaction services include the
collection, processing and dissemination of price quotes of Nasdaq-listed
securities, the routing and execution of buy and sell orders for
Nasdaq-listed securities and transaction reporting services. Market
information services involve the provision of varying levels of quote and
trade information to data vendors, who in turn sell it to the public.
Prior to June 2000, the Company was a wholly-owned subsidiary of
the National Association of Securities Dealers, Inc. (the "NASD"). In 2000,
the NASD implemented a separation of the Company from the NASD by
restructuring and broadening the ownership in Nasdaq through a two-phase
private placement of securities (the "Restructuring"). In the private
placements, (i) the NASD sold (A) an aggregate of 10,806,794 warrants to
purchase an aggregate amount of 43,227,176 shares of outstanding Common
Stock and (B) 4,543,291 shares of outstanding Common Stock and (ii) the
Company sold an aggregate of 28,692,543 newly-issued shares of Common
Stock. Securities in the private placements were offered to all NASD
members, certain issuers listed on Nasdaq and certain institutional
investment companies. As of June 30, 2001, the NASD beneficially owned
approximately 26% of Nasdaq on a fully diluted basis, which assumes (i) the
full exercise of all outstanding warrants issued by the NASD, (ii) the
conversion of Nasdaq's outstanding securities that are convertible into
shares of Common Stock, and (iii) the exercise of outstanding options to
purchase shares of Common Stock. As of June 30, 2001, the NASD beneficially
owned approximately 70% of Nasdaq on a non-diluted basis.
Our principal executive offices are located at One Liberty Plaza,
New York, New York 10006, and our telephone number is (212) 858-4750.
RISK FACTORS
This Reoffer Prospectus contains forward-looking statements that
involve risks and uncertainties. Nasdaq's actual results could differ
materially from those anticipated in these forward-looking statements as a
result of certain factors, including the risks faced by Nasdaq described
below.
The risks and uncertainties described below are not the only ones
facing Nasdaq. Additional risks and uncertainties not presently known to
Nasdaq or that Nasdaq currently believes to be immaterial may also
adversely affect Nasdaq's business. If any of the following risks actually
occur, Nasdaq's business, financial condition, or operating results could
be materially adversely affected.
Nasdaq's operating results could fluctuate significantly in the future.
Nasdaq's operating results may fluctuate significantly in the
future as a result of a variety of factors, including: (i) a decrease in
the trading volume in Nasdaq; (ii) increased competition from alternative
market venues that might reduce market share and create pricing pressure;
(iii) competition from the New York Stock Exchange, Inc. (the "NYSE") or
new competing exchanges for new listings; (iv) a reduction in market data
revenue; (v) the rate at which Nasdaq obtains new listings and maintains
its current listings; (vi) regulatory changes and compliance costs; (vii)
Nasdaq's ability to utilize its capital effectively; (viii) Nasdaq's
ability to manage personnel, overhead, and other expenses, in particular
technology expenses; and (ix) general market and economic conditions.
Nasdaq's business could be harmed by market fluctuations and other risks
associated with the securities industry generally.
A substantial portion of Nasdaq's revenues is tied to the trading
volume of its listed securities. Trading volume is directly affected by
economic and political conditions, broad trends in business and finance,
and changes in volume and price levels of securities transactions. An
adverse change affecting the economy or the securities markets could result
in a decline in trading volume. Nasdaq is also particularly affected by
declines in trading volume in technology and Internet-related stocks
because a significant portion of its customers trade in these types of
stocks and a large number of technology and Internet-related companies are
listed on The Nasdaq Stock Market. A downturn in the initial public
offering market is also likely to have an adverse effect on Nasdaq's
revenues, including, in particular, revenues from listing fees. A decline
in trading volume would lower transaction services revenues, and Nasdaq's
profitability may be adversely affected if it is unable to reduce costs at
the same rate. For example, in the first six months of 2001, 28 initial
public offerings were brought to market on The Nasdaq Stock Market compared
to 221 in the first six months of 2000. There were also 522 delisted
companies in the first six months of 2001 compared to 395 during the same
time period last year. Further downward trends in general market conditions
could adversely affect Nasdaq's revenues and reduce its profitability if
Nasdaq cannot reduce its costs at the same rate to offset such trends.
Substantial competition could reduce Nasdaq's market share and harm
Nasdaq's financial performance.
It is possible that a competing securities exchange, network
provider, or technology company could develop ways to replicate Nasdaq's
network more efficiently than Nasdaq and persuade a critical mass of market
participants to switch to a new network. The NYSE has announced that it
might buy or build its own electronic network for trading Nasdaq stocks and
has announced that it is in discussions with nine other exchanges in
Europe, Asia, and the Americas to form a set of global alliances that would
be intended to allow investors to trade throughout the day. This could have
an adverse effect on Nasdaq's business, financial condition, and results of
operation.
SelectNet is Nasdaq's automated market service that enables
securities firms to route orders, negotiate terms, and execute trades in
Nasdaq-listed securities. If there is an increase in the number of market
makers or electronic communication networks ("ECNs") that determine they do
enough order routing traffic to justify setting up a proprietary network
for their traffic, Nasdaq may be forced to reduce its fees further or risk
losing its share of the order routing business. In addition, certain system
providers link many Nasdaq market makers. These systems may be able to
increase the number of orders executed through their systems versus the
Nasdaq systems. A reduction in the order routing business could have an
adverse effect on Nasdaq's business, financial condition, and operating
results.
The traditional products and services offered by markets are being
unbundled. Historically, Nasdaq has provided listings, execution services,
information services, and regulatory services to the investing public.
Currently, there are many competitors operating in the execution services
market. Nasdaq has not historically implemented pricing strategies that
isolate its various businesses. Due to competition in the execution
services business, as well as Nasdaq's past practice of bundling products
and services, it is uncertain whether Nasdaq will be able to compete
successfully in this business. Further more, Nasdaq faces multiple pricing
constraints, including in particular, regulatory constraints that may
prevent it from competing effectively in certain markets.
