Document:

EXHIBIT 10.40

MODEL MANAGEMENT CONTINUITY AGREEMENT

[FOR UNITED STATES EMPLOYEES]

E*TRADE GROUP, INC.

July 7, 1999

Jarrett Lilien

Dear Jarrett:

             We are pleased to offer you the position of CEO—TIR. This letter, if accepted, sets forth the terms of your employment with E*TRADE Group, Inc. (hereafter
“E*TRADE” or the “Company”), following the Closing (as defined in the Exchange Agreement). As a full-time employee, you would receive an annual base salary of $200,000.00, paid biweekly, less all applicable deductions. 

             All TIR (Holdings) LTD (“TIR”) employee benefits will continue uninterrupted until E*TRADE transitions your benefits coverage from TIR benefits to
E*TRADE benefits. You will be offered E*TRADE’s standard Company-sponsored benefits which will ensure that you receive benefits consistent with and comparable to those offered similarly situated E*TRADE employees. You will, in particular, participate
in E*TRADE’s existing paid time off plan and will be eligible to accrue paid time off based on your prior years of service with TIR. It is E*TRADE’s intention to transition your benefits coverage from TIR benefits to E*TRADE benefits during the
first few months after the Closing. The Company wants to make this transition as smooth as possible.

Commencement Date

             This offer is contingent on the occurrence of the closing of E*TRADE’s acquisition (the “Acquisition”) of TIR, and, if you accept this offer, it
would take effect as of that Closing Date.

Bonus Participation

             Upon achievement of the mutually agreed-upon operating milestones ending in fiscal years 2000 and 2001, as set out in Exhibit “A” hereto, you will be
entitled to participate in a special bonus pool set aside for TIR Executive Committee members in lieu of the Team Quality Incentive (“TQI”) Bonus Program. Milestone factors for the special bonus pool shall be equally weighted among three
categories of performance including the following:  (1) individual performance; (2) integration; and (3) project leadership. Such bonuses shall be payable in two installments in October and April of each applicable fiscal year. The management of TIR may
recommend individual allocations of bonus amounts from such bonus pool; however, E*TRADE shall make the final determinations of eligibility and bonus awards. The TIR special bonus program will terminate at the end of E*TRADE’s fiscal year 2001, and
you will no l
onger be eligible for any further bonus payments under that plan. Beginning in E*TRADE’s fiscal year 2002, that is, September 1, 2001, you will be eligible to participate in the E*TRADE bonus program, subject to the same terms and conditions
applicable to other similarly situated E*TRADE employees.

Stock Options

             Your existing and outstanding stock options with TIR have been assumed by E*TRADE in accordance with your Stock Option Assumption Agreement. In addition, at the
Closing you will be granted an option to purchase 20,000 shares of E*TRADE common stock under the Company’s 1996 Stock Incentive Plan. The per-share exercise price of the option will be equal to the per-share fair market value of the common stock on
the Closing Date, as determined by the E*TRADE Board of Directors. The option will be evidenced by E*TRADE’s standard stock option agreement. So long as you continue in service with E*TRADE, the option will vest and become exercisable with respect to
twenty-five percent (25%) of the option shares on the one-year anniversary of your employment start 

date and with respect to the balance at 25% upon each anniversary of the Closing Date until the fourth anniversary of the Closing Date.

Term of Employment

             You commit to remaining employed by E*TRADE for a period of three (3) years  following the Closing Date (the “Term”). Nevertheless, E*TRADE may
terminate your employment at any time for any reason, during the Term, with or without cause, by giving written notice of such termination. Similarly, you may resign your employment for “Good Reason,” as defined in this Agreement, without being
deemed to have breached this Agreement. In addition, if E*TRADE wishes to terminate your employment for any reason within three (3) years after the Closing Date, it must obtain the written approval of the Chief Executive Officer—TIR, the
President—TIR, the President of E*TRADE International and E*TRADE’s Vice President, Associates and Work Environment before taking such action. If any one of these four (4) individuals is not employed by E*TRADE at the time of the action in
question, then such termina
tion will require the approval of that individual’s replacement. E*TRADE will also provide you with one (1) month’s notice prior to the termination of your employment for any reason.

