EMPLOYMENT AGREEMENT
This Agreement made and entered into as of the 3rd day of December, 1996
(the "Effective Date") by and between Ameritrade Holding Corporation (the
"Company"), and J. Xxx Xxxxxxxx (the "Executive"),
WITNESSETH THAT:
WHEREAS, the parties desire to enter into this Agreement pertaining to the
continued employment of the Executive by the Company;
NOW THEREFORE, in consideration of the mutual covenants and agreements set
forth below, it is hereby covenanted and agreed by the Company and the Executive
as follows:
1. EMPLOYMENT PERIOD. Subject to the terms of this Agreement, the
Company hereby agrees to employ the Executive as its Chairman and Chief
Executive Officer during the Employment Period (as defined below), and the
Executive hereby agrees to remain in the employ of the Company during the
Employment Period and to provide services during the Employment Period in
accordance with this Agreement. The "Employment Period" shall be the period
beginning on the Effective Date and ending on the first anniversary thereof.
After the first anniversary of the Effective Date, the Employment Period shall
be automatically extended for three additional consecutive 12-month periods,
unless one party to this Agreement provides written notice of non-renewal to the
other at least 180 days before the last day of the then current Employment
Period.
2. DUTIES. The Executive agrees that, during the Employment Period while
he is employed by the Company, he will devote his full time, energies and
talents to serving as the Chairman and the Chief Executive Officer of the
Company, subject to the direction of the Board of Directors of the Company (the
"Board"). The Executive shall have such duties and responsibilities as may be
assigned to him from time to time by the Board, including, but not limited to,
managing and directing the operations, executives and markets of the
subsidiaries of the Company, creating and executing strategic business plans to
enable the accomplishment of corporate goals, evaluating profitable corporate
purchases and marketing Company services to the industry. The Executive shall
perform all duties assigned to him faithfully and efficiently, subject to the
direction of the Board and shall have such authorities and powers as are
inherent
to the undertakings applicable to his position and necessary to carry out the
responsibilities and duties required of him hereunder; provided, however, that
the Executive shall not be required to perform any duties while he is disabled
(within the meaning of paragraph 4(c)). Notwithstanding the foregoing
provisions of this Section 2, during the Employment Period, the Executive may
devote reasonable time to activities other than those required under this
Agreement, including the supervision of his personal investments, and activities
involving professional, charitable, educational, religious and similar types of
organizations, speaking engagements, membership on the boards of directors of
other organizations, and similar type activities, to the extent that such other
activities do not, in the judgement of the Board, inhibit or prohibit the
performance of the Executive's duties under this Agreement, or compete or
conflict with the business of the Company or any of its subsidiaries.
3. COMPENSATION. Subject to the terms and conditions of this Agreement,
during the Employment Period while the Executive is employed by the Company, the
Company shall compensate him for his services as follows:
(a) The Executive shall receive, for each 12-consecutive month period
beginning on the Effective Date and each anniversary thereof, an
annual salary of $350,000 (the "Salary"), which Salary shall be
payable in substantially equal monthly or more frequent installments.
The Executive's Salary rate shall be reviewed annually on or about
January 1 of each year; provided, however, that in no event shall the
Salary of the Executive be reduced to an amount that is less than the
amount specified in this paragraph (a) (as the same may be increased
from time to time) except to the extent that reductions of the same
percentage are being made at the same time to the salaries of all
other senior executive officers of the Company.
(b) The Executive shall be entitled to receive bonuses from the Company as
determined in the sole discretion of the Board.
(c) Except as otherwise specifically provided to the contrary in this
Agreement, the Executive shall be provided with the employee benefits
and other fringe benefits and perquisites to the same extent and on
the same terms and conditions as those benefits are provided by the
Company from time to time to the Company's other senior executive
officers.
4. RIGHTS AND PAYMENTS UPON TERMINATION. The Executive's employment with
the Company may be terminated during the
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Employment Period by the Company or the Executive at any time, for any reason,
without breach of this Agreement. The Executive's right to benefits and
payments, if any, for periods after the date on which his employment with the
Company terminates for any reason (his "Termination Date") shall be determined
in accordance with the following provisions of this Section 4:
(a) MINIMUM PAYMENTS. If the Executive's Termination Date occurs during
the Employment Period for any reason, the employee shall be entitled
to the following payments, in addition to any payments or benefits to
which the Executive may be entitled under the following provisions of
this Section 4 (other than this paragraph (a)) and the express terms
of any employee benefit plan or arrangement in which the Executive
participates as of his Termination Date:
(i) his earned but unpaid Salary for the period ending on his
Termination Date; and
(ii) his accrued but unpaid vacation pay for the period ending
with his Termination Date, as determined in accordance with
the Company's policy as in effect from time to time.
