1
EXHIBIT 10.1
SEPARATION AND RELEASE AGREEMENT
THIS SEPARATION AND RELEASE AGREEMENT ("Agreement") is made as of October
11, 2000, by and between Ameritrade Holding Corporation, and its subsidiaries,
affiliates, successors and assigns (collectively, the "Company") and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇, his heirs, representatives, affiliates, successors and assigns
(collectively, "Employee").
WHEREAS, Employee was hired by the Company effective February 15, 1999 and
has held most recently the title of Chief Executive Officer; and
WHEREAS, Employee's last day of work with the Company was August 7, 2000
(the "Termination Date");
WHEREAS, the parties have reached a full and final resolution of all
matters arising from, or related to, Employee's employment with the Company; and
WHEREAS, as a condition precedent to the Company performing its obligations
as provided for herein, Employee has agreed that he will execute and comply
fully with the terms of this Agreement;
NOW, THEREFORE, in consideration of the covenants undertaken in this
Agreement, including the release contained herein, the parties agree as follows:
1. In full and complete satisfaction of Employee's claims for salary,
vacation, bonus, stock options, severance, incentive pay, sick pay, holiday,
out-placement services and other compensation of any kind, and as consideration
for the promises contained in this Agreement, including but not limited to the
release set forth in Paragraph 6 herein, the Company agrees to provide Employee
with the following payments and benefits, some or all of which he would not
otherwise be entitled:
a. The Company shall pay Employee a lump sum of $675,000 (from which
all applicable federal, state and local taxes shall be withheld),
such amount to be payable ten (10) days after the Company
receives the original Agreement executed by Employee;
b. The Company shall pay Employee a lump sum of $28,558 (from which
all applicable federal, state and local taxes shall be withheld),
representing Employee's accrued, but unused, paid time off, such
amount to be payable ten (10) days after the Company receives the
original Agreement executed by Employee;
c. The Company shall pay Employee a lump sum of $160,000 (from which
all applicable federal, state and local taxes shall be withheld),
representing incentive compensation for Employee for fiscal year
2000, such amount to be payable ten (10) days after the Company
receives the original Agreement executed by Employee;
2
d. Should Employee so elect, the Company shall pay the full premiums
for Employee's medical benefits coverage for as long as Employee
continues to receive COBRA coverage up to a maximum of 18 months
from the Termination Date;
e. The Company shall pay to the law firm of Kramon & ▇▇▇▇▇▇, P.A. a
lump sum of $10,000, as a contribution toward Employee's legal
costs in connection with this Agreement, such amount to be
payable ten (10) days after the Company receives the original
Agreement executed by Employee and with respect to which the
Company shall issue Forms 1099;
f. The Company shall pay reasonable and customary expenses
associated with moving the Employee's household furnishings,
personal belongings, motorcycle and motor vehicle from Omaha,
Nebraska to Baltimore, Maryland;
g. The Company shall retain the Company apartment in Omaha, Nebraska
through September 30, 2000, and will make the necessary
arrangements to disconnect all utilities in the Company-provided
apartment; and
h. The Company will permit Employee to retain the Sony laptop
computer and related peripherals (e.g. monitor, keyboard,
scanner, palm cradle, cabling installed software, etc.) issued to
him by the Company, provided, however, that he permits the
Company to download or copy all Company related materials stored
on the computer.
2. In consideration of the payments and benefits to Employee in Paragraph 1
herein, and Employee's execution of this Agreement, and as an express condition
of this Agreement, Employee hereby represents and warrants that through the date
on which this Agreement is executed by the parties, he has not assigned or
transferred, and he will not after such date assign or transfer, (a) any claims
against the Company, (b) any rights that he may have had to assert compulsory or
permissive counterclaims against the Company, or (c) any rights that he has or
may have to the aforesaid payments and benefits.
3. Employee agrees that he will not seek reinstatement or apply for
employment with the Company; notwithstanding the foregoing, the Company and the
Employee may elect to enter into a consulting arrangement at some time in the
future.
4. With the exception of the Sony laptop computer and related peripherals
set forth in Paragraph 1(h) of this Agreement, Employee hereby agrees that,
within ten (10) calendar days of the Termination Date, he shall turn over to the
Company all company equipment and property, including but not limited, to
computers, printers, and related equipment, cell phones, pagers, Company AMEX
cards, and keys, as well as original and copies of notes, correspondence,
memoranda, records, documents, computer disks and files, and all other
information or products, no matter how produced or reproduced, pertaining to the
business of the Company, its affiliates, officers, and shareholders (the
"Company Materials"), it being hereby acknowledged that all of
3
said items are the sole and exclusive property of the Company. Employee's
signature on this Agreement shall serve as a representation and warranty that
Employee has not retained any originals or copies of Company Materials.