Termination of Employment

             For the purposes of this Agreement, a termination by E*TRADE for “Cause” shall mean a termination for any of the following reasons:  (i) your
failure to perform the duties of your position after receipt of a written warning and thirty (30) days in which to cure; (ii) engaging in misconduct as described in E*TRADE’s “Standards of Business Conduct”; (iii) being convicted
of a felony; (iv) committing an act of fraud against or the misappropriation of property belonging to the Company or any of its employees; or (v) a material breach of this agreement or any confidentiality or proprietary information agreement
between you and the Company. E*TRADE will provide written notice of the reason for termination in the case of any termination for “Cause.”  A termination by E*TRADE for any other reason shall be a termination “Without Cause.”

             For the purposes of this Agreement, a resignation for “Good Reason” will occur if you resign your employment within thirty (30) days after the
occurrence of either of the following events:  (i) a reduction in your base salary or benefits; (ii) a material diminution in your duties, responsibilities, position, or authority as described herein; (iii) failure by E*TRADE to establish
and administer the bonus pool for fiscal years ending in 2000 and 2001, as set out herein and in Exhibit A; or (iv) failure by E*TRADE to comply with and satisfy any other material provision of this Agreement.

             If E*TRADE terminates your employment “Without Cause” or you terminate your employment for “Good Reason” prior to the end of the Term, then
E*TRADE will pay you a lump sum payment equal to (i) one (1) month’s salary for each year of service with TIR, providing for the continuity of your service with any E*TRADE business entity, not to exceed twelve (12) months and excluding the one
month’s notice provision provided herein; and (ii) that amount of the bonus pool for which you are eligible prorated to the date of termination of your employment, less applicable deductions and withholdings, as severance (“Severance
Payment”). Such Severance Payment would be in lieu of any entitlement you may have to notice of termination, pay in lieu of notice of termination, or severance pay under any Company policy or practice. If you are eligible to receive a greater amount
of severance from an
y other source or based on any written commitment, then you will have the option of selecting that severance benefit or this one, but not both. All benefits and future stock and option vesting would terminate as of the date of termination of your
employment. You would, of course, be paid your salary through your date of termination and for the value of all unused paid time off earned through that date and allowed to continue your medical coverage to the extent provided for by COBRA, but you would
not be entitled to any additional payments or benefits except as set forth herein. You would be allowed to exercise your vested options during the time period set forth in and in accordance with your option agreement and Stock Option Assumption Agreement.

             If you were to resign your employment other than for “Good Reason” or your employment were to be terminated for “Cause” within three (3)
years after the Closing Date, then you would be paid all salary and benefits through the date of termination of your employment, but nothing else. 

             If your employment were to continue beyond the Term, then your employment would be on an “at-will” basis. This means that either you or E*TRADE could
terminate your employment at any time for any reason with or without cause and without the obligation to pay you, or your right to, any severance payment except as may be provided at such time under E*TRADE’s employee benefit plans for which you are
eligible.

Your Position

             You will initially have the title of CEO—TIR in your present work location; however, you may be relocated with the written approval of the Chief Executive
Officer—TIR, the President—TIR, the President of E*TRADE International and E*TRADE’s Vice President, Associates and Work Environment, in consultation with you. You will have whatever reasonable duties are assigned to you consistent with
your title and position as agreed to by the Chief Executive Officer—TIR, the President—TIR and the President of E*TRADE International. The President of E*TRADE International, with input from the Chief Executive Officer—TIR, the
President—TIR and E*TRADE’s Vice President, Associates and Work Environment, may change your title, duties, compensation, and benefits as they reasonably see fit. In addition, the Company acknowledges that it will attempt to provide you with
employment with E*TRAD
E International focusing on global operations, at a later time consistent with the development of this entity and to the extent possible; however, this acknowledgement shall not give you “Good Reason” to terminate your employment pursuant to
this Agreement.

Non-Competition

             You understand and agree that this Agreement is entered into in connection with the acquisition by E*TRADE of all of the outstanding stock of TIR. You further
understand and agree that you were a shareholder or optionholder of TIR; a key and significant member of the management of TIR; and that E*TRADE paid substantial consideration in order to purchase your stock and/or option interest in TIR. In addition, the
parties agree that, prior to acquisition by E*TRADE of the stock of TIR, TIR was engaged in its business in the United States and throughout the world. E*TRADE represents and you understand that, following the acquisition by E*TRADE of the stock of TIR,
E*TRADE will continue conducting such business in the United States and throughout the world.

