Exhibit 10.1
(OPTIONSXPRESS LOGO) [c95067c9506701.gif]
January 22, 2010
Mr. Paul Eppen
c/o optionsXpress Holdings, Inc.
311 W. Monroe Street, Suite 1000
Chicago, Illinois 60606
Re: Separation Agreement
Dear Paul:
In keeping with our discussions, this letter agreement memorializes the terms of
your separation from optionsXpress Holdings, Inc. (the “Company”).
1. TERMINATION OF EMPLOYMENT. The Company and you agree that effective today,
January 22, 2010, your employment with the Company shall be terminated in
accordance with the terms of this letter agreement.
2. SEVERANCE.
(a) Upon termination of your employment hereunder pursuant to this letter
agreement, all obligations of the Company shall cease, except the Company’s
obligations to (i) comply with all state and federal laws and regulations
applying to any benefits provided hereunder and (ii) pay the severance benefits,
to the extent applicable, to you pursuant to the terms and conditions set forth
in Section 2(b) below.
(b) In connection with your separation from the Company, commencing with the
first month after your date of termination, and paid to you, or, to the extent
that you are no longer living, your successor in trust of the Paul E. Eppen
Living Trust (dated 4/29/2005), in accordance with the payroll procedures of the
Company, all of which shall be subject to applicable withholding and payroll
taxes, and such other deductions as may be required under the Company’s employee
benefit plans, you shall be entitled to: (i) an amount equal to twelve
(12) months’ severance pay at the monthly rate of your current base salary of
$284,000, payable in twenty four (24) semi-monthly installments, (ii) continued
medical coverage for you and your family for twelve (12) months following your
date of termination on the same terms and conditions (including cost sharing)
made available to senior executives of the Company; PROVIDED THAT such coverage
shall terminate if you become eligible for employer-provided medical coverage
during such twelve (12) month period, (iii) immediate vesting of 100% of your
outstanding unvested options, stock appreciation rights, restricted stock,
deferred stock or other similar equity awards granted by the Company, with all
outstanding options and stock appreciation rights being exercisable under the
earlier of the expiration of the original term of such awards or for three
(3) months following your date of termination, (iv) a bonus for 2009 in the
amount of $99,400, to be paid at such time as bonuses are paid to other senior
executives (currently estimated to be prior to the end of February 2010), and
(v) a separation bonus of $124,013 payable in twenty four (24) semi-monthly
installments. You agree and acknowledge that, other than as specifically
provided for in this agreement, and excluding vested benefits, if any, under the
Company’s 401(k) plan, which shall be paid to him in accordance with the terms
of that plan, no additional payments are due from the Company on any basis
whatsoever.

 

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(c) Notwithstanding anything to the contrary contained herein, you shall be
entitled to the benefits described in Section 2(b) if and only if (i) you have
executed and delivered this agreement to the Company, and (ii) subsequent to
your separation, you shall not have (A) revoked or breached this agreement
including the provisions of the general release set forth in Section 12 hereof,
or (B) applied for unemployment compensation chargeable to the company during
such severance period.
(d) Notwithstanding anything herein to the contrary, if, at the time any payment
is payable to you pursuant to the provisions of this letter agreement as a
result of your “separation from service” (within the meaning of Section 409A of
the Internal Revenue Code of 1986, as amended (the “Code”) and the regulations
promulgated thereunder), the Company or any company in the affiliated group in
which the Company’s financial statements are consolidated in accordance with
generally accepted accounting principles has a class of equity securities traded
on an established domestic or foreign securities market or otherwise including,
without limitation, trading on an American exchange only as American Depositary
receipts and you are then designated a “specified person” (as such term is
defined in Section 409A of the Code and the regulations promulgated thereunder)
on a list prepared by the Company periodically pursuant to Section 409A of the
Code and the regulations promulgated thereunder, then, to the extent required by
Section 409A of the Code and the regulations promulgated thereunder, during the
six month period from and after the date of your “separation from service” the
amount payable to you pursuant to the provisions of Section 2 of this letter
agreement shall not exceed the lesser of (x) two times your annual base
compensation or (y) two times the amount determined pursuant to
Section 401(a)(17) of the Code, and any excess amount which accrues to you
during such period shall be withheld during such period and paid to you in a
lump sum upon the expiration of six months after the date of “separation from
service” (or, if earlier than the end of such six month period, upon your
death).
3. CONFIDENTIALITY
(a) You will not at any time during, or after termination of, your employment
with the Company disclose to anyone or make use of, directly or indirectly, any
Confidential Information (as defined below) except (i) as required by law or in
response to a governmental inquiry, and then upon notice to Company to the
extent permitted by law; or (ii) to your attorneys, parents, children, spouses,
attorneys, accountants, or tax advisors on the further condition that such
persons agree to maintain the confidentiality thereof. All records of every
nature and description relating to the Company’s business during your
employment, whether or not prepared by you, shall be and remain the property of
the Company. All records of every nature and description, copies, keys,
telephone calling cards, passwords, data on Blackberry or other handheld
devices, recorders, data on cellular telephones, computers, thumb drives,
printers, files, and other property and equipment relating to the Company’s
business during your employment shall be left with or delivered to the Company
upon termination of your employment.

