{"id":39091,"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-gramaglia2.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"employment-agreement-e-trade-group-inc-and-jerry-gramaglia2","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/employment-agreement-e-trade-group-inc-and-jerry-gramaglia2.html","title":{"rendered":"Employment Agreement – E*Trade Group Inc. and Jerry Gramaglia"},"content":{"rendered":"
              This Agreement is made effective this 1st day of June, 2000 (the \u0093Effective Date\u0094), by and between E*TRADE Group, Inc., a Delaware corporation \n(\u0093Company\u0094), and Jerry Gramaglia (\u0093Executive\u0094).<\/font><\/p>\n
BACKGROUND<\/b><\/p>\n\n
              Executive is serving as President and Chief Operating Officer of the Company. The parties desire to enter into a formal employment agreement with respect \nto the continued employment of Executive by Company, which shall automatically become effective as of the Effective Date.<\/font><\/p>\n
TERMS AND CONDITIONS<\/b><\/p>\n\n
              In consideration of the premises and the mutual covenants and agreements set forth below, the parties agree as follows:<\/font><\/p>\n
              1.  Termination of Prior Agreements<\/b>. Subject to the provision of Section 9 herein, any prior agreement shall terminate and be of no \nfurther force and effect as of the execution of this Agreement.<\/font><\/p>\n
              2.  Employment<\/b>. Executive agrees to serve as President and Chief Operating Officer of Company for the term of this Agreement, subject to \nthe terms set forth in this Agreement and the provisions of the Bylaws of Company. During his employment, Executive shall devote his effort and attention, on a full-time basis, to the performance of the duties required of him as an executive of Company. <\/font><\/p>\n
              3.  Compensation<\/b>. As compensation for his services during the term of this Agreement, Executive shall receive the amounts and benefits \nset forth in this Section 3 all effective as of the Effective Date unless otherwise specified:<\/font><\/p>\n
                     (a)  An annual salary of $425,000 (\u0093Base Salary\u0094) prorated for any partial year of \nemployment. As soon as reasonably practicable after the close of Company\u0092s current fiscal year and the close of each fiscal year thereafter, the Base Salary shall be subject to review by the Compensation Committee of the Company\u0092s Board of \nDirectors for increases in light of the size and performance of Company. The Base Salary, as adjusted in accordance with this subsection (a), shall remain in effect unless and until it is increased in accordance with this subsection (a). \nExecutive\u0092s salary shall be payable semimonthly or in accordance with Company\u0092s regular payroll practices in effect from time to time for officers of his level in Company. <\/font><\/p>\n
                     (b)  Participation in E*TRADE\u0092s gr2 (Success Sharing) Bonus Plan. The Executive will be eligible \nto receive an incentive bonus of 80% of his base salary, which may be increased as determined by the Chairman\/Chief Executive Officer and the Compensation Committee of the Company.<\/font><\/p>\n
                     (c)  Participation in the employee benefit plans maintained by Company and in other benefits provided \nby Company to senior executives, including retirement and 401(k) plans, deferred compensation, medical and dental, annual vacation, paid holidays, sick leave, and similar benefits, which are subject to change from time to time at the reasonable discretion \nof Company.<\/font><\/p>\n
                     (d)  Reimbursement for financial counseling not to exceed $10,000 per year and for annual physical \nexaminations for the executive and his wife not to exceed $20,000 per year.<\/font><\/p>\n
                     (e)  It is acknowledged that Executive has received option grants in accordance with the terms of this \ncontract. Company agrees that there will be no change made in any Stock Option during the term of Executive\u0092s employment hereunder which adversely affects Executive\u0092s rights as established by the foregoing documents, without the prior written \nconsent of Executive.<\/font><\/p>\n
                     (f)  Lease of automobile for company use, of a mutually agreeable make and model of a value not to \nexceed $50,000, and reimbursement of reasonable operating expense.<\/font><\/p>\n
                     (g)  Reimbursement of all reasonable business-related expenses, including without limitation business- \ntravel conducted pursuant to Company\u0092s travel policy.<\/font><\/p>\n
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                     (h)  Reimbursement of the reasonable maintenance costs of a comprehensive security and monitoring \nsystem installed in the Executive\u0092s primary residence.<\/font><\/p>\n
