Document:

Exhibit 10.20

 Exhibit 10.20 
 TRANSITION AGREEMENT 
 This Agreement dated
September 8, 2009 is between Donald H. Layton (“Executive”) and E*TRADE Financial Corporation (the “Company”) (the “Parties”). 
 WHEREAS, the Parties entered into the Employment Agreement, dated as of March 2, 2008 (the “Employment Agreement”),
pursuant to which Executive agreed to serve as the Company’s Chief Executive Officer until December 31, 2009, or until such earlier time as a successor Chief Executive Officer was hired, or one of the Parties otherwise terminated the
relationship; and 
 WHEREAS, the Parties wish to set forth their intentions and commitments regarding the transition of the
Executive during the remaining portion of his term as Chief Executive Officer. 
 1. Transition. 
 (a) The Parties hereby agree that Executive’s employment with the Company will continue until the earlier of:
(i) the date on which the Company hires a new Chief Executive Officer; or (ii) December 31, 2009 (as applicable, the “Transition Period”), unless Executive’s employment is otherwise terminated by either Party
prior to the end of the Transition Period in accordance with the Employment Agreement. Upon completion of the Transition Period, Executive shall resign (and the Company shall accept such resignations) from any and all director, manager, officer,
employee, or other positions he may hold with the Company, its subsidiaries and any of its affiliates and from the Board of Directors of the Company and the board of directors or any subsidiary of the Company on which Executive serves. 

(b) During his continued employment during the Transition Period, Executive shall continue to receive the salary and
benefits set forth in the Employment Agreement, in addition to the benefits set forth in Section 2 below. 
 (c) Executive agrees to actively assist in the search for and transition to a permanent Chief Executive Officer during the Transition Period, including undertaking all necessary corporate communications, using best efforts to keep the
management team together, maintaining relationships with regulators and analysts, assisting in the search for a permanent Chief Executive Officer and in the transition of Executive’s responsibilities. 
 2. Special Recognition Awards. To recognize Executive’s successful efforts in the recapitalization and stabilization of the
Company since his hiring, Executive shall receive the following cash awards subject to his continued employment during the Transition Period: 
 (a) A payment of $375,000 per month, payable effective starting September 1, 2009 through December 31, 2009. 

 (b) Upon completion of the Transition Period in exchange for the services
described in Section 1(c) during the Transition Period, a lump sum payment of $1,500,000.00 (the “Transition Payment”), subject to Executive having signed a release of claims in the form set forth on Exhibit A hereto (the
“Release”), which unless otherwise requested by Executive shall be paid by wire transfer on the day following the date on which the Release becomes effective and irrevocable (or as promptly as practicable thereafter). Notwithstanding the
foregoing, in the event that the Executive engages in an act that would give rise to “Cause” as defined in his existing employment agreement, or in the event that he materially breaches the terms of this Agreement, he shall forfeit the
Transition Payment. 
 3. Other Benefits. 
 (a) The Company shall pay for the reasonable attorney’s fees and expenses incurred by Executive in connection with the
review and negotiation of this Agreement, such payment to be made no later than 60 days after the date hereof. 
 (b) The Company agrees to provide to Executive the use of an office through the first anniversary of the last day of his employment, along with other routine support services (e.g., email access) and either (i) email access and
desk space to an assistant who will be paid by Executive personally or (ii) reasonable assistant services from existing Company resources. 
 4. Tax Matters: All amounts referenced in Section 2 and elsewhere in this Agreement shall be subject to any required tax withholding by the Company. The payments under Section 2 are
intended to qualify for the short-term deferral exception to Section 409A of the Code and therefore, for the avoidance of doubt, shall in no event be paid later than March 15, 2010. 
 5. Continuing Agreements: The Employment Agreement shall remain in effect during the Transition Period, and Executive shall continue
to be bound by and comply with the Agreement Regarding Employment and Proprietary Information and Inventions between the Company and Executive. Executive shall retain his equity incentive awards on their existing terms, as set forth in the
applicable award agreements and the Employment Agreement. 
 6. Necessary Approvals. If after the date of this Agreement,
any amounts payable hereunder become prohibited by applicable law or regulation, the Company and Executive will work together to honor the intent of this Agreement in a manner that complies with applicable regulatory authority. 
 7. Mutual Non-Disparagement; Disclosure of Agreement: During and following Executive’s employment with the Company, Executive
agrees that he shall not disparage the Company or any of its current or future officers, directors, employees with whom he is acquainted, or its current products or services, and the Company agrees that it

  