 

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(b) For purposes of this letter agreement, “Confidential Information” means all
information of a confidential or proprietary nature (whether or not specifically
labeled or identified as “confidential”), in any form or medium, that relates to
the Company or its subsidiaries or their business relations and their respective
business activities and includes, without limitation, the following:
(i) internal business information (including historical and projected financial
information and budgets and information relating to strategic and staffing plans
and practices, business, training, marketing, promotional and sales plans and
practices, cost, rate and pricing structures and financial, accounting and
business methods); (ii) identities and individual requirements of, and specific
contractual arrangements with, the Company’s and its subsidiaries’ customers,
employees, independent contractors, clearing agencies, joint venture partners
and other business relations and their confidential information; (iii) trade
secrets, know-how, compilations of data and analyses, techniques, systems,
formulae, research, records, reports, manuals, documentation, models, data and
data bases relating thereto; (iv) inventions, innovations, improvements,
developments, methods, designs, analyses, drawings, reports and all similar or
related information (whether or not patentable); and (v) information related to
any and all intellectual and proprietary property and rights and rights in
Confidential Information of every kind and description anywhere in the world,
including all (A) patents, patent applications, patent disclosures and
inventions, (B) internet domain names, trademarks, service marks, trade dress,
trade names, logos and corporate names and registrations and applications for
registration thereof together with all of the goodwill associated therewith,
(C) copyrights (registered or unregistered) and copyrightable works and
registrations and applications for registration thereof, (D) mask works and
registrations and applications for registration thereof, (E) computer software,
data, data bases and documentation thereof, (F) trade secrets and other
Confidential Information (including ideas, formulas, compositions, inventions
(whether patentable or unpatentable and whether or not reduced to practice),
know-how, manufacturing and production processes and techniques, research and
development information, drawings, specifications, designs, plans, proposals,
technical data, copyrightable works, financial and marketing plans and customer
and supplier lists and information), (G) other intellectual property rights and
(H) copies and tangible embodiments thereof (in whatever form or medium).
(c) Notwithstanding the provisions of this Section 3, information shall not be
deemed “Confidential Information” for purposes hereof if such information is
(i) in the public domain (other than as a result of a breach of this Agreement
by you), (ii) approved in writing for release by the Company, (iii) lawfully
obtained by you after termination of your employment with the Company from third
parties (other than the Company, any of its affiliates or any of their
respective employees, agents, independent contractors, directors or
representatives) on a nonconfidential basis who, to your knowledge, are not
prohibited from disclosing such information to you by a legal, contractual or
fiduciary obligation to the Company or any of its affiliates, or (iv) actually
known by you prior to the commencement of the discussions between the Company
and you which resulted in your employment with the Company as evidenced by
written records maintained by you.
4. NONCOMPETITION; NONSOLICITATION

 

