þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended September 30, 2008 | ||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from to |
Delaware | 82-0543156 | |
(State or other jurisdiction
of
incorporation or organization) |
(I.R.S. Employer
Identification Number) |
Title of Each Class
|
Name of Each Exchange on Which Registered
|
|
Common Stock $0.01 par value
|
The NASDAQ Stock Market LLC |
Large accelerated
filer
þ
|
Accelerated filer o |
Non-accelerated
filer
o
(Do not check if a smaller reporting company) |
Smaller reporting company o |
2
Item 1. | Business |
| The investment firm of choice for the typical family. | |
| One of the best-run companies. |
| Focus on retail brokerage services. We plan to focus on attracting active traders, long-term investors and RIAs to our retail brokerage services. This focused strategy is designed to enable us to maintain our low operating cost structure while offering our clients outstanding products and services. | |
| Provide a comprehensive long-term investor solution. We continue to expand our suite of diversified investment products and services to best serve investors needs. We help clients make investment decisions by providing simple-to-use investment tools and objective research, guidance and education. |
3
| Maintain industry leadership and market share with active traders. We help traders make better-informed investment decisions by offering fast access to markets, insight into market trends and innovative tools such as strategy back-testing and comprehensive options research and trading capabilities. | |
| Continue to be a leader in the RIA industry. We provide RIAs with comprehensive brokerage and custody services supported by our robust integrated technology platform, customized personal service and practice management solutions. | |
| Leverage our infrastructure to add incremental revenue. Through our proprietary technology, we are able to provide a very robust online experience for long-term investors and active traders. Our low-cost, scalable platform provides speed, reliability and quality trade execution services for clients. The scalable capacity of our trading system allows us to add a significant number of transactions while incurring minimal additional fixed costs. | |
| Continue to be a low-cost provider of quality services. Our operating expense per trade is among the lowest of any of our publicly-traded competitors. We intend to continue to lower our operating costs per trade by creating economies of scale, utilizing our single-platform proprietary system, continuing to automate processes and locating much of our operations in low-cost geographical areas. This low fixed-cost infrastructure provides us with significant financial flexibility. | |
| Continue to differentiate our offerings through innovative technologies and service enhancements. We have been an innovator in our industry over our 30-year history. We continually strive to provide our clients with the ability to customize their trading experience. We provide our clients greater choice by tailoring our features and functionality to meet their specific needs. | |
| Leverage the TD AMERITRADE brand. We believe that we have a superior brand identity and that our advertising has established TD AMERITRADE as a leading brand in the retail brokerage market. | |
| Continue to aggressively pursue growth through acquisitions. When evaluating potential acquisitions, we look for transactions that will give us operational leverage, technological leverage, increased market share or other strategic opportunities. |
| TD AMERITRADE ® is our core offering for self-directed retail investors. We offer sophisticated tools and services, including Streamer Suite, tm TD AMERITRADE command center, SnapTicket, tm Trade Triggers, tm QuoteScope, tm Advanced Analyzer, tm Market Motion Detector, Pattern Matcher, tm StrategyDesk tm and |
4
WealthRuler. tm We offer Ameritrade Apex tm for clients who place an average of five trades per month over a three-month period or have a $100,000 total account value. Apex clients receive free access to services that are normally available on a subscription basis and access to exclusive services and content. |
| TD AMERITRADE Institutional is a leading provider of comprehensive brokerage and custody services to more than 4,000 independent RIAs and their clients. Our advanced technology platform, coupled with personal support from our dedicated service teams, allows RIAs to run their practices more effectively and efficiently while optimizing time with clients. Additionally, TD AMERITRADE Institutional provides a robust offering of products, programs and services. These services are all designed to help advisors build their businesses while helping their clients reach their financial goals. | |
| TD AMERITRADE Izone serves self-directed traders who are willing to forgo traditional support and service in favor of a purely electronic brokerage experience and lower commissions. | |
| Amerivest tm is an online advisory service that develops a portfolio of exchange-traded funds (ETFs) to help long-term investors pursue their financial goals. Our subsidiary, Amerivest Investment Management, LLC, recommends an investment portfolio based on our proprietary automated five-step process centered on an investors goals and risk tolerance. | |
| TDX Independence ETFs were launched in October 2007. Our subsidiary, Amerivest Investment Management, LLC, is a sub-advisor to XShares Advisors LLC for TDX Independence Funds, Inc. TDX Independence Funds, Inc. is an investment company that provides diversified goal-based investing options through five lifecycle ETFs. The target-date funds begin by focusing on asset growth through a higher weighting of stocks, shifting to capital preservation over time through historically less risky allocations, thus creating what we believe to be the first lifecycle ETFs. These ETFs seek to replicate certain lifecycle indexes created by Zacks Investment Research. | |
| TD AMERITRADE Corporate Services provides self-directed brokerage services to employees and executives of corporations, either directly in partnership with the employer or through joint marketing relationships with third-party administrators, such as 401(k) providers and employee benefit consultants. |
| Common and preferred stock. Clients can purchase common and preferred stocks and American Depository Receipts traded on any United States exchange or quotation system. | |
| Exchange-Traded Funds. ETFs are baskets of securities (stocks or bonds) that typically track recognized indices. They are similar to mutual funds, except they trade the same way that a stock trades, on a stock exchange. We have launched an online resource dedicated to ETFs, offering tools, education and information for active and long-term investors seeking alternatives for pursuing their investment strategies. | |
| Option trades. We offer a full range of option trades, including spreads, straddles and strangles. All option trades, including complex trades, are accessible on our trading platform. | |
| Mutual funds. Clients can compare and select from a portfolio of over 13,000 mutual funds from leading fund families, including a broad range of no-transaction-fee (NTF) funds. Clients can also easily exchange funds within the same mutual fund family. | |
| Fixed income. We offer our clients access to a variety of Treasury, corporate, government agency and municipal bonds, as well as mortgage-backed securities and certificates of deposit. | |
| Margin lending. We extend credit to clients that maintain margin accounts. | |
| Cash management services. Through third-party banking relationships, we offer money market deposit accounts and money market mutual funds to our clients as cash sweep alternatives. We also offer checking and ATM services through these relationships. |
5
| Ensuring prompt response to client service calls through adequate staffing with properly trained and motivated personnel in our client service departments, a majority of whom hold a Series 7 license; | |
| Tailoring client service to the particular expectations of the clients of each of our client segments and | |
| Expanding our use of technology to provide automated responses to the most typical inquiries generated in the course of clients securities trading and related activities. |
| Web sites. Our Web sites provide basic information on how to use our services as well as an in-depth education center that includes a guide to online investing and an encyclopedia of finance. Ted, our Virtual Investment Consultant, is a new tool on our Web sites that allows certain retail clients to interact with a virtual representative to ask questions regarding our products, tools and services. | |
| Branches. We offer a nationwide network of over 100 retail branches, located primarily in large metropolitan areas. | |
| E-mail. Clients are encouraged to use e-mail to contact our client service representatives. Our operating standards require a response within 24 hours of receipt of the e-mail; however, we strive to respond within four hours after receiving the original message. | |
| Telephone. For clients who choose to call or whose inquiries necessitate calling one of our client service representatives, we provide a toll-free number that connects to advanced call handling systems. These systems provide automated answering and directing of calls to the proper department. Our systems also allow linkage between caller identification and the client database to give the client service representative immediate access to the clients account data when the call is received. Client service representatives are available 24 hours a day, seven days a week (excluding market holidays). |
6
| Maintaining client accounts; | |
| Extending credit in a margin account to the client; | |
| Engaging in securities lending and borrowing transactions; | |
| Settling securities transactions with clearinghouses such as The Depository Trust & Clearing Corporation and The Options Clearing Corporation; | |
| Settling commissions and transaction fees; | |
| Preparing client trade confirmations and statements; | |
| Performing designated cashiering functions, including the delivery and receipt of funds and securities to or from the client; | |
| Possession, control and safeguarding funds and securities in client accounts; | |
| Processing cash sweep transactions to and from money market deposit accounts and money market mutual funds; | |
| Transmitting tax accounting information to the client and to the applicable tax authority and | |
| Forwarding prospectuses, proxy materials and other shareholder information to clients. |
7
8
Item 1A. | Risk Factors |
9
| a loss of clients or a reduction in the growth of our client base; | |
| increased operating expenses; |
10
| financial losses; | |
| litigation or other client claims and | |
| regulatory sanctions or additional regulatory burdens. |
11
| sales practices and suitability of financial products and services; | |
| auction rate securities; | |
| money market mutual funds; | |
| mutual fund trading; | |
| client cash sweep arrangements; | |
| regulatory reporting obligations; | |
| risk management; | |
| valuation of financial instruments; | |
| best execution practices; | |
| client privacy; | |
| system security and safeguarding practices and | |
| advertising claims. |
12
| difficulties in the integration of acquired operations, services and products; | |
| failure to achieve expected synergies; | |
| diversion of managements attention from other business concerns; | |
| assumption of unknown material liabilities of acquired companies; | |
| amortization of acquired intangible assets, which could reduce future reported earnings; | |
| potential loss of clients or key employees of acquired companies and | |
| dilution to existing stockholders. |
| incur additional indebtedness; |
13
| create liens; | |
| sell assets and make capital expenditures; | |
| pay dividends or make distributions; | |
| repurchase our common stock; | |
| make investments; | |
| merge or consolidate with another entity and | |
| conduct transactions with affiliates. |
14
| the presence of a classified board of directors; | |
| the ability of the board of directors to issue and determine the terms of preferred stock; | |
| advance notice requirements for inclusion of stockholder proposals at stockholder meetings; and | |
| the anti-takeover provisions of Delaware law. |
Item 1B. | Unresolved Staff Comments |
Item 2. | Properties |
15
Item 3. | Legal Proceedings |
16
Item 4. | Submission of Matters to a Vote of Security Holders |
Item 5. | Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
Common Stock Price | ||||||||||||||||
For the Fiscal Year Ended September 30, | ||||||||||||||||
2008 | 2007 | |||||||||||||||
High | Low | High | Low | |||||||||||||
First Quarter
|
$ | 21.13 | $ | 17.15 | $ | 19.69 | $ | 15.51 | ||||||||
Second Quarter
|
$ | 20.64 | $ | 15.06 | $ | 18.67 | $ | 14.80 | ||||||||
Third Quarter
|
$ | 19.68 | $ | 16.50 | $ | 21.31 | $ | 14.67 | ||||||||
Fourth Quarter
|
$ | 23.49 | $ | 16.00 | $ | 20.94 | $ | 13.82 |
17
Period Ended | ||||||||||||||||||||||||
Index | 9/26/03 | 9/24/04 | 9/30/05 | 9/29/06 | 9/30/07 | 9/30/08 | ||||||||||||||||||
TD AMERITRADE Holding Corporation
|
100.00 | 97.58 | 179.37 | 206.23 | 199.34 | 182.38 | ||||||||||||||||||
S&P 500
|
100.00 | 113.32 | 127.71 | 141.49 | 164.75 | 128.55 | ||||||||||||||||||
Peer Group
|
100.00 | 82.41 | 130.64 | 166.96 | 175.74 | 183.78 | ||||||||||||||||||
18
Total Number of
|
Maximum Number
|
|||||||||||||||
Shares Purchased as
|
of Shares that May
|
|||||||||||||||
Total Number of
|
Average Price
|
Part of Publicly
|
Yet Be Purchased
|
|||||||||||||
Period
|
Shares Purchased | Paid per Share | Announced Program | Under the Program | ||||||||||||
July 1, 2008 July 31, 2008
|
220,000 | $ | 18.05 | 220,000 | 9,121,200 | |||||||||||
August 1, 2008 August 31, 2008
|
105,000 | $ | 20.26 | 105,000 | 9,016,200 | |||||||||||
September 1, 2008 September 30, 2008
|
150,000 | $ | 18.89 | 150,000 | 8,866,200 | |||||||||||
Total Three months ended September 30, 2008
|
475,000 | $ | 18.80 | 475,000 | 8,866,200 | |||||||||||
19
21
81
82
Item 6.