Substantial competition could reduce Nasdaq's issuer services revenues.
Nasdaq faces competition for listings from other primary
exchanges, especially from the NYSE. In addition to competition for initial
listings, Nasdaq also competes with the NYSE to maintain listings. In the
past, a number of issuers listed on The Nasdaq Stock Market have left
Nasdaq for the NYSE each year. The largest 50 Nasdaq-listed issuers (based
on U.S. market value) accounted for approximately 52.0% of total dollar
volume traded on The Nasdaq Stock Market for the six months ended June 30,
2001. Therefore, the loss of one or more of these issuers would result in a
significant decrease in revenues from Nasdaq's issuer services.
ECNs do not currently provide listing venues, although such
systems can register as an exchange and compete with traditional exchanges
and Nasdaq for the execution and market data business. At least two ECNs
have applied to become registered as a national securities exchange. If
these new exchanges are successful in attracting trading volume and do not
continue to use Nasdaq transaction systems, traditional listings will
become less profitable to Nasdaq as they will not provide corresponding
revenue from trade executions and the sale of market data. In addition, if
ECNs become exchanges, they may enter the competition for issuer listings.
There can be no assurances that Nasdaq will be able to maintain or increase
its listing revenues. The reduction in initial listings or the loss of a
top issuer could have an adverse effect on Nasdaq's business, financial
condition, and operating results.
Nasdaq's market information services revenues are threatened by other
exchanges trading Nasdaq stocks.
Current SEC regulations permit national securities exchanges to
trade certain securities that are listed on Nasdaq pursuant to the Nasdaq
Unlisted Trading Privileges Plan (the "UTP Plan"). If the UTP Plan
participants' share of trades in Nasdaq stocks increases substantially,
Nasdaq's financial condition and operating results could be adversely
affected. In addition, since the allowable costs that are shared by UTP
Plan participants and the fees Nasdaq can charge for data products are not
exclusively set by Nasdaq, Nasdaq's control over its revenue and cost base
under the UTP Plan is limited. Current amendments to the UTP Plan under
negotiation include (i) an increase in the number of the eligible
securities over a one year period from 1,000 to all securities on The
Nasdaq National Market and The Nasdaq SmallCap Market, and (ii) the
elimination of the floor and ceiling limits on the amount of market data
revenue Nasdaq must share with the UTP Plan participants. These and other
amendments could have a materially adverse effect on Nasdaq's business,
financial condition, and operating results.
Nasdaq's costs may increase if it loses its status as the exclusive SIP
under the UTP Plan.
Under the UTP Plan, Nasdaq collects quotation and last sale
information from competing exchanges (currently the Chicago Stock Exchange
and the Cincinnati Stock Exchange) and consolidates such information with
its own. Nasdaq sells this information to vendors for a fee (a "Tape Fee").
Under the revenue sharing provision of the UTP Plan, Nasdaq is permitted to
deduct certain costs associated with acting as the exclusive securities
information processor (a "SIP") from the total amount of Tape Fees
collected. The SEC has stated that as a condition of extending the UTP
Plan, the parties to the UTP Plan must negotiate in good faith to revise
the UTP Plan so that it provides for either a fully viable alternative
exclusive SIP for all Nasdaq securities or a fully viable alternative
non-exclusive SIP. Each UTP participant will have to share in the
development costs to create the new SIP. Therefore, if Nasdaq loses its
status as the exclusive SIP under the UTP Plan, its ongoing costs will
increase.
Nasdaq may lose trade reporting revenues if more market participants bypass
the comparison feature of its trade reporting system.
As market participants continue to establish automated trading
links with one another and lock-in transactions externally from Nasdaq, the
use of the Automation Confirmation Transaction Service(sm) ("ACT(sm)")
comparison function as a percentage of total trading volume will continue
to decrease. This negatively affects revenue, since firms are using ACT for
trade reporting, but not for comparison. Although ACT comparison revenue
actually increased by more than $10 million in fiscal year 2000 over fiscal
year 1999, this increase was due primarily to increased trading volumes,
particularly during the first quarter of 2000 in OTC Bulletin Board
Service(R) ("OTC Bulletin Board") securities.
Certain Congressional and SEC reviews could result in a reduction in data
fees that could reduce Nasdaq's revenues.
The SEC is reviewing concerns by industry members that the present
levels of data fees do not properly reflect the costs associated with their
collection, processing and distribution. As noted above, the SEC has
established the SEC Advisory Committee on Market Data and its
recommendation was expected on September 30, 2001. Nasdaq has argued that
there are regulatory, market capacity, and other related costs of operating
the market. A fee realignment that does not recognize the full market costs
of creating and delivering market data could reduce overall data revenues
in the future and adversely affect Nasdaq's business, financial condition,
and operating results.
Legislation was introduced and hearings were held in the last
session of Congress pertaining to whether stock exchanges and markets have
a property right to quote and trade data. Hearings were held again on this
subject in March and April 2001. Since securities firms are required to
supply the market operator with quote and trade information, some have
argued that the operator has no right to be able to sell the data back to
the securities firms. This issue continues to be debated and the outcome
could have a significant impact on the viability of Nasdaq's data revenue
and, as a consequence, on its business, financial condition, and operating
results.
Nasdaq is subject to extensive regulation that may harm its ability to
compete with less regulated entities.
Under current federal securities laws, changes in Nasdaq's rules
and operations, including its pricing structure, must be approved by the
SEC. The SEC may approve, disapprove, or recommend changes to proposals
submitted by Nasdaq. In addition, the SEC may delay the initiation of the
public comment process or the approval process. This delay in approving
changes, or the altering of any proposed change, could have an adverse
effect on Nasdaq's business, financial condition, and operating results.
System limitations and failures could harm Nasdaq's business.