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(a) You acknowledge that (i) you are one of the Company’s key employees and that
you are and will become familiar with the Company’s trade secrets and with other
confidential information concerning the Company, including the Company’s
(A) inventions, technology and research and development, (B) customers and
vendors and customer and vendor lists, (C) products and services (including
those under development) and related costs and pricing structures,
(D) accounting and business methods and practices, and (E) similar and related
confidential information and trade secrets; (ii) your services rendered have
been and shall continue to be of special, unique and extraordinary value to the
Company and that you have been substantially responsible for the growth and
development of the Company and the creation and preservation of the Company’s
goodwill; and (iii) the Company would be irreparably damaged (including a
significant loss of goodwill) if you were to provide similar services to any
person or entity competing with the Company or engaged in a similar business.
Due to your access to the confidential proprietary information, customer
information and customer relationships and uniqueness of your services to the
Company and in consideration of the Company’s agreements herein, you agree that
for the term of your employment with the Company and a period of twelve
(12) months after termination of your employment as provided hereunder (the
“Noncompetition Period”), you shall not directly or indirectly, either for
yourself or for any other individual, corporation, partnership, joint venture or
other entity, engage in any Competitive Activity anywhere in the world.
“Competitive Activity” means managing, controlling, participating in (whether as
an officer, director, employee, partner, agent, representative or otherwise),
consulting with or rendering services with respect to any entity that engages or
proposes to engage in the: (i) on-line securities industry for the retail,
consumer customer base (including, for the avoidance of doubt and without
limitation, the service of retail brokerage accounts through independent
representatives), (ii) investment education services industry, or (iii) any
other business conducted by the Company or any of its subsidiaries and in which
you actively participated during your employment term, as well as investing in
or arranging any investment in any entity that is primarily engaged in any of
the foregoing; PROVIDED, HOWEVER, that nothing herein shall prohibit you from
being employed by or otherwise performing services for any entity that is
engaged in the foregoing activities so long as you do not participate in any of
the foregoing; AND PROVIDED, FURTHER, that nothing herein shall prohibit you
from being a passive owner of not more than ten percent (10%) of the outstanding
stock of any class of a corporation which is publicly traded so long as you do
not have any active participation in the business of such corporation.
(b) During the Noncompetition Period, you shall not directly or indirectly
(through any other individual, corporation, partnership, joint venture or other
entity or otherwise) (i) induce or attempt to induce any employee of the Company
or any of its subsidiaries to leave the employ of the Company or any of its
subsidiaries, or in any way interfere with the relationship between the Company
or any of its subsidiaries and any employee thereof, (ii) hire any person who
was an employee of the Company or any of its subsidiaries at any time during the
six (6) month period immediately prior to the date on which such hiring would
take place, or (iii) call on, solicit or service any customer, supplier,
licensee, licensor or other business relation of the Company or any of its
subsidiaries in order to induce or attempt to induce such person to cease doing
business with the Company or any of its subsidiaries, or in any way interfere
with the relationship between any such customer, supplier, licensee or business
relation and the Company or any of its subsidiaries. Each of you and the Company
(on behalf of itself and its subsidiaries) mutually agree not to malign, defame,
blame, or otherwise disparage the other regarding the past or future business or
personal affairs of the other and, in the case of the Company, about any of its
subsidiaries, directors, officers or employees.

 