Selected
Financial Data
Fiscal Year
Ended
(1)
Sept. 30,
Sept. 30,
Sept. 29,
Sept. 30,
Sept. 24,
2008
2007
2006
(2)
2005
2004
(In thousands, except per share amounts)
$
1,017,456
$
813,786
$
738,380
$
533,921
$
571,526
799,189
1,013,600
1,031,971
540,348
278,550
(249,616
)
(455,467
)
(335,820
)
(141,399
)
(41,861
)
549,573
558,133
696,151
398,949
236,689
628,716
535,381
185,014
309,420
232,177
140,699
25,188
21,425
1,487,709
1,325,691
1,021,864
424,137
258,114
32,191
37,469
43,287
45,095
50,473
2,537,356
2,176,946
1,803,531
1,003,153
880,113
503,297
429,820
350,079
180,579
154,792
764
(3,193
)
(1,715
)
44,620
79,681
73,049
26,317
30,610
69,564
82,173
65,445
35,663
39,853
101,787
84,294
74,638
43,411
42,353
36,899
26,237
21,199
10,521
11,066
59,275
54,469
42,286
13,887
12,158
108,271
83,995
87,521
30,630
27,381
78,447
118,173
93,988
1,967
2,581
62,934
46,809
45,383
22,689
17,798
173,296
145,666
164,072
92,312
100,364
35,628
11,703
(8,315
)
(17,930
)
1,274,782
1,148,124
1,027,648
449,661
421,026
1,262,574
1,028,822
775,883
553,492
459,087
928
5,881
81,422
1,263,502
1,034,703
857,305
553,492
459,087
459,585
388,803
330,546
213,739
176,269
$
803,917
$
645,900
$
526,759
$
339,753
$
282,818
$
1.35
$
1.08
$
0.97
$
0.84
$
0.68
$
1.33
$
1.06
$
0.95
$
0.82
$
0.66
593,746
598,503
544,307
404,215
417,629
603,133
608,263
555,465
413,167
426,972
$
0.00
$
0.00
$
6.00
$
0.00
$
0.00
(1)
Fiscal 2005 was a 53-week year. All other periods presented are
52-week years.
(2)
The growth in our results of operations during fiscal 2006 was
primarily due to our acquisition of TD Waterhouse Group, Inc. on
January 24, 2006. This acquisition is discussed in further
detail under the heading Acquisition of TD
Waterhouse in Item 7.
20
As of
Sept. 30,
Sept. 30,
Sept. 29,
Sept. 30,
Sept. 24,
2008
2007
2006
2005
2004
(In thousands)
$
674,135
$
413,787
$
363,650
$
171,064
$
137,392
369,133
76,800
65,275
229,819
17,950
260,000
1,561,910
7,595,359
7,802,575
6,933,926
7,727,969
6,970,834
3,784,688
3,100,572
15,951,522
18,092,327
16,558,469
16,417,110
15,277,021
5,070,671
5,313,576
5,412,981
10,095,837
10,322,539
1,444,544
1,481,948
1,710,712
45,736
37,803
2,925,038
2,154,921
1,730,234
1,518,867
1,210,908
Item 7.
Managements
Discussion and Analysis of Financial Condition and Results of
Operations
22
23
24
25
26
27
Fiscal Year Ended
September 30, 2008
September 30, 2007
September 29, 2006
$
% of Rev.
$
% of Rev.
$
% of Rev.
$
1,437,195
56.6
%
$
1,227,701
56.4
%
$
933,356
51.8
%
928
0.0
%
5,881
0.3
%
81,422
4.5
%
1,438,123
56.7
%
1,233,582
56.7
%
1,014,778
56.3
%
(36,899
)
(1.5
)%
(26,237
)
(1.2
)%
(21,199
)
(1.2
)%
(59,275
)
(2.3
)%
(54,469
)
(2.5
)%
(42,286
)
(2.3
)%
(78,447
)
(3.1
)%
(118,173
)
(5.4
)%
(93,988
)
(5.2
)%
$
1,263,502
49.8
%
$
1,034,703
47.5
%
$
857,305
47.5
%
28
08 vs. 07
07 vs. 06
Fiscal Year
Increase/
Increase/
2008
2007
2006
(Decrease)
(Decrease)
$
9,835
$
9,225
$
14,492
$
610
$
(5,267
)
15,640
14,898
5,734
742
9,164
$
25,475
$
24,123
$
20,226
$
1,352
$
3,897
$
538.1
$
548.8
$
690.0
$
(10.7
)
$
(141.2
)
628.7
535.4
185.0
93.3
350.4
$
1,166.8
$
1,084.2
$
875.0
$
82.6
$
209.2
5.38
%
5.85
%
4.71
%
(0.47
)%
1.14
%
3.95
%
3.53
%
3.19
%
0.42
%
0.34
%
4.50
%
4.42
%
4.28
%
0.08
%
0.14
%
29
Interest Revenue (Expense)
08 vs. 07
07 vs. 06
Fiscal Year
Increase/
Increase/
2008
2007
2006
(Decrease)
(Decrease)
$
0.3
$
31.2
$
324.9
$
(30.9
)
$
(293.7
)
527.1
615.3
500.8
(88.2
)
114.5
56.0
52.9
27.0
3.1
25.9
35.0
24.6
25.3
10.4
(0.7
)
(24.9
)
(53.9
)
(98.9
)
29.0
45.0
(55.4
)
(121.3
)
(89.1
)
65.9
(32.2
)
538.1
548.8
690.0
(10.7
)
(141.2
)
173.3
287.5
151.9
(114.2
)
135.6
(161.8
)
(278.2
)
(145.7
)
116.4
(132.5
)
$
549.6
$
558.1
$
696.2
$
(8.5
)
$
(138.1
)
Average Balance
08 vs. 07
07 vs. 06
Fiscal Year
%
%
2008
2007
2006
Change
Change
$
12
$
597
$
7,235
(98
)%
(92
)%
8,138
7,501
6,397
8
%
17
%
416
655
384
(36
)%
71
%
1,269
472
476
169
%
(1
)%
9,835
9,225
14,492
7
%
(36
)%
5,446
5,344
3,051
2
%
75
%
$
15,281
$
14,569
$
17,543
5
%
(17
)%
$
4,261
$
3,456
$
9,814
23
%
(65
)%
3,200
3,097
2,680
3
%
16
%
7,461
6,553
12,494
14
%
(48
)%
5,446
5,344
3,051
2
%
75
%
$
12,907
$
11,897
$
15,545
8
%
(23
)%
08 vs. 07
07 vs. 06
Average Yield (Cost)
Net Yield
Net Yield
Fiscal Year
Increase/
Increase/
2008
2007
2006
(Decrease)
(Decrease)
2.47
%
5.14
%
4.44
%
(2.67
)%
0.70
%
6.37
%
8.07
%
7.74
%
(1.70
)%
0.33
%
2.71
%
5.15
%
5.26
%
(2.44
)%
(0.11
)%
(0.58
)%
(1.53
)%
(1.00
)%
0.95
%
(0.53
)%
5.38
%
5.85
%
4.71
%
(0.47
)%
1.14
%
3.13
%
5.29
%
4.92
%
(2.16
)%
0.37
%
(2.92
)%
(5.12
)%
(4.72
)%
2.20
%
(0.40
)%
3.54
%
3.77
%
3.92
%
(0.23
)%
(0.15
)%
30
08 vs. 07
07 vs. 06
Fiscal Year
Increase/
Increase/
2008
2007
2006
(Decrease)
(Decrease)
$
309.4
$
232.2
$
140.7
$
77.2
$
91.5
$
70,782
$
49,665
$
29,374
$
21,117
$
20,291
0.43
%
0.46
%
0.47
%
(0.03
)%
(0.01
)%
08 vs. 07
07 vs. 06
Fiscal Year
%
%
2008
2007
2006
Change
Change
78.43
63.11
54.24
24
%
16
%
$
12.97
$
12.90
$
13.61
1
%
(5
)%
311,830
253,440
216,970
23
%
17
%
11.8
10.0
10.1
18
%
(1
)%
4.7
%
4.0
%
4.0
%
18
%
0
%
251.5
249.0
250.0
1
%
(0
)%
Fiscal Year
2008
2007
2006
6,380,000
6,191,000
3,717,000
648,000
554,000
425,000
102,000
2,252,000
(235,000
)
(365,000
)
(203,000
)
6,895,000
6,380,000
6,191,000
8
%
3
%
67
%
4,597,000
4,363,000
2,419,000
4,918,000
4,597,000
4,363,000
7
%
5
%
80
%
$
302.7
$
261.7
$
83.3
$
278.0
$
302.7
$
261.7
(8
)%
16
%
214
%
$
22.8
$
12.4
N/A
*
We began disclosing net new assets effective for fiscal 2007.
Net new assets excludes client assets acquired in business
combinations.
31
Fiscal Year
08 vs. 07
07 vs. 06
2008
2007
2006
% Change
% Change
$
1,017.5
$
813.8
$
738.4
25
%
10
%
799.2
1,013.6
1,032.0
(21
)%
(2
)%
(249.6
)
(455.5
)
(335.8
)
(45
)%
36
%
549.6
558.1
696.2
(2
)%
(20
)%
628.7
535.4
185.0
17
%
189
%
309.4
232.2
140.7
33
%
65
%
1,487.7
1,325.7
1,021.9
12
%
30
%
32.2
37.5
43.3
(14
)%
(13
)%
2,537.4
2,176.9
1,803.5
17
%
21
%
503.3
429.8
350.1
17
%
23
%
0.8
(3.2
)
(1.7
)
N/A
86
%
44.6
79.7
73.0
(44
)%
9
%
69.6
82.2
65.4
(15
)%
26
%
101.8
84.3
74.6
21
%
13
%
36.9
26.2
21.2
41
%
24
%
59.3
54.5
42.3
9
%
29
%
108.3
84.0
87.5
29
%
(4
)%
78.4
118.2
94.0
(34
)%
26
%
62.9
46.8
45.4
34
%
3
%
173.3
145.7
164.1
19
%
(11
)%
35.6
N/A
N/A
11.7
N/A
(100
)%
1,274.8
1,148.1
1,027.6
11
%
12
%
1,262.6
1,028.8
775.9
23
%
33
%
0.9
5.9
81.4
(84
)%
(93
)%
1,263.5
1,034.7
857.3
22
%
21
%
459.6
388.8
330.5
18
%
18
%
$
803.9
$
645.9
$
526.8
24
%
23
%
366
366
364
0
%
1
%
36.4
%
37.6
%
38.6
%
32
33
34
35
36
September 30,
2008
2007
Change
$
674,135
$
413,787
$
260,348
(418,626
)
(183,103
)
(235,523
)
(61,430
)
(2,117
)
(59,313
)
(9,447
)
(7,592
)
(1,855
)
184,632
220,975
(36,343
)
14,491
76,800
(62,309
)
102,427
102,427
486,625
314,280
172,345
$
788,175
$
612,055
$
176,120
37
$
612,055
1,263,502
102,427
22,668
5,226
(274,470
)
(463,379
)
(98,836
)
(74,568
)
(37,404
)
(1,069
)
(267,977
)
$
788,175
38
39
Payments Due by Period (Fiscal Years):
Less Than
More Than
1 Year
1-3 Years
3-5 Years
5 Years
Total
2009
2010-11
2012-13
After 2013
$
1,747,284
$
113,182
$
262,345
$
1,371,757
$
699
699
371,788
44,903
83,986
75,248
167,651
79,777
67,596
11,181
1,000
17,682
17,682
2,575
1,225
1,200
150
100,000
100,000
242,962
242,962
26,994
26,994
$
2,589,761
$
615,243
$
358,712
$
1,448,155
$
167,651
(1)
Represents scheduled principal payments, estimated interest
payments and commitment fees pursuant to the Financings. The
Financings are also subject to certain mandatory prepayments,
which include prepayments based on amounts of excess cash flow
and from the net cash proceeds of asset sales and debt
issuances, subject to certain exceptions. Pursuant to the
Financings, we may prepay borrowings without penalty. Because
mandatory prepayments are based on future operating results and
events, we cannot predict the amount or timing of such
prepayments. Actual amounts of interest may vary depending on
principal prepayments and changes in variable interest rates.