Nasdaq's business depends on the integrity and performance of the
computer and communications systems supporting it. If Nasdaq's systems
cannot be expanded to cope with increased demand or fail to perform, Nasdaq
could experience: (i) unanticipated disruptions in service, (ii) slower
response times, and (iii) delays in the introduction of new products and
services. These consequences could result in lower trading volumes,
financial losses, decreased customer service and satisfaction, litigation
or customer claims, and regulatory sanctions. Nasdaq has experienced
occasional systems failures and delays in the past and it could experience
future systems failures and delays.
Nasdaq uses internally developed systems to operate its business,
including transaction processing systems to accommodate increased
capacity. However, if Nasdaq's trading volume increases unexpectedly,
Nasdaq will need to expand and upgrade its technology, transaction
processing systems and network infrastructure. Nasdaq does not know whether
it will be able to project accurately the rate, timing, or cost of any
increases, or expand and upgrade its systems and infrastructure to
accommodate any increases in a timely manner.
Nasdaq's systems and operations also are vulnerable to damage or
interruption from human error, natural disasters, power loss, sabotage,
computer viruses, intentional acts of vandalism, and similar
events. Nasdaq currently maintains multiple computer facilities to provide
full service during system disruptions, and has facilities in place that
are expected to maintain service during a system disruption. Any system
failure that causes an interruption in service or decreases the
responsiveness of Nasdaq's service could impair its reputation, damage its
brand name, and negatively impact its revenues. Nasdaq also relies on a
number of third parties for systems support. Any interruption in these
third-party services or deterioration in the performance of these services
could also be disruptive to Nasdaq's business and have a material adverse
effect on its business, financial condition, and operating results.
Nasdaq may not be able to keep up with rapid technological and other
competitive changes affecting the structure of the securities markets.
The markets in which Nasdaq competes are characterized by rapidly
changing technology, evolving industry standards, frequent enhancements to
existing services and products, the introduction of new services and
products, and changing customer demands. These market characteristics are
heightened by the emerging nature of the Internet and the trend for
companies from many industries to offer Internet- based products and
services. In addition, the widespread adoption of new Internet, networking,
or telecommunications technologies or other technological changes could
require Nasdaq to incur substantial expenditures to modify or adapt its
services or infrastructure. Nasdaq's future success will depend on its
ability to respond to changing technologies on a timely and cost-effective
basis. Nasdaq's operating results may be adversely affected if it cannot
successfully develop, introduce, or market new services and products. In
addition, any failure by Nasdaq to anticipate or respond adequately to
changes in technology and customer preferences, or any significant delays
in other product development efforts, could have a material adverse effect
on Nasdaq's business, financial condition, and operating results.
Nasdaq may have difficulty managing its growth.
Over the last several years, Nasdaq has experienced significant
growth in its business and the number of its employees. Nasdaq may not be
able to continue to manage its growth successfully. In an attempt to
stimulate future growth, Nasdaq has undertaken several initiatives to
increase its business, including enhancing existing products, developing
new products, and forming strategic relationships. The increased costs
associated with Nasdaq's initiatives may not be offset by corresponding
increases in its revenues. The growth of Nasdaq's business has required,
and will continue to require, Nasdaq to increase its investment in
technology, management personnel, market regulatory services, and
facilities. No assurance can be made that Nasdaq has made adequate
allowances for the costs and risks associated with this expansion, that its
systems, procedures, or controls will be adequate to support its
operations, or that its management will be able to offer and expand its
services successfully. If Nasdaq is unable to manage its growth
effectively, its business, financial condition, and operating results could
be adversely affected.
Nasdaq may need additional funds to support its business plan.
Nasdaq depends on the availability of adequate capital to maintain
and develop its business. Nasdaq believes that its current capital
requirements will be met from internally generated funds and from the funds
raised in connection with the Restructuring. However, based upon a variety
of factors, including the rate of market acceptance of Nasdaq's new
products, the cost of service and technology upgrades, and regulatory
costs, Nasdaq's capital requirements may vary from those currently planned.
There can be no assurance that additional capital will be available on a
timely basis, or on favorable terms or at all.
Nasdaq may not be successful in executing its international strategy.
In order to take advantage of anticipated opportunities that will
arise outside the United States, Nasdaq intends to invest significant
resources in developing strategic partnerships with non-U.S. stock markets.
Nasdaq has had only very limited experience in developing localized
versions of its services and in marketing and operating its services
internationally. To date, Nasdaq's international efforts have not yet
achieved profitability. There can be no assurance that Nasdaq will be able
to succeed in marketing its branded services and developing localized
services in international markets. Nasdaq may experience difficulty in
managing its international operations because of, among other things,
competitive conditions overseas, difficulties in supervising foreign
operations, managing currency risk, established domestic markets, language
and cultural differences, political and economic instability, and changes
in regulatory requirements or the failure to obtain requested regulatory
changes and approvals. Any of the above could have an adverse effect on the
success of Nasdaq's international operations and, consequently, on Nasdaq's
business, financial condition, and operating results.
Extended hours trading may have a negative impact on Nasdaq's business.
Today, market participants, including some ECNs, are trading
beyond traditional market hours (9:30 a.m. to 4:00 p.m., Eastern time).
Extending trading hours may put additional stress on the financial services
industry. Nasdaq has extended the availability of its trade reporting and
quotation systems from 8:00 a.m. until 6:30 p.m. Eastern time.
Specifically, the systems involved include ACT, the Advanced Computerized
Execution System ("ACES"), the Computer Assisted Execution
System/Intermarket Trading System, SelectNet, the Nasdaq Quotation Display
System, Nasdaq Trade Dissemination Service, and Nasdaq Level 1 Service
(which disseminates real-time, inside quote updates, as well as the 4:00
p.m. closing prices). Certain Nasdaq market participants have been unable
to modify their technology to accommodate the expansion of trading hours
and attendant regulatory requirements. To date, volume in extended hours
trading remains relatively low. However, to the extent that a large
extended hours session develops and Nasdaq market participants are not
prepared to handle the additional capacity, Nasdaq may lose trading volume
to more technologically advanced competitors. In addition, insufficient
interest in extended hours trading could result in decreased liquidity,
increased volatility, or degeneration of price discovery, all of which
could potentially undermine the public confidence in Nasdaq and adversely
affect Nasdaq's business, financial condition, and operating results. In
addition, the revenues generated by trading in the extended hours market
may not be sufficient to cover costs associated with such trading.
