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EXHIBIT 10.2
TD AMERITRADE HOLDING CORPORATION
FREDRIC J. TOMCZYK EMPLOYMENT AGREEMENT
This
Agreement, originally entered into as of July 2, 2007, by and
between
TD Ameritrade Holding Corporation (the "Company") and Fredric J.
Tomczyk (the
"Executive"), is hereby amended and restated in its entirety
effective as of May
16, 2008 (the "Amendment Date").
1. Duties
and Scope of Employment.
(a) Positions and Duties. Since July 2, 2007 (the "Effective
Date"),
Executive has served as Chief Operating Officer reporting to the
Company's Chief
Executive Officer (the "CEO"). As of the Amendment Date, Executive
continues to
serve in such position and shall remain so until either (i) the
appointment of a
successor Chief Operating Officer or (ii) September 30, 2008 (the
"Transition
Date"). In addition, as of the Amendment Date, Executive shall
become President.
Immediately after the Transition Date, Executive's service as the
Chief
Operating Officer shall cease and Executive shall, in addition to
being the
Company's President, immediately thereafter become the CEO. Prior
to the
Transition Date Executive will continue to render such business and
professional
services in the performance of his duties, consistent with
Executive's position
within the Company, as will reasonably be assigned to him by the
CEO. After the
Transition Date Executive shall render such business and
professional services
in the performance of his duties, consistent with Executive's
position as CEO,
as will reasonably be assigned to him by the Board of Directors of
the Company
(the "Board"). The period Executive is employed by the Company
under this
Agreement is referred to herein as the "Employment Term."
(b) Obligations. During the Employment Term, Executive will
devote
Executive's full business efforts and time to the Company and will
use good
faith efforts to discharge Executive's obligations under this
Agreement to the
best of Executive's ability and in accordance with each of the
Company's
corporate guidance and ethics guidelines, conflict of interests
policies and
code of conduct. For the duration of the Employment Term, Executive
agrees not
to actively engage in any other employment, occupation, or
consulting activity
for any direct or indirect remuneration without the prior approval
of the
applicable committee of the Board; provided, however, that
Executive may,
without the approval of the Board, serve in any capacity with any
civic,
educational, or charitable organization, provided such services do
not interfere
with Executive's obligations to Company.
(c) Impediments to Employment. Executive hereby represents and
warrants to the Company that Executive is not party to any
contract,
understanding, agreement or policy, written or otherwise, that
would be breached
by Executive's entering into, or performing services under, this
Agreement.
Executive further represents that he has disclosed to the Company
in writing all
threatened, pending, or actual claims that are unresolved and still
outstanding
as of the Effective Date, in each case, against Executive of which
he is aware,
if any, as a result of his employment with the Previous Employer
(or any other
previous entity for which Executive provided services) or his
membership on any
boards of directors.
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(d) Other Entities. Executive agrees to serve, without
additional
compensation, as an officer and director for each of the Company's
subsidiaries,
partnerships, joint ventures, limited liability companies and other
affiliates,
including entities in which the Company has a significant
investment as
determined by the Company. As used in this Agreement, the term
"affiliates" will
include any entity controlled by, controlling, or under common
control of the
Company.
2. At-Will
Employment. Executive and the Company agree that Executive's
employment with the Company constitutes "at-will" employment.
Executive and the
Company acknowledge that this employment relationship may be
terminated at any
time, upon written notice to the other party, with or without good
cause or for
any or no cause, at the option either of the Company or Executive.
However, as
described in this Agreement, Executive may be entitled to severance
benefits
depending upon the circumstances of Executive's termination of
employment.
3. Term of
Agreement. This Agreement shall have an initial term beginning
on the Amendment Date and ending on the Transition Date (the "COO
Term").
Thereafter, this Agreement will have a term of five (5) years
commencing on the
Transition Date (the "Initial Term"). On the fifth anniversary of
the Transition
Date, this Agreement automatically will renew for an additional one
(1) year
term (the "Additional Term") unless either party provides the other
party with
written notice of non-renewal at least sixty (60) days prior to the
date of
automatic renewal. Following the Additional Term, the Agreement
will renew for
an additional one (1) year term upon the mutual consent of
Executive and the
Company.
4.
Compensation.
(a) Base Salary. Subject to periodic review by the Board, the
Company will pay Executive an annual salary of $500,000 as
compensation for his
services (such annual salary, as is then effective, to be referred
to herein as
"Base Salary"). The Base Salary will be paid periodically in
accordance with the
Company's normal payroll practices and be subject to the usual,
required
withholdings.
(b) Annual Incentive. With respect to each full fiscal year
during
the Employment Term, Executive will be eligible to participate in
the Ameritrade
Holding Corporation Management Incentive Plan ("MIP"), pursuant to
which
Executive will be eligible to earn an annual incentive award (the
"Annual
Incentive") based upon the achievement of applicable performance
criteria
established by the Compensation Committee of the Board (the
"Compensation
Committee") within the first ninety (90) days of each fiscal year
during the
Employment Term and communicated to Executive. During the COO Term
each Annual
Incentive will have a target value of $1,100,000. Thereafter, each
Annual
Incentive will have a target value of $1,500,000 (the
"Target").
