Document:

Exhibit 10.1

 Exhibit 10.1 
 EMPLOYMENT AGREEMENT 
 This Employment Agreement (this “Agreement”) is made and
entered into by and between E*TRADE Financial Corporation (the “Company”) and Donald H. Layton (“Executive”) as of the Effective Date. 
 1. Position and Duties: Effective March 2, 2008 (the “Effective Date”), Executive was appointed as the Company’s Chief
Executive Officer (“CEO”), reporting directly and exclusively to the Company’s Board of Directors (the “Board”). In addition, Executive shall continue in his previous role as Chairman of the Board. Executive
agrees to devote all necessary time, energy and skill to his duties at the Company. The Company acknowledges and agrees that Executive’s continued involvement in charitable, industry and civic activities, and as a director of Assured Guaranty
Limited, will not create a business or competitive conflict with the activities of the Company and are consistent with Executive’s effective service as Chairman and CEO of the Company. 
 During his service as CEO, Executive shall not receive further compensation as Chairman and member of the Board, but his equity awards granted prior to
the Effective Date shall continue on their existing terms. The Company shall provide Executive with the same indemnification agreement, if applicable, and D&O insurance protection provided from time to time to its officers and directors
generally. Notwithstanding anything to the contrary in this Agreement, the rights of Executive under any indemnification agreement and the D&O insurance coverage with respect to all matters, events or transactions occurring or effected during
the Executive’s period of employment or service as a director with the Company shall survive the termination of Executive’s employment. 
 2. Term of Agreement: This Agreement shall remain in effect through December 31, 2009 (the “Term”), unless Executive’s employment as CEO is terminated earlier by either party, subject to payments under
Section 5 hereof to the extent applicable. If the Board requests that Executive continue his service as Chairman and CEO beyond December 31, 2009, the parties shall negotiate in good faith to extend Executive’s employment agreement
with annual target compensation substantially similar to that set forth in this Agreement, and such other terms consistent with those of a chief executive officer as may be agreed at that time. Subject to payment of any amounts or provision of any
benefits that may become due under Section 5 on termination of employment, Executive’s employment with the Company shall be “at-will”. 
 3. Compensation: During the Term, Executive shall be compensated by the Company for his services as CEO as follows: 
 (a) Base Salary: Executive shall be paid an annualized Base Salary of $1,000,000 per year, subject to applicable withholding, in accordance with the Company’s normal payroll procedures. 
 (b) Performance Bonus: Executive shall not have the opportunity to earn an annual cash performance bonus. 

 (c) Benefits: Executive shall have the right, on the same basis as other senior
executives of the Company, to participate in and to receive benefits under any of the Company’s employee benefit plans, as such plans may be modified from time to time. 
 4. Equity Compensation Grants: In connection with his appointment as CEO on the Effective Date, Executive has been granted (i) a stock option
to purchase 4,054,161 shares of the Company’s common stock at an exercise price of $4.27 per share (the “New Options”), and (ii) a stock-based award with respect to 1,800,351 shares of the Company’s common stock
(together with the New Options, the “New Equity Grants”). Each agreement evidencing the New Equity Grants shall include each of the additional provisions set forth in this Section 4 and in Section 5 below. To the extent
the New Options are vested upon any termination of Executive’s employment as CEO, the options shall remain exercisable by Executive (or his estate, as applicable) until two years following the later of (x) the date on which Executive
ceases to be employed as CEO and (y) the date on which Executive ceases to be a member of the Board, but in no event beyond the maximum seven-year expiration date set forth in the option agreement. 
 (a) Vesting Schedule. Subject to the remainder of this Section 4, the New Equity Grants shall vest according to the following
schedule: 
  

			
	 Cumulative Percentage Vested
	  	 Date

	 25.0%
	  	April 1, 2008
	 37.5%
	  	July 1, 2008
	 50.0%
	  	October 1, 2008
	 62.5%
	  	January 1, 2009
	 75.0%
	  	April 1, 2009
	 87.5%
	  	July 1, 2009
	 100.0%
	  	October 1, 2009

 Notwithstanding the foregoing vesting schedule, 12.5% of the New Options were immediately vested
on the grant date. 
 (b) Acceleration of New Equity Grant Vesting Upon Change in Control. In the event of a Change in
Control, each New Equity Grant held by Executive, to the extent then outstanding, shall become fully vested and, if applicable, exercisable (and any forfeiture provision shall lapse) immediately prior to but conditioned upon the consummation of the
Change in Control. 
 (c) Acceleration of New Equity Grant Vesting Upon Death or Permanent Disability. If
Executive’s employment as CEO terminates due to Executive’s death or Permanent Disability, then each New Equity Grant held by Executive, to the extent then outstanding, shall become fully vested and, if applicable, exercisable (and any
forfeiture provision shall lapse) in full as of the date of Executive’s death or the date of termination of employment due to Permanent Disability, as applicable. 
  