             You agree that during your employment with E*TRADE you will not engage in any other employment, business, or business related activity unless you receive
E*TRADE’s prior written approval to hold such outside employment or engage in such business or activity, except that E*TRADE agrees that you will be allowed to continue your membership on the Board of Directors of Barton Mines Corporation and Barton
Joint Venture Corporation (BJVC) and devote up to ten (10) business days per year in such capacity. Such written approval will not be unreasonably withheld if such outside employment, business or activity would not in any way be competitive with the
business or proposed business of E*TRADE or otherwise conflict with or adversely affect in any way your performance of your employment obligations to E*TRADE.

             Subject to the approval of the Vice President, Associates and Work Environment or his replacement, commencing on the date of termination of your employment with
E*TRADE and continuing for a period equal to one (1) month for each year of service with TIR (providing for the continuity of your service with any E*TRADE business entity and excluding the one (1) month’s notice provision provided herein) but not to
exceed twelve (12) months, you will not, except as provided below, as an employee, agent, consultant, advisor, independent contractor, general partner, officer, director, stockholder, investor, lender or guarantor of any corporation, partnership or other
entity, or in any other capacity directly or indirectly:

             1.	engage in any activity, in any market where E*TRADE conducts business, in which you participate, manage or advise in the design, development,
marketing, sale or servicing of any product related to global institutional and retail internet securities trading, clearing services or execution (hereafter referred to as “the Business”);

             2.	induce, encourage or solicit any individual who was employed by E*TRADE within six (6) months of the date your employment with E*TRADE terminates to leave
the Company for any reason or to accept employment with any other company, or to employ, interview or arrange to have business opportunities offered to any such individual; or

             3.	permit your name to be used in connection with a business which is competitive or substantially similar to the Business.

             Notwithstanding the foregoing, you may own, directly or indirectly, solely as an investment, up to one percent (1%) of any class of “publicly traded
securities” of any person or entity which owns a business that is competitive or substantially similar to the Business. The term “publicly traded securities” shall mean securities that are traded on a national securities exchange or listed
on the National Association of Securities Dealers Automated Quotation System.

             

             If any restriction set forth in this non-competition section is found by a court to be unreasonable, then you agree, and hereby submit, to the reduction and
limitation of such prohibition to such area or period as shall be deemed reasonable. You acknowledge that the services that you will provide to E*TRADE under this Agreement are unique and that irreparable harm will be suffered by E*TRADE in the event of
the breach by you of any of your obligations under this Agreement, and that E*TRADE will be entitled, in addition to its other rights, to enforce by an injunction or decree of specific performance the obligations set forth in this Agreement. Any claims
asserted by you against E*TRADE shall not constitute a defense in any injunction action brought by E*TRADE to obtain specific enforcement of said paragraphs.

             You agree that if the Company establishes that you, or those acting in concert with you or on your behalf, materially violate the Non-Competition provision in
any way, the Company shall be entitled to recover the reasonable attorneys’ fees and litigation expenses incurred, arising out of or relating to the Company’s efforts to prevent the breach, to establish that a breach has occurred, to enforce the
Non-Competition provisions or to seek to redress a breach, including any appeals if necessary. If the Company fails to establish that you, or those acting in concert with you or on your behalf, have materially violated any of the Non-Competition
provisions in any way, you shall be entitled to reimbursement of reasonable attorneys’ fees and litigation expenses incurred in your defense.

Arbitration

             We each agree that any and all disputes between us which arise out of your employment, the termination of your employment, or under the terms of this Agreement
shall be resolved through final and binding arbitration. This shall include, without limitation, disputes relating to this Agreement, any disputes regarding your employment by E*TRADE or the termination thereof, claims for breach of contract or breach of
the covenant of good faith and fair dealing, and any claims of discrimination or other claims under any federal, state or local law or regulation now in existence or hereinafter enacted and as amended from time to time concerning in any way the subject of
your employment with E*TRADE or its termination. The only claims not covered by this section are the following:  (i) claims for benefits under the unemployment insurance or workers’ compensation laws; (ii) claims concerning the validity, infringement o
r
 enforceability of any trade secret, patent right, copyright, trademark or any other intellectual property held or sought by E*TRADE, or which E*TRADE could otherwise seek; in each of these instances such disputes or claims shall not be subject to
arbitration, but rather, will be resolved pursuant to applicable California law. Binding arbitration will be conducted in Santa Clara County in accordance with the rules and regulations of the American Arbitration Association. The parties will split the
cost of the arbitration filing and hearing fees and the cost of the arbitrator; each side will bear its own attorneys’ fees, unless otherwise decided by the arbitrator. You understand and agree that arbitration shall be instead of any civil
litigation, that each side waives its right to a jury trial, and that the arbitrator’s decision shall be final and binding to the fullest extent permitted by law and enforceable by any court having jurisdiction thereof.

