{"id":39090,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/employment-agreement-e-trade-group-inc-and-jerry-gramaglia.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"employment-agreement-e-trade-group-inc-and-jerry-gramaglia","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/employment-agreement-e-trade-group-inc-and-jerry-gramaglia.html","title":{"rendered":"Employment Agreement &#8211; E*Trade Group Inc. and Jerry Gramaglia"},"content":{"rendered":"<pre>                              EMPLOYMENT AGREEMENT\n\n          This Agreement is made effective this 1st day of June, 2000 (the\n\"Effective Date\"), by and between E*TRADE Group, Inc., a Delaware corporation\n(\"Company\"), and Jerry Gramaglia (\"Executive\").\n\n\n                                   BACKGROUND\n\n          Executive is serving as President and Chief Operating Officer of the\nCompany.  The parties desire to enter into a formal employment agreement with\nrespect to the continued employment of Executive by Company, which shall\nautomatically become effective as of the Effective Date.\n\n\n                              TERMS AND CONDITIONS\n\n          In consideration of the premises and the mutual covenants and\nagreements set forth below, the parties agree as follows:\n\n          1.  Termination of Prior Agreements. Subject to the provision of\nSection 9 herein, any prior agreement shall terminate and be of no further force\nand effect as of the execution of this Agreement.\n\n          2.  Employment. Executive agrees to serve as President and Chief\nOperating Officer of Company for the term of this Agreement, subject to the\nterms set forth in this Agreement and the provisions of the Bylaws of Company.\nDuring his employment, Executive shall devote his effort and attention, on a\nfull-time basis, to the performance of the duties required of him as an\nexecutive of Company.\n\n          3.  Compensation. As compensation for his services during the term of\nthis Agreement, Executive shall receive the amounts and benefits set forth in\nthis Section 3 all effective as of the Effective Date unless otherwise\nspecified:\n\n              (a)  An annual salary of $425,000 (\"Base Salary\") prorated for any\npartial year of employment. As soon as reasonably practicable after the close of\nCompany's current fiscal year and the close of each fiscal year thereafter, the\nBase Salary shall be subject to review by the Compensation Committee of the\nCompany's Board of Directors for increases in light of the size and performance\nof Company. The Base Salary, as adjusted in accordance with this subsection (a),\nshall remain in effect unless and until it is increased in accordance with this\nsubsection (a). Executive's salary shall be payable semimonthly or in accordance\nwith Company's regular payroll practices in effect from time to time for\nofficers of his level in Company.\n\n \n              (b)  Participation in E*TRADE's gr2 (Success Sharing) Bonus Plan.\nThe Executive will be eligible to receive an incentive bonus of 80% of his base\nsalary, which may be increased as determined by the Chairman\/Chief Executive\nOfficer and the Compensation Committee of the Company.\n\n              (c)  Participation in the employee benefit plans maintained by\nCompany and in other benefits provided by Company to senior executives,\nincluding retirement and 401(k) plans, deferred compensation, medical and\ndental, annual vacation, paid holidays, sick leave, and similar benefits, which\nare subject to change from time to time at the reasonable discretion of Company.\n\n              (d)  Reimbursement for financial counseling not to exceed $10,000\nper year and for annual physical examinations for the executive and his wife not\nto exceed $20,000 per year.\n\n              (e)  It is acknowledged that Executive has received option grants\nin accordance with the terms of this contract. Company agrees that there will be\nno change made in any Stock Option during the term of Executive's employment\nhereunder which adversely affects Executive's rights as established by the\nforegoing documents, without the prior written consent of Executive.\n\n              (f)  Lease of automobile for company use, of a mutually agreeable\nmake and model of a value not to exceed $50,000, and reimbursement of reasonable\noperating expense.\n\n              (g)  Reimbursement of all reasonable business-related expenses,\nincluding without limitation business- travel conducted pursuant to Company's\ntravel policy.\n\n              (h)  Reimbursement of the reasonable maintenance costs of a\ncomprehensive security and monitoring system installed in the Executive's\nprimary residence.\n\n              (i)  Executive will be eligible for full relocation benefits as\nprovided by our executive relocation policy.\n\n\n          4.  Term.  The term of this Agreement and the termination rights are\nas follows:\n\n              (a)  This Agreement and Executive's employment under this\nAgreement shall be effective as of the Effective Date and shall continue for a\nterm ending on May 31, 2004 (the \"Initial Term\").