Payments to be made to the Executive pursuant to this paragraph 4(a)
shall be made in a lump sum as soon as practicable after the
Executive's Termination Date. Except as may be otherwise expressly
provided to the contrary in this Agreement, nothing in this Agreement
shall be construed as requiring the Executive to be treated as
employed by the Company following his Termination Date for purposes of
any employee benefit plan or arrangement in which he may participate
at such time.
(b) TERMINATION BY COMPANY FOR CAUSE. If the Executive's Termination Date
occurs during the Employment Period and is a result of the Company's
termination of the Executive's employment on account of Cause (as
defined below), then, except as agreed in writing between the
Executive and the Company, the Executive shall have no right to future
payments or benefits under this Agreement (and the Company shall have
no obligation to make any such future payments or provide any such
future benefits) for periods after the Executive's Termination Date.
For purposes of this Agreement, the term "Cause" shall mean (1) the
continuous failure by the Executive to substantially perform his
duties under this Agreement, (2) the willful engaging by the
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Executive in conduct which is demonstrably and materially injurious to
the Company or its affiliates, monetarily or otherwise, (3) conduct by
the Executive that involves theft, fraud or dishonesty, or (4) the
Executive's violation of the provisions of Section 6 hereof.
(c) TERMINATION FOR DEATH OR DISABILITY. If the Executive's Termination
Date occurs during the Employment Period on account of the Executive's
death or disability (as defined below), then the Executive (or in the
event of his death, his estate) shall be entitled to continuing
payments of his Salary for the period commencing on his Termination
Date and ending on the earliest of (i) the last day of the calendar
month in which his Termination Date occurs, (ii) the last day of the
Employment Period, or (iii) the date on which the Executive violates
the provisions of Section 6 of this Agreement. For purposes of this
Agreement, the term "disability" shall mean the inability of the
Executive to continue to perform his duties under this Agreement on a
full-time basis as a result of mental or physical illness, sickness or
injury for a period of 90 days within any 12-month period, as
determined in the sole discretion of the Board.
(d) TERMINATION BY THE COMPANY FOR REASONS OTHER THAN CAUSE. If the
Executive's Termination Date occurs during the Employment Period and
is a result of the Executive's termination of employment by the
Company for any reason other than Cause (and is not on account of the
Executive's death, disability, or voluntary resignation, the mutual
agreement of the parties or any other reason), then the Executive
shall receive from the Company for the period commencing on his
Termination Date and ending on the earliest of (i) last day of the
Employment Period, (ii) the six month anniversary of his Termination
Date, (iii) the date on which the Executive violates the provisions of
Section 6 of this Agreement, or (iv) the date of the Executive's
death, the Salary in effect as of his Termination Date, payable in
accordance with the provisions of paragraph 3(a). Notwithstanding the
foregoing, the Company may, at any time, relieve the Executive of his
duties for a specified period of time and such action on the part of
the Company shall not be considered a termination of the Executive's
employment hereunder. During any period that the Executive has been
relieved of his duties pursuant to the foregoing sentence, all
provisions of this Agreement, other than the provisions of Section 2
which require the Executive
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to actively perform services for the Company, shall continue to remain
in full force and effect.
(e) TERMINATION FOR VOLUNTARY RESIGNATION, MUTUAL AGREEMENT OR OTHER
REASONS. If the Executive's Termination Date occurs during the
Employment Period on account of his voluntary resignation, mutual
agreement of the parties, or any reason other than those specified in
paragraphs (b), (c) or (d) above then, except as agreed in writing
between the Executive and the Company, the Executive shall have no
right to future payments or benefits under this Agreement (and the
Company shall have no obligation to make any such future payments or
provide any such future benefits) for periods after the Executive's
Termination Date.
(f) NOTICE OF NON-RENEWAL. If the Executive's Termination Date occurs at
the end of the Employment Period on account of non-renewal of the
Employment Period by either party in accordance with Section 1, then,
except as agreed in writing between the Executive and the Company, the
Executive shall have no right to future payments or benefits under
this Agreement (and the Company shall have no obligation to make any
such future payments or provide any such future benefits) for periods
after the Executive's Termination Date.