Failure to protect its intellectual property rights could harm Nasdaq's
brand-building efforts and ability to compete effectively.
To protect its rights to its intellectual property, Nasdaq relies
on a combination of trademark laws, copyright laws, patent laws, trade
secret protection, confidentiality agreements, and other contractual
arrangements with its employees, affiliates, clients, strategic partners,
and others. The protective steps Nasdaq has taken may be inadequate to
deter misappropriation of its proprietary information. Nasdaq may be unable
to detect the unauthorized use of, or take appropriate steps to enforce,
its intellectual property rights. Nasdaq has registered, or applied to
register, its trademarks in the U.S. and in 40 foreign jurisdictions and
has pending U.S. and foreign applications for other trademarks. Effective
trademark, copyright, patent, and trade secret protection may not be
available in every country in which Nasdaq offers or intends to offer its
services. Failure to protect its intellectual property adequately could
harm its brand and affect its ability to compete effectively. Further,
defending its intellectual property rights could result in the expenditure
of significant financial and managerial resources, which could adversely
affect Nasdaq's business, financial condition, and operating results.
Lack of operating history as a for-profit entity with private ownership
interests.
While Nasdaq has an established operating history, it has only
operated as a for-profit company with private ownership interests since
June 28, 2000. Therefore, Nasdaq is subject to the risks and uncertainties
associated with any newly independent company. Nasdaq has had access to
many support functions of the NASD, including: cash management and other
financial services, real estate, legal, surveillance, and other regulatory
services, information services, and corporate and administrative services.
Nasdaq has entered into, and intends to enter into, various intercompany
arrangements with the NASD and its affiliates for the provision of these
services on an on-going or transitional basis. See "-Nasdaq faces potential
conflicts of interest with related parties" and "-The intercompany
agreements may not be effected on terms as favorable to Nasdaq as could
have been obtained from unaffiliated third parties." In addition, Nasdaq's
initiatives designed to increase operating efficiencies may not yield the
expected benefits or efficiencies and may be subject to delays, unexpected
costs, and cost overruns, all of which could have an adverse effect on
Nasdaq's business, financial condition, and operating results.
Failure to attract and retain key personnel may adversely affect Nasdaq's
ability to conduct its business.
Nasdaq's future success depends on the continued service and
performance of its senior management and certain other key personnel. For
example, Nasdaq is dependent on specialized systems personnel to operate,
maintain, and upgrade its systems. The inability of Nasdaq to retain key
personnel or retain other qualified personnel could adversely affect
Nasdaq's business, financial condition, and operating results.
Nasdaq is subject to risks relating to litigation and potential securities
laws liability.
Many aspects of Nasdaq's business potentially involve substantial
risks of liability. While Nasdaq enjoys immunity for certain
self-regulatory organization activities, it could be exposed to substantial
liability under federal and state securities laws, other federal and state
laws and court decisions, as well as rules and regulations promulgated by
the SEC and other federal and state agencies. These risks include, among
others, potential liability from disputes over the terms of a trade, the
claim that a system failure or delay cost a customer money, that Nasdaq
entered into an unauthorized transaction or that it provided materially
false or misleading statements in connection with a securities transaction.
As Nasdaq intends to defend any such litigation actively, significant legal
expenses could be incurred. An adverse resolution of any future lawsuit or
claim against Nasdaq could have an adverse effect on its business,
financial condition, and operating results.
Nasdaq's networks may be vulnerable to security risks.
As with other computer networks, it is possible that Nasdaq's
networks may be vulnerable to unauthorized access, computer viruses, and
other security problems. Persons who circumvent security measures could
wrongfully use Nasdaq's information or cause interruptions or malfunctions
in Nasdaq's operations. Nasdaq is required to continue to expend
significant resources to protect against the threat of security breaches or
to alleviate problems caused by any such breaches. Although Nasdaq intends
to continue to implement industry-standard security measures, these
measures may prove to be inadequate and result in system failures and
delays that could lower trading volumes and have an adverse effect on
Nasdaq's business, financial condition, and operating results.
Nasdaq faces potential conflicts of interest with related parties.
As of July 31, 2001, the NASD beneficially owns, on a fully
diluted basis, approximately 26% of Nasdaq's outstanding Common Stock
(approximately 70% on a non-diluted basis). Until Nasdaq becomes registered
with the SEC as a national securities exchange ("Exchange Registration"),
the shares of Common Stock underlying any unexpired and unexercised
tranches of warrants sold in the Restructuring by the NASD, as well as the
shares of Common Stock purchased through the valid exercise of such
warrants, will be voted at the direction of the NASD. In addition, 6 of the
18 members of the Nasdaq Board of Directors are currently members of the
NASD Board of Governors. Until Exchange Registration, the NASD will be in
a position to continue to control substantially all matters affecting
Nasdaq, including any determination with respect to the direction and
policies of Nasdaq, acquisition or disposition of assets, future issuances
of securities of Nasdaq, Nasdaq's incurrence of debt, and any dividend
payable on the Common Stock.
Conflicts of interest may arise between Nasdaq and the NASD, or
its affiliates, in a number of areas relating to their past and ongoing
relationships, including the nature, quality, and pricing of services
rendered; shared marketing functions; tax and employee benefit matters;
indemnity agreements; sales or distributions by the NASD of all or any
portion of its ownership interest in Nasdaq; or the NASD's ability to
influence certain affairs of Nasdaq prior to Exchange Registration. There
can be no assurance that the NASD and Nasdaq will be able to resolve any
potential conflict or that, if resolved, Nasdaq would not receive more
favorable resolution if it were dealing with an unaffiliated party.