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 5. Effect of Termination of Employment During the Term. 
 (a) Involuntary Termination: If Executive’s employment with the Company is terminated as a result of an Involuntary
Termination (other than in the circumstance set forth in Section 5(b) below), then subject to Executive signing and not revoking the Release, Executive shall receive the following benefits, in addition to any compensation and benefits earned
under Section 3 through the date of Executive’s termination of employment: 
 (i) a lump sum cash severance payment equal to $5 million, which shall be paid within 30 days following the effectiveness of the Release (so long as such Release is signed in a period such that the payment may be
made no later than 2 and  1/2 months following the end of the year in such termination of employment occurs); and

 (ii) accelerated vesting of all New Equity Grants. 
 (b) Appointment of New CEO. In the event that during Executive’s employment, the Board elects a CEO to succeed Executive on or
prior to December 31, 2009, then Executive shall be entitled to receive his Base Salary accrued through the date when he no longer serves as CEO, 50% of the then unvested portion of each New Equity Grant shall immediately vest, and the
remaining 50% of the then unvested New Equity Grants shall be forfeited. It is expected that at such time Executive will remain (non-executive) Chairman, on terms to be negotiated by the parties in good faith at that time. 
 (c) Other Termination. In the event of a termination of Executive’s employment as CEO not specified under Section 4(c),
Section 5(a) or Section 5(b) above, including, without limitation, a termination for Cause, Executive shall not be entitled to any compensation or benefits from the Company, other than those earned under Section 3 through the date of
his termination and, in the case of each stock option, restricted stock award or other Company stock-based award granted to Executive, the extent to which such awards are vested through the date of his termination or as otherwise provided in the
applicable award agreement. 
 6. Certain Tax Considerations. 
 (a) Section 409A. 
 (i) The payments under Section 5 are intended to qualify for the short-term deferral exception to Section 409A of the Code (“Section 409A”) described in the regulations promulgated
under Section 409A (the “Section 409A Regulations”) to the maximum extent possible, and to the extent they do not so qualify, they are intended to qualify for the involuntary separation pay plan exception to
Section 409A described in the Section 409A Regulations to the maximum extent possible. To the extent Section 409A is applicable to this Agreement, this 

  

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Agreement is intended to comply with Section 409A, and shall be interpreted and construed and shall be performed by the parties consistent with such
intent, and the Company shall have no right, without Executive’s consent, to accelerate any payment or the provision of any benefits under this Agreement if such payment or provision of such benefits would, as a result, be subject to tax under
Section 409A of the Code. 
 (ii) Without limiting the generality of the foregoing, if Executive is a “specified
employee” within the meaning of Section 409A, as determined under the Company’s established methodology for determining specified employees, on the date of termination of employment, then to the extent required in order to comply with
Section 409A, amounts that would otherwise be payable under this Agreement during the six-month period immediately following such termination date shall instead be paid (together with interest at the then current six-month LIBOR rate) on the
first business day after the first to occur of (i) the date that is six months following Executive’s termination of employment and (ii) the date of Executive’s death. 
 (iii) Except as expressly provided otherwise herein, no reimbursement payable to Executive pursuant to any provisions of this Agreement or
pursuant to any plan or arrangement of the Company covered by this Agreement shall be paid later than the last day of the calendar year following the calendar year in which the related expense was incurred, and no such reimbursement during any
calendar year shall affect the amounts eligible for reimbursement in any other calendar year, except, in each case, to the extent that the right to reimbursement does not provide for a “deferral of compensation” within the meaning of
Section 409A of the Code. 
 (iv) For purposes of this Agreement, the terms “terminate,” “terminated”
and “termination” mean a termination of Executive’s employment that constitutes a “separation from service” within the meaning of the default rules of Section 409A of the Code; provided, however, that, in the
event of the Executive’s Permanent Disability, “separation from service” means the date that is six months after the first day of disability. 
 (b) 280G Limitation: If the payments and benefits provided to Executive under this Agreement, either alone or together
with other payments and benefits provided to him from the Company (including, without limitation, any accelerated vesting thereof) (the “Total Payments”), would constitute a “parachute payment” (as defined in
Section 280G of the Code) and be subject to the excise tax (the “Excise Tax”) imposed under Section 4999 of the Code, the Total Payments shall be reduced at Executive’s exclusive option if and to the extent that a
reduction in the Total Payments would result in Executive retaining a larger amount than if Executive received 

  

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all of the Total Payments, in each case measured on an after-tax basis (taking into account federal, state and local income taxes and, if applicable, the
Excise Tax). The determination of any reduction in the Total Payments shall be made at the Company’s cost by the Company’s independent public accountants or another firm designated by the Company and reasonably approved by Executive, and
may be determined using reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company shall pay Executive’s costs incurred for tax, accounting and other professional advice in the
event of a challenge of any such reasonable, good faith interpretations by the Internal Revenue Service. 
 7. Certain Definitions:
For the purposes of this Agreement, the following capitalized terms shall have the meanings set forth below: 
 (a)
“Cause” shall mean any of the following: 
 (i) Executive’s theft, dishonesty, willful misconduct,
breach of fiduciary duty for personal profit, or falsification of any material employment or Company records; 
 (ii)
Executive’s willful violation of any law, rule, or regulation (other than traffic violations or similar offenses) or final cease-and-desist order or commission of an act that involves moral turpitude; 
 (iii) Executive’s intentional failure to perform stated duties; 
 (iv) Executive’s improper disclosure of the Company’s confidential or proprietary information; 
 (v) any material breach by Executive of the Company’s Code of Professional Conduct, which breach shall be deemed “material”
if it results from an intentional act by Executive and has a material detrimental effect on the Company’s reputation or business; or 
 (vi) any material breach by Executive of this Agreement, which breach, if curable, is not cured within thirty (30) days following written notice of such breach from the Company. 
 In the event that the Company terminates Executive’s employment for Cause, the Company shall provide written notice to Executive of that fact prior
to, or concurrently with, the termination of employment. Failure to provide written notice that the Company contends that the termination is for Cause shall constitute a waiver of any contention that the termination was for Cause, and the
termination shall be irrebuttably presumed to be an involuntary termination without Cause. However, if, within thirty (30) days following the termination, the Company first discovers facts that would have established “Cause” for
termination, and those facts were not known by the Company at the time of the termination, then the Company shall provide Executive with written notice, including the facts establishing that the purported “Cause” was not known at the time
of the termination, and the Company will pay no severance. 
  