Miscellaneous Provisions

             This Agreement and the accompanying Proprietary Information and Inventions Agreement will be the entire agreement between you and E*TRADE relating to your
employment and the additional matters provided for herein. This Agreement supersedes and replaces (i) any prior verbal or written agreements between the parties except as provided for herein and (ii) any prior verbal or written agreements between the
undersigned employee and TIR relating to the subject matter hereof. This Agreement may be amended or altered only in a writing signed by you and the President of E*TRADE International. This Agreement shall be construed and interpreted in accordance with
the laws of the State of California. Each provision of this Agreement is severable from the others, and if any provision hereof shall be to any extent unenforceable it and the other provisions shall continue to be enforceable to the full extent allowable,
as if such of
fending provision had not been a part of this Agreement. This offer is also contingent on your executing the E*TRADE Proprietary Information and Invention Agreement, a copy of which is attached hereto.

             As used in this Agreement, “E*TRADE Group, Inc.” and “Company” refer to E*TRADE and each of its subsidiaries.

             

             If you have any questions about this offer, please contact me at (650) 331-6097. Please sign and date this letter below and return it to me. 

		 	
  
	
	

	 	
  
	

		 	
  
	Sincerely,

		 	
  
	E*TRADE GROUP INCORPORATED
	

	 	
  
	

/s/ Jerry A. Dark
		 	
  
	Jerry A. Dark, Vice President
Associates and Work Environment

             

             I agree to the terms and conditions in this offer.

		 	
  
	
	

Dated:  July 12, 1999	 	
  
	

/s/ Jarrett Lilien
    

  
		 	
  
	Jarrett Lilien

Exhibit A

Bonus Milestones

Milestone Factors for Determining Bonus Pool Pay-Outs:

        1.  Individual Performance:  The following criteria, to the extent applicable, will be used to determine the degree to which an individual has met his or her individual
performance milestone.

              a.  Business unit financial performance

                     i.  Includes budget management

                     ii.  Performance over revenue targets

              b.  Key business initiatives

                     i.  Includes performance compared with growth targets for sales, volumes by geography/line of
business/function

                     ii.  Customer growth and retention

              c.  Personal impact on business results

              d.  Participation and leadership in performance management process throughout the Company

              e.  Remaining “engaged” and productive post-merger

        2.  Integration:  Degree to which the employee contributes to a seamless and effective transition:

              a.  Contribution to employee selection and retention

              b.  Leadership and participation in H&G/E*TRADE integration teams

              c.  Facilitating successful cultural assimilation

                     i.  Including positive, open, two-way communications, technology transfers and learning

              d.  Succession planning to ensure smooth transitions for all key, high-impact positions.

        3.  Project Leadership:  Degree to which employee takes an active and effective role in identified projects. (Note:  all existing projects will be reviewed and new projects
may be jointly identified by Chief Executive Officer—TIR and President—E*TRADE International. The new projects may differ from the existing “godfather” strategic projects and may include projects necessary as part of integration.)

Evaluation and “Fine Tuning” of Milestone Performance:  Performance results associated with the three milestones will be “fine tuned” as follows:

        1.  Internal Comparisons:  Executive Committee members will be ranked approximately 1-12 relative to his or her peers.

              a.  Factors used for “relative” ranking:

                     i.  Executive Committee member’s success in attracting new talent

                     ii.  Relative performance of regional offices/functions

                     iii.  Motivation level

        2.  External Comparisons:  To ensure retention, market competitiveness of total compensation will be considered in light of planned bonus payouts.

Process For Determining Bonus Pool Pay-Outs:

        1.  Goals for TIR group to be set out by Executive Committee and finalized by the Chief Executive Officer—TIR and the President of E*TRADE International.

