SEPARATION AND RELEASE OF CLAIMS AGREEMENT
Exhibit 10.1
This Separation and Release of Claims Agreement (“Agreement”) is made by and between Xxxxx X.
Xxxxxx (“Employee”) and TD Ameritrade Holding Corporation (“Company”) (collectively referred to as
the “Parties”).
RECITALS
WHEREAS, the Company and Employee have entered into Restricted Stock Unit Agreements, as
detailed in the attached Schedule A, (collectively the “RSU Agreements”) pursuant to which Employee
was eligible to participate in the Company’s 1996 Long-Term Incentive Plan (the “LTIP”);
WHEREAS, the Company and Employee have entered into an Associate Agreement dated as of May 24,
2006 (the “Associate Agreement”);
WHEREAS, Employee was employed by the Company;
WHEREAS, Employee’s employment with Company will be terminated on or about January 28,
2011 (the “Termination Date”);
WHEREAS, the Parties, and each of them, wish to resolve any and all disputes, claims,
complaints, grievances, charges, actions, petitions and demands that Employee may have against the
Company as defined herein, including, but not limited to, any and all claims arising or in any way
related to Employee’s employment with, or separation from, the Company;
NOW THEREFORE, in consideration of the promises made herein, the Parties hereby agree as
follows:
COVENANTS
1. Consideration. Employee agrees that the consideration provided below in
Sections 1(b), (c), (d) and (e) constitute good and adequate consideration for the promises,
covenants, restrictions and other terms and conditions provided by this Agreement given that no
such severance benefits were required to be paid or provided by the Company to Employee prior to
the Effective Date, as defined in Section 27 below.
(a) Accrued Payments. The Company agrees to pay Employee (i) Employee’s accrued
but unpaid salary and (ii) Employee’s accrued but unused vacation, in each case which has accrued
through the Termination Date, within thirty (30) days following the Termination Date. The Company
also agrees to pay Employee for any unreimbursed business expenses required to be reimbursed to
Employee pursuant to the Company’s normal and customary business expense reimbursement procedures.
(b) Severance Payments.
(i) The Company agrees to pay Employee $400,000, which is equal to twelve (12) months of
Employee’s base salary. Payment of this amount pursuant to this Section 1(b)(i) shall be made over
twelve (12) months in substantially equal monthly installments of $33,333.33 beginning on the first
regular payroll date following the Effective Date, subject to all required withholdings.
(ii) The Company also agrees to pay Employee $3,540,055, which is equal to the sum of (A) the
Employee’s current annual cash incentive bonus target ($900,000), (B) the pro-rata portion of
Employee’s
current annual target incentive bonus ($225,000) and (C) the cash value, as determined in the
sole and absolute discretion of the Company, of the forfeited portion of Employee’s Restricted
Stock Units reflected on the attached Schedule A ($2,415,055). Payment of this amount
pursuant to this Section 1(b)(ii) shall be made in three (3) equal payments of $1,180,018.33 on
each of August 1, 2011, November 1, 2011 and February 1, 2012, subject to all required
withholdings.
(c) Restricted Stock Units. The Parties agree that the vesting of Employee’s
outstanding Restricted Stock Units, as of the Termination Date, is reflected on the attached
Schedule A, and reflects the pro-rata vesting acceleration required pursuant to the terms
of the applicable RSU Agreements, and that all awards and the shares issued thereunder, shall
continue to be subject to all of the terms and conditions of the applicable RSU Agreements and
LTIP. The shares of Company stock underlying the pro-rata vested portion of the Restricted Stock
Units shall be settled as soon as practicable after the Termination Date, but in no event later
than February 15, 2011.
(d) Benefits. Employee (and any eligible dependents) shall be eligible for continued
health benefits pursuant to COBRA continuation coverage (as described in Section 4980B of the
Internal Revenue Code of 1986, as amended (the “Code”)). The Company agrees to pay the employer
portion of any premiums for continued health benefits under any Company group medical or dental
plan for Employee (and any eligible dependents) until the first to occur of (i) twelve (12) months
following the Termination Date, or (ii) the date Employee obtains other comparable coverage.