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 (b) “Change in Control” shall mean the occurrence of any of the
following events: 
 (i) (X) any “person” (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended) becomes the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the total
combined voting power represented by the Company’s then outstanding voting securities other than the acquisition of the Company’s common stock by a Company-sponsored employee benefit plan or through the issuance of shares sold directly by
the Company to a single acquiror; or (Y) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becomes the “beneficial owner” (as defined in Rule 13d-3 under
said Act), directly or indirectly, of securities of the Company representing less than fifty percent (50%) of the total combined voting power represented by the Company’s then outstanding voting securities, but in connection with the
person’s acquisition of securities the person acquires the right to terminate the employment of all or a portion of the Company’s management team; 
 (ii) the Company is party to a merger or consolidation which results in the holders of the voting securities of the Company outstanding
immediately prior thereto failing to retain immediately after such merger or consolidation direct or indirect beneficial ownership of more than fifty percent (50%) of the total combined voting power of the securities entitled to vote generally
in the election of directors of the Company or the surviving entity outstanding immediately after such merger or consolidation; 
 (iii) a change in the composition of the Board occurring within a period of twenty-four (24) consecutive months, as a result of which fewer than a majority of the directors are Incumbent Directors; 
 (iv) effectiveness of an agreement for the sale, lease or disposition by the Company of all or substantially all of the Company’s
assets; or 
 (v) a liquidation or dissolution of the Company. 
 The Incumbent Directors shall have the right to determine whether multiple sales or exchanges of the voting stock of the Company, which, in the aggregate,
would result in a Change of Control, are related, and its determination shall be final, binding and conclusive. 
  

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 (c) “Code” means the Internal Revenue Code of 1986, as amended.

 (d) “Change in Control Period” shall mean the period commencing on the earlier of: (i) sixty
(60) days prior to the date of consummation of the Change in Control; (ii) the date of the first public announcement of a definitive agreement that would result in a Change in Control (even though still subject to approval by the
Company’s stockholders and other conditions and contingencies); or (iii) the date of the public announcement of a tender offer that is not approved by the Incumbent Directors and ending on the two year anniversary date of the consummation
of the Change in Control. 
 (e) “Change in Control Period Good Reason” shall mean any of the following
conditions: 
 (i) a decrease in Executive’s Base Salary or employee benefits other than as part of any across-the-board
reduction applying to all senior executives and not resulting in those senior executives receiving lesser benefits than similarly situated executives of an acquiror; 
 (ii) a material, adverse change in Executive’s title, authority, responsibilities or duties, as measured against Executive’s
title, authority, responsibilities or duties immediately prior to such change; provided that for purposes of this subsection, in addition to any other change in title, authority, responsibilities or duties, the following changes shall
constitute an event of “Good Reason”: (X) an individual who held a position in an independent, publicly held company prior to the Change in Control holds a position in a subsidiary company following the Change in Control; and
(Y) an individual who reported directly to the board of directors of a publicly held company prior to the Change in Control reports to an entity that is not the board of directors of a publicly held company; 
 (iii) the relocation of Executive’s principle workplace to a location greater than fifty (50) miles from the prior workplace;

 (iv) any material breach by the Company of any provision of this Agreement, which breach is not cured within thirty
(30) days following written notice of such breach from Executive; 
 (v) any failure of the Company to obtain the
assumption of this Agreement by any successor or assign of the Company; or 
 (vi) any purported termination of
Executive’s employment for “material breach of contract” which is purportedly effected without providing the “cure” period, if applicable, described in Section 7(a)(vi), above. 
  

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 For the purposes of any determination regarding the existence of Good Reason hereunder, any claim by
Executive that Good Reason exists shall be presumed to be correct unless the Company establishes to the Board that Good Reason does not exist, and the Board, acting in good faith, affirms such determination by a vote of not less than two-thirds of
its entire membership. 
 (f) “Incumbent Directors” shall mean members of the Board who either (i) are
members of the Board as of the date hereof, or (ii) are elected, or nominated for election, to the Board with the affirmative vote of at least a majority of the Incumbent Directors at the time of such election or nomination (but shall not
include an individual whose election or nomination is in connection with an actual or threatened proxy contest relating to the election of members of the Board). 
 (g) “Involuntary Termination” shall mean the occurrence of one of the following: 
 (i) termination by the Company of Executive’s employment with the Company for any reason other than Cause at any time; 
 (ii) Executive’s resignation from employment for Non Change in Control Period Good Reason within six (6) months following the
occurrence of the event constituting Non Change in Control Period Good Reason; or 
 (iii) during a Change in Control Period,
Executive’s resignation from employment for Change in Control Period Good Reason within six (6) months following the occurrence of the event constituting Change in Control Period Good Reason. 
 (h) “Non Change in Control Period Good Reason” shall mean any of the following conditions first occurring outside of a
Change in Control Period and occurring without Executive’s written consent: 
 (i) a decrease in Executive’s Base
Salary of greater than 20%; 
 (ii) a material, adverse change in Executive’s title, authority, responsibilities or
duties, as measured against Executive’s title, authority, responsibilities or duties immediately prior to such change. For purposes of this subsection, a material, adverse change shall not occur merely by a change in reporting relationship; or

 (iii) any material breach by the Company of any provision of this Agreement, which breach is not cured within thirty
(30) days following written notice of such breach from Executive. 
  