(c) Equity Awards. During the Employment Term, Executive will
be
eligible to participate in the Ameritrade Holding Corporation 1996
Long-Term
Incentive Plan (the "LTIP"). Each Award Agreement shall provide
Executive, for
purposes of calculating the portion of the applicable award, if
any, vested on
account of the "retirement" (as defined in the applicable Award
Agreement) of
Executive, with vesting credit for years of service with the
Previous Employer.
(i) Special Grant. On July 9, 2007, Executive was granted a
special award under the LTIP of 325,000 performance restricted
share units (the
"Special Grant"), which are
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scheduled to vest and be settled in accordance with the applicable
performance
criteria and vesting schedule provided in the applicable Award
Agreement.
(ii) Annual Award. On October 25, 2007, Executive was granted
an award under the LTIP of 29,427 restricted stock units (the
"Prior Award").
The Prior Award will be scheduled to vest and be settled in
accordance with the
performance criteria and vesting schedule set forth in the
applicable Award
Agreement. With respect to each full fiscal year during the COO
Term, Executive
will be eligible for an award under the LTIP of restricted share
units with a
target value, determined by the Company pursuant to a reasonable
and uniform
methodology, equal to $2,000,000 on the date of grant. With respect
to each full
fiscal year during the Employment Term after the Transition Date,
Executive will
be eligible for an award under the LTIP of restricted share units
with a target
value, determined by the Company pursuant to a reasonable and
uniform
methodology, equal to $3,500,000 on the date of grant (collectively
with the
Prior Award the "Annual Award"), and will be scheduled to vest and
be settled in
accordance with the applicable performance criteria and vesting
schedule
provided in the applicable Award Agreement.
(iii) Stock Option Grant. Effective as of the Amendment Date,
and conditioned upon Executive becoming the CEO as of the
Transition Date,
Executive shall be granted a stock option to purchase 1,150,000
shares of the
Company's common stock (the "Option"). If for any reason Executive
does not
become the CEO on the Transition Date, the Option shall be
forfeited and
Executive shall have no right to shares of Company common stock
thereunder. The
Option shall be a "non-statutory stock option" and shall not be
intended to be
an "incentive stock option" (as described under Section 422 of the
Internal
Revenue Code of 1986, as amended (the "Code")). The per share
exercise price of
such Option shall be equal to the fair market value of a share of
Company common
stock on the date of grant as determined under the LTIP. The term
of the Option
shall be ten years, subject to earlier expiration in the event of
the
termination of the Executive's employment as provided in the
applicable Award
Agreement. The Option, except as otherwise provided in this
Agreement, will be
granted pursuant to and subject to the terms, definitions and
provisions of the
LTIP and will vest and become exercisable as provided in the
applicable Award
Agreement attached hereto as Exhibit B.
5.
Employee Benefits.
(a) Generally. Executive will be eligible to participate in
accordance with the terms of all Company employee benefit plans,
policies and
arrangements that are applicable to other executive officers of the
Company, as
such plans, policies and arrangements may exist from time to
time.
(b) Airplane Travel. When traveling on Company-related
business,
Executive will be entitled to fly on private aircraft, at the sole
expense of
the Company.
(c) Tax Services. The Company will reimburse Executive for
reasonable personal tax preparation costs paid by Executive for any
taxable year
in which Executive has income from both the United States and
Canada.
6.
Expenses. The Company will reimburse Executive for reasonable
travel,
entertainment and other expenses incurred by Executive in the
furtherance of the
performance of
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Executive's duties hereunder, in accordance with the Company's
expense
reimbursement policy as in effect from time to time.
7.
Termination of Employment. In the event Executive's employment with
the
Company terminates for any reason, Executive will be entitled to
any (a) unpaid
Base Salary accrued up to the effective date of termination, (b)
unpaid, but
earned and accrued Annual Incentive for any completed fiscal year
as of his
termination of employment, (c) pay for accrued but unused vacation
that the
Company is legally obligated to pay Executive, (d) benefits or
compensation as
provided under the terms of any employee benefit and compensation
agreements or
plans applicable to Executive, (e) unreimbursed business expenses
required to be
reimbursed to Executive, and (f) rights to indemnification
Executive may have
under the Company's Articles of Incorporation, Bylaws, the
Agreement, or
separate indemnification agreement, as applicable. In addition, if
the
termination is by the Company without Cause or if Executive resigns
for Good
Reason, Executive will be entitled to the amounts and benefits
specified in
Section 8.
8.
Severance.
