1
EXHIBIT 10.21
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and entered into as of March 24, 1999, (the "Effective
Date"), by and between Xxxx X. XxXxxxxxx (the "Executive"), Ameritrade Holding
Corporation (the "Company"), and Ameritrade, Inc. ("Ameritrade");
WITNESSETH THAT:
WHEREAS, the parties desire to enter into this Agreement pertaining to the
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 Executive, the Company
and Ameritrade as follows:
1. Performance of Services. The Executive's employment with the Company
shall be subject to the following;
(a) Subject to the terms of this Agreement, the Company hereby agrees to employ
the Executive during the Agreement Term (as defined below), and the
Executive hereby agrees to remain in the employ of the Company
during the Agreement Term.
(b) During the Agreement Term, while the Executive is employed by the Company,
the Executive shall devote his full time, energies and talents to serving
as the Chief Executive Officer of Ameritrade (the "CEO").
(C) The Executive agrees that he shall perform his duties faithfully and
efficiently subject to the direction on of J. Xxx Xxxxxxxx, Chairman of the
Board of Directors of the Company, or his successor (the "Chairman"). The
Executive's duties may include providing services for Ameritrade, the
Company and their affiliates, as determined by the Chairman. The Executive
shall have such authority, power, responsibilities and the duties as are
inherent in his positions (and the Undertakings applicable to his
positions) and necessary to carry out his responsibilities and the duties
required of him hereunder.
2
(d) Notwithstanding the foregoing provisions of this paragraph 1, during the
Agreement Term, 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, community, educational, religious and similar types of
organizations, speaking engagements, membership on the boards of directors
of other organizations, and similar types of activities, to the extent that
such other activities do not, in the judgment of the Chairman, inhibit or
prohibit the performance of the Executive's duties under this Agreement, or
conflict in any material way with the business of the Company or its
affiliates; provided, however, that the Executive shall not serve on the
board of any business, or hold any other position with any business,
without the consent of the Chairman.
(e) Subject to the terms of this Agreement, the Executive shall not be required
to perform services under this Agreement during any period that he is
Disabled. The Executive shall be considered Disabled during any period in
which he has a physical or mental disability which renders him incapable,
after reasonable accommodation, of performing his duties under this
Agreement. In the event of a dispute as to whether the Executive is
Disabled, the Company may refer the same to a licensed practicing physician
of the Company's choice, and the Executive agrees to submit to such tests
and examinations as such physician shall deem appropriate. During the
period in which the Executive is Disabled, the Company may appoint a
temporary replacement to assume the Executive's responsibilities.
(f) The "Agreement Term" shall be the period beginning on the Effective Date
and ending on the fifth anniversary of the Effective Date.
2, Compensation. Subject to the terms of this Agreement, during the
Agreement Term, 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, in substantially equal
monthly or more frequent an annual base salary of not less than $300,000
(the "Salary"). The Executive's Salary rate shall be reviewed by the
Chairman, while the Executive is employed by the Company, to determine
whether an increase in the amount of Salary is appropriate.
2
3
(b) The Executive shall be entitled to incentive compensation in the form of an
annual cash bonus of up to 55% (but not less than 25% for the first two
years of this Agreement) of his Salary, as provided for in paragraph 2(a),
as in effect as of the first day of the Performance Period (as defined
below), as it is adjusted from time to time. Subject to the immediately
preceding sentence, the amount of such bonus, if any, shall be determined
by the Chairman taking into consideration whether the Executive has met the
performance targets that have been set by the Chairman for such year, the
relative contribution by the Executive to the business of the Company,
general economic conditions, and such other factors as the Chairman deems
relevant. For purposes of this paragraph, the term Performance Period shall
mean the period of time established by the Chairman, which is used for the
calculation of annual bonuses paid to other senior executives of the
Company and which has historically been the fiscal year of the Company.