(2)
Our obligation to Joseph H. Moglia, our Chairman and former CEO,
for deferred compensation will become payable not sooner than
the day after Mr. Moglias employment with the Company
terminates. The obligation is presented in the fiscal 2009
column as the entire amount of the compensation has already been
earned by Mr. Moglia.
(3)
Represents exit and involuntary termination costs incurred in
connection with the planned consolidation of certain facilities
and functions following the TD Waterhouse acquisition.
(4)
On May 24, 2007, we entered into a stock purchase agreement
with Fiserv, Inc. (Fiserv) pursuant to which our
wholly-owned subsidiary agreed to purchase a portion of
Fiservs investment support services business by acquiring
all of the outstanding capital stock of Fiserv
Trust Company, a wholly-owned subsidiary of Fiserv. We
completed the transaction on February 4, 2008. An earn-out
payment of up to $100 million in cash could be payable
following the first anniversary of the acquisition based on the
achievement of certain revenue targets.
(5)
Income taxes payable as of September 30, 2008 primarily
consists of liabilities for uncertain tax positions and related
interest and penalties. The timing of payments, if any, on
liabilities for uncertain tax positions cannot be predicted with
reasonable accuracy.
(6)
During September 2008, the net asset value of two money market
mutual funds held by some of our clients, the Primary Fund and
the International Liquidity Fund, declined below $1.00 per
share. These funds are managed by The Reserve, an independent
mutual fund company. The Reserve subsequently announced that it
was suspending redemptions of these funds to effect an orderly
liquidation. We announced a commitment of up to $55 million
to protect our clients positions in these funds. In the
event our clients receive less than $1.00 per share for these
funds upon an orderly liquidation, we have committed up to
$50 million (or $0.03 per share of the fund) for clients in
the Primary Fund and up to $5 million for clients in the
International Liquidity Fund to mitigate client losses. Based on
information from The Reserve and other public information, we
have accrued an estimated fair value of $27.0 million for
this obligation as of September 30, 2008.
40
Item 7A.
Quantitative
and Qualitative Disclosures About Market Risk
41
42
Item 8.
Financial
Statements and Supplementary Data
43
44
2008
2007
2006
(In thousands, except per share amounts)
$
1,017,456
$
813,786
$
738,380
799,189
1,013,600
1,031,971
(249,616
)
(455,467
)
(335,820
)
549,573
558,133
696,151
628,716
535,381
185,014
309,420
232,177
140,699
1,487,709
1,325,691
1,021,864
32,191
37,469
43,287
2,537,356
2,176,946
1,803,531
503,297
429,820
350,079
764
(3,193
)
(1,715
)
44,620
79,681
73,049
69,564
82,173
65,445
101,787
84,294
74,638
36,899
26,237
21,199
59,275
54,469
42,286
108,271
83,995
87,521
78,447
118,173
93,988
62,934
46,809
45,383
173,296
145,666
164,072
35,628
11,703
1,274,782
1,148,124
1,027,648
1,262,574
1,028,822
775,883
928
5,881
81,422
1,263,502
1,034,703
857,305
459,585
388,803
330,546
$
803,917
$
645,900
$
526,759
$
1.35
$
1.08
$
0.97
$
1.33
$
1.06
$
0.95
593,746
598,503
544,307
603,133
608,263
555,465
$
0.00
$
0.00
$
6.00
45
Total
Accumulated
Common
Total
Additional
Other
Shares
Stockholders
Common
Paid-In
Retained
Treasury
Deferred
Comprehensive
Outstanding
Equity
Stock
Capital
Earnings
Stock
Compensation
Income (Loss)
(In thousands)
406,059
$
1,518,867
$
4,351
$
1,184,004
$
652,742
$
(364,794
)
$
952
$
41,612
526,759
526,759
9,591
9,591
(47,647
)
(47,647
)
(513
)
(513
)
253
253
488,443
196,300
2,123,181
1,963
2,121,218
(2,442,780
)
(1,704,041
)
(738,739
)
(3,827
)
(67,697
)
(67,697
)
3
72
29
43
9,020
95,270
(24,125
)
119,395
71
549
196
643
(290
)
14,329
14,329
607,626
1,730,234
6,314
1,591,610
440,762
(312,410
)
662
3,296
645,900
645,900
23
23
(2,939
)
(2,939
)
230
230
643,214
(15,254
)
(258,637
)
(258,637
)
10
149
8
141
2,204
20,881
(11,754
)
32,635
102
898
412
724
(238
)
18,182
18,175
7
594,688
2,154,921
6,314
1,598,451
1,086,662
(537,547
)
431
610
803,917
803,917
(1,028
)
(1,028
)
(340
)
(340
)
(112
)
(112
)
802,437
(4,167
)
(4,167
)
(4,123
)
(74,568
)
(74,568
)
3
52
13
39
2,523
22,506
(8,594
)
31,100
40
187
167
312
(292
)
23,670
23,663
7
593,131
$
2,925,038
$
6,314
$
1,613,700
$
1,886,412
$
(580,664
)
$
146
$
(870
)
46
2008
2007
2006
(In thousands)
$
803,917
$
645,900
$
526,759
36,899
26,237
21,199
59,275
54,469
42,286
(96,238
)
20,564
45,475
(928
)
(5,881
)
(81,422
)
(2,677
)
(2,382
)
5,145
657
(769
)
35,628
764
(3,193
)
9,988
23,670
18,182
14,329
(4
)
(2,346
)
(1,946
)
(260,000
)
1,561,910
6,109,449
2,572,619
(2,183,063
)
(997,662
)
794,043
(757,135
)
685,055
(87,989
)
(54,014
)
31,939
10,920
(3,004
)
(10,481
)
(43,287
)
(10,939
)
(6,025
)
1,726
(7,524
)
(126
)
27,664
(2,632,270
)
1,364,387
526,103
(242,905
)
(99,405
)
(6,314,596
)
23,681
6,507
(139,984
)
995,416
578,756
484,979
(98,836
)
(59,957
)
(21,697
)
623,837
580,076
(274,470
)
(3,307
)
(20
)
2,677
9,382
(328,690
)
(507,050
)
(1,001,250
)
894,277
495,525
1,165,794
(368,066
)
5,226
10,402
11,239
(1,069
)
10
(16
)
18
452,219
(61,726
)
743,542
1,900,000
(1,245
)
(20,992
)
(34,375
)
(225,000
)
(496,625
)
(1,097,808
)
(3,029
)
(3,764
)
(3,903
)
9,220
10,887
46,881
(2,442,780
)
(74,568
)
(258,637
)
(67,697
)
13,448
10,337
48,864
(1,187,112
)
(467,422
)
(1,036,252
)
(175
)
529
317
260,348
50,137
192,586
413,787
363,650
171,064
$
674,135
$
413,787
$
363,650
$
346,657
$
575,925
$
423,468
$
463,379
$
308,734
$
241,163
$
13,517
$
10,463
$
49,256
$
$
$
5,022
$
$
$
72,077
$
$
$
2,123,181
47
1.
Nature of
Operations and Summary of Significant Accounting
Policies
48
49
50
2.
Business
Combinations
$
272,590
4,853
1,880
$
279,323
51
$
623,837
498,787
175,295
70,524
13,235
1,381,678
(1,097,808
)
(4,547
)
(1,102,355
)
$
279,323
3.
Goodwill
and Acquired Intangible Assets
52
$
1,731,718
37,275
(126
)
1,768,867
175,295
3,009
(69
)
$
1,947,102
(1)
Purchase accounting adjustments for fiscal 2007 primarily
consist of adjustments to liabilities for exit and involuntary
termination costs relating to the acquisition of TD Waterhouse.
(2)
Represents the tax benefit of exercises of replacement stock
options that were issued in connection with the Datek Online
Holdings Corp. (Datek) merger in fiscal 2002. The
tax benefit of an option exercise is recorded as a reduction of
goodwill to the extent the Company recorded fair value of the
replacement option in the purchase accounting. To the extent any
gain realized on an option exercise exceeds the fair value of
the replacement option recorded in the purchase accounting, the
tax benefit on the excess is recorded as additional paid-in
capital.
(3)
Purchase accounting adjustments for fiscal 2008 primarily
consist of $6.2 million of net adjustments to accruals for
uncertain tax positions relating to the acquisition of TD
Waterhouse and the merger with Datek, partially offset by
adjustments of $2.8 million (net of income taxes)
decreasing exit liabilities related to the acquisition of TD
Waterhouse.
September 30,
2008
2007
Gross
Net
Gross
Net
Carrying
Accumulated
Carrying
Carrying
Accumulated
Carrying
Amount
Amortization
Amount
Amount
Amortization
Amount
$
1,062,046
$
(194,041
)
$
868,005
$
991,522
$
(134,766
)
$
856,756
145,674
145,674
145,674
145,674
$
1,207,720
$
(194,041
)
$
1,013,679
$
1,137,196
$
(134,766
)
$
1,002,430
53
4.
Cash and
Cash Equivalents
September 30,
2008
2007
$
184,632
$
220,975
418,626
183,103
61,430
2,117
9,447
7,592
$
674,135
$
413,787
5.
Short-term
Investments
September 30,
2008
2007
$
368,066
$
1,067
76,800
$
369,133
$
76,800
54
6.
Receivable
from and Payable to Brokers, Dealers and Clearing
Organizations
September 30,
2008
2007
$
3,703,360
$
6,534,760
33,610
32,156
413,158
93,630
26,841
89,042
$
4,176,969
$
6,749,588
$
5,685,133
$
8,289,353
8,228
26,816
22,418
49,667
38,947
21,152
$
5,754,726
$
8,386,988
7.
Allowance
for Doubtful Accounts on Receivables
2008
2007
2006
$
19,120
$
20,290
$
12,925
9,780
5,273
2,647
401
8,795
(6,819
)
(6,443
)
(4,077
)
$
22,482
$
19,120
$
20,290
8.
Property
and Equipment
September 30,
2008
2007
$
58,495
$
35,348
46,016
94,444
88,031
48,766
36,059
32,214
228,601
210,772
(75,393
)
(118,324
)
$
153,208
$
92,448
55
9.
Other
Investments
September 30,
2008
2007
$
2,094
$
4,232
10,000
12,094
4,232
674
3,781
$
12,768
$
8,013
10.
Acquisition
Exit Liabilities
Employee
Clearing and
Occupancy
Professional
Compensation
Execution
Communications
and Equipment
Services
Total
$
121
$
$
$
3,217
$
$
3,338
59,335
10,073
46,936
1,734
118,078
(32,780
)
(26,985
)
(400
)
(60,165
)
26,676
10,073
23,168
1,334
61,251
20,569
579
57
3,393
9,674
34,272
(38,408
)
(3,851
)
(57
)
(4,121
)
(8,103
)
(54,540
)
(1,447
)
(1,801
)
(1,401
)
(2,674
)
(7,323
)
7,390
5,000
21,039
231
33,660
649
649
(4,815
)
(5,000
)
(3,912
)
(880
)
(14,607
)
(4,385
)
(4,385
)
$
2,575
$
$
$
12,742
$
$
15,317
56
11.
Credit
Facilities
57
$
37,500
56,250
62,500
21,875
1,265,875
$
1,444,000
12.
Income
Taxes
2008
2007
2006
$
505,270
$
324,315
$
242,511
50,196
43,630
42,392
357
294
168
555,823
368,239
285,071
(76,843
)
15,296
35,518
(19,395
)
5,268
9,225
732
(96,238
)
20,564
45,475
$
459,585
$
388,803
$
330,546
58
2008
2007
2006
35.0
%
35.0
%
35.0
%
2.6
3.2
4.0
(0.9
)
(0.2
)
(0.4
)
(0.3
)
(0.1
)
(0.2
)
(0.1
)
36.4
%
37.6
%
38.6
%
September 30,
2008
2007
$
86,369
$
36,381
28,866
6,066
15,350
16,522
7,327
7,075
575
90,497
6,942
17,048
9,503
246,032
82,489
(16,516
)
(9,453
)
229,516
73,036
(375,243
)
(385,328
)
(200
)
(3,646
)
(2,045
)
(378,889
)
(387,573
)
$
(149,373
)
$
(314,537
)
59
$
135,096
103,409
555
(77
)
(11,082
)
(876
)
$
227,025
13.