\n\n              (b)  This Agreement and Executive's employment may be terminated\nby either party prior to the end of the Initial Term (or any renewal period)\nupon 30 days' prior written notice to the other party, provided that, in the\nevent of such termination, Company shall be obligated to make the payments and\nprovide the benefits described in Section 6 below.\n\n                                     Page 2\n\n \n          5.  Executive will be given the option of a fully secured first\nmortgage loan of up to $10,000,000 for the purchase of a house in the San\nFrancisco area. The terms and conditions of this fully secured and full recourse\nloan will be set forth in a separate writing.\n\n          6.  Termination Payments. Upon termination of Executive's employment,\nCompany shall pay to Executive, within three business days after the end of the\n30-day notice period provided in Section 4 above, a payment in cash equal to\nsubsection (a) of this Section 6, and shall for the period or at the time\nspecified provide the other benefits described in subsection (b) of this Section\n6 if: (i) Executive's employment is terminated by Company, other than for Cause,\nwithin three years after any \"Change in Control\" of Company as defined in\nsubsection (d) of this Section 6, or at the request of or pursuant to an\nagreement with a third party who has taken steps reasonably calculated to effect\na Change in Control, or otherwise in connection with or in anticipation of a\nChange in Control\n\n              (a)  Eighteen (18) months of Executive's current Base Salary.\n\n              (b)  In addition to the amount payable to Executive under\nsubsection (a) of this Section 6, upon termination of Executive for any reason\nthe health care (including medical and dental) and life insurance benefits\ncoverage benefits provided to Executive at his date of termination shall be\ncontinued at the same level and in the same manner as if his employment had not\nterminated (subject to the customary changes in such coverages if Executive\nreaches age 65 or similar events), together with the benefits described in\nsubsections (d) and (f) of Section 3 beginning on the date of such termination\nand ending on the later of: (a) the end of the term of this Agreement or (b) the\ndate eighteen (18) months following the date of the Executive's termination,\nfollowed by COBRA election rights. Any additional coverages Executive had at\ntermination, including dependent coverage, will also be continued for such\nperiod on the same terms. Any costs Executive was paying for such coverages at\nthe time of termination shall continue to be paid by Executive. If the terms of\nany benefit plan referred to in this section do not permit continued\nparticipation by Executive, then Company will arrange for other coverage\nproviding substantially similar benefits at the same contribution level of\nExecutive.\n\n              (c)  For purposes of this Agreement, the following definitions\nshall apply:\n\n                (i)  The \"Board\" shall mean the Board of Directors of Company.\n\n                (ii) The \"Incumbent Board\" shall mean the members of the Board\nas of the date of this Agreement and any person becoming a member of the Board\nhereafter whose election, or nomination for election by Company's shareholders,\nwas approved by a vote of at least a majority of the directors then comprising\nthe Incumbent Board (other than an election or nomination of an individual whose\ninitial assumption of office is in connection with an actual or threatened\nelection contest relating to the election of the directors of Company).\n\n                (iii)  \"Change in Control\" shall mean:\n\n                        (A)  The acquisition (other than from Company) by any\nperson, entity or \"group,\" within the meaning of Section 13(d)(3) or 14(d)(2) of\nthe Exchange\n\n                                     Page 3\n\n \nAct (excluding, for this purpose, any employee benefit plan of Company or its\nsubsidiaries which acquires beneficial ownership of voting securities of\nCompany) of beneficial ownership (within the meaning of Rule 13d-3 promulgated\nunder the Exchange Act) of 50% or more of either the then outstanding shares of\nCommon Stock or the combined voting power of Company's then outstanding voting\nsecurities entitled to vote generally in the election of directors; or\n\n                        (B)  The failure for any reason of individuals who\nconstitute the Incumbent Board to continue to constitute at least a majority of\nthe Board; or\n\n                        (C)  Approval by the stockholders of Company of a\nreorganization, merger, consolidation, in each case, with respect to which the\nshares of Company voting stock outstanding immediately prior to such\nreorganization, merger or consolidation do not constitute or become exchanged\nfor or converted into more than 50% of the combined voting power entitled to\nvote generally in the election of directors of the reorganized, merged or\nconsolidated company's then outstanding voting securities, or a liquidation or\ndissolution of Company or of the sale of all or substantially all of the assets\nof Company.