Notwithstanding any other provision of this Agreement, the Executive shall
automatically cease to be an officer and/or director of the Company and its
affiliates as of his Termination Date.
5. SET-OFF. The Company shall be entitled to set off against the amounts
payable to the Executive under this Agreement, any amounts owed to the Company
or its affiliates by the Executive.
6. CONFIDENTIAL INFORMATION. The Executive agrees that:
(a) Except as may be required by the lawful order of a court or agency of
competent jurisdiction, or except to the extent that the Executive has
express authorization from the Company, he shall keep secret and
confidential indefinitely all non-public information (including,
without limitation, information regarding costs of new accounts,
activity rates of different market niche customers and advertising
results) concerning the Company and the subsidiaries which was
acquired by or disclosed to the Executive during the course of his
employment with the Company and not to disclose the same, either
directly or indirectly, to any other
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person, firm, or business entity, or to use it in any way.
(b) Upon his Termination Date or at the Company's earlier request, he will
promptly return to the Company any and all records, documents,
physical property, information, computer disks or other materials
relating to the business of the Company and its affiliates obtained by
him during his course of employment with the Company.
(c) The Executive shall keep the Company informed of, and shall execute
such assignments as may be necessary to transfer to the Company or its
affiliates the benefits of, any inventions, discoveries, improvements,
trade secrets, developments, processes, and procedures made by the
Executive, in whole or in part, or conceived by the Executive either
alone or with others, which result from any work which the Executive
may do for or at the request of the Company, whether or not conceived
by the Executive while on holiday, on vacation, or off the premises of
the Company, including such of the foregoing items conceived during
the course of employment which are developed or perfected after the
Executive's termination of employment. The Executive shall assist the
Company or other nominated by it, to obtain patents, trademarks and
service marks and the Executive agrees to execute all documents and to
take all other actions which are necessary or appropriate to secure to
the Company and its affiliates the benefits thereof. Such patents,
trademarks and service marks shall become the property of the Company
and its affiliates. The Executive shall deliver to the Company all
sketches, drawings, models, figures, plans, outlines, descriptions or
other information with respect thereto.
(d) To the extent that any court or agency seeks to have the Executive
disclose confidential information, he shall promptly inform the
Company, and he shall take such reasonable steps to prevent disclosure
of Confidential Information until the Company has been informed of
such requested disclosure, and the Company has an opportunity to
respond to such court or agency. To the extent that the Executive
obtains information on behalf of the Company or any of the
subsidiaries that may be subject to attorney-client privilege as to
the Company's attorneys, the Executive shall take reasonable steps to
maintain the confidentiality of such information and to preserve such
privilege.
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(e) Nothing in the foregoing provisions of this Section 6 shall be
construed so as to prevent the Executive from using, in connection
with his employment for himself or an employer other than the Company
or any of its affiliates, knowledge which was acquired by him during
the course of his employment with the Company and its affiliates, and
which is generally known to persons of his experience in other
companies in the same industry.
7. EQUITABLE REMEDIES. The Executive acknowledges that the Company would
be irreparably injured by a violation of Section 6 and agrees that the Company,
in addition to other remedies available to it for such breach or threatened
breach, shall be entitled to a preliminary injunction, temporary restraining
order, other equivalent relief, restraining the Executive from any actual or
threatened breach of Section 6 without any bond or other security being
required.
8. DEFENSE OF CLAIMS. The Executive agrees that, on and after the
Effective Date, he will cooperate with the Company and its affiliates in the
defense of any claims that may be made against the Company or its affiliates to
the extent that such claims may relate to services performed by him for the
Company. To the extent travel is required to comply with the requirements of
this Section 9, the Company, shall to the extent possible, provide the Executive
with notice at least 10 days prior to the date on which such travel would be
required and the Company agrees to reimburse the Executive for all of his
reasonable actual expenses associated with such travel; provided, however, that
if the Company reasonably expects the travel to be extensive or unduly
burdensome to the Executive from a financial perspective, the Executive may
provide to the Executive pre-paid tickets for transportation in connection with
such travel.