(c) The Chairman shall recommend to the Compensation Committee of the Board of
Directors of the Company (the "Committee") that the Executive be granted
stock options, under the terms and in accordance with the Company's 1996
Long Term Incentive Plan (the "Incentive Plan"), at the same time as grants
are made to other senior executives of the Company, with each such
bi-annual grant, having a present value (determined using the "Growth
Model" methodology utilized by the Company's compensation consultant as of
the Effective Date) of not less than $420,000 based on target payout (or
$840,000 based on maximum payout) determined as of the date of grant. The
initial grant, to be made during October of 1999 (the "Initial grant"),
shall be for a two year period with the next anticipated grant being made
in the fall of 2001. The value used to determine the number of shares to be
covered by the option grant shall be adjusted due to changes in the
Executive's Salary, as in effect on the grant date, in a manner consistent
with the methodology used by the Company's compensation consultants when
making such adjustments for other senior executives of the Company.
(d) One-Time Payments. To compensate the Executive for forgoing alternative
business opportunities, the Chairman shall recommend to the Committee that
the Executive receive, as soon as practicable after the Effective Date, a
non-qualified stock option award (the "Option") to purchase 45,400 shares
of Company stock pursuant to the terms and conditions of the Incentive
Plan. The per share price of the option shall be the fair market value of a
share of the Company's common stock on the date of such award. This Option
shall become exercisable with respect to 1/3 of the shares of stock awarded
on the first anniversary of the grant date and with respect to an
additional 1/3 on each subsequent anniversary date
3
4
until such time as this Option is fully exercisable. The option shall be
exercisable for a period as determined under the terms of the Incentive
Plan, but in no event shall the options granted under this paragraph be
exercisable after the tenth anniversary of the date of grant.
(e) The Executive shall be entitled to participate in all employee pension and
welfare benefit plans and programs made available to the Company's senior
level executives or to its employees generally, as such plans or programs
may be in effect from time to time, including, without limitation, pension,
profit sharing, savings and other retirement plans or programs, medical,
dental, hospitalization, short-term and long-term disability and life
insurance plans, supplemental life insurance, accidental death and
dismemberment protection, travel accident insurance, and any other pension
or retirement plans or programs and any other employee welfare benefit
plans or programs that may be sponsored by the Company from time to time,
including any plans that supplement the above-listed types of plans or
programs, whether funded or unfunded. The Company, however, shall not be
required to provide a benefit under this paragraph (e) if such benefit
would duplicate (or otherwise be of the same type as) a benefit
specifically required to be provided under another provision of this
Agreement. The Executive shall complete all forms and physical
examinations, and otherwise take all other similar actions to secure
coverage and benefits described in this paragraph 2, to the extent
determined to be necessary or appropriate by the Company.
(f) The Company shall maintain directors and officers liability insurance in
commercially reasonable amounts (as reasonably determined by the Board),
and the Executive shall be covered under such insurance to the same extent
as other senior management employees of the Company. The Executive shall be
eligible for indemnification by the Company under the Company by-laws as
currently in effect. The Company agrees that it shall not take any action
that would impair the Executive's rights to indemnification under the
Company by-laws, as currently in effect.
(g) The Executive shall be entitled to paid vacations in accordance with the
applicable policy of the Company as in effect from time to time, subject to
a minimum of 3 weeks per annum.
3. Termination. The Executive's employment with the Company during the
Agreement Term may be terminated by the Company or the Executive without any
breach
4
5
of this Agreement only under the circumstances described in paragraphs 3(a)
through 3(g);
(a) Death. The Executive's employment hereunder will terminate upon his
death.
(b) Permanent Disability. The Company may terminate the Executive's
employment during any period in which he is Permanently Disabled. The
Executive shall be considered "Permanently Disabled" during any period
in which he is Disabled; provided, however, that the Executive shall
not be considered to be "Permanently Disabled" until, for a period of
180 consecutive days, the Executive, as a result of a physical or
mental disability, is incapable, after reasonable accommodation, of
performing his duties under this Agreement on a permanent, full-time
basis, and is eligible for income replacement benefits under the
Company's long-term disability plan during such period of disability,
In the event of a dispute as to whether the Executive is Permanently
Disabled, the Company may refer the same to a mutually acceptable
licensed practicing physician, and the Executive agrees to submit to
such tests and examination as such physician shall deem appropriate.