Capital
Requirements
60
September 30,
2008
2007
Minimum
Minimum
Net Capital
Excess
Net Capital
Excess
Net Capital
Required
Net Capital
Net Capital
Required
Net Capital
$
836,531
$
157,458
$
679,073
$
678,042
$
171,796
$
506,246
44,039
250
43,789
75,723
7,996
67,727
$
880,570
$
157,708
$
722,862
$
753,765
$
179,792
$
573,973
14.
Stock-based
Compensation
61
Weighted
Weighted
Average
Average
Remaining
Aggregate
Number of
Exercise
Contractual
Intrinsic
Options
Price
Term (Years)
Value
15,693
$
4.72
1,150
$
18.21
(2,523
)
$
3.65
(4
)
$
8.69
(3
)
$
6.27
14,313
$
6.00
4.1
$
154,931
13,154
$
4.92
3.6
$
154,900
2008
2007
2006
3.39
%
4.67
%
4.40
%
0
%
0
%
0
%
44
%
54
%
58
%
6.8
3.2
5.0
62
Weighted
Average
Number of
Grant Date
Units
Fair Value
659
$
20.06
888
$
19.09
(28
)
$
18.78
(59
)
$
19.82
1,460
$
19.50
Weighted
Average
Number of
Grant Date
Units
Fair Value
1,782
$
19.17
55
$
20.73
(16
)
$
17.09
(66
)
$
19.88
52
$
18.28
1,807
$
19.18
63
15.
Employee
Benefit Plans
16.
Earnings
Per Share
2008
2007
2006
$
803,917
$
645,900
$
526,759
593,746
598,503
544,307
7,655
9,357
11,064
1,665
361
64
67
42
30
603,133
608,263
555,465
$
1.35
$
1.08
$
0.97
$
1.33
$
1.06
$
0.95
17.
Commitments
and Contingencies
Minimum Lease
Sublease
Net Lease
Payments
Proceeds
Commitments
$
44,903
$
(5,276
)
$
39,627
44,331
(4,468
)
39,863
39,655
(731
)
38,924
38,955
(644
)
38,311
36,293
(161
)
36,132
167,651
167,651
$
371,788
$
(11,280
)
$
360,508
64
$
699
699
(155
)
$
544
65
66
18.
Segment
and Geographic Area Information
67
2008
2007
2006
$
2,537,356
$
2,176,946
$
1,799,915
3,616
$
2,537,356
$
2,176,946
$
1,803,531
19.
Derivative
Financial Instruments and Hedging Activities
20.
Related
Party Transactions
68
69
70
71
21.
Condensed
Financial Information (Parent Company Only)
As of September 30, 2008 and 2007
72
For the Years Ended September 30, 2008, September 30,
2007 and September 29, 2006
2008
2007
2006
(In thousands)
$
52,264
$
30,931
$
36,985
472
939
1,871
16
12
52,752
31,882
38,856
44,745
24,854
25,415
78,392
117,717
89,809
11,703
210
5,695
4,337
1,908
6,601
127,474
144,689
139,223
(74,722
)
(112,807
)
(100,367
)
487
78,840
(74,722
)
(112,320
)
(21,527
)
(24,484
)
(46,009
)
(10,354
)
(50,238
)
(66,311
)
(11,173
)
854,155
712,211
537,932
$
803,917
$
645,900
$
526,759
73
For the Years Ended September 30, 2008, September 30,
2007 and September 29, 2006
2008
2007
2006
(In thousands)
$
803,917
$
645,900
$
526,759
(854,155
)
(712,211
)
(537,932
)
(1,531
)
(2,147
)
9,427
(487
)
(78,840
)
11,703
495,000
596,000
23,670
18,182
14,329
454
(35,586
)
85,556
43,708
2,843
3,211
29,439
97,566
19,383
(33,815
)
51,262
(107,359
)
195,513
87,986
445,028
776,745
(77,000
)
870
7,492
(20
)
(774
)
(198
)
(774
)
870
(69,726
)
1,900,000
(1,245
)
(20,992
)
(34,375
)
(225,000
)
(196,625
)
9,220
10,887
46,881
(2,442,780
)
(74,568
)
(258,637
)
(67,697
)
13,448
10,337
48,864
(86,275
)
(463,658
)
(732,349
)
937
(17,760
)
(25,330
)
52
17,812
43,142
$
989
$
52
$
17,812
$
75,694
$
113,930
$
86,530
$
443,438
$
298,523
$
256,170
$
13,517
$
10,463
$
49,256
$
$
(36
)
$
(852
)
$
$
$
72,077
$
$
$
2,123,181
74
22.
Quarterly
Data (Unaudited)
(Dollars in thousands, except per share amounts)
For the Fiscal Year Ended September 30, 2008
First
Second
Third
Fourth
Quarter
Quarter
Quarter
Quarter
$
641,616
$
622,887
$
623,604
$
649,249
$
356,631
$
299,954
$
328,180
$
278,737
$
240,839
$
186,716
$
204,362
$
171,999
$
0.40
$
0.31
$
0.34
$
0.29
$
0.40
$
0.31
$
0.34
$
0.29
For the Fiscal Year Ended September 30, 2007
First
Second
Third
Fourth
Quarter
Quarter
Quarter
Quarter
$
535,176
$
524,762
$
541,807
$
575,201
$
239,371
$
229,730
$
254,531
$
311,072
$
145,633
$
141,139
$
158,698
$
200,431
$
0.24
$
0.24
$
0.27
$
0.34
$
0.24
$
0.23
$
0.26
$
0.33
75
Item 9.
Changes
in and Disagreements with Accountants on Accounting and
Financial Disclosure
Item 9A.
Controls
and Procedures
76
77
Item 9B.
Other
Information
Item 10.
Directors,
Executive Officers and Corporate Governance
Item 11.
Executive
Compensation
Item 12.
Security
Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
78
Number of Securities
Remaining Available
for Future
Issuance Under Equity
Number of Securities to
Weighted-Average
Compensation Plans
be Issued Upon Exercise
Exercise Price of
(Excluding
of Outstanding Options,
Outstanding Options,
Securities Reflected
Warrants and Rights
Warrants and Rights
in Column (a))
(a)
(b)
(c)
14,223,453
$
6.01
25,720,800
(1)
90,000
$
3.48
N/A
14,313,453
$
6.00
25,720,800
(1)
The Ameritrade Holding Corporation 1996 Long-Term Incentive Plan
(the Long-Term Incentive Plan) and the
2006 Directors Incentive Plan (the Directors
Plan) authorize the issuance of shares of common stock as
well as options. As of September 30, 2008, there were, in
the aggregate, 21,049,677 shares remaining available for
issuance pursuant to the Long-Term Incentive Plan and the
Directors Plan.
Number of Securities to
Weighted-Average
be Issued Upon Exercise
Exercise Price of
of Outstanding Options,
Outstanding Options,
Warrants and Rights
Warrants and Rights
(a)
(b)
224,802
$
3.58
90,000
$
3.48
314,802
$
3.55
Item 13.
Certain
Relationships and Related Transactions, and Director
Independence
Item 14.
Principal
Accounting Fees and Services
79
Item 15.
Exhibits
and Financial Statement Schedules
2
.1
Stock Purchase Agreement, dated May 24, 2007, between TD
AMERITRADE Online Holdings Corporation and Fiserv, Inc.
(incorporated by reference to Exhibit 2.1 of the
Companys quarterly report on
Form 10-Q
filed on August 7, 2007)
2
.2
Agreement of Sale and Purchase between Ameritrade Holding
Corporation and The Toronto-Dominion Bank dated as of
June 22, 2005 (incorporated by reference to
Exhibit 2.1 of the Companys
Form 8-K
filed on June 28, 2005)
2
.3
Amendment No. 1 to the Agreement of Sale and Purchase
between Ameritrade Holding Corporation and The Toronto-Dominion
Bank dated as of October 28, 2005 (incorporated by
reference to Exhibit 2.2 of the Companys
Form 8-K
filed October 31, 2005)
2
.4
Amendment No. 2 to the Agreement of Sale and Purchase
between Ameritrade Holding Corporation and The Toronto-Dominion
Bank dated as of December 23, 2005 (incorporated by
reference to Exhibit 2.3 of the Companys
Form 8-K
filed December 29, 2005)
2
.5
Agreement of Sale and Purchase among Ameritrade Holding
Corporation, Datek Online Holdings Corp., The Toronto-Dominion
Bank and TD Waterhouse Canada Inc, dated as of June 22,
2005 (incorporated by reference to Exhibit 99.2 of the
Companys
Form 8-K
filed on September 12, 2005)
3
.1
Amended and Restated Certificate of Incorporation of TD
AMERITRADE Holding Corporation, dated January 24, 2006
(incorporated by reference to Exhibit 3.1 of the
Companys
Form 8-K
filed on January 27, 2006)
3
.2
Amended and Restated By-Laws of TD AMERITRADE Holding
Corporation, effective March 9, 2006 (incorporated by
reference to Exhibit 3.1 of the Companys
Form 8-K
filed on March 15, 2006)
4
.1
Form of Certificate for Common Stock (incorporated by reference
to Exhibit 4.1 of the Companys
Form 8-A
filed on September 5, 2002)
10
.1*
Form of Indemnification Agreements, dated as of May 30,
2006, between TD AMERITRADE Holding Corporation and several
current and previous members of the Companys board of
directors (incorporated by reference to Exhibit 10.1 of the
Companys
Form 8-K
filed on June 5, 2006)
10
.2*
Employment Agreement, as amended and restated, effective as of
June 11, 2008, between Joseph H. Moglia and TD AMERITRADE
Holding Corporation (incorporated by reference to
Exhibit 10.1 of the Companys quarterly report on
Form 10-Q
filed on August 8, 2008)
10
.3*
Amendment to Employment Agreement, dated as of
September 29, 2008, between Joseph H. Moglia and TD
AMERITRADE Holding Corporation
10
.4*
Deferred Compensation Plan, effective as of March 1, 2001,
between Joseph H. Moglia and Ameritrade Holding Corporation
(incorporated by reference to Exhibit B of
Exhibit 10.1 of the Companys quarterly report on
Form 10-Q
filed on May 14, 2001)
10
.5*
Letter Agreement and Promissory Note, dated as of
September 13, 2001, between Joseph H. Moglia and Ameritrade
Holding Corporation (incorporated by reference to
Exhibit 10.14 of the Companys Annual Report on
Form 10-K
filed on December 24, 2001)
80
10
.6*
Non-Qualified Stock Option Agreement, dated as of March 1,
2003, between Joseph H. Moglia and Ameritrade Holding
Corporation (incorporated by reference to Exhibit 10.9 of
the Companys Annual Report on
Form 10-K
filed on December 9, 2004)
10
.7*
Employment Agreement, as amended and restated, effective as of
May 16, 2008, between Fredric J. Tomczyk and TD
AMERITRADE Holding Corporation (incorporated by reference to
Exhibit 10.2 of the Companys quarterly report on
Form 10-Q
filed on August 8, 2008)
10
.8*
Non-Qualified Stock Option Agreement, dated May 15, 2008,
between Fredric J. Tomczyk and TD AMERITRADE Holding Corporation
(incorporated by reference to Exhibit 10.3 of the
Companys quarterly report on
Form 10-Q
filed on August 8, 2008)
10
.9*
Employment Agreement, as amended and restated, effective as of
October 13, 2008, between Ellen L.S. Koplow and TD
AMERITRADE Holding Corporation
10
.10*
Employment Agreement, dated May 23, 2006, between T.