        2.  Quarterly review of process executed by the Chief Executive Officer—TIR and the President of E*TRADE International, with input from E*TRADE’s Vice President,
Associates and Work Environment

        3.  Final determination of bonus pay-outs per individual by the Chief Executive Officer—TIR, the President—TIR, and the President of E*TRADE International, with input
from E*TRADE’s Vice President, Associates and Work EnvironmentExhibit 10.41

EMPLOYMENT AGREEMENT

              This Agreement is made effective this 1st day of June, 2000 (the “Effective Date”), by and between E*TRADE Group, Inc., a Delaware corporation
(“Company”), and Jerry Gramaglia (“Executive”).

BACKGROUND

              Executive is serving as President and Chief Operating Officer of the Company. The parties desire to enter into a formal employment agreement with respect
to the continued employment of Executive by Company, which shall automatically become effective as of the Effective Date.

TERMS AND CONDITIONS

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

              1.  Termination of Prior Agreements. Subject to the provision of Section 9 herein, any prior agreement shall terminate and be of no
further force and effect as of the execution of this Agreement.

              2.  Employment. Executive agrees to serve as President and Chief Operating Officer of Company for the term of this Agreement, subject to
the terms set forth in this Agreement and the provisions of the Bylaws of Company. During his employment, Executive shall devote his effort and attention, on a full-time basis, to the performance of the duties required of him as an executive of Company. 

              3.  Compensation. As compensation for his services during the term of this Agreement, Executive shall receive the amounts and benefits
set forth in this Section 3 all effective as of the Effective Date unless otherwise specified:

                     (a)  An annual salary of $425,000 (“Base Salary”) prorated for any partial year of
employment. As soon as reasonably practicable after the close of Company’s current fiscal year and the close of each fiscal year thereafter, the Base Salary shall be subject to review by the Compensation Committee of the Company’s Board of
Directors for increases in light of the size and performance of Company. The Base Salary, as adjusted in accordance with this subsection (a), shall remain in effect unless and until it is increased in accordance with this subsection (a).
Executive’s salary shall be payable semimonthly or in accordance with Company’s regular payroll practices in effect from time to time for officers of his level in Company. 

                     (b)  Participation in E*TRADE’s gr2 (Success Sharing) Bonus Plan. The Executive will be eligible
to receive an incentive bonus of 80% of his base salary, which may be increased as determined by the Chairman/Chief Executive Officer and the Compensation Committee of the Company.

                     (c)  Participation in the employee benefit plans maintained by Company and in other benefits provided
by Company to senior executives, including retirement and 401(k) plans, deferred compensation, medical and dental, annual vacation, paid holidays, sick leave, and similar benefits, which are subject to change from time to time at the reasonable discretion
of Company.

                     (d)  Reimbursement for financial counseling not to exceed $10,000 per year and for annual physical
examinations for the executive and his wife not to exceed $20,000 per year.

                     (e)  It is acknowledged that Executive has received option grants in accordance with the terms of this
contract. Company agrees that there will be no change made in any Stock Option during the term of Executive’s employment hereunder which adversely affects Executive’s rights as established by the foregoing documents, without the prior written
consent of Executive.

                     (f)  Lease of automobile for company use, of a mutually agreeable make and model of a value not to
exceed $50,000, and reimbursement of reasonable operating expense.

                     (g)  Reimbursement of all reasonable business-related expenses, including without limitation business-
travel conducted pursuant to Company’s travel policy.

                     (h)  Reimbursement of the reasonable maintenance costs of a comprehensive security and monitoring
system installed in the Executive’s primary residence.

                     (i)  Executive will be eligible for full relocation benefits as provided by our executive relocation
policy.

              4.  Term. The term of this Agreement and the termination rights are as follows:

                     (a)  This Agreement and Executive’s employment under this Agreement shall be effective as of the
Effective Date and shall continue for a term ending on May 31, 2004 (the “Initial Term”).

                     (b)  This Agreement and Executive’s employment may be terminated by either party prior to the end
of the Initial Term (or any renewal period) upon 30 days’ prior written notice to the other party, provided that, in the event of such termination, Company shall be obligated to make the payments and provide the benefits described in Section 6
below.

              5.  Executive will be given the option of a fully secured first mortgage loan of up to $10,000,000 for the purchase of a house in the San
Francisco area. The terms and conditions of this fully secured and full recourse loan will be set forth in a separate writing.