(c) Cause. The Company may terminate the Executive's employment hereunder
at any time for Cause. For purposes of this Agreement, the term
"Cause" shall mean:
(i) the willful and continued failure by the Executive to
substantially perform his duties with the Company (other than any
such failure resulting from the Executive's being Disabled),
within a reasonable period of time after a written demand for
substantial performance is delivered to the Executive by the
Chairman, which demand specifically identifies the manner in
which the Chairman believes that the Executive has not
substantially performed his duties;
(ii) the willful engaging by the Executive in conduct which is
demonstrably and materially injurious to the Company, monetarily
or otherwise; or
(iii)the engaging by the Executive in egregious misconduct involving
serious moral turpitude to the extent that, in the reasonable
judgment of the Chairman, the Executive's credibility and
reputation no longer conform to the standard of the Company's
executives.
For purposes of this Agreement, no act, or failure to act, on the Executive's
part shall be deemed "willful" unless done, or omitted to be done, by the
Executive not
5
6
in good faith and without reasonable belief that the Executive's action or
omission was in the best interest of the Company.
(d) Constructive Discharge. If the Executive (i) provides written notice
to the Company of the occurrence of Good Reason (as defined below)
within a reasonable time after the Executive has knowledge of the
circumstances constituting Good Reason, which notice shall
specifically identifies the circumstances which the Executive believes
constitute Good Reason; (ii) the Company fails to notify the Executive
of the Company's intended method of correction within a reasonable
period of time after the Company receives the notice, or the Company
fails to correct the circumstances within a reasonable time after such
notice (except that no such opportunity to correct shall be applicable
if the circumstances constituting Good Reason are those described in
paragraph (C) below, relating to relocation); and (iii) the Executive
resigns within a reasonable time after receiving the Company's
response, if such notice does not indicate an intention to correct
such circumstances, or within a reasonable time after the Company
fails to correct such circumstances, then the Executive shall be
considered to have been subject to a Constructive Discharge by the
Company. For purposes of this Agreement, "Good Reason" shall mean,
without the Executive's express written consent (and except in
consequence of a prior termination of the Executive's employment), the
occurrence of any of the following circumstances;
(i) The assignment to the Executive of any duties inconsistent with
the Executive's position and status as CEO of Ameritrade, or a
diminution of the Executive's duties, authorities or
responsibilities with respect to Ameritrade, without the
written consent of the Executive.
(ii) A reduction by the Company in-the Executive's Salary to an
amount that is less than required under paragraph 2(a).
(iii) The relocation of the Executive's base office to an office that
is more than 50 highway miles of the Executive's base office on
the Effective Date, or a requirement that the Executive engage
in travel that is materially greater than is reasonably
required by the Ameritrade business.
The Executive's right to terminate his employment pursuant to this paragraph (d)
shall not be affected by his incapacity due to the Executive's Disability. The
Executive's
6
7
continued employment shall not constitute consent to, or a waiver of rights with
respect to, any circumstance constituting Good Reason hereunder.
(e) Termination By Executive. The Executive may terminate his employment
hereunder at any time for any reason by giving the Company prior written
Notice of Termination (as defined in paragraph 3(g)), which Notice of
Termination shall be effective not less than 30 days after it is given to
the Company, provided that nothing in this Agreement shall require the
Executive to specify a reason for any such termination.
However to the extent that the procedures specified in paragraph 3(d) are
required, the procedures of this paragraph 3(e) may not be used in lieu of
the procedures under paragraph 3(d).
(f) Non-Renewal of Agreement. Except as otherwise agreed to in writing by the
parties, this Agreement shall not apply to employment after the end of the
Agreement Term, however, non-renewal of this Agreement will not otherwise
limit or interfere with the benefits which the Executive has accrued under
any welfare, pension or other plan as of the end of the Agreement Term.
(g) Termination by the Company. The Company may terminate the Executive's
employment hereunder at any time for any reason, by giving the Executive
prior written Notice of Termination, which Notice of Termination shall be
effective immediately, or such later time as is specified in such notice.