Except as otherwise set forth herein, Employee’s participation in all other benefits and incidents
of employment shall cease on the Termination Date, except with respect to Employee’s participation,
as a terminated employee, in any 401(k) plan. Employee shall cease accruing employee benefits,
including, but not limited to, vacation time and paid time off, as of the Termination Date.
(e) Outplacement. Employee will be eligible for an executive outplacement assistance
program through an outplacement provider which is selected by the Employee and approved by the
Company, up to an amount of $15,000.
f) Legal Fees. Employer will reimburse Employee’s legal fees and expenses incurred
by Employee in connection with the review and negotiation of this Agreement up to $30,000 on the
delivery of invoices.
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(g) Home Security. Employee agrees to allow the dismantling and removal of the home
security system which has been installed in his homes which is the property of the Company. The
Company will coordinate with Employee on a mutually convenient time for the work to be performed,
but in no event later than March 31, 2011,subject to ADT’s schedule. The Company will have no
further liability for the monitoring or maintenance of those systems after the Termination Date
except that it will pay any appropriate invoices received within 30 days of the removal, for
reasonable costs incurred in repairing damage caused by the removal, if any.
2. Confidential Information. Employee shall continue to maintain the
confidentiality of all Confidential and proprietary information of the Company as set forth in
Section 3 of the Associate Agreement and shall continue to comply with the terms and conditions of
the Associate Agreement, which continues in full force and effect except as may be expressly
modified by this Agreement. Employee shall return all of the Company’s property and
Confidential and proprietary information in his possession to the Company on the Termination Date
except as provided in Section 1(g) above and an iPad which Employee has received on condition that
he return the iPad currently in Employee’s possession (which shall be considered as income to
Employee in an amount equal to the then current fair market value of the Company property and the
Company shall withhold all applicable taxes associated with such transfer of property). Employee
affirmatively asserts that he has returned all Company property to the Company and is not in
possession of any Company Confidential or Proprietary information or property, including, but not
limited to, any information that may be contained in computer files, discs and hard copies of
documents or files.
3. Payments. Employee acknowledges and represents that the Company will have paid all
salary, wages, bonuses, accrued vacation, commissions and any and all other benefits due to
Employee once the above noted payments and benefits are received.
4. Release of Claims. Employee agrees that the foregoing consideration represents
settlement in full of all outstanding obligations owed to Employee by the Company and its officers,
managers, supervisors, agents and employees. Employee, on his own behalf, and on behalf of his
respective heirs, family members, executors, agents, and assigns, hereby fully and forever releases
the Company and its officers, directors, employees, agents, investors, shareholders,
administrators, affiliates, divisions, subsidiaries, predecessor and successor corporations, and
assigns, from, and agree not to xxx concerning, any claim, duty, obligation or cause of action
relating to any matters of any kind, whether presently known or unknown, suspected or unsuspected,
that Employee may possess arising from any omissions, acts or facts that have occurred up until and
including the Effective Date of this Agreement including, without limitation:
(a) any and all claims relating to or arising from Employee’s employment relationship
with the Company and the termination of that relationship;
(b) any and all claims relating to, or arising from, Employee’s right to purchase, or actual
purchase of shares of stock of the Company, including, without limitation, any claims for fraud,
misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law,
and securities fraud under any state or federal law;
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(c) any and all claims under the law of any jurisdiction including, but not limited to,
wrongful discharge of employment; constructive discharge from employment; termination in violation
of public policy; discrimination; breach of contract, both express and implied; breach of a
covenant of good faith and fair dealing, both express and implied; promissory estoppel; negligent
or intentional infliction of emotional distress; negligent or intentional misrepresentation;
negligent or intentional interference with contract or prospective economic advantage; unfair
business practices; defamation; libel; slander; negligence; personal injury; assault; battery;
invasion of privacy; false imprisonment; and conversion;
(d) any and all claims for violation of any federal, state or municipal statute, including,
but not limited to, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the
Age Discrimination in Employment Act of
1967, the Americans with Disabilities Act of 1990, the Fair Labor Standards Act, the Employee
Retirement Income Security Act of 1974, The Worker Adjustment and Retraining Notification Act,
Older Workers Benefit Protection Act; the Maryland Laws Against Job Discrimination; and the New
Jersey Law Against Discrimination;
(e) any and all claims for violation of the federal, or any state, constitution;
(f) any and all claims arising out of any other laws and regulations relating to employment or
employment discrimination;
(g) any claim for any loss, cost, damage, or expense arising out of any dispute over the
non-withholding or other tax treatment of any of the proceeds received by Employee as a result of
this Agreement; and
(h) any and all claims for attorneys’ fees and costs.