              6.  Termination Payments. Upon termination of Executive’s employment, Company shall pay to Executive, within three business days
after the end of the 30-day notice period provided in Section 4 above, a payment in cash equal to subsection (a) of this Section 6, and shall for the period or at the time specified provide the other benefits described in subsection (b) of this
Section 6 if: (i) Executive’s employment is terminated by Company, other than for Cause, within three years after any “Change in Control” of Company as defined in subsection (d) of this Section 6, or at the request of or pursuant to an
agreement with a third party who has taken steps reasonably calculated to effect a Change in Control, or otherwise in connection with or in anticipation of a Change in Control

                     (a)  Eighteen (18) months of Executive’s current Base Salary.

                     (b)  In addition to the amount payable to Executive under subsection (a) of this Section 6, upon
termination of Executive for any reason the health care (including medical and dental) and life insurance benefits coverage benefits provided to Executive at his date of termination shall be continued at the same level and in the same manner as if his
employment had not terminated (subject to the customary changes in such coverages if Executive reaches age 65 or similar events), together with the benefits described in subsections (d) and (f)  of Section 3 beginning on the date of such termination and
ending on the later of:  (a) the end of the term of this Agreement or (b) the date eighteen (18) months following the date of the Executive’s termination, followed by COBRA election rights. Any additional coverages Executive had at termination,
including dependen

t coverage, will also be continued for such period on the same terms. Any costs Executive was paying for such coverages at the time of termination shall continue to be paid by Executive. If the terms of any benefit plan referred to in this section do not
permit continued participation by Executive, then Company will arrange for other coverage providing substantially similar benefits at the same contribution level of Executive.

                     (c)  For purposes of this Agreement, the following definitions shall apply:

                            (i)  The “Board” shall mean the Board of
Directors of Company.

                            (ii)  The “Incumbent Board” shall mean the
members of the Board as of the date of this Agreement and any person becoming a member of the Board hereafter whose election, or nomination for election by Company’s shareholders, was approved by a vote of at least a majority of the directors then
comprising the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the directors of Company).

                            (iii)  “Change in Control” shall mean:

                            (A)  The acquisition (other than from Company) by any
person, entity or “group,” within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (excluding, for this purpose, any employee benefit plan of Company or its subsidiaries which acquires beneficial ownership of voting securities of
Company) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% 

or more of either the then outstanding shares of Common Stock or the combined voting power of Company’s then outstanding voting securities entitled to vote generally in the election of directors; or

                            (B)  The failure for any reason of individuals who
constitute the Incumbent Board to continue to constitute at least a majority of the Board; or

                            (C)  Approval by the stockholders of Company of a
reorganization, merger, consolidation, in each case, with respect to which the shares of Company voting stock outstanding immediately prior to such reorganization, merger or consolidation do not constitute or become exchanged for or converted into more
than 50% of the combined voting power entitled to vote generally in the election of directors of the reorganized, merged or consolidated company’s then outstanding voting securities, or a liquidation or dissolution of Company or of the sale of all or
substantially all of the assets of Company.

                            (iv)   “Current Total Annual Compensation”
shall be the greater of (i) Executive’s Base Salary for the calendar year in which his employment terminates or (ii) such salary for the calendar year prior to the year of such termination.

                            (v)  “Disability” shall mean the total and
permanent inability of Executive due to illness, accident or other physical or mental incapacity to perform the usual duties of his employment under this Agreement, as determined by a physician selected by Company and acceptable to Executive or
Executive’s legal representative (which agreement as to acceptability shall not be unreasonably withheld).

                            (vi)  The “Exchange Act” shall mean the
Securities Exchange Act of 1934, as amended.

                            (vii)  “Cause” shall be defined solely as
(i) Executive’s defalcation or misappropriation of funds or property of the Company, or the commission of any other illegal act in the course of his employment with Company which, in the reasonable judgment of the Board of Directors, has a
material adverse financial effect on the Company or on Executive’s ongoing abilities to carry out his duties under this Agreement; (ii) Executive’s conviction of a felony or of any crime involving moral turpitude, and affirmance of such
conviction following the exhaustion of any appeals; (iii) refusal of Executive to substantially perform all of his duties and responsibilities, or Executive’s persistent neglect of duty or chronic unapproved absenteeism (other than for a
temporary or permane

nt Disability), which remains uncured following thirty days after written notice of such alleged Cause by the Board of Directors; or (iv) any material and substantial breach by Executive of other terms and conditions of this Agreement, which, in the
reasonable judgment of the Board of Directors, has a material adverse financial effect on the Company or on Executive’s ongoing abilities to carry out his duties under this Agreement and which remains uncured following thirty days after written
notice of such alleged Cause by either the Board of Directors, or Company’s chairman and Chief Executive Officer.