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 For the purposes of any determination regarding the existence of Non Change in Control Period Good Reason
hereunder, Executive shall bear the burden of demonstrating that an event of Non Change in Control Period Good Reason has occurred. Only the Board, acting as a majority, may determine that an event of Non Change in Control Period Good Reason has not
occurred; the Board must act within five business days of notification from Executive, or the Executive’s claim shall be deemed valid. 
 (i) “Permanent Disability” shall mean Executive’s permanent and total disability within the meaning of Section 22(e)(3) of the Code. 
 (j) “Release” shall mean a general release of all known and unknown claims against the Company and its affiliates and
their stockholders, directors, officers, employees, agents, successors and assigns substantially in a form reasonably acceptable to the Company, which has been executed by Executive and not revoked within the applicable revocation period.

 8. Insider Trading Policy: Executive agrees to abide by the terms and conditions of the Company’s Insider Trading Policy, as
it may be amended from time to time. 
 9. Dispute Resolution: In the event of any dispute or claim relating to or arising out of this
Agreement (including, but not limited to, any claims of breach of contract, wrongful termination or age, sex, race or other discrimination), Executive and the Company agree that all such disputes shall be fully and finally resolved by binding
arbitration conducted by the American Arbitration Association in New York, New York in accordance with its National Employment Dispute Resolution rules. Executive acknowledges that by accepting this arbitration provision he is waiving any right to a
jury trial in the event of such dispute. In connection with any such arbitration, the Company shall bear all costs not otherwise borne by a plaintiff in a court proceeding. 
 10. Attorneys’ Fees: The prevailing party shall be entitled to recover from the losing party its attorneys’ fees and costs incurred in
any action brought to enforce any right arising out of this Agreement. The Company shall pay Executive’s reasonable legal fees in connection with the review and negotiation of this Agreement and any ancillary services related thereto.

 11. General. 
 (a) Successors and Assigns: The provisions of this Agreement shall inure to the benefit of and be binding upon the Company, Executive and each and all of their respective heirs, legal representatives, successors and assigns. The
duties, responsibilities and obligations of Executive under this Agreement shall be personal and not assignable or delegable by Executive in any manner whatsoever to any person, corporation, partnership, firm, company, joint venture or other entity.
Executive may not assign, transfer, convey, mortgage, pledge or in any other manner encumber the compensation or other benefits to be received by him or any rights which he may have pursuant to the terms and provisions of this Agreement. 

 

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 (b) Amendments; Waiver: No provision of this Agreement shall be modified, waived
or discharged unless the modification, waiver or discharge is agreed to in writing and signed by Executive and by an authorized officer of the Company. No waiver by either party of any breach of, or of compliance with, any condition or provision of
this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time. 
 (c) Notices: Any notices to be given pursuant to this Agreement by either party to the other party may be effected by personal delivery or by overnight delivery with receipt requested. Mailed notices shall be
addressed to the parties at the addresses stated below, but each party may change its or his address by written notice to the other in accordance with this Paragraph: 
 Mailed notices to Executive shall be addressed as follows: 
 To the last known address provided by Executive to the Company, 
 with a copy to: 
 Shearman & Sterling 
 599 Lexington Avenue 
 New York, New York 10022 
 Attention: Doreen E. Lilienfeld 
 Mailed notices to the Company shall be addressed as
follows: 
 E*TRADE Financial Corporation 
 671 North Glebe Road 
 Arlington, VA 22203 
 Attention: General Counsel 
 (d) Entire Agreement: This Agreement constitutes the entire employment agreement between Executive and the Company regarding the
terms and conditions of his employment, with the exception of (i) the Agreement Regarding Employment and Proprietary Information and Inventions between the Company and Executive, (ii) any stock option, restricted stock, restricted stock
unit award or other Company stock-based award agreements between Executive and the Company to the extent not modified by this Agreement, (iii) any indemnification agreement referenced in Section 1 and (iv) the Company’s employee
benefit plans referenced in Section 3(c). This Agreement (including the documents described in (i) through (iv) herein) supersedes all prior negotiations, representations or agreements between Executive and the Company, whether

  

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written or oral, concerning Executive’s employment by or service to the Company, including, without limitation, the letter agreement dated
December 7, 2007 between Executive and the Company. 
 (e) Withholding Taxes: All payments made under this
Agreement shall be subject to reduction to reflect taxes required to be withheld by law. 
 (f) Counterparts: This
Agreement may be executed by the Company and Executive in counterparts, each of which shall be deemed an original and which together shall constitute one instrument. 
 (g) Headings: Each and all of the headings contained in this Agreement are for reference purposes only and shall not in any manner
whatsoever affect the construction or interpretation of this Agreement or be deemed a part of this Agreement for any purpose whatsoever. 
 (h) Savings Provision: To the extent that any provision of this Agreement or any paragraph, term, provision, sentence, phrase, clause or word of this Agreement shall be found to be illegal or unenforceable for
any reason, such paragraph, term, provision, sentence, phrase, clause or word shall be modified or deleted in such a manner as to make this Agreement, as so modified, legal and enforceable under applicable laws. The remainder of this Agreement shall
continue in full force and effect. 
 (i) Construction: The language of this Agreement and of each and every paragraph,
term and provision of this Agreement shall, in all cases, for any and all purposes, and in any and all circumstances whatsoever be construed as a whole, according to its fair meaning, not strictly for or against Executive or the Company, and with no
regard whatsoever to the identity or status of any person or persons who drafted all or any portion of this Agreement. 
 (j)
Further Assurances: From time to time, at the Company’s request and without further consideration, Executive shall execute and deliver such additional documents and take all such further action as reasonably requested by the Company to
be necessary or desirable to make effective, in the most expeditious manner possible, the terms of this Agreement and to provide adequate assurance of Executive’s due performance hereunder. 
 (k) Governing Law: Executive and the Company agree that this Agreement shall be interpreted in accordance with and governed by the
laws of the State of New York. 
  