The Company shall not be required to specify a reason for the termination
under this paragraph 3(g), provided that termination of the Executive's
employment by the Company shall be deemed to have occurred under this
paragraph 3(g) only if it is not for reasons described in paragraph 3(b),
3(c), 3(d), 3(e) or 3(f). Notwithstanding the foregoing, provisions of this
paragraph (g), if the Executive's employment is terminated by the Company
in accordance with this paragraph (g), and within a reasonable time period
thereafter, it is determined by the Board that circumstances existed which
would have constituted a basis for termination of the Executive's
employment for Cause in accordance with paragraph 3(c) (disregarding
circumstances which could have been remedied if notice had been given in
accordance with paragraph 3(c)(i)), the Executive's employment will be
deemed to have been terminated for Cause in accordance with paragraph 3(c).
(h) Notice of Termination. Any termination of the Executive's employment by the
Company or the Executive (other than a termination pursuant to paragraph
3(a) or
7
8
paragraph 3(f)) must be communicated by a written Notice of Termination, to
the other party hereto. For purposes of this Agreement, a "Notice of
Termination" means a dated notice which indicates the Date of Termination
(not earlier than 30 days after the date on which the notice is provided,
except in the case of a termination pursuant to paragraph 3(a), 3(c) or
3(f)), and which indicates the specific termination provision in this
Agreement relied on and which sets forth in reasonable detail the facts and
circumstances, if any, claimed to provide a basis for termination of the
Executive's employment under the provision so indicated.
Notwithstanding the immediately preceding paragraph, in the event that the
Company is required to provide notice of termination not less than 30 days
prior to its effective date, the Company may, in its sole discretion,
choose to have the notice effective immediately upon delivery to the
Executive, provided the Company shall be obligated to provide the Executive
with the compensation and benefits to which he is entitled to as an
employee for such 30 day period.
(i) Date of Termination. "Date of Termination" means the last day the Executive
is employed by the Company, provided that the Executive's employment is
terminated in accordance with the foregoing provisions of this paragraph 3.
4. Rights and Payments Upon Termination or Change in Control. The
Executive's right to payment and benefits under this Agreement for periods after
his Date of Termination shall be determined in accordance with the following
provisions of this paragraph 4:
(a) If the Executive's Date of Termination occurs during the Agreement Term for
any reason, the Company shall pay to the Executive:
(i) The Executive's Salary for the period ending on the Date of
Termination.
(ii) Payment for unused vacation days, as determined in accordance with
Company policy as in effect from time to time.
(iii) If the Date of Termination occurs after the end of a performance
period and prior to the payment of the performance bonus (as
described in paragraph 2(b)) for the period, the Executive shall be
paid such bonus amount at the regularly scheduled time.
8
9
(iv) Any other payments or benefits to be provided to the Executive by the
Company pursuant to any employee benefit plans or arrangements adopted
by the Company, to the extent such amounts are due from the Company.
Except as may otherwise be 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 for purposes of any
employee benefit plan or arrangement following the date of the Executive's
Date of Termination.
(b) If the Executive's Date of Termination occurs during the Agreement Term
under circumstances described in paragraph 3(a) (relating to the
Executive's death), paragraph 3(b) (relating to the Executive's being
Disabled), paragraph 3(c) relating to the Executive's termination for
Cause), paragraph 3(e) (relating to the Executive's resignation), then,
except as otherwise expressly provided in this Agreement or otherwise
agreed in writing between the Executive and the Company, the Company shall
have no obligation to make payments under the Agreement for periods after
the Executive's Date of Termination. If the Executives employment with the
Company terminates after the end of the Agreement Term, the Company shall
have no obligation to make payments for periods after the Executive's Date
of Termination.
(c) If the Executive's Date of Termination occurs during the Agreement Term
under circumstances described in paragraph 3(d) (relating to Constructive
Discharge) or 3(g) (relating to termination by the Company without Cause),
then, in addition to the amounts payable in accordance with paragraph 4(a):
(i) If the termination of employment occurs prior to a Change in Control
(as defined below) the Executive shall receive from the Company for
the period continuing through the first anniversary of the Date of
Termination, the Salary amount described in paragraph 2(a), as in
effect on his Date of Termination, in monthly or more frequent
installments as is
required under that paragraph, and the bonus amount described in
paragraph 2(b). The determination of the bonus payable for the
performance period in which the Date of Termination occurs shall be
based on actual performance for the entire period. The bonus payable
for any performance period thereafter shall be at the same rate as the
rate determined in accordance with the preceding sentence; provided,
however, that the bonus for the performance period that includes the
9
10
one-year anniversary of the Date of Termination shall be subject to a
pro-rata reduction to reflect the portion of the performance period
following such anniversary. Payment, under this paragraph (i), of any bonus
described in paragraph 2(b) shall be made at the regularly scheduled time
for payment of such amounts to active employees. The Company's obligation
to make payments under this paragraph (i) shall cease with respect to
periods after the earlier to occur of the date of the Executive's death, or
a date, if any, of the breach by the Executive of the provisions of
paragraph 7 or paragraph 8. As of the Date of Termination (under this
paragraph), all outstanding stock options then held by the Executive which
are not yet exercisable shall become fully exercisable and shall remain
exercisable for the period as determined under the terms and conditions of
the Incentive Plan.