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will not disparage Executive in the course of any authorized internal or external communication, and the Company shall cause its current and future directors and executive officers not to
disparage Executive and shall instruct its executive officers and directors to refrain from making such statements and to instruct their respective representatives to so refrain. Notwithstanding the foregoing, nothing contained in this Agreement
shall prohibit Executive 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 Executive or the Company. Executive and the Company acknowledge that the Company will be required to disclose this Agreement and its
terms in its public filings with the SEC. 
 8. Dispute Resolution: Consistent with the Employment Agreement, 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. 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. 
 9. Due Authority. By executing this Agreement, the representative of the Company represents and warrants that he is duly authorized
to bind the Company to the terms of this Agreement and that all necessary or appropriate corporate approvals for this Agreement to be effective have been obtained. 
 10. Entire Agreement; Miscellaneous: This Agreement, the Employment Agreement, any confidentiality, proprietary rights and dispute resolution agreement between Executive and the Company, and any
agreement or plan concerning any stock options and other equity awards issued to Executive, 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. This Agreement may not be altered or amended except by a written document signed by Executive and an authorized representative of the Company. 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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	Date: September 8, 2009	 		 	E*TRADE Financial Corporation
				
		 		 	By:	 	/s/ Ron Fisher
		 		 		 	Name:	 	Ron Fisher
		 		 		 	Title:	 	Chair of the Compensation Committee

  

					
			
	Date: September 8, 2009	 		 	/s/ Donald H. Layton
		 		 	Donald H. Layton

  

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 EXHIBIT A – Release of Claims 
 1. Full Release: In exchange for the benefits described in the Transition Agreement, dated September 8, 2009 (the
“Transition Agreement”), between Donald H. Layton (“Executive”) and E*TRADE Financial Corporation (the “Company”) (the “Parties”), Executive 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 Executive 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 Transition Agreement by Executive, including, but not limited to: 
 (a) claims relating to any letter or agreement offering Executive service or employment with the Company, the Employment Agreement between Executive and the Company dated as of March 2, 2008, the
parties’ employment relationship, the termination of that relationship, 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 Executive Retirement Income Security Act, the federal Worker Adjustment and Retraining Notification Act, the federal Family and Medical Leave Act, the
National Labor Relations Act, and applicable state statues preventing employment discrimination, 
 (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 Executive may have to enforce the Transition Agreement,
including the agreements that are incorporated by reference therein, (iii) any right or claim that arises after the date of this Release, (iv) Executive’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 Executive may have to obtain contribution as permitted by law in the event of entry of
judgment against Executive as a result of any act or failure to act for which Executive, on the one hand, and Company or any other release hereunder, on the other hand, are jointly liable. This Release does not amend any equity compensation award
agreement between Executive and the Company. 
  

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 2. All Claims Waived: Executive understands that he is releasing claims that he may
not know about. That is Executive’s knowing and voluntary intent even though he recognizes that someday he may regret having signed the Transition Agreement and this Release. Nevertheless, by signing the Transition Agreement and this Release,
Executive agrees that he is assuming that risk, and he agrees that the Transition Agreement and this Release shall remain effective in all respects in any such case. Executive expressly waives all rights he may have under any law that is intended to
protect him from waiving unknown claims. 
 3. Older Workers Benefit Protection Act: In accordance with the Older Workers
Benefit Protection Act, Executive understands and acknowledges that he has been advised to consult an attorney before accepting the Transition Agreement and signing this Release. Executive further understands and acknowledges that he has at least 21
days 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. Executive further understands that, once having signed this Release, Executive will
have an additional 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 the Company’s
General Counsel. If Executive revokes such ADEA Release during such seven-day period, Executive will not be eligible for the payments and benefits under Section 2(b) of the Transition Agreement. 
 EXECUTIVE UNDERSTANDS THAT HE IS ENTITLED TO CONSULT WITH, AND HAS CONSULTED WITH, AN ATTORNEY PRIOR TO SIGNING THIS RELEASE AND THAT HE IS GIVING UP ANY
LEGAL CLAIMS HE HAS AGAINST THE PARTIES RELEASED ABOVE BY SIGNING THIS RELEASE. EXECUTIVE IS SIGNING THIS AGREEMENT KNOWINGLY, WILLINGLY AND VOLUNTARILY IN EXCHANGE FOR THE BENEFITS DESCRIBED IN THE TRANSITION AGREEMENT. 
  