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 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year written below.

  

					
	Date: March 2, 2008	 	E*TRADE Financial Corporation
			
		 	By:	 	 /s/ Ronald D. Fisher

		 	Name:	 	Ronald D. Fisher
		 	Title:	 	Board Member
		
	Date: March 2, 2008	 	 /s/ Donald H. Layton

		 	Donald H. Layton

  

 12Exhibit 10.2

 Exhibit 10.2 
 SEPARATION AGREEMENT 
 AND GENERAL RELEASE OF CLAIMS 
 This Agreement dated April 22, 2008 is between Arlen W. Gelbard (“Employee”) and E*TRADE Financial Corporation (the “Company”)
(the “Parties”). The parties hereby agree that Employee’s employment with the Company will terminate on April 22, 2008 (the “Separation Date”). 
  

	1.	Consideration: In consideration for and subject to Employee signing on or within 21 days after the Separation Date, the release of claims set forth on Exhibit A hereto
(the “Release”), the Company agrees to pay or provide Employee with the following payments and benefits: 

  

	 	a.	A lump sum payment of $1,785,588, to be paid on or promptly following the Separation Date (but no later than 5 business days following the Separation Date), reflecting the sum of
(i) one times Employee’s base salary, (ii) one times Employee’s target bonus for fiscal 2007 and (iii) a prorated target bonus for 2008. 

  

	 	b.	The following Company equity awards which would have become vested on or before June 3, 2008 if Employee had remained employed by the Company through that date shall become
vested on the Separation Date, and to the extent such equity awards are restricted stock awards, the applicable shares of Company common stock will be delivered to Employee as soon as practicable after the Separation Date, but in any event on or
before May 15, 20081: (i) Employee’s restricted stock award granted June 3, 2003 with respect to 187,500 shares of the
Company’s common stock which would have become vested on June 3, 2008; (ii) Employee’s restricted stock award granted May 25, 2004 with respect to 12,320 shares of the Company’s common stock which would have become
vested on May 25, 2008; and (iii) Employee’s stock option granted May 25, 2004 with respect to 80,528 shares which would have become vested on May 25, 2008. 

  

	1	With approval of the board, this provision was expanded to clarify inclusion of grants that would have vested on May 3, 2008. 

  

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	 	c.	Reimbursement, on a monthly basis, for the cost of medical insurance coverage at a level equivalent to that provided by the Company to Employee and his dependents immediately prior
to the Separation Date and elected by Employee through COBRA (or, if Employee is no longer eligible for COBRA continuation coverage, through a lump sum payment in an amount necessary to permit Employee to obtain medical insurance coverage at a level
equivalent to that provided by the Company immediately prior to the Separation Date, which lump sum payment shall be made to the Employee promptly after Employee provides the Company with the necessary documentation but in any event no later than
five business days after the first anniversary date of the Separation Date) and for the cost of life and disability insurance coverage at a level equivalent to that provided by the Company to Employee, for a period from the Separation Date through
the earlier of (i) the one-year anniversary of the Separation Date or (ii) the time Employee begins alternative employment. Receipt of the benefits pursuant to this clause (c) shall be subject to Employee not revoking the ADEA Release
(as defined in the Release). 

  

	 	d.	Outplacement services for up to 12 months following the Separation Date on a basis consistent with the Company’s practices, provided the aggregate amount of such services shall
not exceed $12,000. 

  

	 	e.	Payment for the reasonable attorney’s fees and expenses incurred by Employee in connection with the review and negotiation of this Agreement, in an amount not to exceed
$10,000, such payment to be made within 30 days following the Separation Date. 

  

	2.	 Resignations: As of the Separation Date, Employee hereby resigns (and the Company hereby accepts such resignations) from any and all director,
manager, officer or employee positions he may hold with the Company, its subsidiaries and any of its affiliates. Until the Separation Date, 

  

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Employee shall continue to serve in his current capacity and receive his base salary and employee benefits and be reimbursed for reasonable business expenses
in accordance with the Company’s practices and procedures. 

  

	3.	Transition Consulting. Employee agrees to be available to provide consulting services to the Company as an independent contractor from the Separation Date until
May 16, 2008 (the “Consulting Period”) and, during normal business hours, to render such advice and services to the Company as may be reasonably required by the Company in its Arlington, Virginia and New York, New York offices
in order to facilitate an orderly transition. In return, Employee will receive a weekly consulting fee of $19,952, which shall be paid in arrears no less often than bi-weekly. As a consultant, Employee shall not be an employee of the Company and
shall not be entitled to participate in any employee benefit plans or other benefits or conditions of employment (including any bonus plans) available to the employees of the Company. Employee shall have no authority to act as an agent of the
Company, except on authority specifically so delegated, and Employee shall not represent the contrary to any person. Employee shall not direct the work of any employee of the Company, or make any management decisions, or undertake to commit the
Company to any course of action in relation to third persons. The Company will reimburse Employee for reasonable business expenses incurred during the Consulting Period in accordance with the Company’s policies, but in any event on or before
June 30, 2008. 