(ii) If the Date of Termination of employment occurs within 2 years after a
Change in Control the Executive shall receive from the Company, for the
period continuing through the first anniversary of the Date of Termination,
the Salary amount described in paragraph 2(a), as in effect on his Date of
Termination, in monthly or more frequent installments as is required under
that paragraph, and the bonus amount described in paragraph 2(b). The
determination of the bonus payable for the performance period in which the
Date of Termination occurs shall be based on actual performance for the
entire period. The bonus payable for any performance period thereafter
shall be at the same rate as the rate determined in accordance with the
preceding sentence; provided, however, that the bonus for the performance
period that includes the one-year anniversary of the Date of Termination
shall be subject to a pro-rata reduction to reflect the portion of the
performance period following such anniversary. Payment under this paragraph
(ii) of any bonus described in paragraph 2(b) shall be made at the
regularly scheduled time for payment of such amounts to active employees.
The Company's obligation to make payments under this paragraph (ii) shall
cease with respect to periods after the earlier to occur of the date of the
Executive's death, or a date, if any, of the breach by the Executive of
the provisions of paragraph 7 or paragraph 8. As of the Date of Termination
(under this paragraph), all outstanding stock options then held by the
Executive which are not yet exercisable shall
10
11
become fully exercisable and shall remain exercisable for the period
as determined under the terms and conditions of the Incentive Plan.
(iii)For purposes of this Agreement, a Change in Control will be deemed to
have occurred on the first day on which J. Xxx Xxxxxxxx, together with
the members of his immediate family (as defined below), and trusts,
partnerships, or limited liability companies established and
maintained to primarily benefit J. Xxx Xxxxxxxx and/or his immediate
family have not appointed more than 50% of the then members of the
Board, and do not directly or indirectly have the power to appoint
more than 50% of the members of the Board. For purposes of the
preceding sentence, the term immediate family of J. Xxx Xxxxxxxx shall
mean his spouse, parents, children, stepchildren, adoptive
relationships, sisters, brothers and grandchildren or any trust,
partnership or limited liability company of which such persons control
a majority of the voting rights.
(iv) For such period of that time that the Executive or any of his
dependents is eligible for and elects COBRA continuation coverage (as
described in section 4980B of the Internal Revenue Code of 1986, as
amended (the "Code")) under any Company group health plan, the Company
shall pay 100% of the premiums necessary to maintain such COBRA
continuation coverage. The Company's obligation to make payments under
this paragraph (iv) shall cease with respect to periods after the
earlier to occur of the date of the Executive's death, or a date, if
any, of the breach by the Executive of the provisions of paragraph 7
or paragraph 8.
(d) Except as may be otherwise specifically provided in an amendment of this
paragraph (d) adopted in accordance with paragraph 12, the Employee's
rights under this paragraph 4 shall be in lieu of any benefits that may be
otherwise payable to or on behalf of the Executive pursuant to the terms of
any severance pay arrangement of the Company or its affiliates or any
other, similar arrangement of the Company or its affiliates providing
benefits upon involuntary termination of employment.
(e) If the Executive's Date of Termination occurs after the end of the
Agreement Term under circumstances described in paragraph 3(f) (relating to
the termination of employment after the end of the Agreement Term) then,
except as otherwise expressly provided in this Agreement, or otherwise
agreed in writing between the
11
12
Executive and the Company, the Company shall have no obligation to
make payments under the Agreement for periods after the Executive's
Date of Termination.