					
			
	Date: December 18, 2009	 		 	/s/ Donald H. Layton
		 		 	Donald H. Layton

  

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 CONSULTING AGREEMENT 
 December 18, 2009 
 Donald H. Layton 
  

	Re:	Consulting Services Agreement 

 Dear Don:

 This letter agreement sets forth the terms and conditions of your consulting services to E*TRADE Financial Corp. (the
“Company”), effective December 31, 2009 through June 30, 2010 (the “Consulting Period”). 
 Services. You agree to be available for part-time consultation with the Company’s Chief Executive Officer, whether interim or permanent, as reasonably requested by the Company in order to facilitate such Chief Executive
Officer’s transition. 
 Compensation. Your compensation hereunder during the Consulting Period will consist of the
following: 
  

	 	•	 	 A fee of $1,100 per hour worked at the request of the Company. 

  

	 	•	 	 You shall be reimbursed in accordance with the policies of the Company for necessary and reasonable business and travel expenses incurred by you in
connection with the performance of your duties hereunder. 

  

	 	•	 	 All fees or expense reimbursements due to you shall be paid promptly upon submission of a listing of the time or expenses, together with supporting
documentation reasonably requested by the Company. 

 Independent Contractor Status. You understand
that, during the Consulting Period, you will not be an employee of the Company. To the extent consistent with applicable law, the Company will not withhold any amounts from any consulting fees paid hereunder as federal income tax withholding or as
employee contributions under the Federal Insurance Contributions Act or any other state or federal laws. You shall be solely responsible for the withholding and/or payment of any federal, state or local income or payroll taxes. 
 Confidentiality. You agree to treat as confidential and not to publish, distribute or otherwise disclose in any manner (except to
employees, consultants and advisors of the Company who agree to be bound by these provisions) any information received from the Company or its representatives in connection herewith, without the prior written approval of the Company (such approval
shall not be unreasonably withheld). Upon termination of your services hereunder, you shall promptly deliver to the Company all copies in

  

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whatever form existing (whether written, computerized or otherwise) of any and all confidential information or documents of the Company. 
 Indemnification. The Company shall indemnify you and hold you harmless from and against any and all losses, claims, damages,
liabilities, penalties, obligations, judgments, awards, costs, fees, expenses and disbursements, including without limitation the costs, fees, expenses and disbursements of counsel and others, as and when incurred, from the first dollar, of
investigating, preparing or defending any pending or threatened action, claim, suit, proceeding or investigation, directly or indirectly caused by, relating to, based upon, arising out of or in connection with the performance by you of services to
the Company pursuant to this letter agreement, other than as is found in a final judgment by a court of competent jurisdiction (not subject to further appeal) to have resulted primarily and directly from your gross negligence, bad faith or willful
misconduct. The Company shall be entitled to participate in and control the defense of any such proceeding under this provision at its sole cost and expense. 
 Termination. Your consulting services hereunder may be terminated at any time by either you or the Company upon written notice to the other party. Such termination for any reason shall not affect
any obligations of either party which have arisen prior to such termination. 
 Miscellaneous. This letter agreement
describes the entire terms and conditions of your engagement by the Company during the Consulting Period. Nothing in this letter agreement shall amend or terminate any other agreement between you and the Company, whether related to the terms of your
employment prior to the Consulting Period or the termination of such employment. This letter agreement will be governed by the laws of the State of New York. 
  
  

					
		 		 	Sincerely,
			
		 		 	E*TRADE FINANCIAL CORPORATION
			
	Agreed and accepted:	 		 	
			
	/s/ Donald H. Layton	 		 	Dated: December 21, 2009
	(Signature)	 		 	

  
  