                     (i)  Executive will be eligible for full relocation benefits as provided by our executive relocation \npolicy.<\/font><\/p>\n
              4.  Term<\/b>. The term of this Agreement and the termination rights are as follows:<\/font><\/p>\n
                     (a)  This Agreement and Executive\u0092s employment under this Agreement shall be effective as of the \nEffective Date and shall continue for a term ending on May 31, 2004 (the \u0093Initial Term\u0094).<\/font><\/p>\n
                     (b)  This Agreement and Executive\u0092s employment may be terminated by either party prior to the end \nof the Initial Term (or any renewal period) upon 30 days\u0092 prior written notice to the other party, provided that, in the event of such termination, Company shall be obligated to make the payments and provide the benefits described in Section 6 \nbelow.<\/font><\/p>\n
              5.  Executive will be given the option of a fully secured first mortgage 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 loan will be set forth in a separate writing.<\/font><\/p>\n
              6.  Termination Payments<\/b>. Upon termination of Executive\u0092s employment, Company shall pay to Executive, within three business days \nafter the end of the 30-day notice period provided in Section 4 above, a payment in cash equal to subsection (a) of this Section 6, and shall for the period or at the time specified provide the other benefits described in subsection (b) of this \nSection 6 if: (i) Executive\u0092s employment is terminated by Company, other than for Cause, within three years after any \u0093Change in Control\u0094 of Company as defined in subsection (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 a Change in Control, or otherwise in connection with or in anticipation of a Change in Control<\/font><\/p>\n
                     (a)  Eighteen (18) months of Executive\u0092s current Base Salary.<\/font><\/p>\n
                     (b)  In addition to the amount payable to Executive under subsection (a) of this Section 6, upon \ntermination of Executive for any reason the health care (including medical and dental) and life insurance benefits coverage benefits provided to Executive at his date of termination shall be continued at the same level and in the same manner as if his \nemployment had not terminated (subject to the customary changes in such coverages if Executive reaches age 65 or similar events), together with the benefits described in subsections (d) and (f)  of Section 3 beginning on the date of such termination and \nending on the later of:  (a) the end of the term of this Agreement or (b) the date eighteen (18) months following the date of the Executive\u0092s termination, followed by COBRA election rights. Any additional coverages Executive had at termination, \nincluding dependen\n\nt coverage, will also be continued for such period on the same terms. Any costs Executive was paying for such coverages at the time of termination shall continue to be paid by Executive. If the terms of any benefit plan referred to in this section do not \npermit continued participation by Executive, then Company will arrange for other coverage providing substantially similar benefits at the same contribution level of Executive.<\/font><\/p>\n
                     (c)  For purposes of this Agreement, the following definitions shall apply:<\/font><\/p>\n
                            (i)  The \u0093Board<\/b>\u0094 shall mean the Board of \nDirectors of Company.<\/font><\/p>\n
                            (ii)  The \u0093Incumbent Board\u0094<\/b> shall mean the \nmembers of the Board as of the date of this Agreement and any person becoming a member of the Board hereafter whose election, or nomination for election by Company\u0092s shareholders, was approved by a vote of at least a majority of the directors then \ncomprising the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the directors of Company).<\/font><\/p>\n
                            (iii)  \u0093Change in Control<\/b>\u0094 shall mean:<\/font>\n<\/p>\n
                            (A)  The acquisition (other than from Company) by any \nperson, entity or \u0093group,\u0094 within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (excluding, for this purpose, any employee benefit plan of Company or its subsidiaries which acquires beneficial ownership of voting securities of \nCompany) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% <\/font><\/p>\n
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or more of either the then outstanding shares of Common Stock or the combined voting power of Company\u0092s then outstanding voting securities entitled to vote generally in the election of directors; or<\/font><\/p>\n
                            (B)  The failure for any reason of individuals who \nconstitute the Incumbent Board to continue to constitute at least a majority of the Board; or<\/font><\/p>\n