Christian Armstrong and TD AMERITRADE Holding Corporation
(incorporated by reference to Exhibit 10.4 of the
Companys
Form 8-K
filed on May 25, 2006)
10
.11*
Amendment to Employment Agreement, dated as of April 24,
2008, between T. Christian Armstrong and TD AMERITRADE Holding
Corporation (incorporated by reference to Exhibit 10.4 of
the Companys quarterly report on
Form 10-Q
filed on August 8, 2008)
10
.12*
Executive Employment Agreement, dated as of November 1,
2007, between Bryce B. Engel and TD AMERITRADE Holding
Corporation (incorporated by reference to Exhibit 10.1 of
the Companys quarterly report on
Form 10-Q
filed on February 8, 2008)
10
.13*
Amendment to Employment Agreement, dated as of September 9,
2008, between Bryce B. Engel and TD AMERITRADE Holding
Corporation
10
.14*
Separation and Release of Claims Agreement, dated as of
September 9, 2008, between Bryce B. Engel and TD AMERITRADE
Holding Corporation
10
.15*
Ameritrade Holding Corporation 1996 Long-Term Incentive Plan, as
amended and restated (incorporated by reference to
Appendix B of the Companys Proxy Statement filed on
January 30, 2006)
10
.16*
Form of 1996 Long Term Incentive Plan Non-Qualified Stock Option
Agreement for Executives (incorporated by reference to
Exhibit 10.25 of the Companys Annual Report on
Form 10-K
filed on December 9, 2004)
10
.17*
Form of Performance Restricted Stock Unit Agreement
(incorporated by reference to Exhibit 10.1 of the
Companys
Form 8-K
filed on March 9, 2006)
10
.18*
Form of Restricted Stock Unit Agreement (incorporated by
reference to Exhibit 10.2 of the Companys
Form 8-K
filed on March 9, 2006)
10
.19*
TD AMERITRADE Holding Corporation 2006 Directors Incentive
Plan, effective as of November 15, 2006 (incorporated by
reference to Appendix A of the Companys Proxy
Statement filed on January 24, 2007)
10
.20*
Form of Directors Incentive Plan Non-Qualified Stock Option
Agreement (incorporated by reference to Exhibit 10.27 of
the Companys Annual Report on
Form 10-K
filed on December 9, 2004)
10
.21*
Form of Directors Incentive Plan Restricted Stock Agreement
(incorporated by reference to Exhibit 10.28 of the
Companys Annual Report on
Form 10-K
filed on December 9, 2004)
10
.22*
Form of award letter to Bonus Recipients under the Directors
Incentive Plan, dated February 27, 2006 (incorporated by
reference to Exhibit 10.2 of the Companys
Form 8-K
filed on March 1, 2006)
10
.23*
Form of Restricted Stock Unit Agreement for Non-employee
Directors (incorporated by reference to Exhibit 10.2 of the
Companys
Form 8-K
filed on May 16, 2006)
10
.24*
Amended and Restated Ameritrade Holding Corporation Executive
Deferred Compensation Program effective December 28, 2005
(incorporated by reference to Exhibit 10.1 of the
Companys
Form 8-K
filed on December 30, 2005)
10
.25*
Form of award letter to Bonus Recipients under the Executive
Deferred Compensation Program, dated February 23, 2006
(incorporated by reference to Exhibit 10.1 of the
Companys
Form 8-K
filed on March 1, 2006)
10
.26*
Management Incentive Plan, effective as of November 15,
2006 (incorporated by reference to Appendix B of the
Companys Proxy Statement filed on January 24, 2007)
10
.27*
Datek Online Holdings Corp. 1998 Stock Option Plan, as amended
and restated effective as of September 9, 2002
(incorporated by reference to Exhibit 4.2 of the
Companys Registration Statement on
Form S-8,
File
No. 333-99481,
filed on September 13, 2002)
10
.28*
First Amendment of Datek Online Holdings Corp. 1998 Stock Option
Plan, effective as of September 25, 2004 (incorporated by
reference to Exhibit 10.32 of the Companys Annual
Report on
Form 10-K
filed on December 9, 2004)
10
.29*
Datek Online Holdings Corp. 2001 Stock Incentive Plan, as
amended and restated effective as of September 9, 2002
(incorporated by reference to Exhibit 4.2 of the
Companys Registration Statement on
Form S-8,
File
No. 333-99353,
filed on September 10, 2002)
10
.30*
First Amendment of Datek Online Holdings Corp. 2001 Stock
Incentive Plan, effective as of September 25, 2004
(incorporated by reference to Exhibit 10.34 of the
Companys Annual Report on
Form 10-K
filed on December 9, 2004)
10
.31
Stockholders Agreement among Ameritrade Holding Corporation, The
Toronto-Dominion Bank, J. Joe Ricketts and certain of his
affiliates dated as of June 22, 2005 (incorporated by
reference to Exhibit 10.1 of the Companys
Form 8-K
filed on June 28, 2005)
10
.32
Amendment No. 1 to Stockholders Agreement among TD
AMERITRADE Holding Corporation, The Toronto-Dominion Bank and
certain other stockholders of TD AMERITRADE, dated
February 22, 2006 (incorporated by reference to
Exhibit 10.4 of the Companys quarterly report on
Form 10-Q
filed on May 8, 2006)
10
.33
Amended and Restated Registration Rights Agreement by and among
Ameritrade Holding Corporation, The Toronto-Dominion Bank, J.
Joe Ricketts and certain of his affiliates, entities affiliated
with Silver Lake Partners, and entities affiliated with TA
Associates, dated as of June 22, 2005 (incorporated by
reference to Exhibit 99.1 of the Companys
Form 8-K
filed on September 12, 2005)
10
.34
Trademark License Agreement among The Toronto-Dominion Bank and
Ameritrade Holding Corporation, dated as of June 22, 2005
(incorporated by reference to Exhibit 99.3 of the
Companys
Form 8-K
filed on September 12, 2005)
10
.35
$2,200,000,000 Credit Agreement, dated January 23, 2006
(incorporated by reference to Exhibit 10.5 of the
Companys quarterly report on
Form 10-Q
filed February 8, 2006)
10
.36
Amendment No. 1 to the Loan Documents for the
$2,200,000,000 Credit Agreement, dated March 31, 2006
(incorporated by reference to Exhibit 10.10 of the
Companys quarterly report on
Form 10-Q
filed on May 8, 2006)
10
.37
Amendment and Waiver No. 2 to the Loan Documents for the
$2,200,000,000 Credit Agreement, dated December 11, 2006
(incorporated by reference to Exhibit 10.1 of the
Companys quarterly report on
Form 10-Q
filed on February 7, 2007)
14
Code of Ethics (incorporated by reference to Exhibit 14 of
the Companys quarterly report on
Form 10-Q
filed May 6, 2004)
21
.1
Subsidiaries of the Registrant
23
.1
Consent of Ernst & Young LLP
31
.1
Certification of Fredric J. Tomczyk, Principal Executive
Officer, as required pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
31
.2
Certification of William J. Gerber, Principal Financial Officer,
as required pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
32
.1
Certification pursuant to 18 U.S.C. Section 1350 as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002
*
Management contracts and compensatory plans and arrangements
required to be filed as exhibits under Item 15(b) of this
report.
By:
By:
Chairman of the Board
Director
Vice Chairman of the Board
Director
Director
Director
Director
Director
Director
Director
Director
83
EXHIBIT 10.3
AMENDMENT NUMBER ONE TO EMPLOYMENT AGREEMENT
This Amendment Number One to Employment Agreement is entered into as of the 29th day of September, 2008, (the "Effective Date"), by and between TD Ameritrade Holding Corporation (the "Company") and Joseph H. Moglia ("Executive") (collectively referred to as the "Parties").
WHEREAS, Executive and Company entered into an Employment Agreement dated June 11, 2008 (the "Employment Agreement"); and
WHEREAS, Executive and Company desire to modify certain of the terms and conditions of Executive's employment relationship, as originally provided pursuant to the Employment Agreement;
NOW, THEREFORE, in consideration of the promises made herein, the Parties hereby agree as follows:
(Capitalized terms shall have the meanings ascribed them in the Employment Agreement)
1. Annual Awards. The sixth sentence in Section 4(c)(ii) of the Employment Agreement is hereby amended in its entirety to read as follows:
"The 2008 Award and the 2009 Award shall be paid entirely in cash after satisfaction of the applicable performance criteria and vesting schedule established pursuant to the terms and conditions of the LTIP."
Except as expressly amended hereby, the Employment Agreement shall remain in full force and effect. In the event of any conflict between the terms and conditions of this Amendment and the terms and conditions of the Employment Agreement, this Amendment shall prevail.
IN WITNESS WHEREOF, the Parties have executed this Amendment on the respective dates set forth below:
TD AMERITRADE HOLDING CORPORATION
Dated: September 29, 2008 By: /s/ W. EDMUND CLARK ---------------------------------------- Name: W. Edmund Clark Title: Chairman of the HR & Compensation Committee |
Joseph H. Moglia, an individual
Dated: September 29, 2008 /s/ JOSEPH H. MOGLIA ---------------------------------------- |
EXHIBIT 10.9
TD AMERITRADE HOLDING CORPORATION
ELLEN L.S. KOPLOW EMPLOYMENT AGREEMENT
This Agreement, originally entered into as of September 26, 2006, by and between TD Ameritrade Holding Corporation (the "Company") and Ellen L.S. Koplow ("Executive"), is hereby amended and restated in its entirety effective as of October 13, 2008 (the "Amendment Date").
1. Duties and Scope of Employment.
(a) Positions and Duties. As of September 26, 2006 (the "Effective Date"), Executive serves, and will continue to serve, as Executive Vice President, General Counsel and Secretary, reporting to the Company's Chief Executive Officer (the "CEO"). Executive will render such business and professional services in the performance of her duties, consistent with Executive's position within the Company, as will reasonably be assigned to her by the CEO. The period Executive is employed by the Company under this Agreement is referred to herein as the "Employment Term".
(b) Obligations. During the Employment Term, Executive will devote Executive's full business efforts and time to the Company and will use good faith efforts to discharge Executive's obligations under this Agreement to the best of Executive's ability and in accordance with each of the Company's corporate guidance and ethics guidelines, conflict of interests policies and code of conduct. For the duration of the Employment Term, Executive agrees not to actively engage in any other employment, occupation, or consulting activity for any direct or indirect remuneration without the prior approval of the applicable committee of the Board of Directors (the "Board") or the CEO (which approval will not be unreasonably withheld); provided, however, that Executive may, without the approval of the Board, serve in any capacity with any civic, educational, or charitable organization, provided such services do not interfere with Executive's obligations to Company.
(i) Executive hereby represents and warrants to the Company that Executive is not party to any contract, understanding, agreement or policy, written or otherwise, that would be breached by Executive's entering into, or performing services under, this Agreement. Executive further represents that he has disclosed to the Company in writing all threatened, pending, or actual claims that are unresolved and still outstanding as of the Effective Date, in each case, against Executive of which he is aware, if any, as a result of her employment with her current employer (or any other previous employer) or her membership on any boards of directors.
(c) Other Entities. Executive agrees to serve, if requested and without additional compensation, as an officer and director for each of the Company's subsidiaries, partnerships, joint ventures, limited liability companies and other affiliates, including entities in which the Company has a significant investment as determined by the Company. As used in this Agreement, the term "affiliates" will include any entity controlled by, controlling, or under common control of the Company.
2. At-Will Employment. Executive and the Company agree that Executive's employment with the Company constitutes "at-will" employment. Executive and the Company acknowledge that this employment relationship may be terminated at any time, upon written notice to the other party, with or without good cause or for any or no cause, at the option either of the Company or Executive. However, as described in this Agreement, Executive may be entitled to severance benefits depending upon the circumstances of Executive's termination of employment.
3. Term of Agreement. This Agreement will have an initial term of three
(3) years commencing on the Effective Date (the "Initial Term"). On the third
anniversary of the Effective Date, this Agreement automatically will renew for
an additional one (1) year term (the "Additional Term") unless either party
provides the other party with written notice of non-renewal at least sixty (60)
days prior to the date of automatic renewal. Following the Additional Term, the
Agreement will renew for an additional one (1) year term upon the mutual consent
of Executive and the Company.
