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Exhibit 10.18
SEPARATION AND RELEASE AGREEMENT
THIS SEPARATION
AND RELEASE AGREEMENT ("Agreement") is made this 26th day
of August, 2005, effective as of the close
of business August 26, 2005
("Effective Date"), by and between
Ameritrade Holding Corporation, and its
successors and assigns (collectively, the
"Company") and Kurt D. Halvorson,
Executive Vice President and Chief
Administrative Officer, his heirs,
representatives, affiliates, successors and
assigns (collectively the
"Employee").
WITNESSETH:
WHEREAS,
Employee and the Company are parties to an Employment Agreement
dated September 9, 2002, (the "Employment
Agreement") pursuant to which Employee
is employed by the Company; and
WHEREAS, the
Company and Employee agree that the Employee's employment
under the Employment Agreement shall
terminate without cause as of close of
business on August 26, 2005, and
WHEREAS, the
Company recognizes Employee's longstanding, unique and
valuable contributions made over his 18
years of loyal service to the Company;
and
WHEREAS, as a
condition precedent to Employee receiving certain of the
severance benefits enumerated in the
Employment Agreement, Employee and Company
agreed to execute this Agreement.
NOW, THEREFORE,
in consideration of the covenants undertaken in this
Agreement, including the release contained
herein, the parties agree as follows:
1. Severance Payments In full
and complete satisfaction of Employee's
claims under the Employment Agreement, including, but not limited
to,
salary, vacation, bonus, stock options, severance, change in
control
payments, incentive pay, sick pay, benefits, 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, upon the later to
occur
of (a) expiration of the seven (7) day revocation period explained
in
Section 15 below, or (b) the Effective Date ("Expiration Date")
and
subject to Employee's compliance with the terms of this Agreement,
the
Company agrees to provide Employee with the following payments
and
benefits, as reiterated below for convenience:
a. The Company
shall pay Employee a base salary sum equal
to three-hundred-thousand dollars ($300,000) (the "Base
Salary") pursuant to Section 6(e)(x) of the Employment
Agreement. A portion of the Base Salary in
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the amount of
one-hundred-forty-nine-thousand-nine-hundred-ninety-nine
dollars and eighty-nine cents ($149,999.89) shall be payable
in a lump sum approximately six (6) months after Effective
Date on March 10, 2006, with the remaining Base Salary paid
in equal installments of
eleven-thousand-five-hundred-thirty-eight dollars and
forty-seven cents ($11,538.47) (any payments shall have all
applicable federal, state and local taxes withheld), with
such remaining payments to be payable pursuant to Company's
regular payroll schedule commencing on March 24, 2006 and
ending on September 8, 2006 ;
b. The Company
shall pay Employee Earned Bonus at Target,
pro-rated for the period employed during fiscal year 2005,
paid pursuant to the termination provisions of Section 6(b)
in the Employment Agreement in the amount of
five-hundred-forty-three-thousand-four-hundred-twenty
dollars ($543,420), representing 90.57% of $600,000 and
payable on September 9, 2005;
c. Employee
shall receive payment of his accrued but unused
paid time off (the "PTO") balance, payable on September 9,
2005;
d. An annual
Bonus at Target in the amount of
six-hundred-thousand dollars ($600,000), payable pursuant to
Section 6(e)(y) of the Employment Agreement and paid at the
same time as other MIP participants receive their MIP
bonuses, on or about October 31, 2005;
e. A special
bonus of one-million-eight-hundred-thousand
dollars ($1,800,000) to be paid January 13, 2006;
f. If the
Employee or any of his dependents are participating
in medical and dental coverage under any Company group
medical or dental plan, the Company will pay the employer
premium costs of the coverage (the "Employer Premium") for
twelve (12) months from September 1, 2005 through August 31,
2006 (the "Covered Period"). Employee will pay the employee
portion of monthly premiums (the "Employee Premium") by
remitting a check payable to the Company by the tenth (10th)
of each month, commencing in September 2005 in the amount of
two-hundred-twenty-nine dollars and ninety cents ($229.90)
for
medical and thirty-six
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dollars and seventy-two cents ($36.72) for dental coverage.
Employee Premium may be adjusted as rates change for all
employees (the "New Rates") and Company will notify Employee
of such rate change. Company will pay to the Employee an
amount equal to monthly Employee Premiums, subject to New
Rates as applicable and grossed up for taxes at supplemental
withholding rates on the first regularly scheduled payroll
dates of each month during the Covered Period. To the extent
Employee is eligible for medical or dental coverage under
another plan (the "Other Coverage"), Employee will
immediately notify Company and Company will cease Company
medical or dental coverage coincident with the end of the
calendar month Employee is eligible for Other Coverage. To
the extent that Employee is not eligible for Other Coverage,
at the end of the Covered Period, Employee shall be eligible
for COBRA
continuation coverage (as described in Section
4980B of the Internal Revenue Code of 1986, as amended).
g. Employee's
Company stock options shall be governed by the
terms of the respective stock option agreements and the
applicable plan document.
Except as provided herein, Employee will be entitled to no other
or
further compensation, remuneration, payments or benefits of any
kind,
including but not limited to bonuses, paid time off hours,
profit
sharing and/or 401(k) plan Company contributions, insurances and
other
salary continuation benefits. However, nothing in this Agreement
is
intended to divest Employee of any vested rights, if any, in a
Profit
Sharing and/or 401(k) plan.
2. Assignment of Claims. In
consideration of the payments and benefits to
Employee in Section 1 herein, and Employee's execution of this
Agreement, and as an express condition of this Agreement,
Employee
hereby represents and warrants that, up 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 aforesaid payments
and
benefits.
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3. Return of Property. Employee
hereby agrees that, within ten (10)
calendar days after the Effective 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 Credit cards, and keys, as well as originals 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
subsidiaries, affiliates, officers, and shareholders ("Company
Materials"), it being hereby acknowledged that all of 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.
4. Non-Compete and
Confidentiality. As an inducement for the Company to
enter into this Agreement and in furtherance of the terms of
the
Employment Agreement, Employee expressly agrees that he
provides
unique and specialized services, skills and expertise to the
Company,
and that the Company hired him because of the unique and
specialized
services, skills and expertise he is able to provide. Employee
further
expressly agrees that he has been given access to Confidential
Information and trade secrets of the Company and Ameritrade and
their
subsidiaries (collectively "Ameritrade"). Accordingly, Employee
acknowledges and reaffirms his obligations under the terms of
Sections
4 and 5 of the Employment Agreement through the Effective Date and
for
a 12 month period thereafter ("Restricted Period").
5. Remedies for Brea