Conflicts may also arise between Nasdaq and American Stock
Exchange LLC ("Amex") by virtue of commitments made by the NASD in
connection with its acquisition of Amex.
The intercompany agreements may not be effected on terms as favorable to
Nasdaq as could have been obtained from unaffiliated third parties.
For purposes of governing their ongoing relationship, Nasdaq and
the NASD, or their affiliates, have entered into, or intend to enter into,
various agreements involving the provision of services such as market
surveillance and other regulatory functions, cash management and other
financial services, legal, facilities sharing, information services,
corporate, and other administrative services. However, as of the date
hereof, Nasdaq has only fully negotiated a contract with NASD Regulation,
Inc. (the "NASDR") pursuant to which NASDR will regulate Nasdaq trading
activity commencing upon the effectiveness of Exchange Registration. The
NASDR will continue regulating trading activity on Nasdaq under a new
long-term contract that establishes the various functions NASDR will
perform and the price that Nasdaq will pay for these functions. The
functions covered under this contract are substantially the same type and
scope as those NASDR performs under the SEC-approved plan pursuant to which
Nasdaq's legal authority to operate as a stock market is delegated to it by
the NASD.
The terms of the other intercompany agreements have not yet been
fully negotiated. Although it is the intention of the parties to negotiate
agreements that provide for arm's length, fair market value pricing, there
can be no assurance that these contemplated agreements, or the transactions
provided in them, will be effected on terms as favorable to Nasdaq as could
have been obtained from unaffiliated third parties. The cost to Nasdaq for
such services could increase at a faster rate than its revenues and could
adversely affect Nasdaq's business, financial condition, and operating
results.
The SEC may challenge or not approve Nasdaq's plan to become a national
securities exchange or it may require changes in the manner Nasdaq
conducts its business before granting this approval.
The SEC may not approve Nasdaq's proposal to be registered as a
national securities exchange or may require changes in the manner Nasdaq
conducts its business before granting this approval. Failure to be so
registered could adversely effect Nasdaq's competitive position and could
have a material adverse effect on Nasdaq's business conditions and business
prospects.
In connection with Exchange Registration, certain changes must be
made to the national market system plans. Certain participants in the plans
may object to, or request modifications to, amendments proposed by Nasdaq.
Failure to resolve these issues in a timely manner could delay Exchange
Registration. In addition, the SEC has also stated that its approval of
Exchange Registration is linked to the NASD's ability to provide an
alternative facility to NASD members to assist in the quotation and
transaction reporting of exchange-listed securities. Any significant delay
or failure on the part of the NASD to build this residual market could also
delay the SEC's approval of Exchange Registration.
There can be no assurance that Exchange Registration will occur or
that the registration process will occur in a timely manner. Because of the
nature of the regulatory process and the variety of market structure issues
that would have to be resolved across all markets, the registration process
could be lengthy. The failure to be approved as an exchange by the SEC may
have negative implications on the ability of Nasdaq to fund its planned
initiatives.
In addition, the SEC has not yet agreed and may not agree to
Nasdaq's proposal to continue to operate the OTC Bulletin Board after
Exchange Registration.
Nasdaq may face competition from the establishment of a "residual market"
by the NASD.
In the SEC's January 2001 order approving the Nasdaq Order Display
Facility ("SuperMontage(sm)"), it noted that in order to address concerns
that Nasdaq's position as an exclusive SIP would compel participation in
SuperMontage, the NASD has committed to provide NASD members with the
ability to opt-out of SuperMontage by providing an alternative quotation
and transaction reporting facility for NASD members. In addition, the SEC
has also stated that the approval of Exchange Registration is linked to the
NASD's obligation to provide an alternative facility to allow NASD members
to report trades and disseminate quotations in exchange-listed securities.
If this market becomes a viable alternative to The Nasdaq Stock Market,
then Nasdaq faces the risk of reduced market share in transactions and
market information services revenues, which would adversely affect Nasdaq's
business, financial condition, and operating results.
Nasdaq will not pay cash dividends for the foreseeable future.
Nasdaq anticipates that earnings, if any, will be retained for the
development of its business and that no cash dividends will be declared on
the Common Stock for the foreseeable future.
Provisions of Delaware law and Nasdaq's governing documents may delay or
prevent its takeover.
Nasdaq is organized under the laws of the State of Delaware and
was incorporated in 1979. Certain provisions of Delaware law may have the
effect of delaying or preventing a transaction that would cause a change in
Nasdaq's control. In addition, certain provisions of the Certificate of
Incorporation and Nasdaq's By-Laws may delay, defer, or prevent this type
of transaction, even if Nasdaq's stockholders consider the transaction to
be in their best interests. For example, the Certificate of Incorporation
places limitations on the voting rights of persons, other than the NASD or
any other person as may be approved by the Nasdaq Board prior to the time
such person owns more than 5% of the then outstanding shares of Common
Stock, who otherwise would be entitled to exercise voting rights in respect
of more than 5% of the then outstanding shares of Common Stock. As a
result, third parties are limited from exercising voting control over
Nasdaq. Moreover, it is possible that the SEC might object to any action of
the Nasdaq Board that would permit certain persons from being exempted from
the foregoing restriction on voting power. In addition, in response to the
SEC's concern about a concentration of ownership of Nasdaq, Nasdaq's
Exchange Registration application includes a rule that prohibits any Nasdaq
member or any person associated with a Nasdaq member from beneficially
owning more than 5% of the outstanding shares of Common Stock. Other
provisions make the removal of incumbent directors and the election of new
directors more time consuming and difficult, which may discourage third
parties from attempting to obtain control of Nasdaq, even if the change in
control would be in the best interests of its stockholders.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this Registration Statement contain or may
contain forward-looking statements that are subject to known and unknown
risks, uncertainties and other factors which may cause actual results,
performance or achievements to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. These forward-looking statements were based on
various factors and were derived utilizing numerous assumptions and other
factors that could cause actual results to differ materially from those in
the forward-looking statements. These factors include, but are not limited
to, Nadsaq's ability to implement its strategic initiatives, economic,
political and market conditions and fluctuations, government and industry
regulation, interest rate risk, U.S. and global competition, and other
factors. Most of these factors are difficult to predict accurately and are
generally beyond our control. You should consider the areas of risk
described in connection with any forward-looking statements that may be
made herein. Readers should carefully review this Registration Statement in
its entirety, including but not limited to Nasdaq's financial statements
and the notes thereto incorporated by reference herein and the risks
described in "Risk Factors." Except for Nasdaq's ongoing obligations to
disclose material information under the Federal securities laws, Nasdaq
undertakes no obligation to release publicly any revisions to any
forward-looking statements, to report events or to report the occurrence of
unanticipated events. For any forward-looking statements contained in any
document, Nasdaq claims the protection of the safe harbor for forward-
looking statements contained in the Private Securities Litigation Reform
Act of 1995.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of shares
which may be sold pursuant to this reoffer prospectus for the respective
accounts of the Selling Securityholders. All such proceeds, net of
brokerage commissions, if any, will be received by the Selling
Securityholders. See "Selling Securityholders" and "Plan of Distribution."