5. The Employee acknowledges the provisions of paragraph 7
(Noncompetition), paragraph 8 (Confidential Information), paragraph 9
(Assistance with Claims) and paragraph 10 (Equitable Remedies) of his Employment
Agreement with the Company, dated February 15, 1999 (the "Employment
Agreement"). The Employee and the Company expressly agree that paragraphs 7, 8,
9 and 10 of the Employment Agreement are specifically incorporated by reference
into this Agreement. A copy of paragraphs 7, 8, 9 and 10 of the Employment
Agreement is annexed hereto as Exhibit A.
6. Subject to the Company's obligations as set forth herein, and except for
claims based upon a breach of this Agreement, in consideration of the promises
contained in this Agreement and the payments set forth in Paragraph 1 hereof,
Employee hereby releases and forever discharges the Company and its affiliates,
and their respective officers, directors, shareholders, representatives, agents,
employees, and insurers (hereinafter, together with the Company, collectively
and individually the "Company Releasees") from any and all rights, claims,
demands, debts, dues, sums of money, accounts, attorneys' fees, complaints,
judgments, executions, actions and causes of action of any nature whatsoever,
cognizable at law or equity, which Employee has or claims, or might hereafter
have or claim, against any Company Releasees based upon or arising out of any
matter or thing whatsoever, from the beginning of the world through the date of
this Agreement, including but not limited to any damages, ▇▇▇▇▇, personal
injuries or any rights, claims, complaints or actions or causes of action which
were or could have been asserted by Employee arising out of or related to his
work for the Company or his separation therefrom, or under any local, state, or
federal law dealing with employment discrimination, including Title VII of the
Civil Rights Act of 1964, the Age Discrimination in Employment Act and the
Americans with Disabilities Act. However, and notwithstanding the foregoing, the
Employee expressly does not release or discharge the Company from any claims,
rights, demands, debts, dues, sums of money, accounts, complaints, actions and
causes of action which are based upon indemnification to which Employee may be
entitled pursuant to any applicable law or any directors' and officers'
insurance policies with respect to actions asserted against Employee in his
capacity as an officer of the Company by shareholders of the Company or others.
7. Subject to the Employee's obligations as set forth herein, and except
for claims based upon a breach of this Agreement, in consideration of the
promises contained in this Agreement, the Company, on its own behalf and on
behalf of the Company Releasees, hereby releases and forever discharges the
Employee and his heirs, administrators, executors and legal representatives
(hereinafter, together with the Employee, collectively and individually the
"Employee Releasees") from any and all rights, claims, demands, debts, dues,
sums of money, accounts, attorneys' fees, complaints, judgments, executions,
actions and causes of action of any nature whatsoever, cognizable at law or
equity, which the Company has or claims, or might hereafter have or claim,
against any Employee Releasee based upon or arising out of any matter or thing
whatsoever, from the beginning of the world through the date of this Agreement,
3
4
including but not limited to any damages, ▇▇▇▇▇, personal injuries or any
rights, claims, complaints or actions or causes of action which were or could
have been asserted by the Company arising out of or related to the Employee's
work for the Company, his activities while employed by the Company, his
separation therefrom or the Employment Agreement. However, and notwithstanding
the foregoing, the Company expressly does not release or discharge the Employee
from any claims, rights, demands, debts, dues, sums of money, accounts,
complaints, actions and causes of action which are based upon acts or omissions
that involve breach of the fiduciary duty of the Employee to the company, his
intentional misconduct, gross negligence and/or fraud. The Company represents
and warrants that it is not presently aware of any claims which it may have
against Employee that involve breach of the fiduciary duty of the Employee to
the Company, his intentional misconduct, gross negligence and/or fraud, or any
facts or actions on the part of the Employee upon which such claims could be
based; however, the Employee expressly acknowledges that the Company has not
conducted any investigation whatsoever into whether the Employee engaged in any
conduct which could give rise to such claims by the Company.