 2Exhibit 10.21

 Exhibit 10.21 
 FORM OF EMPLOYMENT AGREEMENT 
 This Employment
Agreement (this “Agreement”) is made and entered into by and between E*TRADE Financial Corporation (the “ Company”) and
                         (“Executive”) as of
                         (the “Effective Date”). 
 1. Position and Duties: As of the Effective Date, Executive will be appointed as
                            . Executive agrees to devote all necessary time, energy and skill to his
duties at the Company. 
 The Company shall provide Executive with the same indemnification 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 to indemnification and the D&O insurance coverage with respect to all matters, events or
transactions occurring or effected during the Executive’s period of employment with the Company shall survive the termination of Executive’s employment. 
 2. Term of Agreement: This Agreement shall remain in effect through December 31, 2011 (the “Term”), unless Executive’s employment is terminated earlier by either party,
subject to payments under Section 5 hereof to the extent applicable. The Term of this Agreement shall automatically renew for additional one-year periods unless either party provides at least ninety days’ prior written notice of
termination of the Agreement; provided that in the event of a Change in Control during the term of this Agreement, this Agreement may not be terminated until 24 months following such Change in Control. Executive’s employment with the
Company shall be “at-will”. Unless Executive terminates his employment prior to the end of the Term pursuant to the terms of this Agreement (for the avoidance of doubt, including to the extent an Involuntary Termination occurs following
the Company’s delivery of notice of its non-renewal of this Agreement pursuant to the preceding sentence), Executive’s continued employment following the end of the Term shall continue to be on an at-will basis and on such terms and
conditions as the parties may agree. 
 3. Compensation: During the Term, Executive shall be compensated by the Company
for his services as follows: 
 (a) Base Salary: Executive shall be paid an annualized base salary of
$                 per year, subject to applicable withholding, in accordance with the Company’s normal payroll procedures. Executive’s base salary may
be adjusted from time to time in the discretion of the Company, subject to the provisions of Section 5 (incorporating the definitions set forth in Section 7) (this is referred to as the “Base Salary”). 

(b) Performance Bonus: Executive shall have the opportunity to earn an annual performance bonus. The performance
bonus shall be earned upon the Executive and the Company meeting pre-established performance targets. Executive’s current cash bonus target amount is
$                . The annual cash bonus, if earned, will be paid at the same time and in the same manner as payments to similarly situated executives of the
Company and, except as expressly provided otherwise in this Agreement or in the applicable bonus plan document, shall not be earned unless Executive remains employed with the Company on the date of payment. 

 (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. Executive will be eligible to receive equity compensation awards from time to time if the Company’s
Board of Directors or its designee, in its sole discretion, determines that such an award(s) is appropriate. 
 5. Effect of
Termination of Employment During the Term: 
 (a) Involuntary Termination outside a Change in Control
Period: If Executive’s employment with the Company is terminated as a result of an Involuntary Termination outside of a Change in Control Period, then subject to Executive signing and not revoking the Release (so long as such Release is
signed in a period such that the payments under clauses (i) and (ii) below may be made no later than 2 and 1/2 months following the end of the year in such termination of employment occurs), Executive shall receive the following benefits,
in addition to any compensation and benefits earned and unpaid under Section 3 through the date of Executive’s termination of employment: 
 (i) a lump sum cash severance payment equal to one times the sum of (x) Executive’s annual Base Salary and (y) Executive’s annual cash performance bonus at the target payment level,
which payment shall be paid within 30 days following the effectiveness of the Release; 
 (ii) a pro rata share
of the target performance bonus for the year in which termination of employment occurs, provided that the Company’s performance meets the target performance level for the year of termination, as determined at year-end, which payment
shall be paid no later than 2 and 1/2 months following the end of the year in such termination of employment occurs; 
 (iii) reimbursement for the cost of medical coverage at a level equivalent to that provided by the Company immediately prior to termination of employment, through the earlier of: (A) 12 months following Executive’s termination of
employment, or (B) the time Executive begins alternative employment; provided that (x) it shall be the obligation of Executive to inform the Company that new employment has been obtained and (y) such reimbursement shall be made
by the Company subsidizing or reimbursing COBRA premiums or, if Executive is no longer eligible for COBRA continuation coverage, by a lump sum payment based on the monthly premiums immediately prior to the expiration of COBRA coverage. 

(iv) 12 months’ accelerated vesting of outstanding options, restricted stock awards, restricted stock units and other
equity awards (collectively, “Equity Grants”), such that as of the later of the date of Executive’s termination of employment or the last day following Executive’s execution of the Release on which Executive may revoke
such Release under its terms, all such Equity Grants will be deemed vested to the extent such awards would have become vested on or before the first anniversary of the date of Executive’s termination of employment; 
 (b) Involuntary Termination during a Change in Control Period: If Executive’s employment with the Company is
terminated as a result of an Involuntary Termination

  