The Company and Employee agree that the release set forth in this section shall be and remain
in effect in all respects as a complete general release as to the matters released. This release
does not extend to any obligations incurred under this Agreement. Notwithstanding anything to the
contrary herein, this release shall not apply with respect to (i) any of the Company’s obligations
under this Agreement and (ii) the Employee’s indemnification rights pursuant to Section 15 of this
Agreement.
Employee acknowledges and agrees that any breach of any provision of this release shall
constitute a material breach of this Agreement and shall entitle the Company to all appropriate and
available injunctive and other equitable relief, including specifically to immediately recover and
cease the severance benefits provided to Employee under this Agreement.
5. Acknowledgement of Waiver of Claims Under ADEA. Employee acknowledges that he
is waiving and releasing any rights he may have under the Age Discrimination in Employment Act of
1967 (“ADEA”) and that this waiver and release is knowing and voluntary. Employee and the Company
agree that this waiver and release does not apply to any rights or claims that may arise under ADEA
after the Effective Date of this Agreement. Employee acknowledges that the consideration given for
this waiver and release Agreement is in addition to anything of value to
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which Employee was already
entitled. Employee further acknowledges that he has been advised by this writing that:
(a) he should consult with an attorney prior to executing this Agreement;
(b) he has up to twenty-one (21) days within which to consider this Agreement;
(c) he has seven (7) days following his execution of this Agreement to revoke this Agreement;
(d) this Agreement shall not be effective until the revocation period has expired; and,
(e) nothing in this Agreement prevents or precludes Employee from challenging or seeking a
determination in good faith of the validity of this waiver under the ADEA, nor does it impose any
condition precedent, penalties or costs for doing so, unless specifically authorized by federal
law.
6. Unknown Claims. Employee acknowledges that he has been advised by legal
counsel and is familiar with the principle that a general release does not extend to claims which
the releasor does not know or suspect to exist in his favor at the time of executing the release,
which if known by him must have materially affected his settlement with the releasee. Employee,
being aware of said principle, agrees to expressly waive any rights Employee may have to that
effect, as well as under any other statute or common law principles of similar effect.
7. No Pending or Future Lawsuits. Employee represents that he has no lawsuits,
claims, or actions pending in his name, or on behalf of any other person or entity, against the
Company or any other person or entity referred to herein. Employee also represents that he does
not intend to bring any claims on his own behalf or on behalf of any other person or entity against
the Company or any other person or entity referred to herein.
8. Application for Employment. Employee understands and agrees that, as a condition
of this Agreement, he shall not be entitled to any employment with the Company, or any of its
subsidiaries, and he hereby waives any right, or alleged right, of employment or re-employment with
the Company, or any of its subsidiaries. For purposes of this Section 8, “subsidiaries” means
those companies that are subsidiaries of the Company on the Termination Date.
9. No Cooperation. Employee agrees he shall not intentionally act in any manner that
might damage the business of the Company. For purposes of clarity, this provision is not intended
to conflict with any other provisions of this Agreement. Employee agrees that he shall not counsel
or assist any attorneys or their clients in the presentation or prosecution of any disputes,
differences, grievances, claims, charges, or complaints by any third party against the Company
and/or any officer, director, employee, agent, representative, shareholder or attorney of the
Company, unless otherwise required to do so under a subpoena, court order, regulatory request or
other judicial, administrative or legal process or otherwise as required by law. Employee further
agrees both to immediately notify the Company upon receipt of any court order, subpoena, regulatory
request or any
legal discovery device that seeks or might require the disclosure or production of the
existence
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or terms of this Agreement, and to furnish, within three (3) business days of its
receipt, a copy of such court order, subpoena, regulatory request or legal discovery device to the
Company.
10. Non-Disparagement, Non-Solicitation and Non-Competition; No Duty to Mitigate;
Conditions to Receipt of Severance.