5. Duties on Termination. Subject to the terms and conditions of this
Agreement, during the period beginning on the date of delivery of a Notice of
Termination, and ending on the Date of Termination, the Executive shall continue
to perform his duties as set forth in this Agreement, and shall also perform
such services for the Company as are necessary and appropriate for a smooth
transition to the Executive's successor, if any. Notwithstanding the foregoing
provisions of this paragraph 5, the Company may suspend the Executive from
performing his duties under this Agreement following the delivery of a Notice of
Termination providing for the Executive's resignation, or delivery by the
Company of a Notice of Termination providing for the Executive's termination of
employment for any reason; provided, however, that during the period of
suspension (which shall end on the Date of Termination), the Executive shall
continue to be treated as employed by the Company for other purposes, and his
rights to compensation or benefits shall not be reduced by reason of the
suspension.
6. Mitigation and Set-Off. The Executive shall not be required to mitigate
the amount of any payment provided for in this Agreement by seeking other
employment or otherwise. The Company shall not be entitled to set off against
the amounts payable to the Executive under this Agreement any amounts owed to
the Company by the Executive, any amounts earned by the Executive in other
employment after termination of his employment with the Company, or any amounts
which might have been earned by the Executive in other employment had he sought
such other employment.
7. Non-competition. While he is employed by the Company, and for a period
of 24 months after termination of the Executive's employment with the Company
for any reason:
(a) The Executive shall not, without the express written consent of the
Chairman, be employed by, serve as a consultant to, or otherwise assist or
directly or indirectly provide services to a Competitor (defined below) if:
(i) the services that the Executive is to provide to the Competitor are the
same as, or substantially similar to, any of the services that the
Executive provided to the Company or its affiliates and such services are
to be provided with respect to any location in which the Company or its
affiliates had material operations during the 12-month period prior to the
Date of Termination, or with respect to any location in which the Company
or its affiliates had devoted material resources to establishing operations
during the
12
13
12-month period prior to the Date of Termination; or (ii) the trade
secrets, confidential information, or proprietary information (including,
without limitation, confidential or proprietary methods) of the Company
and its affiliates to which the Executive had access could reasonably be
expected to benefit the Competitor if the Competitor were to obtain access
to such secrets or information. For purposes of this paragraph (a),
services provided by others shall be deemed to have been provided by
the Executive if the Executive had material supervisory responsibilities
with respect to the provision of such services.
(b) The Executive shall not, without the express written consent of the
Chairman, solicit or attempt to solicit any party who is then or, during
the 12-month period prior to such solicitation or attempt by the Executive
was (or was solicited to become), a customer or supplier of the Company,
provided that the restriction in this paragraph (b) shall not apply to any
activity on behalf of a business that is not a Competitor.
(c) The Executive shall not, without the express written consent of the
Chairman, solicit, entice, persuade or induce any individual who is
employed by the Company or its affiliates (or was so employed within 90
days prior to the Executive's action) to terminate or refrain from
renewing or extending such employment or to become employed by or enter
into contractual relations with any other individual or entity other than
the Company or its affiliates, and the Executive shall not approach any
such employee for any such purpose or authorize or knowingly cooperate with
the taking of any such actions by any other individual or entity.
(d) The Executive shall not, without the express written consent of the
Chairman, directly or indirectly own an equity interest in any Competitor
(other than ownership of 1% or less of the outstanding stock of any
corporation listed on the New York Stock Exchange or the American Stock
Exchange or included in the NASDAQ System).
The term "Competitor" means any enterprise (including a person, firm or
business, whether or not incorporated) during any period in which it is
materially competitive in any way with any business in which the Company, or any
of its affiliates, was engaged during the 12-month period prior to the
Executive's termination of employment. Nothing in this paragraph 7 or paragraph
8 shall be construed as limiting the Executive's duty of loyalty to the Company,
or any other duty he may otherwise have to the Company, while he is employed by
the Company. Nothing in paragraphs 7, 8 or 9 shall be construed to adversely
affect the rights that the Company would possess in the absence of the
provisions of such paragraphs.
