EXHIBIT 10.57

 

AGREEMENT

 

This Agreement is made effective as of this 23rd day of January, 2003 (the
“Effective Date”), by and between E*TRADE GROUP, INC., a Delaware corporation
(“Company”), and CHRISTOS M. COTSAKOS (“Executive”). References herein to the
Company shall include its subsidiaries, unless otherwise required by context.

 

BACKGROUND

 

A.    Executive is the Chairman of the Board and Chief Executive Officer of
Company and is currently employed pursuant to the terms of an employment
agreement dated May 15, 2002 (the “Employment Agreement”); and

 

B.    Executive and the Company have mutually agreed that Executive shall resign
from his employment with the Company and his position as a member of its Board
of Directors, pursuant to the terms and conditions set forth below.

 

TERMS AND CONDITIONS

 

In consideration of the premises and the mutual covenants and agreements set
forth below, the parties agree as follows:

 

1.    Resignation from Positions.

 

(a)    Executive shall resign from his employment with the Company and his
position on the Board of Directors effective as of the close of business on
January 23, 2003 (the “Resignation Date”). Each of the Executive and the Company
waive the notice requirement described in paragraph 5 of the Employment
Agreement. To formalize his resignation, on January 23, 2003, Executive shall
present a letter of resignation in the form attached as Exhibit A.

 

(b)    Pursuant to the terms of the E*Trade Ventures I, LLC Limited Liability
Company (the “Fund I Company”) Operating Agreement, Executive is a Managing
Member of the Fund I Company. From and after the Resignation Date, the Company
has the right to require Executive to withdraw as Managing Member of the Fund I
Company and waive any and all rights and duties as a Managing Member. Executive
hereby transfers and assigns to the Company all future payments and rights to
payments in respect of his Managing Member interest. When and if so required by
the Company, Executive shall cooperate with the Company to execute all documents
necessary to effectuate this withdrawal and transfer and assignment. The
provisions of this subsection shall not affect Executive’s direct or indirect
limited partnership interests in the E*Trade eCommerce Fund, L.P.

 

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(c)    Pursuant to the terms of the E*Trade Ventures II, LLC Limited Liability
Company (the “Fund II Company”) Operating Agreement, Executive is a Managing
Member of the Fund II Company. From and after the Resignation Date, the Company
has the right to require Executive to withdraw as Managing Member of the Fund II
Company and waive any and all rights and duties as a Managing Member. Executive
hereby transfers and assigns to the Company all future payments and rights to
payments in respect of his Managing Member interest. When and if so required by
the Company, Executive shall cooperate with the Company to execute all documents
necessary to effectuate this withdrawal and transfer and assignment. The
provisions of this subsection shall not affect Executive’s direct or indirect
limited partnership interests in the E*Trade eCommerce Fund II, L.P.

 

2.    Separation Benefits.    Following his resignation, the Company agrees to
provide Executive with the following benefits, subject to Executive’s continuing
compliance with his obligations under Section 4:

 

(a)    On the Resignation Date, the Company will issue a press release
announcing Executive’s resignation in the form attached as Exhibit B.

 

(b)    The Company shall pay to Executive an amount in cash equal to $4 million.
Of such amount, $1 million shall be paid promptly after the execution of this
Agreement, $1 million shall be paid on or before March 23, 2003, $1 million
shall be paid on or before May 23, 2003 and the remaining $1 million shall be
paid on or before July 23, 2003.

 

(c)    The Company shall provide Executive with an office and administrative
support at its reasonable expense and convenience for a period of up to 6 months
following the Resignation Date.

 

(d)    The Company shall allow Executive to retain all office equipment
previously provided for his use at his principal residence and shall transfer
any ownership interest currently held by the Company in such equipment to
Executive; provided, however, that all confidential and/or proprietary
information of the Company, its subsidiaries and its affiliated entities shall
be removed from such equipment.

 

(e)    Executive currently has use of an automobile leased by the Company, which
Executive may continue to use through January 31, 2004. After such date,
Executive shall be permitted to convert the Company’s lease to a personal lease,
and the Company shall cooperate with Executive to effect such conversion.

 

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(f)    The Company has retained a life insurance policy on behalf of Executive
with coverage of $10 million. Executive will be permitted to retain that policy;
provided, however, that he will be responsible for paying all future premiums.
Executive understands that if such premiums are not paid, the policy will lapse.

 

(g)    Executive shall be permitted to continue to receive Long Term Care
insurance as provided under the Long Term Care Insurance policy provided to
Executive; provided, however, that Executive shall be responsible for paying all
future premiums after January 31, 2004. Executive understands that if premiums
after such date are not paid by him, the policy will lapse.

 

(h)    Executive shall participate in all of the Company’s group health
insurance programs as an active participant through January 31, 2004.
Thereafter, Executive shall be permitted to continue to participate in the
Company’s group health insurance programs (including the Executive Health Care
Reimbursement Program) at his own expense in accordance with COBRA and/or its
state equivalent.

 

(i)    The Company shall amend all stock options held by Executive that have
vested on or before the Resignation Date to provide that such options shall
remain exercisable through the first anniversary of the Resignation Date.

 

Executive acknowledges that except as expressly set forth in this Agreement,
following the Resignation Date, he shall be entitled to no further or additional
payments or benefits from the Company.