SELLING SECURITYHOLDERS
This reoffer prospectus relates to shares of Common Stock which
have been acquired by the Selling Securityholders of the Company pursuant
to our Equity Incentive Plan.
The inclusion in the table of the individuals named therein shall
not be deemed to be an admission that any such individuals are "affiliates"
of the Company.
Number of Shares to be offered
Name of Selling Securityholder hereby
------------------------------------------------------------------------------
Robert E. Aber 6,750
Paul P. Andrews 1,500
John P. Athey Jr. 1,500
Gregor S. Bailar 30,000
Alfred R. Berkeley III 15,900
Larry Bickner 1,500
Donald H. Bosic 6,750
Diane B. Brendel 1,500
Sherman W. Broka 6,750
Michael L. Buckingham 1,500
Gregory W. Buckis 1,500
Joseph Bunch 1,500
Trevor Byrne 1,500
J. Patrick Campbell 30,000
James M. Cangiano 6,750
Donald J. Catapano 1,500
Lee A. Congdon 6,750
Joan C. Conley 6,750
Daniel F.C. Crowley 1,500
Sheila L. Dagucon 1,500
Phung T. Daniel 1,500
Thomas J. Davin III 1,500
Doreen Barr Davis 1,500
John C. Delta 1,500
Pasquale DeLuca 1,500
Mark DeNat 6,750
Mary M. Dunbar 1,500
Michael Edleson 6,750
Michael S. Emen 6,750
Mark A. Esposito 1,500
Anna M. Ewing 6,750
Glenn C. Faulkner 1,500
Robert G. Fitzsimmons 1,500
Dan B. Franks 6,750
Adena T. Friedman 6,750
Steven Dean Furbush 15,900
Sue A. Gillespie 1,500
Richard P. Gonzalez 6,750
Robert G. Guely 1,500
David A. Hanna 1,500
John M. Hickey 15,900
John L. Hilley 30,000
John L. Jacobs 6,750
Richard G. Ketchum 40,000
Edward S. Knight 15,900
Richard N. Lind 6,750
Eugene A. Lopez 6,750
Andrew MacMillan 6,750
Gordon Martin 15,900
Wesley W. McGrew 6,750
Douglas E. Moore 1,500
John G. Moran 6,750
Edward J. Morgan 1,500
Vincent E. Palmiere 1,500
Robert H. Power 6,750
Steven J. Randich 15,900
James N. Richmann 1,500
Stuart R. Serkin 1,500
Sharon R. Smithwick 1,500
Christopher H. Spille 1,500
Lawrence J. Stein 6,750
Katchen M. Stonehouse 1,500
Stephen E. Storch 1,500
Gary N. Sundick 1,500
William T. Teague II 1,500
John N. Tognino 15,900
Timothy W. Vincent 1,500
John T. Wall 15,900
David P. Warren 15,900
Brian S. Wilson 1,500
Frank G. Zarb 60,000
Total 528,850
PLAN OF DISTRIBUTION
Shares offered hereby may be sold from time to time directly by or
on behalf of the Selling Securityholders in one or more transactions on any
stock exchange or stock market on which the Common Stock may be listed at
the time of sale, in privately negotiated transactions, or through a
combination of such methods, at market prices prevailing at the time of
sale, at prices related to such prevailing market prices, at fixed prices
(which may be changed) or at negotiated prices. The Selling Securityholders
may sell shares through one or more agents, brokers or dealers or directly
to purchasers. Such brokers or dealers may receive compensation in the form
of commissions, discounts or concessions from the Selling Securityholders
and/or purchasers of the shares or both (which compensation as to a
particular broker or dealer may be in excess of customary commissions).
In connection with such sales, the Selling Securityholders and any
participating broker or dealer may be deemed to be "underwriters" within
the meaning of the Securities Act, and any commissions they receive and the
proceeds of any sale of shares may be deemed to be underwriting discounts
and commissions under the Securities Act.
In order to comply with certain state securities laws, if
applicable, the shares may be sold in such jurisdictions only through
registered or licensed brokers or dealers. In certain states, the shares
may not be sold unless the shares have been registered or qualified for
sale in such state or an exemption from regulation or qualification is
available and is complied with. Sales of shares must also be made by the
Selling Securityholders in compliance with all other applicable state
securities laws and regulations.
In addition to any shares sold hereunder, Selling Securityholders
may, at the same time, sell any shares of common stock, including the
shares, owned by them in compliance with all of the requirements of Rule
144, regardless of whether such shares are covered by this reoffer
prospectus.
There can be no assurance that any of the Selling Securityholders
will sell any or all of the shares offered by them hereby.
The Company will pay all expenses of the registration of the
shares and will not receive any proceeds from the sale of any shares by the
selling Securityholders.
The Company has notified certain Selling Securityholders of the
need to deliver a copy of this reoffer prospectus in connection with any
sale of the shares.