4. Compensation.
(a) Base Salary. Subject to periodic review by the Board, the Company will pay Executive an annual salary of $300,000 as compensation for her services (such annual salary, as is then effective, to be referred to herein as "Base Salary"). The Base Salary will be paid periodically in accordance with the Company's normal payroll practices and be subject to the usual, required withholdings.
(b) Annual Incentive. With respect to each full fiscal year during the Employment Term, Executive will be eligible to participate in the Ameritrade Holding Corporation Management Incentive Plan ("MIP"), pursuant to which Executive will be eligible to earn an annual incentive award (the "Annual Incentive") based upon the achievement of applicable performance criteria established by the Board within the first ninety (90) days of each fiscal year during the Employment Term and communicated to Executive. Each Annual Incentive will, effective as of each fiscal year beginning on or after October 1, 2008, have a target value of $360,000 (the "Target").
(c) Equity Awards. During the Employment Term, Executive will be eligible to participate in the Ameritrade Holding Corporation 1996 Long-Term Incentive Plan (the "LTIP").
(i) Special Grant. On March 10, 2006, Executive was granted a special award under the LTIP of 34,832 performance restricted share units (the "Special Grant"). The Special Grant will be scheduled to vest and be settled in accordance with the performance criteria and vesting schedule set forth on Exhibit B of the applicable Special Grant Award Agreement.
(ii) Annual Award. With respect to each full fiscal year beginning on and after October 1, 2008 during the Employment Term, Executive will be eligible for an award under the LTIP of performance restricted share units with a target value, determined by the Company pursuant to a reasonable and uniform methodology, equal to $240,000 on the date of grant (the "Annual Award"), and will be scheduled to vest and be settled in accordance with the applicable performance criteria and vesting schedule provided in the applicable Award Agreement.
5. Employee Benefits. Executive will be eligible to participate in accordance with the terms of all Company employee benefit plans, policies and arrangements that are applicable to other
executive officers of the Company, as such plans, policies and arrangements may exist from time to time.
6. Expenses. The Company will reimburse Executive for reasonable travel, entertainment and other expenses incurred by Executive in the furtherance of the performance of Executive's duties hereunder, in accordance with the Company's expense reimbursement policy as in effect from time to time.
7. Termination of Employment. In the event Executive's employment with the
Company terminates for any reason, Executive will be entitled to any (a) unpaid
Base Salary accrued up to the effective date of termination, (b) unpaid, but
earned and accrued Annual Incentive for any completed fiscal year as of her
termination of employment, (c) pay for accrued but unused vacation that the
Company is legally obligated to pay Executive, (d) benefits or compensation as
provided under the terms of any employee benefit and compensation agreements or
plans applicable to Executive, (e) unreimbursed business expenses required to be
reimbursed to Executive, and (f) rights to indemnification Executive may have
under the Company's Articles of Incorporation, Bylaws, the Agreement, or
separate indemnification agreement, as applicable. In addition, if the
termination is by the Company without Cause or if Executive resigns for Good
Reason, Executive will be entitled to the amounts and benefits specified in
Section 8.
8. Severance.
(a) Termination Without Cause or Resignation for Good Reason. If during the Employment Term Executive's employment is terminated by the Company without Cause or if Executive resigns for Good Reason, then, subject to Sections 9 and 10 and the requirement to delay certain payments in Section 25, Executive will receive: (i) a severance amount equal to $1,320,000 which shall be paid in equal amounts over the course of the two (2) year period beginning after Executive's employment is terminated in accordance with the Company's normal payroll policies; (ii) an additional severance payment determined by taking the current year's Annual Incentive pro-rated to the date of termination, with such pro-rated amount to be calculated by multiplying the current year's Annual Incentive target incentive compensation by a fraction with a numerator equal to the number of days between the start of the current fiscal year and the date of termination and a denominator equal to 365, (iii) for a period of two (2) years, if the Executive or any of her dependents is eligible for and elects COBRA continuation coverage (as described in Section 4980B of the Internal Revenue Code of 1986, as amended (the "Code")) under any Company group medical or dental plan, Executive will not be charged any premiums for such coverage; provided, however, Executive will be responsible for any income tax due with respect to such premiums, and (iv) restricted share units granted under the LTIP as part of any Annual Awards or the Special Grant that (A) are subject to performance vesting will be fully earned and the actual number of restricted share units which will be considered vested (in addition to those which vested in accordance with their terms) will be determined (1) by actual performance for any completed performance period through the date of Executive's termination and (2) by actual performance, as specified in the applicable Award Agreement, for any incomplete or remaining performance periods after Executive's termination (the vested restricted share units will be settled in shares of Company common stock on the original settlement date as forth in the Award Agreement (without regard to such termination)), and (B) are subject to time based vesting shall be considered fully vested and will be settled promptly thereafter as provided by the applicable Award Agreement.
(b) Termination due to Death or Disability. In the event of a termination of Executive's employment during the Employment Term due to death or Disability, then, subject to Sections 9 and 10, Executive, or Executive's estate as applicable, will be entitled to receive the current year's Annual Incentive pro-rated to the date of termination, with such pro-rated amount to be calculated by multiplying the current year's target incentive compensation by a fraction with a numerator equal to the number of days between the start of the current fiscal year and the date of termination and a denominator equal to 365.
9. Conditions to Receipt of Severance; Non-solicitation and Non-competition; No Duty to Mitigate.
(a) Conditions to Receipt of Severance. The receipt of any severance
pursuant to Section 8 will be subject to Executive signing and not revoking a
separation and release of claims agreement in substantially the form attached as
Exhibit A, but with any appropriate reasonable modifications, reflecting changes
in applicable law, as is necessary to provide the Company with the protection it
would have if the release were executed as of the Effective Date. No severance
will be paid or provided until the separation agreement and release agreement
becomes effective. The Company agrees that it will execute and deliver to
Executive said separation and release of claims agreement no later than eight
(8) days after it receives a copy of such agreement executed by Executive.
Company agrees that it will be bound by such separation and release of claims
agreement and that same will become effective from and after the "Effective
Date" thereof (as defined in Section 28 of such separation and release of claims
agreement), even if Company fails or refuses to execute and deliver same to
Executive. The receipt of any severance pursuant to Section 8 will also be
subject to, during the Employment Term and the Restricted Period, Executive
complying with the non-solicitation and non-competition requirements of Section
9(b).
(b) Non-solicitation and Non-competition. During the Employment Term and the Restricted Period (and with respect to the Restricted Period, only as permitted by applicable law and the Maryland Rules of Professional Conduct, or such other applicable rules of ethical conduct in effect in any other State under which the Executive might be, or might become, authorized to practice law), the Executive will not (without the written consent of the CEO) engage or participate in any business within any state in the United States where the Company conducts business (as an owner, partner, stockholder, holder of any other equity interest, or financially as an investor or lender, or in any capacity calling for the rendition of personal services or acts of management, operation or control) which is engaged in any activities and for any business competitive with any of the primary businesses conducted by the Company or any of its Affiliates (as defined below). For purposes of this Agreement, the term "primary businesses" is defined as an on-line brokerage business, including active trader and long term investor client segments, and also includes any such other business formally proposed (and considered at a meeting of the Board) to be conducted by the Company or any of its Affiliates during the twelve (12) month period prior to the date of termination (collectively a "Competitive Business"). Provided that this restriction will not restrict Executive from being employed by or consulting with a business, firm, corporation, partnership or other entity that owns or operates an on-line brokerage, provided that (i) the on-line brokerage business is de minimis as compared to its core business in terms of revenue and/or resources, and (ii) Executive's involvement with the company excludes, directly or indirectly, the on-line brokerage business during the Restriction Period. Notwithstanding the foregoing, Executive may (i) own securities of a Competitive Business so long as the securities of such corporation or other entity are listed on a
national securities exchange or on the NASDAQ National Market and the securities owned directly or indirectly by Executive do not represent more than 2% of the outstanding securities of such corporation or other entity; and (ii) during the Restricted Period, practice law as an attorney in private practice (e.g., as an attorney affiliated with a law firm or as a solo practitioner) so long as Executive agrees, to the extent permitted by applicable law and the Maryland Rules of Professional Conduct, or such other applicable rules of ethical conduct in effect in any other State under which the Executive might be, or might become, authorized to practice law), to not provide legal advice or any assistance of any nature to any Competitive Business;
(i) During the Restricted Period, neither Executive, nor any business in which Executive may engage or participate in, will directly or indirectly, (A) knowingly induce any customer or vendor of the Company or of corporations or businesses which directly or indirectly are controlled by the Company (collectively, the "Affiliates") to patronize any Competitive Business; (B) knowingly request or advise any customer or vendor to withdraw, curtail or cancel such customer's or vendor's business with the Company or any of its Affiliates; or (C) compete with the Company or any of its Affiliates in merging with or acquiring any other company or business (whether by a purchase of stock or other equity interests, or a purchase of assets or otherwise) which is a Competitive Business;
(ii) During the Restricted Period, neither Executive nor any business in which Executive may engage or participate in will (A) knowingly hire, solicit for hire or attempt to hire any employee of the Company or any of its Affiliates, or (B) encourage any employee of the Company or any of its Affiliates to terminate such employment. For purposes of this Agreement, "employee" means current employees as well as anyone employed by the Company or any of its Affiliates within the prior six (6) months from Executive's date of termination; provided, however, that this provision will not preclude any business in which Executive may engage or participate in from soliciting any such employee by means of or hiring any such employee who responds to a public announcement placed by the business as long as Executive otherwise complies with subsections (A) and (B) above; and
(iii) In the event that any of the provisions of this Section should ever be deemed to exceed the time, geographic or occupational limitations permitted by applicable laws, then such provisions will and are hereby reformed to the maximum time, geographic or occupational limitations permitted by applicable law.
(c) Nondisparagement. During the Employment Term and Restricted Period, Executive will not knowingly disparage, criticize, or otherwise make any derogatory statements regarding the Company, its directors, or its officers. The Company will instruct its officers and directors to not knowingly disparage, criticize, or otherwise make any derogatory statements regarding Executive during the Employment Term and Restricted Period. Notwithstanding the foregoing, nothing contained in this agreement will be deemed to restrict Executive, the Company or any of the Company's current or former officers and/or directors from providing information to any governmental or regulatory agency (or in any way limit the content of any such information) to the extent they are requested or required to provide such information pursuant to applicable law or regulation.
(d) Other Requirements. Executive's initial receipt of severance and/or the receipt of continued severance payments will be subject to Executive complying with the terms and provisions of Sections 9 and 10. Executive will not be obligated to comply with Section 9 of this Agreement while the Company is in material default of its payment and reimbursement obligations under Sections 7, 8, or 10 of this Agreement. Notwithstanding the foregoing, the Company will not be considered to be in default of its payments and reimbursement obligations unless Executive provides written notice to the Board setting forth her reasons why he believes the Company is in default and giving the Company fifteen (15) days to cure such default, if any.
(e) No Duty to Mitigate. Executive will not be required to mitigate the amount of any payment or consideration contemplated by this Agreement, nor will any earnings that Executive may receive from any other source reduce any such payment or consideration.
10. Confidential Information and Intellectual Property.
(a) Except as may be required by law, or except to the extent required to perform Executive's duties and responsibilities hereunder, Executive will keep secret and confidential indefinitely all non-public confidential information (including, without limitation, information regarding cost of new accounts, activity rates of different market niche customers, advertising results, technology (hardware and software), architecture, discoveries, processes, algorithms, maskworks, strategies, intellectual properties, customer lists and other customer information) concerning any of the Company and its affiliates which was acquired by or disclosed to Executive during the course of Executive's employment with the Company ("Confidential Information") and not use in any manner or disclose the same, either directly or indirectly, to any other person, firm or business entity.
(b) At the end of the Employment Term (whether by expiration or termination) or at the Company's earlier request, Executive will promptly return to the Company any and all records, documents, physical property, information, computer disks, drives or other materials relative to the business of any of the Company and its affiliates obtained by Executive during the course of her employment with the Company and not keep any copies thereof.