8. The Employee represents that he has not sued or commenced any
proceeding, and, except for claims based upon a breach of this Agreement, and as
otherwise expressly set forth in the second sentence of this Paragraph 8, hereby
covenants and agrees not to ▇▇▇, file any grievances or arbitration or commence
any other proceeding, administrative or judicial, against the Company or the
other Company Releasees, in any court of law or equity, or before any
administrative agency, with respect to any matter arising from or relating to
Employee's employment with the Company or his separation thereof. However, and
notwithstanding the foregoing, the Employee expressly acknowledges that the
Employee's covenant not to ▇▇▇ shall not apply to claims for indemnification to
which Employee may be entitled pursuant to any applicable law or any directors'
and officers' insurance policies with respect to actions asserted against the
Employee in his capacity as an officer of the Company by shareholders of the
Company or others.
9. The Company, on its own behalf and on behalf of the Company Releasees,
represents that it has not sued or commenced any proceeding, and, except for
claims based upon a breach of this Agreement and as otherwise expressly set
forth in the second sentence of this Paragraph 9, hereby covenants and agrees
not to ▇▇▇, file any grievances or arbitration or commence any other proceeding,
administrative or judicial, against the Employee or the other Employee
Releasees, in any court of law or equity, or before any administrative agency,
with respect to any matter arising from or relating to Employee's employment
with the Company or his separation thereof. However, the Employee expressly
acknowledges that the Company's covenant not to ▇▇▇ shall not apply to claims
involving breach of fiduciary duty, intentional misconduct, gross negligence
and/or fraud, as set forth more fully in the last sentence of paragraph 7 of
this Agreement.
10. By entering into this Agreement, neither party admits, and each party
specifically denies, any liability or wrongdoing, and it is expressly understood
and agreed that this Agreement is being entered into solely for the purpose of
avoiding costs of litigation and amicably resolving all matters in controversy,
disputes and causes of action between Employee and the Company.
4
5
11. The Employee hereby covenants and agrees, as a condition of the
Company's performance of its obligations arising under this Agreement, that he
(i) has not disclosed and shall not disclose the terms of this Agreement to
anyone, provided, however, that does not and shall not preclude disclosure to
his counsel, immediate family members, certified financial advisors (if any),
and provided further that this does not and shall not preclude disclosure under
subpoena or other judicial or administrative orders or to the extent necessary
to enforce the Agreement or to comply with applicable law; and (ii) has
instructed or will instruct his counsel, immediate family members, certified
financial advisors (if any), to whom he has disclosed or may disclose the terms
of this Agreement not to disclose the terms and conditions of this Agreement to
anyone. Employee further agrees that any violation or breach of the
nondisclosure obligations shall give rise on the part of the Company to a claim
for relief to recover from Employee, before a court of competent jurisdiction,
any and all other amounts previously paid to or on behalf of Employee by the
Company pursuant to this Agreement, but shall not release Employee from the
performance of his obligations under this Agreement.
12. The Company hereby covenants and agrees, as a condition of the
Employee's performance of his obligations arising under this Agreement, that the
Company (i) has not disclosed and shall not disclose the terms of this Agreement
to anyone, provided, however, that does not and shall not preclude disclosure of
its counsel, accountants, auditors or certified financial advisors (if any) and
those at the Company who have a need to know, and provided further that this
does not and shall not preclude disclosure under subpoena or other judicial or
administrative orders, or as required under the federal or state securities laws
or other rules or regulations of any exchange, or to the extent necessary to
enforce the Agreement; and (ii) has instructed its counsel, accountants,
auditors and certified financial advisors (if any) and those at the Company who
have a need to know, to whom he has disclosed or may disclose the terms of this
Agreement, not to disclose the terms and conditions of this Agreement to anyone.
13. Employee shall not, directly or indirectly, disparage or make negative,
derogatory or defamatory statements about the Company, its business activities,
or any of its directors, officers, employees, affiliates, agents, or
representatives, or any of them, to any person or business entity. Except
pursuant to a subpoena validly issued or enforced by a court, arbitrator,
agency, or other governmental body of competent jurisdiction, or in response to
a valid investigative demand by a governmental body, Employee will not testify,
consult, cooperate or otherwise communicate with any other person concerning any
legal proceeding, judicial or administrative, against or adverse to the Company
or an affiliate of the Company, actual or contemplated. Employee shall give the
Company prompt notice (i.e., no later than five (5) business days following
receipt) of any such subpoena or investigative demand before taking any action
in response thereto.
14. Employee recognizes that irreparable injury will result to the
Company and its business in the event of any breach by Employee of any of the
provisions of Paragraphs 11 and 13 of this Agreement and paragraphs 7, 8 and 9
of the Employment Agreement (attached hereto
5
6
as Exhibit A). In the event of any breach of any of the commitments of Employee
pursuant to paragraphs 11 and 13 of this Agreement or paragraphs 7, 8 and 9 of
the Employment Agreement, the Company shall be entitled, in addition to any
other remedies and damages available, to injunctive relief to restrain the
violation of such commitments by Employee or by any person or persons acting for
or with Employee in any capacity whatsoever.