(a) Non-Disparagement. Employee shall not disparage or make negative, derogatory
or defamatory statements about the Company, its business activities, or any of its past (to the
extent known to Employee) or current directors, officers, employees, and affiliates, or any of
them. The Company shall direct those employees who are aware of the facts and circumstances of the
termination of Employee’s employment and this Agreement and its director and, officers that they
shall not directly or indirectly, now or any time in the future, whether in writing, orally or
electronically, disparage or make negative, derogatory or defamatory statements about the Employee.
Disparagement shall not include testimony or reporting made in a truthful and good faith manner,
provided pursuant to or in connection with legal or regulatory matters. All inquiries by potential
future employers of Employee shall be directed to the Company’s Human Resources Department. Upon
inquiry, the Human Resources Department shall only state the following: Employee’s last position
and dates of employment. Except that on the request of the Employee, the Company will send a
reference letter in a form agreeable to the parties. In response to an inquiry from the press
after the required filing of an 8K, the Company’s investor relations office and Employee will
respond by referring to the Press Release issued on January 21, 2011.
(b) Non-Solicitation. Beginning on the Termination Date and ending on the first
anniversary of the Termination Date, neither Employee nor any business in which Employee may engage
or participate in will (A) knowingly hire, solicit for hire or attempt to hire any employee of the
Company or any of its Affiliates (as defined below), or (B) encourage any employee of the Company
or any of its Affiliates to terminate such employment. For purposes of this Agreement, “employee”
means current employees as well as anyone employed by the Company or any of its Affiliates within
the six (6) months prior to the Termination Date; provided, however, that this provision will not
preclude any business in which Employee may engage or participate in from soliciting any such
employee by means of or hiring any such employee who responds to a public announcement placed by
the business as long as Employee otherwise complies with subsections (A) and (B) of this Section
10(b) above.
(c) Non-Competition. Beginning on the Termination Date and ending on the first
anniversary of the Termination Date (the “Non-Compete Period”), Employee will not (without the
written consent of the Company’s Chief Executive Officer (“CEO”)) engage or participate in any
business within any state in the United States, or any province in Canada, where the Company
conducts business (as an owner, partner, stockholder, holder of any other equity interest, or
financially as an investor or lender, or in any capacity calling for the rendition of personal
services or acts of management, operation or control) which is engaged in any activities and for
any business competitive with any of the primary businesses conducted by the Company or any of its
Affiliates (as defined below). For purposes of this Agreement, the term “primary businesses” is
defined as an on-line brokerage business, including without limitation the active trader and long
term investor client segments, and the investment adviser business, (collectively a “Competitive
Business”). Provided that this restriction will not restrict Employee from consulting with and/or
being employed
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by a business, firm, corporation, partnership or other entity that owns or operates
an on-line brokerage or investment adviser, provided that (i) the on-line brokerage and/or
investment adviser business is de minimis as compared to its core business in terms of revenue
and/or resources, and (ii) Employee’s involvement with the company excludes, directly or
indirectly, the on-line brokerage and/or investment adviser business during the Non-Compete Period.
Notwithstanding the foregoing, Employee may own securities of a Competitive Business so long as the
securities of such corporation or other entity are listed on a national securities exchange or on
the NASDAQ Global Market and the securities owned directly or indirectly by Employee do not
represent more than 2% of the outstanding securities of such corporation or other entity.
During the Non-Compete Period, neither Employee, nor any business in which Employee may engage or
participate in, will directly or indirectly, (A) knowingly induce any customer or vendor of the
Company or of corporations or businesses which directly or indirectly are controlled by the Company
(collectively, the “Affiliates”) to patronize any Competitive Business; (B) knowingly request or
advise any customer or vendor to withdraw, curtail or cancel such
customer’s or vendor’s business with the Company or any of its Affiliates; or (C) compete with the
Company or any of its Affiliates in merging with or acquiring any other company or business
(whether by a purchase of stock or other equity interests, or a purchase of assets or otherwise)
which is a Competitive Business. For purposes of this paragraph, “customer or vendor” means any
person or company that is a “customer or vendor” of the Company or its Affiliates on the
Termination Date.
In the event that any of the provisions of this Section should ever be deemed to exceed the
time, geographic or occupational limitations permitted by applicable laws, then such provisions
will and are hereby reformed to the maximum time, geographic or occupational limitations permitted
by applicable law. Nothing in this Agreement is intended to alter the terms of the RSU’s or
Associate Agreements regarding non-competition and non-solicitation which remain in full force and
effect.