\n\n                (iv) \"Current Total Annual Compensation\" shall be the greater of\n(i) Executive's Base Salary for the calendar year in which his employment\nterminates or (ii) such salary for the calendar year prior to the year of such\ntermination.\n\n                (v)  \"Disability\" shall mean the total and permanent inability\nof Executive due to illness, accident or other physical or mental incapacity to\nperform the usual duties of his employment under this Agreement, as determined\nby a physician selected by Company and acceptable to Executive or Executive's\nlegal representative (which agreement as to acceptability shall not be\nunreasonably withheld).\n\n                (vi) The \"Exchange Act\" shall mean the Securities Exchange Act\nof 1934, as amended.\n\n                (vii)  \"Cause\" shall be defined solely as (i) Executive's\ndefalcation or misappropriation of funds or property of the Company, or the\ncommission of any other illegal act in the course of his employment with Company\nwhich, in the reasonable judgment of the Board of Directors, has a material\nadverse financial effect on the Company or on Executive's ongoing abilities to\ncarry out his duties under this Agreement; (ii) Executive's conviction of a\nfelony or of any crime involving moral turpitude, and affirmance of such\nconviction following the exhaustion of any appeals; (iii) refusal of Executive\nto substantially perform all of his duties and responsibilities, or Executive's\npersistent neglect of duty or chronic unapproved absenteeism (other than for a\ntemporary or permanent Disability), which remains uncured following thirty days\nafter written notice of such alleged Cause by the Board of Directors; or (iv)\nany material and substantial breach by Executive of other terms and conditions\nof this Agreement, which, in the reasonable judgment of the Board of Directors,\nhas a material adverse financial effect on the Company or on Executive's ongoing\nabilities to carry out his duties under this Agreement and which remains uncured\nfollowing thirty days after written notice of such alleged Cause by either the\nBoard of Directors, or Company's chairman and Chief Executive Officer.\n\n                                     Page 4\n\n \n              7.  Executive agrees that during his employment with E*TRADE\nExecutive will not engage in any other employment, business, or business related\nactivity unless Executive receives E*TRADE's prior written approval to hold such\noutside employment or engage in such business or activity. Such written approval\nwill not be unreasonably withheld if such outside employment, business or\nactivity would not in any way be competitive with the business or proposed\nbusiness of E*TRADE or otherwise conflict with or adversely affect in any way\nhis performance of his employment obligations to E*TRADE.\n\n                  Subject to the approval of the Chief People Officer or his\nreplacement, commencing on the date of termination of his employment with\nE*TRADE and continuing for a period not to exceed twelve (12) months, Executive\nwill not, except as provided below, as an employee, agent, consultant, advisor,\nindependent contractor, general partner, officer, director, stockholder,\ninvestor, lender or guarantor of any corporation, partnership or other entity,\nor in any other capacity directly or indirectly:\n\n             i.    engage in any activity, in any market where E*TRADE conducts\n                   business, in which Executive participate, manage or advise in\n                   the design, development, marketing, sale or servicing of any\n                   product related to global institutional and retail internet\n                   securities trading, clearing services or execution (hereafter\n                   referred to as \"the Business\");\n\n             ii.   induce, encourage or solicit any individual who was employed\n                   by E*TRADE within six (6) months of the date his employment\n                   with E*TRADE terminates to leave the Company for any reason\n                   or to accept employment with any other company, or to employ,\n                   interview or arrange to have business opportunities offered\n                   to any such individual; or\n\n             iii.  permit his name to be used in connection with a business\n                   which is competitive or substantially similar to the\n                   Business.\n\n                   Notwithstanding the foregoing, Executive may own, directly or\nindirectly, solely as an investment, up to one percent (1%) of any class of\n\"publicly traded securities\" of any person or entity which owns a business that\nis competitive or substantially similar to the Business. The term \"publicly\ntraded securities\" shall mean securities that are traded on a national\nsecurities exchange of listed on the National Association of Securities Dealers\nAutomated Quotation System.