15. The Employee agrees to direct prospective employers to J. ▇▇▇ ▇▇▇▇▇▇▇▇,
Chairman and Chief Executive Officer of Ameritrade Holding Corporation, for any
references concerning the Employee's work for the Company.
16. The Employee agrees to cooperate fully with the Company, for whatever
period of time that the Company deems reasonably necessary, to ensure a smooth
transition of his duties.
17. Employee expressly acknowledges that he has received more than adequate
consideration in exchange for the release given in paragraph 6 of this Agreement
and the other obligations of such party contained herein, and covenants that
such party will not in any way seek to challenge this Agreement on the grounds
of lack of consideration.
18. Employee also expressly acknowledges that he has vested and exercisable
stock options for 57,800 shares of stock of the Company, with a strike price of
$15.3021 per share; pursuant to the Company's 1996 Long Term Incentive Plan, as
amended, those vested and exercisable options shall expire on the three-month
anniversary of the Termination Date. The Company represents and warrants to the
Employee that the granting of all other stock options granted by the Company to
Employee during the period of his employment, were approved in advance by the
Board of Directors of the Company or a committee thereof composed of two or more
non-employee directors within the meaning of Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). To exercise
such options, Employee should contact either ▇▇▇ ▇▇▇▇ or ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ in the
Company's Compensation and Benefits group. Other than those set forth in this
paragraph 18, Employee has no rights or entitlements whatsoever to any stock
options or stock grants from the Company.
19. This Agreement shall be binding upon and shall inure to the benefit of
all parties hereto, and their respective heirs, assigns, administrators,
executors and legal representatives, related and affiliated entities, and
successors and assigns, as the case may be.
20. If any provision, section, subsection or other portion of this
Agreement shall be determined by any court of competent jurisdiction to be
invalid, illegal or unenforceable in whole or in part, and such determination
shall become final, such provision or portion shall be deemed to be severed or
limited, but only to the extent required to render the remaining provisions and
portions of this Agreement enforceable. This Agreement as thus amended shall be
enforced so as to give effect to the intention of the parties insofar as that is
possible. In addition, the parties hereby expressly empower a court of competent
jurisdiction to modify any term or provision of this Agreement to the extent
necessary to comply with existing law and to enforce the intent of this
Agreement as modified.
6
7
21. 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
or jurisdiction. The parties hereby agree to submit to personal jurisdiction in
Omaha, Nebraska and any dispute arising out of this Agreement shall be brought
in either Nebraska State Court or the federal district court for the District of
Nebraska.
22. This Agreement may be signed in multiple counterparts, each of which
shall be deemed to be an original for all purposes.
7
8
23. Employee acknowledges that he has carefully read and fully understands
the terms and provisions of this Agreement, that he has been advised of his
right to consult with an attorney prior to signing this Agreement, that
sufficient opportunity has been made available to him to consult with an
attorney and to consider the terms of this Agreement and that he has availed
himself of that right. Employee acknowledges that he was given twenty-one (21)
days from the date of presentment of this Agreement to decide whether or not to
enter into this Agreement and to waive his right to ▇▇▇ under the Age
Discrimination in Employment Act. Employee further acknowledges that he had not
relied upon any oral representation or statement by the Company or its
representatives which is not set forth in this Agreement. Employee shall have
the right to revoke this Agreement at any time up to seven (7) days following
his execution of the Agreement. This Agreement shall not be enforceable or
effective until after the seven-day revocation period has expired.
24. This Agreement constitutes the entire understanding of the parties,
supersedes all prior oral or written agreements, including the Employment
Agreement -- with the exception of paragraphs 7, 8, 9 and 10 of the Employment
Agreement, which are expressly incorporated by reference into this Agreement --
and cannot be modified except by a writing signed by both parties. This
instrument, and the provisions of the Employment Agreement specifically
incorporated by reference herein, constitute the entire agreement between the
parties, and it may not be modified, nor any of its conditions waived, without
express written agreement of the parties. No agreements or representations, oral
or otherwise, expressed or implied, with respect to the subject matter hereof
have been made by any party which are not set forth expressly in this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
set forth below.
AMERITRADE HOLDING CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------------
Name: J. ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
Date: October 16, 2000
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Date: October 11, 2000