LEGAL MATTERS
The validity of the shares being offered hereby has been passed
upon for the Company by Skadden, Arps, Slate, Meagher & Flom LLP.
EXPERTS
The consolidated financial statement of the Company at December
31, 2000 and 1999, and for each of the three years in the period ended
December 31, 2000, incorporated by reference in this Registration Statement
and Reoffer Prospectus on Form S-8, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report and incorporated by
reference in this Reoffer Prospectus in reliance upon such report given on
the authority of such firm as experts in accounting and auditing.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference.
The following documents, which have been filed by the Registrant
with the U.S. Securities and Exchange Commission (the "SEC") pursuant to
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), are
incorporated by reference in this Registration Statement as of their
respective dates:
(1) The Registration Statement on Form 10 filed on April 30, 2001, by
the Company pursuant to Section 12(b) or 12(g) of the Exchange
Act, as such Form 10 may be amended from time to time (the "Form
10");
(2) The description of the Company's Common Stock set forth under the
caption "Item 11. Description of Registrant's Securities to be
Registered" in the Form 10 including any amendment or report filed
for the purpose of updating such description;
(3) The registrant's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 2001 and June 30, 2001; and
(4) The registrant's Current Reports on Form 8-K filed on July 27,
2001.
All documents filed or subsequently filed by the Company pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, after the date
of this Registration Statement and prior to the filing of a post-effective
amendment which indicates that all securities offered have been sold or
which deregisters all securities then remaining unsold, shall be deemed to
be incorporated by reference herein and to be a part hereof from the date
of filing of such documents with the SEC. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this
Registration Statement to the extent that a statement contained herein or
in any other subsequently filed document which also is incorporated or
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law allows for the
indemnification of officers, directors, and any corporate agents in terms
sufficiently broad to indemnify such person under certain circumstances for
liabilities, including reimbursement for expenses, incurred arising under
the Securities Act. The Company's Restated Certificate of Incorporation and
By-Laws provide that the Company shall indemnify its directors, officers,
employees, and members of the Company's Listing and Hearing Review Council
to the fullest extent permitted by Delaware law. The Company in its
discretion, may indemnify its agents to the fullest extent and under the
circumstances permitted by the Delaware General Corporation Law. The
directors and officers of the Company are covered by insurance policies
indemnifying them against certain liabilities, including certain
liabilities arising under the Securities Act, which might be incurred by
them in such capacities and against which they may not be indemnified by
the Company.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
The following exhibits are filed as part of this Registration
Statement or, where so indicated, have been previously filed and are
incorporated herein by reference:
Exhibit No. Description of Exhibit
3.1 Restated Certificate of Incorporation of the Company
(incorporated by reference to the Company's Registration
Statement on Form 10 (Registration No. 000-32651)).
3.2 By-laws of the Company (incorporated by reference to the
Company's Registration Statement on Form 10 (Registration
No. 000-32651)).
4.1 Form of certificate representing shares of Common Stock
(incorporated by reference to the Company's Registration
Statement on Form 10 (Registration No. 000-32651)).
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP,
regarding the legality of the securities being registered.+
10.1 The Nasdaq Stock Market, Inc. Equity Incentive Plan
(incorporated by reference to the Company's Registration
Statement on Form 10 (Registration No. 000-32651)).
23.1 Consent of Ernst & Young LLP.+
23.2 Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(included in Exhibit 5.1).+
24.1 Power of Attorney.+
+ Filed herewith
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the
Registration Statement (or the most recent
post-effective amendment thereof) which,
individually or in the aggregate, represent a
fundamental change in the information set forth in
the Registration Statement. Notwithstanding the
forego ing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high
end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
SEC pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more
than 20 percent change in the maximum aggregate
offering price set froth in the "Calculation of
Registration Fee" table in the effective
Registration Statement; and
(iii) To include any material information with respect
to the plan of distribution not previously
disclosed in the registration statement or any
material change to such information in the
Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished
to the SEC by the registrant pursuant to Section 13 or 15(d) of the
Exchange Act that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each post-effective amendment shall
be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering.
(b) The undersigned registrant hereby further undertakes, that, for
purposes of determining any liability under the Securities Act,
each filing of the registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Exchange Act (and, where applicable,
each filing of an employee benefit plan's annual report pursuant
to Section 15(d) of the Exchange Act) that is incorporated by
reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in
the opinion of the SEC such indemnification is against public
policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant
of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed
in the Securities Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused
this registration statement has been signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of
New York, on this 4th day of October, 2001.
The Nasdaq Stock Market, Inc.
By: /s/ Hardwick Simmons
----------------------------------
Hardwick Simmons
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on this 4th day of October, 2001.
Name Title Date
/s/ Hardwick Simmons Chairman and Chief October 4, 2001
---------------------------- Executive Officer
Hardwick Simmons (Principal Executive Officer)
Chief Financial Officer October 4, 2001
/s/ David P. Warren (Principal Financial and
----------------------------- Accounting Officer)
David P. Warren
Dr. Josef Ackermann* Director October 4, 2001
--------------------------
Dr. Josef Ackermann
H. Furlong Baldwin* Director October 4, 2001
---------------------------
H. Furlong Baldwin
----------------------------- Director
Frank E. Baxter
----------------------------- Director
Michael Casey
Michael W. Clark* October 4, 2001
-----------------------------
Michael W. Clark
William S. Cohen* Director October 4, 2001
----------------------------
William S. Cohen
----------------------------- Director
F. Warren Hellman
/s/ Richard G. Ketchum President and Director October 4, 2001
---------------------------
Richard G. Ketchum
John D. Markese* Director October 4, 2001
----------------------------
John D. Markese
----------------------------- Director
E. Stanley O'Neal
----------------------------- Director
Vikram S. Pandit
Kenneth D. Pasternak* Director October 4, 2001
-----------------------------
Kenneth D. Pasternak
------------------------------ Director
David S. Pottruck
Arthur Rock* Director October 4, 2001
-----------------------------
Arthur Rock
Richard C. Romano* Director October 4, 2001
------------------------------
Richard C. Romano
------------------------------ Director
Arvind Sodhani
Sir Martin Sorrell* Director October 4, 2001
-------------------------------
Sir Martin Sorrell
*By: /s/ Edward S. Knight
----------------------
Attorney-in-Fact
EXHIBIT INDEX
Exhibit No. Description of Exhibit
3.1 Restated Certificate of Incorporation of the
Company (incorporated by reference to the
Company's Registration Statement on Form S-1
(Registration No. 333-51023)).