  

	4.	Reimbursements: Employee will be reimbursed for outstanding reasonable business expenses incurred in connection with his duties to the Company prior to the Separation
Date (“Covered Business Expenses”) in accordance with the Company’s standard procedures. Employee will have 10 business days from the Separation Date to submit all outstanding Covered Business Expenses, if any, with appropriate
documentation for reimbursement by the Company. Failure to submit documented Covered Business Expenses for reimbursement within this time period will be considered a representation by Employee that he has been reimbursed for all business expenses.

  

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	5.	Vested and Accrued Benefits: Employee understands and acknowledges that he shall be entitled to no benefits from the Company other than those expressly set forth
herein and any vested and accrued benefits earned under employee benefit plans through the Separation Date, including any earned but unpaid vacation and base salary through the Separation Date, which shall be paid or provided by the Company to
Employee in accordance with the terms and conditions of such plans. With respect to any vested stock options (i) granted under the Company’s 1996 Stock Option Plan or under the Company’s 2005 Equity Incentive Plan for which Employee
would have a shorter period of time to exercise such options, Employee will have 180 days following the Separation Date (but in no event beyond the maximum term set forth in the applicable stock option agreement) to exercise such vested stock
options, and (ii) granted under the Company’s 2005 Equity Incentive Plan in 2006 or later, Employee will have, as provided by such award agreements, 12 months following the Separation Date to exercise such vested stock options. In the
event that Employee fails to exercise any vested stock options in the required time, those options will expire. All other provisions of the stock option agreements applicable to any stock option grant shall remain in full force and effect. Except as
expressly set forth in Section 1, all unvested stock options and unvested restricted stock awards shall terminate as of the Separation Date. Employee understands that he will receive no bonus payment for the 2007 or 2008 fiscal year except as
expressly set forth in Section 1. 

  

	6.	 Tax Matters: All amounts referenced in Section 1 and elsewhere in this Agreement shall be subject to any required tax withholding by the Company.
Notwithstanding any other provision in this Agreement to the contrary, all expenses eligible for reimbursement hereunder shall be paid to Employee promptly in accordance with the Company’s customary practices (if any) applicable to the
reimbursement of expenses of such type, but in any event by no later than March 15 of the calendar 

  

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year following the calendar year in which such expenses were incurred. The expenses incurred by Employee in any calendar year that are eligible for
reimbursement under this Agreement shall not affect the expenses incurred by Employee in any other calendar year that are eligible for reimbursement hereunder. Employee’s right to receive any reimbursement hereunder shall not be subject to
liquidation or exchange for any other benefit. The parties acknowledge that they believe in good faith that Employee’s termination of employment is an “involuntary separation from service” for purposes of Section 409A of the
Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder. 

  

	7.	No Admission: This Agreement constitutes a mutually acceptable vehicle for effecting Employee’s departure from the Company and shall not be used or treated or
deemed to be an admission of liability or responsibility on the part of any released person or entity. 

  

	8.	Continuing Agreements: Employee acknowledges and agrees that he shall continue to be bound by and comply with the Company’s Employee Inventions and Proprietary
Rights Assignment Agreement. Without limiting the foregoing, Employee agrees that for a period of one year after the Separation Date, he shall not, either directly or indirectly, solicit the services, or attempt to solicit the services, of any
employee of the Company to any other person or entity. Anything to the contrary notwithstanding, the Company agrees that the following shall not be deemed a violation of this Section 8: (i) Employee’s responding to an unsolicited
request for an employment reference regarding any former employee of the Company from such former employee, or from a third party, by providing a reference setting forth his personal views about such former employee, or (ii) if an entity with
which Employee is associated solicits, hires or engages any employee of the Company or any of its subsidiaries, if Employee was not, directly or indirectly, involved in identifying such person as a potential recruit or assisting in the recruitment
of such employee. For purposes hereof, Employee shall only be deemed to have been involved “indirectly” in soliciting or identifying an employee if Employee (x) directs a third party to solicit the employee, (y) identifies an
employee to a third party as a potential recruit or (z) aids, assists or participates with a third party in soliciting an employee. 

  

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	9.	Agreement Not to Compete; Return of Company Property: Employee agrees that he shall not compete with the Company in any unfair manner, including, without limitation,
using any confidential or proprietary information of the Company to compete with the Company in any way. The parties agree that Employee’s employment by any other person or entity shall not, by itself, violate the preceding sentence. Employee
agrees that for a period of one year following the Separation Date he will not accept employment, or perform services as a consultant or independent contractor, for any of the following entities or their successors: Ameritrade, Charles
Schwab & Co., Fidelity Investments, Scottrade, Inc. or TD Waterhouse Group, Inc. Employee represents that he has returned or will promptly return to the Company all documents, property, and other records of the Company or any affiliate of
the Company, and all copies thereof, within Employee’s possession, custody or control. Anything to the contrary notwithstanding, Employee shall be entitled to retain (i) papers and other materials of a personal nature, including, but not
limited to, photographs, correspondence, personal diaries, calendars and rolodexes, personal files and phone books, (ii) information showing his compensation or relating to reimbursement of expenses, (iii) information that he reasonably
believes may be needed for tax purposes, (iv) copies of plans, programs and agreements relating to his employment, or termination thereof, with the Company, (v) copies of minutes, presentation materials and personal notes from any meeting
of the Board of Directors of the Company or any of its subsidiaries, or any committee thereof, while he was a member of any such Board of Directors or committee thereof, and (vi) Employee’s laptop computer and blackberry, provided that all
confidential and/or proprietary information of the Company, its subsidiaries and its affiliated entities shall be removed from such items to the reasonable satisfaction of the Company. 