                            (C)  Approval by the stockholders of Company of a \nreorganization, merger, consolidation, in each case, with respect to which the shares of Company voting stock outstanding immediately prior to such reorganization, merger or consolidation do not constitute or become exchanged for or converted into more \nthan 50% of the combined voting power entitled to vote generally in the election of directors of the reorganized, merged or consolidated company\u0092s then outstanding voting securities, or a liquidation or dissolution of Company or of the sale of all or \nsubstantially all of the assets of Company.<\/font><\/p>\n
                            (iv)   \u0093Current Total Annual Compensation<\/b>\u0094 \nshall be the greater of (i) Executive\u0092s Base Salary for the calendar year in which his employment terminates or (ii) such salary for the calendar year prior to the year of such termination.<\/font><\/p>\n
                            (v)  \u0093Disability<\/b>\u0094 shall mean the total and \npermanent inability of Executive due to illness, accident or other physical or mental incapacity to perform the usual duties of his employment under this Agreement, as determined by a physician selected by Company and acceptable to Executive or \nExecutive\u0092s legal representative (which agreement as to acceptability shall not be unreasonably withheld).<\/font><\/p>\n
                            (vi)  The \u0093Exchange Act<\/b>\u0094 shall mean the \nSecurities Exchange Act of 1934, as amended.<\/font><\/p>\n
                            (vii)  \u0093Cause<\/b>\u0094 shall be defined solely as \n(i) Executive\u0092s defalcation or misappropriation of funds or property of the Company, or the commission of any other illegal act in the course of his employment with Company which, in the reasonable judgment of the Board of Directors, has a \nmaterial adverse financial effect on the Company or on Executive\u0092s ongoing abilities to carry out his duties under this Agreement; (ii) Executive\u0092s conviction of a felony or of any crime involving moral turpitude, and affirmance of such \nconviction following the exhaustion of any appeals; (iii) refusal of Executive to substantially perform all of his duties and responsibilities, or Executive\u0092s persistent neglect of duty or chronic unapproved absenteeism (other than for a \ntemporary or permane\n\nnt Disability), which remains uncured following thirty days after written notice of such alleged Cause by the Board of Directors; or (iv) any material and substantial breach by Executive of other terms and conditions of this Agreement, which, in the \nreasonable judgment of the Board of Directors, has a material adverse financial effect on the Company or on Executive\u0092s ongoing abilities to carry out his duties under this Agreement and which remains uncured following thirty days after written \nnotice of such alleged Cause by either the Board of Directors, or Company\u0092s chairman and Chief Executive Officer.<\/font><\/p>\n
              7.  Executive agrees that during his employment with E*TRADE Executive will not engage in any other employment, business, or business related \nactivity unless Executive receives E*TRADE\u0092s prior written approval to hold such outside employment or engage in such business or activity. Such written approval will not be unreasonably withheld if such outside employment, business or activity would \nnot in any way be competitive with the business or proposed business of E*TRADE or otherwise conflict with or adversely affect in any way his performance of his employment obligations to E*TRADE.<\/font><\/p>\n
                     Subject to the approval of the Chief People Officer or his replacement, commencing on the date of termination of \nhis employment with E*TRADE and continuing for a period not to exceed twelve (12) months, Executive will not, except as provided below, as an employee, agent, consultant, advisor, independent contractor, general partner, officer, director, stockholder, \ninvestor, lender or guarantor of any corporation, partnership or other entity, or in any other capacity directly or indirectly:<\/font><\/p>\n
                            i.  engage in any activity, in any market where E*TRADE \nconducts business, in which Executive participate, manage or advise in the design, development, marketing, sale or servicing of any product related to global institutional and retail internet securities trading, clearing services or execution (hereafter \nreferred to as \u0093the Business\u0094);<\/font><\/p>\n
                            ii.  induce, encourage or solicit any individual who was \nemployed by E*TRADE within six (6) months of the date his employment with E*TRADE terminates to leave the Company for <\/font><\/p>\n
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