(d) No Duty to Mitigate. Employee will not be required to mitigate the amount of
any payment or consideration contemplated by this Agreement, nor will any earnings that Employee
may receive from any other source reduce any such payment or consideration.
(e) Conditions to Receipt of Severance. The receipt of any payments and benefits
under this Agreement will be subject to the Employee complying with the requirements of this
Section 10. To the extent the Employee has violated any term and condition of this Section 10, the
Company may take all appropriate and available injunctive and other equitable relief, including
specifically to cease the payment of the severance specified in Section 1 of this Agreement and the
Employee shall be required to repay to the Company the amount of any such severance already paid by
the Company pursuant to Section 1 of this Agreement (other than the accrued payments specified in
Section 1(a)).
11. No Admission of Liability. The Parties understand and acknowledge that this
Agreement constitutes a compromise and settlement of disputed claims. No action taken by the
Parties hereto, or either of them, either previously or in connection with this Agreement shall be
deemed or construed to be: (a) an admission of the truth or falsity of any claims heretofore made
or (b) an acknowledgment or admission by either Party of any fault or liability whatsoever to the
other Party or to any third party.
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12. No Knowledge of Wrongdoing. Employee represents that he has no knowledge of any
wrongdoing involving improper or false claims against a federal or state governmental agency.
13. Tax Consequences. The Company makes no representations or warranties with respect
to the tax consequences of the payment of any sums to Employee under the terms of this Agreement.
Employee agrees and understands that he is responsible for payment, if any, of local, state and/or
federal taxes
on the sums paid hereunder by the Company and any penalties or assessments thereon.
14. Costs. Except as otherwise provided herein, the Parties shall each bear their own
costs, expert fees, attorneys’ fees and other fees incurred in connection with this Agreement.
15. Indemnification.
(a) The Parties agree to indemnify and hold harmless each other from and against any and
all loss, costs, damages or expenses, including, without limitation, attorneys’ fees or expenses
incurred by the other Party arising out of the breach of this Agreement by the other Party, or from
any false representation made herein by the other Party, or from any action or proceeding which may
be commenced, prosecuted or threatened by the other Party or for the other Party’s benefit, upon
the other Party’s initiative, or with the other Party’s aid or approval, contrary to the provisions
of this Agreement. The Parties further agree that in any such action or proceeding, this Agreement
may be pled by the the Party as a complete defense, or may be asserted by way of counterclaim or
cross-claim.
(b) After the Termination Date, Employee will continue to be provided with indemnification for
matters relating to the period of Employee’s employment with the Company, to the maximum extent
permitted under applicable law and by the Company’s Articles of Incorporation or Bylaws, including,
if applicable, any directors and officers insurance policies, on terms no less favorable than those
provided to any other Company executive officer; provided that the Company will not advance any
fees in any proceeding in which the Employee is pursing claims against the Company unless and until
a final determination is made that the Company is liable, but will advance reasonable fees in other
circumstances to the extent permitted under applicable law and by the Company’s Articles of
Incorporation or Bylaws, including, if applicable, any directors and officers insurance policies,
on terms no less favorable than those provided to any other Company executive officer.
16. Cooperation in Litigation. Employee agrees to cooperate fully with the
Company in any matters that have or may result in a legal or regulatory claim against the Company,
and of which Employee may have knowledge as a result of Employee’s employment with the Company.
This requires Employee, without limitation, to (1) make himself available upon reasonable request
to provide information and assistance to the Company on such matters without additional
compensation, except for Employee’s out-of-pocket costs, and (2) notify the Company promptly of any
requests to Employee for information related to any pending or potential legal or regulatory claim
or litigation involving the Company, reviewing any such request with a designated representative of
the Company prior to disclosing any such information, and permitting the representative of the
Company to be present during any communication of such information. Nothing herein prohibits
Employee from retaining his own counsel to review the Company’s
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requests. The Company hereby
agrees to reimburse Employee for his reasonable and appropriate out-of-pocket costs and
expenses incurred in connection with Employee’s cooperation in accordance with this Section,
including, but not limited to, reasonable attorney’s fees. This right to reimbursement is subject
to Employee submitting documentation of the costs and expenses to be reimbursed within ninety (90)
days after incurring any such costs or expenses.