9. NOTICES. Notices provided for in this Agreement shall be in writing
and shall be deemed to have been duly received when delivered in person or sent
by facsimile transmission, on the first business day after it is sent by air
express courier service or on the second business day following deposit in the
United States registered or certified mail, return receipt requested, postage
prepaid and addressed, in the case of the Company to the following address:
Ameritrade Holding Corporation
0000 Xxxxx 000xx Xxxxxx
P.O. Box 3288
Omaha, Nebraska 68103-0288
Attention: Xxxxx X. Xxxxxx
Vice President, Human Resources
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or to the Executive:
J. Xxx Xxxxxxxx
0000 Xxxxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
or such other address as either party may have furnished to the other in writing
in accordance herewith, except that a notice of change of address shall be
effective only upon actual receipt.
10. WITHHOLDING. All compensation payable under this Agreement shall be
subject to customary withholding taxes and other employment taxes as required
with respect to compensation paid by a corporation to an employee and the amount
of compensation payable hereunder shall be reduced appropriately to reflect the
amount of any required withholding. The Company shall have no obligation to
make any payments to the Executive or to make the Executive whole for the amount
of any required taxes.
11. ARBITRATION OF ALL DISPUTES. Any controversy or claim arising out of
or relating to this Agreement (or the breach thereof) shall be settled by final,
binding and non-appealable arbitration in Omaha, Nebraska by three arbitrators.
Except as otherwise expressly provided in this paragraph 18, the arbitration
shall be conducted in accordance with the rules of the American Arbitration
Association (the "Association") then in effect. One of the arbitrators shall be
appointed by the Company, one shall be appointed by the Executive, and the third
shall be appointed by the first two arbitrators. If the first two arbitrators
cannot agree on the third arbitrator within 30 days of the appointment of the
second arbitrator, then the third arbitrator shall be appointed by the
Association. Each party shall pay its own expenses relating to resolution of
any dispute relating to this Agreement.
12. SUCCESSORS. This Agreement shall be binding on, and inure to the
benefit of, the Company and its successors and assigns and any person acquiring,
whether by merger, reorganization, consolidation, by purchase of assets or
otherwise, all or substantially all of the assets of the Company.
13. NONALIENATION. The interests of the Executive under this Agreement
are not subject to the claims of his creditors, other than the Company, and may
not otherwise be voluntarily or involuntarily assigned, alienated or encumbered.
14. WAIVER OF BREACH. The waiver by either the Company or the Executive
of a breach of any provision of this Agreement shall not operate as or be deemed
a waiver of any subsequent breach by either the Company or the Executive.
Continuation of payments hereunder by the Company following a breach by the
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Executive of any provision of this Agreement shall not preclude the Company from
thereafter terminating said payments based upon the same violation.
15. SEVERABILITY. It is mutually agreed and understood by the parties
that should any of the agreements and covenants contained herein be determined
by any court of competent jurisdiction to be invalid by virtue of being vague or
unreasonable, including but not limited to the provisions of Section 6, then the
parties hereto consent that this Agreement shall be amended retroactive to the
date of its execution to include the terms and conditions said court deems to be
reasonable and in conformity with the original intent of the parties and the
parties hereto consent that under such circumstances, said court shall have the
power and authority to determine what is reasonable and in conformity with the
original intent of the parties to the extent that said covenants and/or
agreements are enforceable.
16. APPLICABLE LAW. This Agreement shall be construed in accordance with
the laws of the State of Delaware.
17. AMENDMENT. This Agreement may be amended or cancelled by mutual
Agreement of the parties in writing without the consent of any other person.
18. SURVIVAL OF AGREEMENT. Except as otherwise expressly provided in this
Agreement, the rights and obligations of the parties to this Agreement shall
survive the termination of the Executive's employment with the Company.
19. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute one and the same instrument.
Each counterpart may consist of a copy hereof containing multiple signature
pages, each signed by one party hereto, but together signed by both of the
parties hereto.
20. OTHER AGREEMENTS. This Agreement constitutes the sole and complete
Agreement between the Company and the Executive and supersedes all other
agreements, both oral and written, between the Company and the Executive with
respect to the matters contained herein including, without limitation any
severance agreements or arrangements between the parties. No verbal or other
statements, inducements, or representations have been made to or relied upon by
the Executive. The parties have read and understand this Agreement.
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Dated as of the date set forth above.
AMERITRADE HOLDING CORPORATION
By: /s/ Xxxxxx X. Xxxxx
-------------------------
Its: President and
Chief Operating Officer
/s/ J. Xxx Xxxxxxxx
------------------------------
J. XXX XXXXXXXX
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