(a) Termination Without Cause or Resignation for Good Reason
During
the COO Term. If during the COO Term Executive's employment is
terminated by the
Company without Cause or if Executive resigns for Good Reason,
then, subject to
Sections 9 and 10 and the requirement to delay certain payments in
Section 25,
Executive will receive: (i) a severance amount equal to $3,200,000
which shall
be paid in equal amounts over the course of the two (2) year period
beginning
after Executive's employment is terminated in accordance with the
Company's
normal payroll policies; (ii) an additional severance payment
determined by
taking the current year's Annual Incentive pro-rated to the date of
termination,
with such pro-rated amount to be calculated by multiplying the
current year's
target incentive compensation by a fraction with a numerator equal
to the number
of days between the start of the current fiscal year and the date
of termination
and a denominator equal to 365, (iii) for a period of two (2)
years, if the
Executive or any of his dependents is eligible for and elects COBRA
continuation
coverage (as described in Section 4980B of the Code) under any
Company group
medical or dental plan, Executive will not be charged any premiums
for such
coverage; provided, however, Executive will be responsible for any
income tax
due with respect to such premiums, and (iv) restricted share units
granted under
the LTIP as part of any Annual Awards or the Special Grant that (A)
are subject
to performance vesting will be fully earned and the actual number
of restricted
share units which will be considered vested (in addition to those
which vested
in accordance with their terms) will be determined (1) by actual
performance for
any completed performance period through the date of Executive's
termination and
(2) by actual performance, as specified in the applicable Award
Agreement, for
any incomplete or remaining performance periods after Executive's
termination
(the vested restricted share units will be settled in shares of
Company common
stock on the original settlement date as forth in the Award
Agreement (without
regard to such termination)), and (B) are subject to time based
vesting shall be
considered fully vested and will be settled promptly thereafter as
provided by
the applicable Award Agreement.
(b) Termination Without Cause or Resignation for Good Reason
After
the Transition Date. If during the Employment Term and after the
Transition Date
Executive's employment is terminated by the Company without Cause
or if
Executive resigns for Good Reason, then, subject to Sections 9 and
10 and the
requirement to delay certain payments in Section 25, Executive will
receive: (i)
a severance amount equal to $4,000,000 which shall be paid in
equal
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amounts over the course of the two (2) year period beginning after
Executive's
employment is terminated in accordance with the Company's normal
payroll
policies; (ii) an additional severance payment determined by taking
the current
year's Annual Incentive pro-rated to the date of termination, with
such
pro-rated amount to be calculated by multiplying the current year's
target
incentive compensation by a fraction with a numerator equal to the
number of
days between the start of the current fiscal year and the date of
termination
and a denominator equal to 365, (iii) for a period of two (2)
years, if the
Executive or any of his dependents is eligible for and elects COBRA
continuation
coverage (as described in Section 4980B of the Code) under any
Company group
medical or dental plan, Executive will not be charged any premiums
for such
coverage; provided, however, Executive will be responsible for any
income tax
due with respect to such premiums, (iv) restricted share units
granted under the
LTIP as part of any Annual Awards or the Special Grant that (A) are
subject to
performance vesting will be fully earned and the actual number of
restricted
share units which will be considered vested (in addition to those
which vested
in accordance with their terms) will be determined (1) by actual
performance for
any completed performance period through the date of Executive's
termination and
(2) by actual performance, as specified in the applicable Award
Agreement, for
any incomplete or remaining performance periods after Executive's
termination
(the vested restricted share units will be settled in shares of
Company common
stock on the original settlement date as forth in the Award
Agreement (without
regard to such termination)), and (B) are subject to time based
vesting shall be
considered fully vested and will be settled promptly thereafter as
provided by
the applicable Award Agreement, and (v) the Option shall become
vested and
exercisable as provided in the applicable Award Agreement.
(c) Termination due to Death or Disability. In the event of a
termination of Executive's employment during the Employment Term
due to death or
Disability, then, subject to Sections 9 and 10, Executive, or
Executive's estate
as applicable, will be entitled to receive the current year's
Annual Incentive
pro-rated to the date of termination, with such pro-rated amount to
be
calculated by multiplying the current year's target incentive
compensation by a
fraction with a numerator equal to the number of days between the
start of the
current fiscal year and the date of termination and a denominator
equal to 365.
9.
Conditions to Receipt of Severance; Non-solicitation and
Non-competition; No Duty to Mitigate.
(a) Conditions to Receipt of Severance. The receipt of any
severance
pursuant to Section 8 will be subject to Executive signing and not
revoking a
separation and release of claims agreement in substantially the
form attached as
Exhibit A, but with any appropriate reasonable modifications,
reflecting changes
in applicable law, as is necessary to provide the Company with the
protection it
would have if the release were executed as of the Effective Date.
No severance
will be paid or provided until the separation agreement and release
agreement
becomes effective. The Company agrees that it will execute and
deliver to
Executive said separation and release of claims agreement no later
than eight
(8) days after it receives a copy of such agreement executed by