17. Arbitration. The Parties agree that any and all disputes arising out of the terms
of this Agreement, Employee’s employment by the Company, Employee’s service as an officer or
director of the Company, or Employee’s compensation and benefits, their interpretation and any of
the matters herein released, will be subject to binding arbitration in New York, New York before
the American Arbitration Association under its National Rules for the Resolution of Employment
Disputes, supplemented by the Maryland Rules of Civil Procedure. The Parties agree that the
prevailing Party in any arbitration will be entitled to injunctive relief in any court of competent
jurisdiction to enforce the arbitration award. The Parties hereby agree to waive their right to
have any dispute between them resolved in a court of law by a judge or jury. This paragraph will
not prevent either Party from seeking injunctive relief (or any other provisional remedy) from any
court having jurisdiction over the Parties and the subject matter of their dispute relating to each
party’s obligations under this Agreement and the agreements incorporated herein by reference.
18. Authority. The Company represents and warrants that the undersigned has the
authority to act on behalf of the Company and to bind the Company and all who may claim through it
to the terms and conditions of this Agreement. Employee represents and warrants that he has the
capacity to act on his own behalf and on behalf of all who might claim through him to bind them to
the
terms and conditions of this Agreement. Each Party warrants and represents that there are no
liens or claims of lien or assignments in law or equity or otherwise of or against any of the
claims or causes of action released herein.
19. No Representations. Each Party represents that it has had the opportunity to
consult with an attorney, and has carefully read and understands the scope and effect of the
provisions of this Agreement. Neither Party has relied upon any representations or statements made
by the other Party hereto which are not specifically set forth in this Agreement.
20. Severability. In the event that any provision hereof becomes or is declared by a
court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue
in full force and effect without said provision so long as the remaining provisions remain
intelligible and continue to reflect the original intent of the Parties.
21. Entire Agreement. This Agreement represents the entire agreement and understanding
between the Company and Employee concerning the subject matter of this Agreement and Employee’s
relationship with the Company, and supersedes and replaces any and all prior agreements and
understandings between the Parties concerning the subject matter of this Agreement and Employee’s
relationship with the Company, with the exception of the Associate Agreement and the RSU
Agreements, which shall remain in full force and effect.
22. No Waiver. The failure of any Party to insist upon the performance of any of the
terms and conditions in this Agreement, or the failure to prosecute any breach of any of the terms
and
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conditions of this Agreement, shall not be construed thereafter as a waiver of any such terms
or conditions. This entire Agreement shall remain in full force and effect as if no such
forbearance or failure of performance had occurred.
23. No Oral Modification. Any modification or amendment of this Agreement, or
additional obligation assumed by either Party in connection with this Agreement, shall be effective
only if placed in writing and signed by both Parties or by authorized representatives of each
Party.
24. Governing Law. This Agreement shall be deemed to have been executed and delivered
within the state of Maryland, and it shall be construed, interpreted, governed, and enforced in
accordance with the laws of the state of Maryland, without regard to conflict of law principles.
To the extent that either Party seeks injunctive relief in any court having jurisdiction for any
claim relating to the alleged misuse or misappropriation of trade secrets or confidential or
proprietary information, each Party hereby consents to personal and exclusive jurisdiction and
venue in the state and federal courts of the state of Maryland.
25. Attorneys’ Fees. In the event that either Party brings an action to enforce or
effect its rights under this Agreement, the prevailing Party shall be entitled to recover its costs
and expenses, including the costs of mediation, arbitration, litigation, court fees, plus
reasonable attorneys’ fees, incurred in connection with such an action.
26. Section 409A of the Code.
(a) Any amount paid under this Agreement that satisfies the requirements of the
“short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the final treasury regulations
issued under Section 409A of the Code (the “Treasury Regulations”) shall not constitute deferred
compensation for purposes of Section 409A of the Code.
(b) Each payment and benefit payable under this Agreement is intended to constitute separate
payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.