  

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	10.	Non-Disparagement; Disclosure of Agreement: Employee agrees that he shall not disparage the Company or any of its former, current or future officers, directors,
employees, products or services, and the Company agrees that it will not (and will cause each of its subsidiaries not to and will use reasonable efforts to cause its directors and officers not to) disparage Employee in the course of any authorized
internal or external communication. Notwithstanding the foregoing, nothing contained in this Agreement shall prohibit Employee or the Company from (x) responding publicly to incorrect, disparaging or derogatory public statements to the extent
reasonably necessary to correct or refute such public statement or (y) making any truthful statement to the extent (i) necessary with respect to any litigation, arbitration or mediation involving this Agreement, including, but not limited
to, the enforcement of this Agreement or (ii) required by law or by any court, arbitrator, mediator or administrative or legislative body (including any committee thereof) with apparent jurisdiction over Employee or the Company. Employee and
the Company acknowledge that the Company will be required to disclose this Agreement and its terms in its public filings with the SEC. 

  

	11.	 Cooperation Clause: Employee agrees that, as requested by the Company or its counsel, he will fully cooperate with the Company and its counsel in any
formal or informal inquiry, investigation, disciplinary or other proceeding initiated by any government, regulatory or law enforcement agency (including without limitation the Securities and Exchange Commission, FINRA, formerly the National
Association of Securities, Inc., or the Office of Thrift Supervision). Employee further agrees to fully cooperate with the Company and its counsel in both the pursuit or prosecution of any claim or right the Company may hold against others for
damages or relief and in defending the Company against any pending or future claims, complaints or actions brought against the Company, including but not limited regulatory actions, administrative proceedings, arbitration claims, lawsuits or
independent investigations by the Board in conjunction with a stockholder demand. In this regard, Employee agrees that he will 

  

 7 

	 	 
promptly provide all information or documents he may possess relevant to the subject matter of any inquiry, and that he will testify truthfully and with
complete candor in connection with any such regulatory, administrative or legal action or proceeding. To the extent possible, the Company will try to limit Employee’s participation to regular business hours. Any request for cooperation by the
Company hereunder will take into account, to the extent practicable, Employee’s personal and professional schedule. The Company agrees to provide Employee reasonable notice, to the extent practicable, in the event his assistance is required.
The Company will reimburse Employee for reasonable travel expenses (including lodging and meals) incurred by him in connection with providing such assistance and for legal fees to the extent Employee reasonably believes that separate representation
is warranted, in either case within 30 days of the submission of the appropriate documentation to the Company. Employee’s entitlement to such reimbursement, including legal fees, pursuant to this Section 11, shall in no way affect
Employee’s rights to be indemnified and/or advanced expenses in accordance with the Company’s or any of its subsidiaries’ corporate or other organizational documents, or any applicable insurance policy. 

 

	12.	Dispute Resolution: In the event of any dispute or claim relating to or arising out of this Agreement (including, but not limited to, any claims of breach of contract,
wrongful termination or age, sex, race or other discrimination), Employee and the Company agree that all such disputes shall be fully and finally resolved by binding arbitration conducted through the American Arbitration Association in Arlington,
Virginia in accordance with its National Employment Dispute Resolution rules. The Parties acknowledge that by accepting this arbitration provision that they are waiving any right to a jury trial in the event of such dispute. In connection with any
such arbitration, the Company shall bear all costs not otherwise born in a court proceeding. 

  

 8 

	13.	Prevailing Party: The prevailing party shall be entitled to recover from the losing party its attorneys’ fees and costs incurred in any action or proceeding
brought to enforce any right arising out of this Agreement. 

  

	14.	Entire Agreement: This Agreement, any confidentiality, proprietary rights and dispute resolution agreement between Employee and the Company, and any agreement
concerning any stock options and other equity awards issued to Employee, constitute the entire agreement between the parties with respect to the subject matter hereof and thereof and supersede all prior negotiations and agreements, whether written
or oral, including without limitation the Employment Agreement between Employee and the Company dated as of September 1, 2004 (as amended, the “Employment Agreement”). This Agreement may not be altered or amended except by a
written document signed by Employee and an authorized representative of the Company. This Agreement shall be governed by the internal laws of the State of New York. 

  

	15.	Acknowledgment: Employee understands and acknowledges that he has been advised to consult an attorney before accepting this Agreement. Employee further understands and
acknowledges that he has up to 21 days from the Separation Date to Employee to sign the Release and return it to the Company, although it may be signed and returned at any time within such period. Furthermore, in the event Employee does not sign the
Release, Employee will not be eligible and will be required to return all consideration received under this Agreement. 

  

	16.	Indemnification: Nothing herein or in the Release shall affect or otherwise limit any indemnification of Employee provided by the Company’s (or its
subsidiaries’) bylaws, charter, other corporate or organizational documents or other agreement concerning indemnification (including the Company’s insurance policies). The indemnification provisions for officers under the Company’s
(or its subsidiaries’) bylaws shall (to the maximum extent permitted by law) be extended to the Employee following the Separation Date with respect to all matters, events or transactions occurring or effected during the Employee’s period
of employment with the Company. 

  

 9 

 EMPLOYEE UNDERSTANDS THAT HE IS ENTITLED TO CONSULT WITH, AND HAS CONSULTED WITH, AN ATTORNEY PRIOR TO SIGNING THIS
AGREEMENT. EMPLOYEE IS SIGNING THIS AGREEMENT KNOWINGLY, WILLINGLY AND VOLUNTARILY IN EXCHANGE FOR THE BENEFITS DESCRIBED IN SECTION 1. 
  