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(c) If, at the time of enforcement of the covenants contained in this Section 4
(the “Restrictive Covenants”), a court shall hold that the duration, scope or
area restrictions stated herein are unreasonable under circumstances then
existing, you agree that the maximum duration, scope or area reasonable under
such circumstances shall be substituted for the stated duration, scope or area
and that the court shall be allowed and directed to revise the restrictions
contained herein to cover the maximum period, scope and area permitted by law.
You acknowledge that you have consulted with legal counsel regarding the
Restrictive Covenants and, based on such consultation, have determined and
hereby acknowledge that the Restrictive Covenants are reasonable in terms of
duration, scope and area restrictions and are necessary to protect the goodwill
of the Company’s business and the on-line nature of the Company’s business is
such that it is not conducted with respect to geographical boundaries.
(d) If you breach, or threaten to commit a breach of, any of the Restrictive
Covenants, the Company shall have the right and remedy to have the Restrictive
Covenants specifically enforced by any court of competent jurisdiction, it being
agreed that any breach or threatened breach of the Restrictive Covenants would
cause irreparable injury to the Company and that money damages would not provide
an adequate remedy to the Company.
(e) In the event of any breach or violation by you of any of the Restrictive
Covenants, the time period of such covenant shall be tolled until such breach or
violation is resolved.
5. THE COMPANY’S OWNERSHIP OF INTELLECTUAL PROPERTY.
(a) In the event that you, as part of your activities on behalf of the Company
or any of its subsidiaries generate, author or contribute to (whether before or
after the date of this letter agreement) any invention, design, new product or
service development, device, product, method or process (whether or not
patentable or reduced to practice or comprising Confidential Information), any
copyrightable work (whether or not comprising Confidential Information) or any
other form of Confidential Information relating directly or indirectly to the
Company’s or any of its subsidiaries’ business as now or hereinafter conducted
(the “Intellectual Property”), you acknowledge that such Intellectual Property
is the exclusive property of the Company and hereby assign all right, title and
interest in and to such Intellectual Property to the Company. Any copyrightable
work prepared in whole or in part by you will be deemed “a work made for hire”
under Section 201(b) of the 1976 Copyright Act, and the Company shall own all of
the rights comprised in the copyright therein. You shall promptly and fully
disclose to the Company all Intellectual Property not generally known to the
Company through the ordinary course of operation of the business, and you shall
cooperate with the Company to protect the Company’s interests in and rights to
such Intellectual Property (including, without limitation, providing reasonable
assistance in securing patent protection and copyright registrations and
executing all documents as reasonably requested by the Company, whether such
requests occur prior to or after termination of your employment with the
Company). The Company agrees to pay you for any reasonable costs, fees and
expenses incurred by you for providing your assistance pursuant to this
Section 5, including, but not limited to, any of your costs, expenses and your
hourly fees if such assistance is provided after your termination for any
reason.

 

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(b) In accordance with Section 2872 of the Illinois Employee Patent Act, Ill.
Rev. Stat. Chap. 140, Section 301 et seq. (1983), you are hereby advised that
Section 5 of this Agreement regarding the Company’s ownership of Intellectual
Property does not apply to any invention for which no equipment, supplies,
facilities or trade secret information of the Company was used and which was
developed entirely on your own time, unless (i) the invention relates to the
business of the Company or any of its subsidiaries or to the Company’s or any of
its subsidiaries actual or demonstrably anticipated research or development or
(ii) the invention results from any work performed by you for or on behalf of
the Company or any of its subsidiaries.
6. BINDING EFFECT. The terms hereof shall be binding upon and shall inure to the
benefit of you and the Company, the successors and assigns of the Company, and
the heirs, executors, administrators, legal representatives and assigns of you,
PROVIDED THAT your rights and obligations hereunder may not be delegated or
assigned.
7. ENTIRE AGREEMENT. This letter agreement shall supersede any former oral
agreement and any former written agreement heretofore executed relating
generally to your employment with the Company, and this letter agreement can
only be amended, altered or terminated and its provisions can only be waived by
an agreement in writing signed by you and the Company; PROVIDED, HOWEVER, that
this letter agreement shall not be deemed to supersede any restricted stock,
equity award or other agreement between the Company and you.
8. REPRESENTATIONS. You hereby represent and warrant to the Company that (a) the
execution, delivery and performance of this Agreement by you does not and shall
not conflict with, breach, violate or cause a default under any contract,
agreement, instrument, order, judgment or decree to which you are a party or by
which your are bound, (b) you are not a party to or bound by any employment
agreement, noncompete agreement or confidentiality agreement with any person or
entity other than the Company and/or its subsidiaries and (c) upon the execution
and delivery of this Agreement by the Company, this Agreement shall be the valid
and binding obligation of you, enforceable in accordance with its terms. You
hereby acknowledge and represent that you have consulted with independent legal
counsel (or that you have decided to forego the engagement of such legal
counsel) regarding your rights and obligations under this Agreement and that you
fully understand the terms and conditions contained herein.
9. COOPERATION. During the term of your employment and for a period of two
(2) years after termination of your employment for any reason, you shall
reasonably cooperate with the Company in (a) any internal investigation or any
administrative, regulatory or judicial proceeding (so long as such investigation
or proceeding is not adversarial in nature between you and the Company) or (b)
any dispute with a third party, as reasonably requested by the Company
(including, without limitation, being available to the Company upon reasonable
advance notice for interviews and factual investigations, appearing at the
Company’s request to give testimony without requiring service of a subpoena or
other legal process, volunteering to the Company all pertinent information and
turning over to the Company all relevant documents which are or may come into
your possession, all at times and on schedules that are reasonably consistent
with your other activities and commitments). In the event the Company requires
your cooperation in accordance with this Section, the Company shall reimburse
you for all actual reasonable and customary travel and other out-of-pocket
expenses (including lodging and meals) incurred by you in connection therewith
promptly upon submission of receipts therefore.