(c) Executive acknowledges and agrees that all right, title and interest in inventions, discoveries, improvements, trade secrets, developments, processes and procedures made by Executive, in whole or in part, or conceived by Executive either alone or with others, when employed by the Company, including such of the foregoing items conceived during the course of employment which are developed or perfected after Executive's termination of employment, are owned by the Company ("Company IP"). Executive assigns any and all right, title and interest he may have to Company IP to the Company and will promptly assist the Company or its designee, at the Company's expense, to obtain patents, trademarks, copyrights and service marks concerning Company IP made by Executive and Executive will promptly execute all reasonable documents prepared by the Company or its designee and take all other reasonable actions which are necessary or appropriate to secure to the Company and its affiliates the benefits of Company IP. Such patents, trademarks, copyrights and service marks will at all times be the property of the Company and its affiliates. Executive promptly will keep the Company informed of, and promptly will execute such assignments prepared by the Company or its designee as may be necessary to transfer to the Company or its affiliates the benefits of, any Company IP.
(d) To the extent that any court or agency seeks to require Executive to disclose Confidential Information, Executive promptly will inform the Company and take reasonable steps to endeavor to prevent the disclosure of Confidential Information until the Company has been informed of such requested disclosure, and the Company has an opportunity to respond to such court or agency. To the extent Executive obtains information on behalf of the Company or any of its affiliates that may be subject to attorney-client privilege as to the Company's attorneys, Executive will promptly inform the Company and take reasonable steps to endeavor to maintain the confidentiality of such information and to preserve such privilege.
(e) Confidential Information does not include information already in the public domain or information which has been released to the public by the Company. Nothing in this Section 10 will be construed so as to prevent Executive from using, in connection with her employment for himself or an employer other than the Company, knowledge which was acquired by him during the course of her employment with the Company and which is generally known to persons of her experience in other companies in the same industry. Subject to Section 10(d), Executive will be permitted to disclose Confidential Information if required by a subpoena or court or administrative order.
(f) The receipt of any severance pursuant to Section 8 will be subject to Executive complying with the terms of this Section 10.
11. Excise Taxes. In the event that the benefits provided for in this
Agreement constitute "parachute payments" within the meaning of Section 280G of
the Code and will be subject to the excise tax imposed by Section 4999 of the
Code (the "Excise Tax"), then Executive's severance benefits payable under the
terms of this Agreement will be either (i) delivered in full, or (ii) delivered
as to such lesser extent which would result in no portion of such severance
benefits being subject to the Excise Tax, whichever of the foregoing amounts,
taking into account the applicable federal, state and local income taxes and the
Excise Tax, results in the receipt by Executive on an after-tax basis, of the
greatest amount of severance benefits, notwithstanding that all or some portion
of such severance benefits may be taxable under Section 4999 of the Code. Unless
the Company and Executive otherwise agree in writing, any determination required
under this Section 11 will be made in writing by the Company's independent
public accountants (the "Accountants"), whose determination will be conclusive
and binding upon Executive and the Company for all purposes. For purposes of
making the calculations required by this Section 11, the Accountants may make
reasonable assumptions and approximations concerning applicable taxes and may
rely on reasonable, good faith interpretations concerning the application of
Section 280G and 4999 of the Code. The Company and Executive will furnish to the
Accountants such information and documents as the Accountants may reasonably
request in order to make a determination under this Section 11. The Company will
bear all costs the Accountants may reasonably incur in connection with any
calculations contemplated by this Section 11. Any reduction in payments and/or
benefits required by this Section 11 shall occur in the following order: (1)
reduction of cash payments; and (2) reduction of other benefits paid to
Executive. In the event that acceleration of vesting of equity awards is to be
reduced, such acceleration of vesting shall be cancelled in the reverse order of
the date of grant for Executive's equity awards.
12. Definitions.
(a) Award Agreement. For purposes of this Agreement, "Award Agreement" will mean the form of award agreement entered into between Executive and the Company in connection with the Special Grant and Annual Awards.
(b) Cause. For purposes of this Agreement, "Cause" will mean:
(i) Executive's willful and continued failure to perform the duties and responsibilities of her or her position after there has been delivered to Executive a written demand for performance from the Board which describes the basis for the Board's belief that Executive has not substantially performed her or her duties and provides Executive with thirty (30) days to take corrective action;
(ii) Any act of personal dishonesty taken by Executive in connection with her or her responsibilities as an employee of the Company with the intention or reasonable expectation that such action may result in the substantial personal enrichment of Executive;
(iii) Executive's conviction of, or plea of nolo contendere to, a felony that the Board reasonably believes has had or will have a material detrimental effect on the Company's reputation or business;
(iv) A breach of any fiduciary duty owed to the Company by Executive that has a material detrimental effect on the Company's reputation or business;
(v) Executive being found liable in any Securities and Exchange Commission or other civil or criminal securities law action or entering any cease and desist order with respect to such action (regardless of whether or not Executive admits or denies liability);
(vi) Executive (A) obstructing or impeding; (B) endeavoring to influence, obstruct or impede, or (C) failing to materially cooperate with, any investigation authorized by the Board or any governmental or self-regulatory entity (an "Investigation"). However, Executive's failure to waive attorney-client privilege relating to communications with Executive's own attorney in connection with an Investigation will not constitute "Cause"; or
(vii) Executive's disqualification or bar by any governmental or self-regulatory authority from serving in the capacity contemplated by this Agreement or Executive's loss of any governmental or self-regulatory license that is reasonably necessary for Executive to perform her responsibilities to the Company under this Agreement, if (A) the disqualification, bar or loss continues for more than thirty (30) days, and (B) during that period the Company uses its good faith efforts to cause the disqualification or bar to be lifted or the license replaced. While any disqualification, bar or loss continues during Executive's employment, Executive will serve in the capacity contemplated by this Agreement to whatever extent legally permissible and, if Executive's employment is not permissible, Executive will be placed on leave (which will be paid to the extent legally permissible).
(c) Change of Control. For purposes of this Agreement, "Change of Control" will have the meaning set forth in the LTIP.
(d) Disability. For purposes of this Agreement, Disability means, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or receipt by Executive of income replacement benefits for a period of not less than three (3) months under an applicable disability benefit plan of the Company.
(e) Good Reason. For purposes of this Agreement, "Good Reason" means the occurrence of any of the following, without Executive's express written consent:
(i) A significant reduction of Executive's duties, position, or responsibilities, relative to Executive's duties, position or responsibilities in effect immediately prior to such reduction;
(ii) A material reduction in the kind or level of employee benefits to which Executive is entitled immediately prior to such reduction with the result that Executive's overall benefits package is significantly reduced. Notwithstanding the foregoing, a one-time reduction that also is applied to substantially all other executive officers of the Company and that reduces the level of employee benefits by a percentage reduction of 10% or less will not constitute Good Reason;
(iii) A reduction in Executive's Base Salary, Target Annual Incentive, or Annual Award as in effect immediately prior to such reduction. Notwithstanding the foregoing, a one-time reduction that also is applied to substantially all other executive officers of the Company and which one-time reduction reduces the Base Salary, Target Annual Incentive, or Annual Award by a percentage reduction of 10% or less in the aggregate will not constitute Good Reason;
(iv) The relocation of Executive to a facility or location more than twenty-five (25) miles from her current place of employment; or
(v) The failure of the Company to obtain the assumption of the Agreement by a successor.
(f) In Connection with a Change of Control. For purposes of this Agreement, a termination of Executive's employment with the Company is "in Connection with a Change of Control" if Executive's employment is terminated within twelve (12) months following a Change of Control.
(g) Restricted Period. For purposes of this Agreement, "Restricted Period" will mean the period of time commencing on the date of the termination of Executive's employment and continuing for two (2) years (or in the case of a termination in Connection with a Change of Control continuing for a period equal to one (1) year). Notwithstanding the foregoing, if Executive terminates her employment voluntarily, and such termination is not a termination for Good Reason, then at the discretion of the Company, the Restricted Period will mean a period of time commencing on the date of the termination of Executive's employment and continuing for one (1) year; provided, however, that the Company agrees to pay to Executive continued payment of her Base Salary for a period of one (1) year.
13. Indemnification. Subject to applicable law, Executive will be provided indemnification to the maximum extent permitted by the Company's Articles of Incorporation or Bylaws, including, if applicable, any directors and officers insurance policies, with such indemnification to be on terms determined by the Board or any of its committees, but on terms no less favorable than provided to any other Company executive officer or director and subject to the terms of any separate written indemnification agreement.
14. Assignment. This Agreement will be binding upon and inure to the benefit of (a) the heirs, executors and legal representatives of Executive upon Executive's death, and (b) any successor of the Company. Any such successor of the Company will be deemed substituted for the Company under the terms of this Agreement for all purposes. For this purpose, "successor" means any person, firm, corporation, or other business entity which at any time, whether by purchase, merger, or otherwise, directly or indirectly acquires all or substantially all of the assets or business of the Company. None of the rights of Executive to receive any form of compensation payable pursuant to this Agreement may be assigned or transferred except by will or the laws of descent and distribution. Any other attempted assignment, transfer, conveyance, or other disposition of Executive's right to compensation or other benefits will be null and void.
15. Notices. All notices, requests, demands and other communications called for hereunder will be in writing and will be deemed given (a) on the date of delivery if delivered personally, (b) one (1) day after being sent overnight by a well established commercial overnight service, or (c) four (4) days after being mailed by registered or certified mail, return receipt requested, prepaid and addressed to the parties or their successors at the following addresses, or at such other addresses as the parties may later designate in writing:
If to the Company:
Attn: Chairman of the HR and Compensation Committee
c/o Chief Human Resources Officer
TD Ameritrade Holding Corporation
4211 South 102nd Street
Omaha, NE 68127
If to Executive:
at the last residential address known by the Company.
16. Severability. If any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable, or void, this Agreement will continue in full force and effect without said provision.
17. Arbitration. The Parties agree that any and all disputes arising out of the terms of this Agreement, Executive's employment by the Company, Executive's service as an officer or director of the Company, or Executive's compensation and benefits, their interpretation and any of the matters herein released, will be subject to binding arbitration in Omaha, Nebraska before the American Arbitration Association under its National Rules for the Resolution of Employment Disputes, supplemented by the Nebraska Rules of Civil Procedure. The Parties agree that the
prevailing party in any arbitration will be entitled to injunctive relief in any court of competent jurisdiction to enforce the arbitration award. THE PARTIES HEREBY AGREE TO WAIVE THEIR RIGHT TO HAVE ANY DISPUTE BETWEEN THEM RESOLVED IN A COURT OF LAW BY A JUDGE OR JURY. This paragraph will not prevent either party from seeking injunctive relief (or any other provisional remedy) from any court having jurisdiction over the Parties and the subject matter of their dispute relating to Executive's obligations under this Agreement.
18. Integration. This Agreement and the standard forms of equity award grant that describe Executive's outstanding equity awards, represents the entire agreement and understanding between the parties as to the subject matter herein and supersedes all prior or contemporaneous agreements whether written or oral, including, but not limited to, the Employment Agreement entered into between Executive and Ameritrade Holding Corporation, dated September 9, 2002. No waiver, alteration, or modification of any of the provisions of this Agreement will be binding unless in a writing and signed by duly authorized representatives of the parties hereto. In entering into this Agreement, no party has relied on or made any representation, warranty, inducement, promise, or understanding that is not in this Agreement.
19. Waiver of Breach. The waiver of a breach of any term or provision of this Agreement, which must be in writing, will not operate as or be construed to be a waiver of any other previous or subsequent breach of this Agreement.
20. Survival. The Company's and Executive's responsibilities under Sections 8, 9, 10, and 13 will survive the termination of this Agreement.
21. Headings. All captions and Section headings used in this Agreement are for convenient reference only and do not form a part of this Agreement.
22. Tax Withholding. All payments made pursuant to this Agreement will be subject to withholding of applicable taxes.
23. Governing Law. This Agreement will be governed by the laws of the State of New York without regard to its conflict of laws provisions.
24. Acknowledgment. Executive acknowledges that he has had the opportunity to discuss this matter with and obtain advice from her private attorney, has had sufficient time to, and has carefully read and fully understands all the provisions of this Agreement, and is knowingly and voluntarily entering into this Agreement.