\n\n                   If any restriction set forth in this non-competition section\nis found by a court to be unreasonable, then Executive agrees, and hereby\nsubmit, to the reduction and limitation of such prohibition to such area or\nperiod as shall be deemed reasonable. Executive acknowledges that the services\nthat Executive will provide to E*TRADE under this Agreement are unique and that\nirreparable harm will be suffered by E*TRADE in the event of the breach by\nExecutive of any of his obligations under this Agreement, and that E*TRADE will\nbe entitled, in addition to its other rights, to enforce by an injunction or\ndecree of specific performance the obligations set forth in this Agreement. Any\nclaims asserted by Executive against E*TRADE \n\n                                     Page 5\n\n \nshall not constitute a defense in any injunction action brought by E*TRADE to\nobtain specific enforcement of said paragraphs.\n\n                   Executives agree that if the Company establishes that\nExecutive, or those acting in concert with Executive or on his behalf,\nmaterially violate the Non-Competition provision in any way, the Company shall\nbe entitled to recover the reasonable attorneys' fees and litigation expenses\nincurred, arising out of or relating to the Company's efforts to prevent the\nbreach, to establish that a breach has occurred, to enforce the Non-Competition\nprovisions or to seek to redress a breach, including any appeals if necessary.\nIf the Company fails to establish that Executive, or those acting in concert\nwith Executive or on his behalf, have materially violated any of the Non-\nCompetition provisions in any way, Executive shall be entitled to reimbursement\nof reasonable attorneys' fees and litigation expenses incurred in his defense.\n\n               8.  Arbitration. We each agree that any and all disputes between\nus which arise out of his employment, the termination of his employment, or\nunder the terms of this Agreement shall be resolved through final and binding\narbitration. This shall include, without limitation, disputes relating to this\nAgreement, any disputes regarding his employment by E*TRADE or the termination\nthereof, claims for breach of contract or breach of the covenant of good faith\nand fair dealing, and any claims of discrimination or other claims under any\nfederal, state or local law or regulation now in existence or hereinafter\nenacted and as amended from time to time concerning in any way the subject of\nhis employment with E*TRADE or its termination. The only claims not covered by\nthis section are the following: (i) claims for benefits under the unemployment\ninsurance or workers' compensation laws; (ii) claims concerning the validity,\ninfringement or enforceability of any trade secret, patent right, copyright,\ntrademark or any other intellectual property held or sought by E*TRADE, or which\nE*TRADE could otherwise seek; in each of these instances such disputes or claims\nshall not be subject to arbitration, but rather, will be resolved pursuant to\napplicable California law. Binding arbitration will be conducted in Santa Clara\nCounty in accordance with the rules and regulations of the American Arbitration\nAssociation. The parties will split the cost of the arbitration filing and\nhearing fees and the cost of the arbitrator; each side will bear its own\nattorneys' fees, unless otherwise decided by the arbitrator. Executive\nunderstand and agree that arbitration shall be instead of any civil litigation,\nthat each side waives its right to a jury trial, and that the arbitrator's\ndecision shall be final and binding to the fullest extent permitted by law and\nenforceable by any court having jurisdiction thereof.\n\n               9.  Miscellaneous Provisions. This Agreement, the stock options\ngrant agreements and the previously executed Proprietary Information and\nInventions Agreement will be the entire agreement between Executive and E *TRADE\nrelating to his employment and the additional matters provided for herein. This\nAgreement supersedes and replaces (i) any prior verbal or written agreements\nbetween the parties except as provided for herein and (ii) any prior verbal or\nwritten agreements between the undersigned Executive and the Company relating to\nthe subject matter hereof. This Agreement may be amended or altered only in a\nwriting signed by Executive and the Company. This Agreement shall be construed\nand interpreted in accordance with the laws of the State of California. Each\nprovision of this Agreement is severable from the others, and if any provision\nhereof shall be to any extent unenforceable it and the other \n\n                                     Page 6\n\n \nprovisions shall continue to be enforceable to the full extent allowable, as if\nsuch offending provision had not been a part of this Agreement.\n\n               10.  Assignment; Successors. Any assignment of this Agreement\nshall be in accordance with the following:\n\n                    (a)  The rights and benefits of Executive under this\nAgreement, other than accrued and unpaid amounts due hereunder, are personal to\nhim and shall not be assignable by Executive, except with the prior written\nconsent of Company.