 

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10. REMEDIES. In the event that you violate any of the provisions hereof, you
hereby acknowledge that the Company will suffer irreparable damages and will be
entitled to full injunctive relief or such other relief against you as may be
provided by law or in equity.
11. ENFORCEABILITY. This letter agreement shall be construed and enforced under
the laws of the State of Illinois without giving effect to the principles of
conflicts of laws thereof. If any provision of this letter agreement is held
invalid or unenforceable by operation of law or otherwise, such circumstances
shall not have the effect of rendering any of the other provisions of this
letter agreement invalid or unenforceable.
12. GENERAL RELEASE. You, for and on behalf of yourself and your heirs,
executors, beneficiaries, administrators, attorneys, successors, and assigns
hereby release and discharge the Company and its affiliates and their respective
directors, officers, employees, agents, benefits plans, plan administrators,
successors and assigns from any and all claims of every kind, whether known or
unknown, based upon any fact or matter occurring prior to your execution of this
Agreement. This general release extends to all claims including, but not limited
to, all claims under common law, statute, regulation, or ordinance, and
including, but not limited to, all claims under the Americans with Disabilities
Act, Title VII of the Civil Rights Act of 1964, the Employee Retirement Income
Security Act of 1974, the Family Medical Leave Act, the Illinois Human Rights
Act, and all claims for negligence, breach of contract, wrongful or retaliatory
discharge, defamation, and intentional infliction of emotional distress. The
Company releases and discharges you from all known claims arising out of or
relating to your employment with the Company and the termination thereof
excepting your breach of this Agreement or the Employee Agreement Regarding
Confidentiality and Nonsolicitation dated August 14, 2007. The parties intend
this release of claims to be broadly construed so as to resolve any and all
disputes arising out of or relating to your employment with the Company and the
termination thereof. If you commences any legal action yourself or through a
third party in violation of this paragraph, the Company shall be entitled to
assert this Agreement as a bar to such action.
You acknowledge that this Separation Agreement includes a waiver of any rights
and claims arising under the Age Discrimination in Employment Act. You
acknowledge that you have been given an opportunity to take up to twenty-one
(21) days within which to consider this agreement. You understand that you may
revoke this agreement during the seven (7) calendar days following the execution
of this agreement by sending written notice via reputable overnight delivery
service to: Hillary Victor, Associate General Counsel, optionsXpress Holdings,
Inc., 311 West Monroe; Suite 1000; Chicago, IL 60606, and that the Agreement
shall not become effective or enforceable until that seven (7) calendar day
revocation period has expired without revocation.
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By signing below, the Company agrees to all of the terms and conditions of this
letter agreement. Your signature below indicates your acceptance of these terms
and conditions.

            Sincerely yours,
optionsXpress Holdings, Inc.
      By:   /s/ David Fisher         David Fisher, Chief Executive Officer     
       

ACCEPTED AND AGREED as of
this 22nd day of January, 2010

          /s/ Paul Eppen       Paul Eppen             

 

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