3.2 By-laws of the Company (incorporated by reference
to the Company's Registration Statement on Form
S-1 (Registration No. 333-51023)).
4.1 Form of certificate representing shares of Class A
Common Stock (incorporated by reference to the
Company's Registration Statement on Form S-1
(Registration No. 333-51023)).
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom
LLP, regarding the legality of the securities
being registered.+
10.1 The Nasdaq Stock Market, Inc. Equity Incentive
Plan (incorporated by reference to the Company's
Registration Statement on Form 10 (Registration
No. 000-32651)).
23.1 Consent of Ernst & Young LLP.+
23.2 Consent of Skadden, Arps, Slate, Meagher & Flom
LLP (included in Exhibit 5.1).+
24.1 Power of Attorney.+
+ Filed herewith
EXHIBIT 5.1
[LETTERHEAD OF SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP]
October 4, 2001
The Nasdaq Stock Market, Inc.
One Liberty Plaza
New York, NY 10006
Gentlemen:
We have acted as special counsel to The Nasdaq Stock
Market, Inc., a Delaware corporation (the "Company"), in connection with
the proposed issuance by the Company of up to 20,000,000 shares (the
"Shares") of Common Stock, par value $0.01 per share (the "Common Stock"),
pursuant to the Company's Equity Incentive Plan (the "Equity Incentive
Plan").
This opinion is delivered in accordance with the
requirements of Item 601(b)(5) of Regulation S-K under the Securities Act
of 1933, as amended (the "Securities Act").
In connection with this opinion, we have examined and are
familiar with originals or copies, certified or otherwise identified to our
satisfaction, of (i) the Company's Registration Statement on Form S-8,
relating to the Shares, filed with the Securities and Exchange Commission
(the "Commission") under the Securities Act on October 4, 2001 (together
with all exhibits thereto, the "Registration Statement"), (ii) the Restated
Certificate of Incorporation of the Company, as currently in effect, (iii)
the By-Laws of the Company, as currently in effect, (iv) specimen
certificates representing the Common Stock, (v) resolutions of the Board of
Directors of the Company relating to the Equity Incentive Plan and the
filing of the Registration Statement; (vi) the Equity Incentive Plan; and
(vii) the form of option agreement between the Company and the employees
and directors receiving options (the "Option Agreement"). We have also
examined originals or copies, certified or otherwise identified to our
satisfaction, of such records of the Company and such agreements,
certificates of public officials, certificates of officers or other
representatives of the Company and others, and such other documents,
certificates and records, as we have deemed necessary or appropriate as a
basis for the opinions set forth herein.
In our examination, we have assumed the legal capacity of
all natural persons, the genuineness of all signatures, the authenticity of
all documents submitted to us as originals, the conformity to original
documents of all documents submitted to us as certified or photostatic
copies and the authenticity of the originals of such latter documents. In
making our examination of documents executed or to be executed by parties
other than the Company, we have assumed that such parties had or will have
the power, corporate or other, to enter into and perform all obligations
thereunder and have also assumed the due authorization by all requisite
action, corporate or other, and execution and delivery by such parties of
such documents and the validity and binding effect thereof. We have further
assumed that each of the Option Agreements to be entered into between the
Company and the employees and directors receiving options under the Equity
Incentive Plan will conform to the form of agreement examined by us. As to
any facts material to the opinions expressed herein which we have not
independently established or verified, we have relied upon oral or written
statements and representations of officers and other representatives of the
Company and others.
Members of our firm are admitted to the Bar in the State
of New York, and we do not express any opinion as to the laws of any other
jurisdiction, other than the General Corporation Law of the State of
Delaware.
Based upon and subject to the foregoing, we are of the
opinion that when (i) the Registration Statement becomes effective; (ii)
the compensation committee appointed by the Board of Directors to
administer the Equity Incentive Plan (the "Compensation Committee") or the
Board of Directors grants the options pursuant to the Equity Incentive Plan
(the "Options") and determines the exercise price of the Options; (iii) the
Compensation Committee or the Board of Directors issues restricted shares
of Common Stock pursuant to the Equity Incentive Plan; (iv) certificates
representing the Shares in the form of the specimen certificates examined
by us have been manually signed by an authorized officer of the transfer
agent and registrar for the Common Stock and registered by such transfer
agent and registrar, and delivered to and paid for by the plan participants
at a price per share not less than the par value per share and in
accordance with the terms and conditions of the Equity Incentive Plan, as
applicable, the issuance and sale of the Shares will have been duly
authorized, and the Shares will be validly issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion with the
Commission as Exhibit 5 to the Registration Statement. In giving such
consent, we do not thereby admit that we are included in the category of
persons whose consent is required under Section 7 of the Securities Act.
Very truly yours,
/s/ Skadden, Arps, Slate, Meagher & Flom LLP
Exhibit 23.1
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-8 No. 333-XXXXX) and related Reoffer
Prospectus pertaining to The Nasdaq Stock Market, Inc. Equity Incentive
Plan and to the incorporation by reference therein of our report dated
January 26, 2001, except for Note 4 as to which the date is August 17,
2001, with respect to the consolidated financial statements of The Nasdaq
Stock Market, Inc. included in its Form 10 (File No. 000-32651) for the
year ended December 31, 2000, filed with the U.S. Securities and Exchange
Commission.
Ernst & Young LLP
New York, New York
October 4, 2001