(c) Any amount paid under this Agreement that qualifies as a payment made as a result of an
involuntary separation from service pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury
Regulations that does not exceed the Section 409A Limit (as defined below) shall not constitute
deferred compensation subject to Section 409A of the Code. For purposes of this Section 27(c),
“Section 409A Limit” will mean the lesser of two (2) times: (i) Employee’s annualized compensation
based upon the annual rate of pay paid to Employee during the Company’s taxable year preceding the
Company’s taxable year of Employee’s termination of employment as determined under Treasury
Regulation 1.409A-1(b)(9)(iii)(A)(1); or (ii) the maximum amount that may be taken into account
under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which the
Termination Date occurs.
(d) With respect to reimbursements (whether such reimbursements are for business expenses or,
to the extent permitted under the Company’s policies, other expenses) and/or in-kind benefits, in
each case, that constitute deferred compensation subject to Section 409A of the Code, each of the
following shall apply: (1) no reimbursement of expenses incurred by the Employee
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during any taxable
year shall be made after the last day of the following taxable year of the Employee, (2) the amount
of expenses eligible for reimbursement, or in-kind benefits provided, during a taxable year of the
Employee shall not affect the expenses eligible for reimbursement, or in-kind benefits to be
provided,
to the Employee in any other taxable year, and (3) the right to reimbursement of such expenses
or in-kind benefits shall not be subject to liquidation or exchange for another benefit. The
Company and Employee agree that this Agreement and the rights granted to the Employee hereunder are
intended to meet the requirements of paragraphs (2), (3) and (4) of Section 409A(a)(1)(A) of the
Code.
(e) Notwithstanding anything to the contrary in this Agreement, no severance payments will
become payable under this Agreement until Employee has a “separation from service” within the
meaning of Section 409A of the Code.
(f) This Section 26 is intended to comply with the requirements of Section 409A of the Code so
that none of the severance payments and benefits to be provided hereunder will be subject to either
(1) the six (6) month delay which may otherwise be required with respect to payments of deferred
compensation to “specified employees” as defined in Section 409A, and (b) any additional tax
imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. The
Company and Employee agree to work together in good faith to consider amendments to this Agreement
and to take such reasonable actions which are necessary, appropriate or desirable to avoid
imposition of any additional tax or income recognition prior to actual payment to Employee under
Section 409A.
27. Effective Date. This Agreement is effective after it has been signed by both
parties and after eight (8) days have passed since Employee has signed the Agreement (the
“Effective Date”), unless revoked by Employee within seven (7) days after the date the Agreement
was signed by Employee.
28. Counterparts. This Agreement may be executed in counterparts, and each
counterpart shall have the same force and effect as an original and shall constitute an effective,
binding agreement on the part of each of the undersigned.
29. Voluntary Execution of Agreement. This Agreement is executed voluntarily and
without any duress or undue influence on the part or behalf of the Parties hereto, with the full
intent of releasing all claims. The Parties acknowledge that:
(a) they have read this Agreement;
(b) they have been represented in the preparation, negotiation, and execution of this
Agreement by legal counsel of their own choice or that they have voluntarily declined to seek such
counsel;
(c) they understand the terms and consequences of this Agreement and of the releases it
contains; and
(d) they are fully aware of the legal and binding effect of this Agreement.
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IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective dates set forth
below.
| TD AMERITRADE HOLDING CORPORATION |
||||
| Dated: February 11, 2011 | By | /s/ XXXXX XXXXXX | ||
| Xxxxx Xxxxxx | ||||
| EVP, General Counsel and Secretary | ||||
| Xxxxx X. Xxxxxx, an individual |
||||
| Dated: February 11, 2011 | /s/ XXXXX X. XXXXXX | |||
12
Schedule A
Restricted Stock Unit Vesting / Forfeiture as of Termination Date
| Total | Pro-Rata | Shares | ||||||||||||||
| Grant Date | Expiration Date | Granted | Vested | Forfeited | ||||||||||||
10/28/2008 |
Termination Date | 51,967 | 34,644 | 17,323 | ||||||||||||
10/28/2008 |
Termination Date | 35,113 | 23,408 | 11,705 | ||||||||||||
10/29/2009 |
Termination Date | 39,640 | 13,213 | 26,427 | ||||||||||||
3/3/2010 |
Termination Date | 5,777 | 0 | 5,777 | ||||||||||||
10/29/2010 |
Termination Date | 54,045 | 0 | 54,045 | ||||||||||||
TOTAL: |
186,542 | 71,265 | 115,277 | |||||||||||||
13