              7.  Executive agrees that during his employment with E*TRADE Executive will not engage in any other employment, business, or business related
activity unless Executive receives E*TRADE’s prior written approval to hold such outside employment or engage in such business or activity. Such written approval will not be unreasonably withheld if such outside employment, business or activity would
not in any way be competitive with the business or proposed business of E*TRADE or otherwise conflict with or adversely affect in any way his performance of his employment obligations to E*TRADE.

                     Subject to the approval of the Chief People Officer or his replacement, commencing on the date of termination of
his employment with E*TRADE and continuing for a period not to exceed twelve (12) months, Executive will not, except as provided below, as an employee, agent, consultant, advisor, independent contractor, general partner, officer, director, stockholder,
investor, lender or guarantor of any corporation, partnership or other entity, or in any other capacity directly or indirectly:

                            i.  engage in any activity, in any market where E*TRADE
conducts business, in which Executive participate, manage or advise in the design, development, marketing, sale or servicing of any product related to global institutional and retail internet securities trading, clearing services or execution (hereafter
referred to as “the Business”);

                            ii.  induce, encourage or solicit any individual who was
employed by E*TRADE within six (6) months of the date his employment with E*TRADE terminates to leave the Company for 

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any reason or to accept employment with any other company, or to employ, interview or arrange to have business opportunities  offered to any such individual; or 

                            iii.  permit his name to be used in connection with a
business which is competitive or substantially similar to the Business.

                     Notwithstanding the foregoing, Executive may own, directly or indirectly, solely as an investment, up to one
percent (1%) of any class of “publicly traded securities” of any person or entity which owns a business that is competitive or substantially similar to the Business. The term “publicly traded securities” shall mean securities that are
traded on a national securities exchange of listed on the National Association of Securities Dealers Automated Quotation System.

                     If any restriction set forth in this non-competition section is found by a court to be unreasonable, then
Executive agrees, and hereby submit, to the reduction and limitation of such prohibition to such area or period as shall be deemed reasonable. Executive acknowledges that the services that Executive will provide to E*TRADE under this Agreement are unique
and that irreparable harm will be suffered by E*TRADE in the event of the breach by Executive of any of his obligations under this Agreement, and that E*TRADE will be entitled, in addition to its other rights, to enforce by an injunction or decree of
specific performance the obligations set forth in this Agreement. Any claims asserted by Executive against E*TRADE shall not constitute a defense in any injunction action brought by E*TRADE to obtain specific enforcement of said paragraphs.

                     Executives agree that if the Company establishes that Executive, or those acting in concert with Executive or on
his behalf, materially violate the Non-Competition provision in any way, the Company shall be entitled to recover the reasonable attorneys’ fees and litigation expenses incurred, arising out of or relating to the Company’s efforts to prevent the
breach, to establish that a breach has occurred, to enforce the Non-Competition provisions or to seek to redress a breach, including any appeals if necessary. If the Company fails to establish that Executive, or those acting in concert with Executive or
on his behalf, have materially violated any of the Non-Competition provisions in any way, Executive shall be entitled to reimbursement of reasonable attorneys’ fees and litigation expenses incurred in his defense.

              8.  Arbitration. We each agree that any and all disputes between us which arise out of his employment, the termination of his employment,
or under the terms of this Agreement shall be resolved through final and binding arbitration. This shall include, without limitation, disputes relating to this Agreement, any disputes regarding his employment by E*TRADE or the termination thereof, claims
for breach of contract or breach of the covenant of good faith and fair dealing, and any claims of discrimination or other claims under any federal, state or local law or regulation now in existence or hereinafter enacted and as amended from time to time
concerning in any way the subject of his employment with E*TRADE or its termination. The only claims not covered by this section are the following: (i) claims for benefits under the unemployment insurance or workers’ compensation laws; (ii) claims
conce