\n\n                    (b)  Subject to the provisions of subsection (c) of this\nSection 6, this Agreement shall not be assignable by Company, provided that with\nthe consent of Executive, Company may assign this Agreement to another\ncorporation wholly owned by it either directly or through one or more other\ncorporations, or to any corporate successor of Company or any such corporation.\n\n                    (c)  Any business entity succeeding to substantially all of\nthe business of Company, by purchase, merger, consolidation, sale of assets or\notherwise, shall be bound by and shall adopt and assume this Agreement, and\nCompany shall require the assumption of this Agreement by such successor as a\ncondition to such purchase, merger, consolidation, sale of assets or other\nsimilar transaction.\n\n               11.  Notices. Any notice or other communications under this\nAgreement shall be in writing, signed by the party making the same, and shall be\ndelivered personally or sent by certified or registered mail, postage prepaid,\naddressed as follows:\n\n          If to Executive:      Mr. Jerry Gramaglia \n                                c\/o E*Trade Group, Inc. \n                                4500 Bohannon Drive \n                                Menlo Park, CA 94025\n\n          If to Company:        Chief Legal Affairs Officer\n                                c\/o E*Trade Group, Inc.\n                                4500 Bohannon Drive\n                                Menlo Park, CA 94025\n\n \nor such other address or agent as may hereafter be designated by either party\nhereto.  All such notices shall be deemed given on the date personally delivered\nor mailed.\n\n                12.  Full Settlement and Legal Expenses. In no event shall\nExecutive be obligated to seek other employment or take any other action by way\nof mitigation of the amounts payable to Executive under any of the provisions of\nthis Agreement. The prevailing party shall be entitled to recover all legal fees\nand expenses which such party may reasonably incur as a result of any legal\nproceeding relating to the validity, enforceability, or breach of, or liability\nunder, any provision of this Agreement or any guarantee of performance\n(including as a result of any contest by Executive about the amount of any\npayment pursuant to Section 6 of this \n\n                                     Page 7\n\n \nAgreement), plus in each case interest at the applicable Federal Rate provided\nfor in Section 7872(f)(2) of the Code.\n\n                13.  Governing Law. This Agreement shall be interpreted and\nenforced in accordance with the laws of the State of California, except that any\narbitration shall be governed by the Federal Arbitration Act.\n\n                14.  Severability. Whenever possible, each provision of this\nAgreement shall be interpreted in such manner as to be effective and valid, but\nif any one or more of the provisions contained in this Agreement shall be\ninvalid, illegal or unenforceable in any respect for any reason, the validity,\nlegality and enforceability of any such provisions in every other respect and of\nthe remaining provisions of this Agreement shall not be in any way impaired. \n\n                                     Page 8\n\n \n          IN WITNESS WHEREOF, the undersigned have executed this Agreement as of\nthe day and year first above written.\n\n                                     E*TRADE GROUP, INC.\n\n\n                                      \/s\/ Christos M. Cotsakos      \n                                     ----------------------------------------\n                                     By:  Christos M. Cotsakos\n                                     Chairman &amp; Chief Executive Officer\n\n\n                                     EXECUTIVE\n\n\n                                     \/s\/ Jerry Gramaglia  \n                                     ----------------------------------------\n                                         Jerry Gramaglia\n\n                                     Witnesseth:\n\n\n                                     \/s\/ Theodore J. Theophilos      \n                                     ----------------------------------------\n                                         Theodore J. Theophilos\n\n                                     Page 9\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7386],"corporate_contracts_industries":[],"corporate_contracts_types":[9539],"class_list":["post-39090","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-e-trade-group-inc","corporate_contracts_types-compensation"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/39090","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=39090"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=39090"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=39090"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=39090"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}