							
	Dated: April 22, 2008	 		 	Employee
			
		 		 	 /s/ Arlen W. Gelbard

		 		 	Arlen W. Gelbard
			
	Dated: April 22, 2008	 		 	E*TRADE Financial Corporation
				
		 		 	By:	 	 /s/ Donald H. Layton

		 		 		 	Donald H. Layton
		 		 		 	Chief Executive Officer and Chairman of the Board of Directors

  

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 EXHIBIT A – Release of Claims 
  

	1.	Full Release: In exchange for the benefits described in the Separation Agreement dated April 22, 2008 (the “Separation Agreement”) between Arlen
W. Gelbard (“Employee”) and E*TRADE Financial Corporation (the “Company”) (the “Parties”), Employee and his successors and assigns release and absolutely discharge the Company and its subsidiaries
and other affiliated entities, and each of their respective shareholders, directors, employees, agents, attorneys, legal successors and assigns of and from any and all claims, actions and causes of action, whether now known or unknown, which
Employee now has, or at any other time had, or shall or may have, against those released parties arising out of or relating to any matter, cause, fact, thing, act or omission whatsoever occurring or existing at any time to and including the date of
execution of this Release by Employee, including, but not limited to: 

  

	 	(a)	claims relating to any letter offering Employee employment with the Company, the Employment Agreement between Employee and the Company dated as of September 1, 2004, the
parties’ employment relationship, the termination of that relationship, the Employee’s purchase or right to purchase shares of the Company’s stock, and any claims for breach of contract, infliction of emotional distress, fraud,
defamation, personal injury, wrongful discharge or age, sex, race, national origin, industrial injury, physical or mental disability, medical condition, sexual orientation or other discrimination, harassment or retaliation, claims under the federal
Americans with Disabilities Act, Title VII of the federal Civil Rights Act of 1964, as amended, 42 U.S.C. Section 1981, the federal Fair Labor Standards Act, the federal Employee Retirement Income Security Act, the federal Worker Adjustment and
Retraining Notification Act, the federal Family and Medical Leave Act, the National Labor Relations Act, the Virginians with Disabilities Act and the Virginia Human Rights Act, which prevent employment discrimination, Virginia Code sections 40.1-29,
et seq., 

  

 11 

	 	(b)	the Age Discrimination in Employment Act (subject to Section 3 below); or 

  

	 	(c)	any other federal, state or local law, all as they have been or may be amended, and all claims for attorneys fees and/or costs, to the full extent that such claims may be released.

 This Release does not apply to (i) claims which cannot be released as a matter of law, including claims
for indemnification under applicable state law, (ii) any right Employee may have to enforce the Separation Agreement, (iii) any right or claim that arises after the date of this Release, (iv) Employee’s eligibility for
indemnification and advancement of expenses in accordance with applicable laws or the certificate of incorporation and by-laws of Company and/or its subsidiaries, or any applicable insurance policy or (v) any right Employee may have to obtain
contribution as permitted by law in the event of entry of judgment against Employee as a result of any act or failure to act for which Employee, on the one hand, and Company or any other releasee hereunder, on the other hand, are jointly liable.

  

	2.	All Claims Waived: Employee understands that he is releasing claims that he may not know about. That is Employee’s knowing and voluntary intent even though he
recognizes that someday he may regret having signed the Separation Agreement and this Release. Nevertheless, by signing the Separation Agreement and this Release, Employee agrees that he is assuming that risk, and he agrees that the Separation
Agreement and this Release shall remain effective in all respects in any such case. Employee expressly waives all rights he may have under any law that is intended to protect him from waiving unknown claims. 

  

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	3.	Older Workers Benefit Protection Act: In accordance with the Older Workers Benefit Protection Act, Employee understands and acknowledges that he has been advised to
consult an attorney before accepting the Separation Agreement and signing this Release. Employee further understands and acknowledges that he has up to 21 days from the Separation Date to sign this Release by dating and signing a copy of this
Release and returning it to the Company, although it may be accepted at any time within such period. Employee further understands that, once having signed this Release, Employee will have an additional seven (7) days within which to revoke the
release of claims solely under the Age Discrimination in Employment Act (the “ADEA Release”), by delivering written notice of revocation of the ADEA Release to Christine Wolf, Managing Director, Human Resources. If Employee revokes
such ADEA Release during such seven-day period, Employee will not be eligible for the consideration under Section 1(c) of the Separation Agreement. Employee’s revocation of the ADEA Release shall not impact the Release in any other way,
and the Release is otherwise irrevocable on the date signed. 

  

 13 

 EMPLOYEE UNDERSTANDS THAT HE IS ENTITLED TO CONSULT WITH, AND HAS CONSULTED WITH, AN ATTORNEY PRIOR TO SIGNING THE
SEPARATION AGREEMENT AND THIS RELEASE AND THAT HE IS GIVING UP ANY LEGAL CLAIMS HE HAS AGAINST THE PARTIES RELEASED ABOVE BY SIGNING THIS RELEASE. EMPLOYEE IS SIGNING THIS AGREEMENT KNOWINGLY, WILLINGLY AND VOLUNTARILY IN EXCHANGE FOR THE BENEFITS
DESCRIBED IN SECTION 1 OF THE SEPARATION AGREEMENT. 
  

							
	Dated: 	 		 	Employee
			
		 		 	  

		 		 	Arlen W. Gelbard
			
	Dated: 	 		 	E*TRADE Financial Corporation
			
		 		 	  

		 		 	By:	 	

  

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