rning the validity, infringement or enforceability of any trade secret, patent right, copyright, trademark or any other intellectual property held or sought by E*TRADE, or which E*TRADE could otherwise seek; in each of these instances such disputes or
claims shall not be subject to arbitration, but rather, will be resolved pursuant to applicable California law. Binding arbitration will be conducted in Santa Clara County in accordance with the rules and regulations of the American Arbitration
Association. The parties will split the cost of the arbitration filing and hearing fees and the cost of the arbitrator; each side will bear its own attorneys’ fees, unless otherwise decided by the arbitrator. Executive understand and agree that
arbitration shall be instead of any civil litigation, that each side waives its right to a jury trial, and that the arbitrator’s decision shall be final and binding to the fullest extent permitted by law and enforceable by any court having
jurisdiction thereof.

              9.  Miscellaneous Provisions. This Agreement, the stock options grant agreements and the previously executed Proprietary Information and
Inventions Agreement will be the entire agreement between Executive and E *TRADE relating to his employment and the additional matters provided for herein. This Agreement supersedes and replaces (i) any prior verbal or written agreements between the
parties except as provided for herein and (ii) any prior verbal or written agreements between the undersigned Executive and the Company relating to the subject matter hereof. This Agreement may be amended or altered only in a writing signed by Executive
and the Company. This Agreement shall be construed and interpreted in accordance with the laws of the State of California. Each provision of this Agreement is severable from the others, and if any provision hereof shall be to any extent unenforceable it
and the oth

er provisions shall continue to be enforceable to the full extent allowable, as if such offending provision had not been a part of this Agreement. 

	Page 3

              10.  Assignment; Successors. Any assignment of this Agreement shall be in accordance with the following:

                     (a)  The rights and benefits of Executive under this Agreement, other than accrued and unpaid amounts
due hereunder, are personal to him and shall not be assignable by Executive, except with the prior written consent of Company.

                     (b)  Subject to the provisions of subsection (c) of this Section 6, this Agreement shall not be
assignable by Company, provided that with the consent of Executive, Company may assign this Agreement to another corporation wholly owned by it either directly or through one or more other corporations, or to any corporate successor of Company or any such
corporation.

                     (c)  Any business entity succeeding to substantially all of the business of Company, by purchase,
merger, consolidation, sale of assets or otherwise, shall be bound by and shall adopt and assume this Agreement, and Company shall require the assumption of this Agreement by such successor as a condition to such purchase, merger, consolidation, sale of
assets or other similar transaction.

              11.  Notices. Any notice or other communications under this Agreement shall be in writing, signed by the party making the same, and shall
be delivered personally or sent by certified or registered mail, postage prepaid, addressed as follows:

	 	If to Executive: 	Mr. Jerry Gramaglia
c/o E*Trade Group, Inc.
4500 Bohannon Drive
Menlo Park, CA 94025

	 	If to Company:	Chief Legal Affairs Officer
c/o E*Trade Group, Inc.
4500 Bohannon Drive
Menlo Park, CA 94025

or such other address or agent as may hereafter be designated by either party hereto. All such notices shall be deemed given on the date personally delivered or mailed.

              12.  Full Settlement and Legal Expenses. In no event shall Executive be obligated to seek other employment or take any other action by
way of mitigation of the amounts payable to Executive under any of the provisions of this Agreement. The prevailing party shall be entitled to recover all legal fees and expenses which such party may reasonably incur as a result of any legal proceeding
relating to the validity, enforceability, or breach of, or liability under, any provision of this Agreement or any guarantee of performance (including as a result of any contest by Executive about the amount of any payment pursuant to Section 6 of this
Agreement), plus in each case interest at the applicable Federal Rate provided for in Section 7872(f)(2) of the Code.

              13.  Governing Law. This Agreement shall be interpreted and enforced in accordance with the laws of the State of California, except that
any arbitration shall be governed by the Federal Arbitration Act.

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

	Page 4

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

	

	 	  	E*TRADE GROUP, INC.

		 	By:  	/s/ Christos M. Cotsakos
		 	  	

	
  	 	  	Christos M. Cotsakos
Chairman & Chief Executive Officer

	

	 	  	

	

	 	  	EXECUTIVE

		 	  	/s/ Jerry Gramaglia
		 	  	

	
  	 	  	Jerry Gramaglia

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