 

3.    SERP Benefits.    Following the Resignation Date, Executive shall be
entitled to receive distribution of vested benefits currently held in
Executive’s SERP Account Balance in accordance with the terms of the SERP Plan
Document. For the avoidance of doubt, the Executive’s vested SERP benefit as of
the Resignation Date is approximately $5,100,000.

 

4.    Covenants.

 

(a)    Executive shall hold in strictest confidence and not use or disclose to
any individual, partnership, corporation, limited liability company, trust or
other entity, without prior written authorization of the Board of Directors, any
Confidential Information. “Confidential Information” means any proprietary
information, technical data, trade secrets and know-how of the Company, its
subsidiaries and its affiliated entities, including, but not limited to,
research, product plans, products, services, customer lists and customers
(including, but not limited to, actual or potential customers of the Company,
its subsidiaries and its affiliated entities), markets, software, developments,
inventions, processes, formulas, technology, designs, drawings, engineering,
hardware configuration

 

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information, personnel-related information, marketing, finances and other
business information disclosed to Executive by the Company either directly or
indirectly in writing, orally or by drawings or observation. Executive further
understands that Confidential Information does not include any of the foregoing
items which has become publicly known and made generally available through no
wrongful act of his or of others who were under confidentiality obligations as
to the item or items involved.

 

(b)    Executive agrees to cooperate fully with the Company, its Board of
Directors and its management following the termination of his employment on
matters within the scope of his experience while employed by the Company,
including, but not limited to (i) provision of any information, document, or
other instrument reasonably requested by the Board, any committee thereof, or
the senior management of the Company; (ii) rendering support and assistance to
the Company, its subsidiaries and its affiliated entities in connection with
litigation or arbitration involving any of such entities, whether or not
currently pending; and (iii) assisting the Company, its subsidiaries and its
affiliated entities with any inquiry, investigation or proceeding of any
regulatory agency or body involving any of such entities. The Company shall
reimburse the Executive for expenses reasonably incurred by him in complying
with his obligations hereunder, in accordance with the Company’s normal expense
reimbursement policies for senior executives.

 

5.    Indemnification.    The Company will continue to cover Executive under its
directors and officers liability insurance policy, and will indemnify and defend
Executive as provided under Delaware and California law and the terms of the
Company’s by-laws, for any and all past, present or future claims arising out of
the performance of Executive’s duties while employed by the Company through the
Resignation Date.

 

6.    Withholding.

 

(a)    Any payment due to Executive hereunder shall be subject to withholding of
any federal, state or local taxes that may be required to be withheld.

 

(b)    The Company may withhold from any payment due to Executive hereunder any
amount owed by Executive to the Company, its subsidiaries and its affiliated
entities.

 

7.    Release of Claims.    In exchange for the benefits described in this
Agreement, Executive, on behalf of himself and his successors and assigns,
hereby releases and absolutely discharges the Company, including each and every
of its subsidiaries and other affiliated entities (including, but not limited
to, E*TRADE Securities, Incorporated), and their shareholders, directors and

 

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employees), and their agents, attorneys, legal successors and assigns of and
from any and all claims, actions and causes of action, whether now known or
unknown, which Executive now has, or at any other time had, or shall or may have
against the Company based upon or arising out of any matter, cause, fact, thing,
act or omission whatsoever occurring or existing at any time to and including
the date hereof, including, but not limited to, any claims of breach of
contract, fraud, negligent misrepresentation, negligence, intentional or
negligent infliction of emotional distress, defamation, wrongful discharge or
age, sex, race, national origin, physical or mental disability, medical
condition, sexual orientation or other discrimination under the federal Age
Discrimination in Employment Act, the federal Americans with Disabilities Act,
the federal Civil Rights Act of 1964, as amended, the federal Employee
Retirement Income Security Act, the federal Sarbanes-Oxley Act, the California
Fair Employment and Housing Act, the California Labor Code, or any other
applicable federal, state or local law; provided, however, that this release
does not extend to the obligations of the Company pursuant to this Agreement,
including, but not limited to Section 5.

 

8.    Governing Law.    This Agreement shall be interpreted and enforced in
accordance with the laws of the State of California.

 

9.    Severability.    Whenever possible, each provision of this Agreement shall
be interpreted in such manner as to be effective and valid, but if any one or
more of the provisions contained in this Agreement shall be invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provisions in every other respect and of the
remaining provisions of this Agreement shall not be in any way impaired.

 

10.    Entire Agreement.    This Agreement (including the equity documentation
referred to in Section 1, and the employee benefit plans and arrangements of the
Company referred to in Section 2) contains the entire agreement of the parties
with respect to the subject matter contained in this Agreement. There are no
restrictions, promises, covenants or undertakings between Company and Executive,
other than those expressly set forth in this Agreement. This Agreement
supersedes all prior agreements and understandings between the parties
(including, but not limited to, the Employment Agreement). This Agreement may
not be amended or modified except in writing executed by the parties.

 

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the day
and year first above written.

 

E*TRADE GROUP, INC.

/s/    GEORGE HAYTER

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George Hayter

Lead Director

 

 

EXECUTIVE

/s/    CHRISTOS M. COTSAKOS

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Christos M. Cotsakos

 

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