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during a Change in Control Period, then subject to Executive signing and not revoking 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), Executive shall receive the following benefits, in addition to any compensation and benefits earned and unpaid under Section 3 through the date of
Executive’s termination of employment: 
 (i) a lump sum cash severance payment equal to two times the sum
of (x) Executive’s annual Base Salary and (y) Executive’s annual cash performance bonus at the target payment level, which payment shall be paid within 30 days following the effectiveness of the Release; 
 (ii) a pro rata share of the target performance bonus for the year in which termination of employment occurs, provided
that the Company’s performance meets the target performance level for the year of termination, as determined at year-end, which payment shall be paid no later than 2 and 1/2 months following the end of the year in such termination of employment
occurs; 
 (iii) each Equity Grant shall become fully vested and, if applicable, exercisable (and any forfeiture
provision shall lapse) in full as of the later of the date of Executive’s termination of employment or the last day following Executive’s execution of the Release on which Executive may revoke such Release under its terms; 
 (iv) reimbursement for the cost of medical coverage at a level equivalent to that provided by the Company immediately prior
to termination of employment, through the earlier of: (A) 24 months following Executive’s termination of employment, or (B) the time Executive begins alternative employment; provided that (x) it shall be the obligation of
Executive to inform the Company that new employment has been obtained and (y) such reimbursement shall be made by the Company subsidizing or reimbursing COBRA premiums or, if Executive is no longer eligible for COBRA continuation coverage, by a
lump sum payment based on the monthly premiums immediately prior to the expiration of COBRA coverage. 
 (c)
Death or Disability.  
 (i) In the event of Executive’s death, all Equity Grants held by Executive,
to the extent then outstanding, shall become fully vested and, if applicable, exercisable (and any forfeiture provision shall lapse) as of the date of Executive’s death. 
 (ii) In the event the Executive’s employment terminates as a result of his death or Permanent Disability, Executive (or
Executive’s estate, as applicable) shall be entitled to a pro rata share of the Executive’s cash or other performance bonus to the date of death or Permanent Disability. 
 (d) Other Termination: In the event of a termination of Executive’s employment not specified under
Section 5(a), Section 5(b) or Section 5(c) 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 and unpaid under
Section 3 through the date of his termination and, in the case of each stock option, restricted stock

  

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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 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. 
 (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

  

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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 if and to the
extent that a reduction in the Total Payments would result in Executive retaining a larger amount than if Executive received 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 conviction (including any plea of guilty or
nolo contendere) of any criminal act involving fraud, dishonesty, misappropriation or moral turpitude, or which impairs Executive’s ability to perform his duties with the Company; 
 (iii) Executive’s intentional and repeated failure to perform stated duties after notice from the Company of, and a
reasonable opportunity to cure, such failure; 
 (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 or of any agreement regarding proprietary information and inventions,
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. 
 (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) 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: 
  

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 (i) a material decrease in Executive’s Base Salary other than as part
of any across-the-board reduction applying to all senior 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 (ii),
in addition to any other material, adverse change in title, authority, responsibilities or duties, a material diminution in the authority, duties, or responsibilities of the supervisor to whom the Executive is required to report shall constitute an
event of “Change in Control Period Good Reason”; 
 (iii) the relocation of Executive’s principal
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, or the Company’s delivery of written notice of non-renewal of this Agreement
(other than as a result of a termination for Cause) pursuant to Section 2 hereof; 
 (v) any failure of the
Company to obtain the assumption (by operation of law or by contract) 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; 
 provided that Executive shall have provided written notice to the Company of
the existence of the condition constituting Good Reason within 90 days of the initial existence of the condition. 
 (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 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 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: 
  

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 (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; provided that for purposes of this subsection, a material, adverse change shall not occur merely by a change in reporting relationship; or

 (iii) the relocation of Executive’s principal 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, or the Company’s delivery of written notice of non-renewal of this Agreement (other than as a result of a termination for Cause) pursuant
to Section 2 hereof; 
 provided that Executive shall have provided written notice to the Company of the existence of
the condition constituting Good Reason within 90 days of the initial existence of the condition. 
 (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

  

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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. 
 (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 to the last known address
provided by Executive to the Company, 
 Mailed notices to the Company shall be addressed as follows: 

E*TRADE Financial Corporation 
 135 E. 57th St. 
 New York, NY, 10022 
 Attention: Executive Vice President Human
Resources 
 (d) Entire Agreement: This Agreement constitutes the entire employment agreement between
Executive and the Company regarding the terms and conditions of his employment and any amounts due on termination of such employment, with the exception of (i) the Agreement Regarding Employment and Proprietary Information and Inventions
between the Company and Executive, (ii) the Restricted Stock Unit Agreement representing the award granted September 8, 2009 and 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 written or oral, concerning Executive’s employment by
or service to 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. 
  

 9 

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

							
	Dated:                     , 2009	 		 	E*TRADE Financial Corporation
				
		 		 	By:	 	 
		 		 		 	Donald H. Layton
		 		 		 	Chairman and CEO
				
	Dated:                     , 2009	 		 		 	 
		 		 		 	[Name]
		 		 		 	

  

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