13
14
8. Confidential Information. The Executive agrees that:
(a) Except as may be required by the lawful order of a court or agency of
competent jurisdiction, except as necessary to carry out his duties to the
Company and its affiliates, or except to the extent that the Executive has
express authorization from the Company, the Executive agrees to keep secret
and confidential indefinitely, all Confidential Information, and not to
disclose the same, either directly or indirectly, to any other person, firm
or business entity, or to use it in any way.
(b) 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 its affiliates 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.
(c) Nothing in the foregoing provisions of this paragraph 8 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 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.
(d) For purposes of this Agreement, the term "Confidential Information" shall
include all non-public information (including, without limitation,
information regarding litigation and pending litigation) concerning the
Company and its affiliates which was acquired by or disclosed to the
Executive during the course of his employment with the Company, or during
the course of his consultation with the Company following his Date of
Termination (regardless of whether consultation is pursuant to paragraph
11). For purposes of this Agreement, the term "Confidential Information"
shall also include all non-public information concerning any other company
that was shared with the Company or its affiliates subject to an agreement
to maintain the confidentiality of such information.
14
15
(e) This paragraph 8 shall not be construed to unreasonably restrict the
Executive's ability to disclose confidential information in an arbitration
proceeding or a court proceeding in connection with the assertion of, or
defense against any claim of breach of this Agreement in accordance with
paragraph 10. If there is a dispute between the Company and the Executive
as to whether information may be disclosed in accordance with this
paragraph (e), the matter shall be submitted to arbitrators or the court
(whichever is applicable) for decision.
9. Assistance with Claims. The Executive agrees that, for the period
beginning on the Effective Date, and continuing for a reasonable period after
the Executive's Date of Termination, the Executive will provide reasonable
assistance to the Company and its affiliates in defense of any claims that may
be made against the Company and its affiliates, and will provide reasonable
assistance to the Company and its affiliates in the prosecution of any claims
that may be made by the Company or its affiliates, to the extent that such
claims may relate to services performed by the Executive for the Company and its
affiliates. The Executive agrees to promptly inform the Company if he becomes
aware of any lawsuits involving such claims that may be filed against the
Company or its affiliates. The Company agrees to reimburse the Executive for all
of the Executive's reasonable out-of-pocket expenses associated with such
assistance, including travel expenses. For periods after the Executive's
employment with the Company terminates, the Company agrees to provide reasonable
compensation to the Executive for such assistance. The Executive also agrees to
promptly inform the Company if he is asked to assist in any investigation of the
Company or its affiliates (or their actions) that may relate to services
performed by the Executive for the Company or its affiliates, regardless of
whether a lawsuit has then been filed against the Company or its affiliates with
respect to such investigation. For any required assistance under this paragraph,
the Company shall take into consideration the Executive's then current
employment situation and all other relevant personal factors as presented by the
Executive in order to determine what is reasonable in the given circumstances.
10. Equitable Remedies. The Executive acknowledges that the Company would
be irreparably injured by a violation of paragraph 7 or 8, and he agrees that
the Company, in addition to any other remedies available to it for such breach
or threatened breach, shall be entitled to a preliminary injunction, temporary
restraining order, or other equivalent relief, restraining the Executive from
any actual or threatened breach of either paragraph 7 or paragraph 8. If a bond
is required to be posted in order for the Company to secure an injunction or
other equitable remedy, the parties agree that said bond need not be more than a
nominal sum.
15
16
11. Nonalienation. The interests of the Executive under this Agreement are
not subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment, or garnishment by creditors of the
Executive or the Executive's beneficiary.
12. AMENDMENT. This Agreement may be amended or canceled only by mutual
agreement of the parties in writing without the consent of any other person. So
long as the Executive lives, no person, other than the parties hereto, shall
have any rights under or interest in this Agreement or the subject hereof.
13. Applicable Law. The provisions of this Agreement shall be construed in
accordance with the laws of the State of Nebraska, without regard to the
conflict of law provisions of any state. All disputes shall be arbitrated or
litigated (whichever is applicable) in Omaha, Nebraska.
14. Severability. The invalidity or unenforceability of any provision of
this Agreement will not affect the validity or enforceability of any other
provision of this Agreement, and this Agreement will be construed as if such
invalid or unenforceable provision were omitted (but only to the extent that
such provision cannot be appropriately reformed.
15. Waiver of Breach. No waiver by any party hereto of a breach of any
provision of this Agreement by any other party, or of compliance with any
condition or provision of this Agreement to be performed by such other party,
will operate or be construed as a waiver of any subsequent breach by such other
party of any similar or dissimilar provisions and conditions at the same or any
prior or subsequent time. The failure of any party hereto to take any action by
reason of such breach will not deprive such party of the right to take action at
any time while such breach continues.
16. Successors. This Agreement shall be binding upon, and inure to the
benefit of the Company and its successors and assigns and upon any person
acquiring, whether by merger, consolidation, purchase of assets or otherwise,
all or substantially all of the Company's assets and business, and the successor
shall be substituted for the Company under this Agreement.
17. Notices. Notices and all other communications provided for in this
Agreement shall be in writing and shall be delivered personally or sent by
registered or certified mail, return receipt requested, postage prepaid, or sent
by facsimile or prepaid overnight courier to the parties at the addresses set
forth below (or such other addresses as
16
17
shall be specified by the parties by like notice). Such notices, demands,
claims and other communications shall be deemed given:
(a) in the case of delivery by overnight service with guaranteed next day
delivery, the next day or the day designated for delivery;
(b) in the case of certified or registered U.S. mail, five days after deposit
in the U.S. mail or
(c) in the case of facsimile, the date upon which the transmitting party
received confirmation of receipt by facsimile, telephone or otherwise;
provided, however, that in no event shall any such communications be deemed to
be given later than the date they are actually received. Communications that are
to be delivered by the U.S. mail or by overnight service are to be delivered to
the addresses set forth below:
to the Company
Ameritrade Holding Corporation
0000 X. 000xx Xxxxxx
Xxxxx, XX 00000
or to the Executive:
Xxxx X. XxXxxxxxx
[ADDRESS TO BE PROVIDED]
All notices to the Company shall be directed to the attention of J. Xxx
Xxxxxxxx, of the Company, with a copy to the Secretary of the Company. Each
party, by written notice furnished to the other party, may modify the applicable
delivery address, except that notice of change of address shall be effective
only upon receipt.
18. 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.
17
18
One of the arbitrators shall be appointed by the Company, out 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. This paragraph 18 shall not be construed to limit
the Company's right to obtain relief under paragraph 10 with respect to any
matter or controversy subject to paragraph 10, and, pending a final
determination by the arbitrator with respect to any such matter or controversy,
the Company shall be entitled to obtain any such relief by direct application to
a court of law, without being required to first arbitrate such matter or
controversy. Any and all proceedings, hearings, findings or any other record of
a dispute under this paragraph 18 shall be private and shall be held in the
strictest confidence of all parties so involved, including but not limited to
the parties to this Agreement and any appointed arbitrators.
19. 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.
20. Entire Agreement. Except as otherwise noted herein or in any separation
agreement subsequently entered into by the Executive and the Company, this
Agreement, including any Exhibit(s) attached hereto, constitutes the entire
agreement between the parties concerning the subject matter hereof and
supersedes all prior and contemporaneous agreements, if any, between the parties
relating to the subject matter hereof.
21. Prior Agreements. The Executive represents that, he has not signed, and
is not currently subject to, any written agreement or policy that restricts his
ability to be employed by the Company, to compete with a former employer, or to
use information, and that his employment by the Company will not violate the
terms of any policy of any prior employer of the Executive regarding competition
or confidentiality.
18
19
IN WITNESS THEREOF, the Executive has hereunto set his hand, and the
Company has cause these presents to be executed in its name and on its behalf,
and its corporate seal to be hereunto affixed, all as of the day and year first
above written.
/s/ XXXX X. XXXXXXXXX
----------------------------
Xxxx X. XxXxxxxxx
Ameritrade Holding Corporation
By /s/ XXXX XXX XXXXXXXX
---------------------------------
Its Chairman & CEO
---------------------------------
Ameritrade, Inc.
By /s/ XXXX XXX XXXXXXXX
---------------------------------
Its CEO
---------------------------------
ATTEST:
-------------------
(Seal)
19