25. Code Section 409A. Notwithstanding anything to the contrary in this Agreement, if the Company reasonably determines that Section 409A of the Code will result in the imposition of additional tax to an earlier payment of any severance or other benefits otherwise due to Executive on or within the six (6) month period following Executive's termination, the severance benefits will accrue during such six (6) month period and will become payable in a lump sum payment on the date six (6) months and one (1) day following the date of Executive's termination. All subsequent payments, if any, will be payable as provided in this Agreement.
26. Counterparts. This Agreement may be executed in counterparts, and each counterpart will have the same force and effect as an original and will constitute an effective, binding agreement on the part of each of the undersigned.
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by a duly authorized officer, as of the day and year written below.
COMPANY:
TD AMERITRADE HOLDING CORPORATION
/s/ FREDRIC J. TOMCZYK Date: October 14, 2008 ----------------------------------------- Fredric J. Tomczyk Chief Executive Officer |
EXECUTIVE:
/s/ ELLEN L.S. KOPLOW Date: October 13, 2008 ----------------------------------------- Ellen L.S. Koplow |
[SIGNATURE PAGE TO KOPLOW EMPLOYMENT AGREEMENT]
EXHIBIT A
SEPARATION AND RELEASE OF CLAIMS AGREEMENT
EXHIBIT 10.13
AMENDMENT NUMBER ONE TO EMPLOYMENT AGREEMENT
This Amendment Number One to Employment Agreement is entered into as of the 9th day of September, 2008, (the "Effective Date"), by and between TD Ameritrade Holding Corporation (the "Company") and Bryce Engel ("Executive") (collectively referred to as the "Parties").
WHEREAS, Executive and Company entered into an Employment Agreement dated November 1, 2007 (the "Employment Agreement"); and
WHEREAS, Executive and Company desire to modify certain of the terms and conditions of Executive's employment relationship, as originally provided pursuant to the Employment Agreement;
NOW, THEREFORE, in consideration of the promises made herein, the Parties hereby agree as follows:
1. Termination of Employment. Executive's employment with the Company will terminate on November 1, 2008, upon the expiration of the original term of the Employment Agreement (the "Termination Date").
2. Position and Duties. As of the Effective Date, the Executive will no longer serve as the Chief Brokerage Operations Officer of the Company, but shall thereafter, until the Termination Date, continue to serve as an employee, in an advisory role, in the brokerage business of the Company.
3. Consideration. The Company agrees that Executive shall be entitled to the following:
(a) Base Salary. Executive will continue to receive the base salary specified in the Employment Agreement through the Termination Date.
(b) Bonus. Executive will continue to be eligible for the target
cash bonus specified in the Employment Agreement, provided that (i) the target
cash bonus for the period beginning on October 1, 2008 shall be pro-rated
through the Termination Date; (ii) the bonus shall be paid entirely in cash; and
(iii) such cash bonus shall be paid in a single lump sum payment as soon as
practicable following the Termination Date.
4. Separation and Release of Claims Agreement. Executive acknowledges that the foregoing consideration, and the severance and other benefits offered to Executive in the Employment Agreement, shall be subject to execution of a separation and release agreement and Executive expressly agrees to sign and not revoke a separation and release agreement, in substantially the form attached hereto as Exhibit A.
5. Waiver of Additional Payments and Rights. Executive acknowledges, understands and hereby agrees to waive any right to any additional compensation, benefits, severance or any additional cash bonus or equity award, other than that compensation, benefits,
severance and pro-rata portion of the cash bonus as specified in this Amendment and the attached separation and release of claims agreement. Executive also acknowledges, understands and hereby agrees that neither the modifications to his positions and duties prior to the Termination Date contemplated by Section 2 of this Amendment nor the execution of this Amendment shall be considered grounds to constitute Good Reason pursuant to the Employment Agreement.
Except as expressly amended and supplemented hereby, the Employment Agreement shall remain in full force and effect. In the event of any conflict between the terms and conditions of this Amendment and the terms and conditions of the Employment Agreement, this Amendment shall prevail.
IN WITNESS WHEREOF, the Parties have executed this Amendment on the respective dates set forth below:
TD AMERITRADE HOLDING CORPORATION
Dated: September 10, 2008 By: /s/ FRED TOMCZYK ------------------------------------- Name: Fred Tomczyk Title: Chief Operating Officer |
Bryce Engel, an individual
Dated: September 9, 2008 /s/ BRYCE B. ENGEL ----------------------------------------- |
EXHIBIT 10.14
SEPARATION AND RELEASE OF CLAIMS AGREEMENT
This Separation and Release of Claims Agreement ("Agreement") is made by and between Bryce Engel ("Employee") and TD AMERITRADE Holding Corporation ("Company") (together referred to as the "Parties").
RECITALS
WHEREAS, Employee and Company entered into an Employment Term Sheet, effective as of November 1, 2007, which outlines the payments promised to Employee for services to the Company (the "Employment Agreement");
WHEREAS, the Company and Employee have entered into Performance Restricted Stock Unit Agreements, dated March 10, 2006, October 25, 2006 and October 25, 2007, (collectively the "Restricted Stock Unit Agreements) pursuant to which the Employee was eligible to participate in the Ameritrade Holding Corporation 1996 Long-Term Incentive Plan (the "Plan");
WHEREAS, Employee was employed by the Company;
WHEREAS, Employee's employment with Company will be terminated on or about November 1, 2008 (the "Termination Date");
WHEREAS, the Parties, and each of them, wish to resolve any and all disputes, claims, complaints, grievances, charges, actions, petitions and demands that the Employee may have against the Company as defined herein, including, but not limited to, any and all claims arising or in any way related to Employee's employment with, or separation from, the Company;
NOW THEREFORE, in consideration of the promises made herein, the Parties hereby agree as follows:
1. Consideration.
(a) Accrued Payments. The Company agrees to pay Employee: (i) Employee's accrued but unpaid salary, (ii) accrued but unpaid Annual Incentive for the Company's 2008 fiscal year (which amount shall be paid based on actual performance and the Employee's purported portion of the Annual Incentive which would have otherwise been paid in Company stock awards shall be paid entirely in cash), and (iii) pay for accrued but unused vacation, which has accrued through the Termination Date. The Company also agrees to pay the Employee for any unreimbursed business expenses required to be reimbursed to Employee pursuant to the Company's normal and customary business expense reimbursement procedures.
(b) Severance. The Company agrees to pay Employee, after the delay required pursuant to Section 1(e) of this Agreement, the following amounts as severance pursuant to the Employment Agreement:
(i) Base Salary. The Company agrees to continue to pay Employee, following the delay required by Section 1(e) of this Agreement, a lump sum cash payment equal to eighteen months (18) of his current Base Salary, which is equal to $450,000, subject to required withholdings.
(ii) Annual Incentive. The Company agrees to pay Employee, following the delay required by Section 1(e) of this Agreement, an additional lump sum severance cash payment of $525,000, which is equal to 1.5 times Employee's fiscal year 2008 target cash bonus component.
(iii) Pro-rata 2009 Annual Incentive. The Company agrees to pay Employee, following the delay required by Section 1(e) of this Agreement, an additional lump sum severance cash payment of $29,167, which is equal to the pro-rata portion of the 2009 Annual Incentive determined as of the Termination Date.
(c) Restricted Stock Units. The Parties agree that, the vesting and settlement of Restricted Stock Units shall be governed by the terms of Exhibit A to this Agreement. Except as provided herein and in Exhibit A, all restricted stock units shall continue to be subject to all other terms and conditions of the Restricted Stock Unit Agreements.
(d) Benefits. Employee (and any eligible dependents) shall be eligible for continued health benefits pursuant to COBRA continuation coverage (as described in Section 4980B of the Internal Revenue Code of 1986, as amended). The Company's portion of any COBRA continuation coverage, if elected by the Employee pursuant to the policies and procedures of the Company, shall be paid by the Company for the first twelve (12) months (or such shorter period pursuant to which the Employee remains eligible for such COBRA coverage) of applicable COBRA continuation coverage. Employee shall be responsible for paying the Employee's share of such COBRA coverage during the entire period of continuation coverage. Employee's participation in all other benefits and incidents of employment ceased on the Termination Date. Employee ceased accruing employee benefits, including, but not limited to, vacation time and paid time off, as of the Termination Date.
(e) Section 409A Delayed Payments. The Company has determined that
payment of the severance benefits provided in this Agreement would result in the
imposition of additional tax on the Employee, and consequently, no severance
benefits owed to the Employee pursuant to this Agreement on or within the six
(6) month period following the Termination Date will be paid at such time.
Instead, all such suspended severance benefits shall accrue during such six (6)
month period and will become payable in a lump sum payment on the date six (6)
months and one (1) day following the Termination Date. All subsequent severance
payments, as applicable, will then be payable as provided in this Agreement.
2. Confidential Information. Employee shall continue to maintain the confidentiality of all confidential and proprietary information of the Company. Employee shall return all of the Company's property and confidential and proprietary information in his possession to the Company on the Effective Date of this Agreement.
3. Payments. Employee acknowledges and represents that the Company has paid all salary, wages, bonuses, accrued vacation, commissions and any and all other benefits due to Employee after payments and benefits in section 1 above are received.
4. Release of Claims. Employee agrees that the foregoing consideration represents settlement in full of all outstanding obligations owed to Employee by the Company and its officers, managers, supervisors, agents and employees. Employee, on his own behalf, and on behalf of his respective heirs, family members, executors, agents, and assigns, hereby fully and forever releases the Company and its officers, directors, employees, agents, investors, shareholders, administrators, affiliates, divisions, subsidiaries, predecessor and successor corporations, and assigns, from, and agree not to sue concerning, any claim, duty, obligation or cause of action relating to any matters of any kind, whether presently known or unknown, suspected or unsuspected, that Employee may possess arising from any omissions, acts or facts that have occurred up until and including the Termination Date of this Agreement including, without limitation:
(a) any and all claims relating to or arising from Employee's employment relationship with the Company and the termination of that relationship;
(b) any and all claims relating to, or arising from, Employee's right to purchase, or actual purchase of shares of stock of the Company, including, without limitation, any claims for fraud, misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law, and securities fraud under any state or federal law;
(c) any and all claims under the law of any jurisdiction including, but not limited to, wrongful discharge of employment; constructive discharge from employment; termination in violation of public policy; discrimination; breach of contract, both express and implied; breach of a covenant of good faith and fair dealing, both express and implied; promissory estoppel; negligent or intentional infliction of emotional distress; negligent or intentional misrepresentation; negligent or intentional interference with contract or prospective economic advantage; unfair business practices; defamation; libel; slander; negligence; personal injury; assault; battery; invasion of privacy; false imprisonment; and conversion;
(d) any and all claims for violation of any federal, state or municipal statute, including, but not limited to, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act of 1990, the Fair Labor Standards Act, the Employee Retirement Income Security Act of 1974, The Worker Adjustment and Retraining Notification Act, Older Workers Benefit Protection Act; the Massachusetts Fair Employment Practice Act;
(e) any and all claims for violation of the federal, or any state, constitution;
(f) any and all claims arising out of any other laws and regulations relating to employment or employment discrimination;
(g) any claim for any loss, cost, damage, or expense arising out of any dispute over the non-withholding or other tax treatment of any of the proceeds received by Employee as a result of this Agreement; and
(h) any and all claims for attorneys' fees and costs.
The Company and Employee agree that the release set forth in this section shall be and remain in effect in all respects as a complete general release as to the matters released. This release does not extend to any obligations incurred under this Agreement.
Employee acknowledges and agrees that any breach of any provision of this Agreement shall constitute a material breach of this Agreement and shall entitle the Company immediately to recover and cease the severance benefits provided to Employee under this Agreement.
5. Acknowledgement of Waiver of Claims Under ADEA. Employee acknowledges that he is waiving and releasing any rights he may have under the Age Discrimination in Employment Act of 1967 ("ADEA") and that this waiver and release is knowing and voluntary. Employee and the Company agree that this waiver and release does not apply to any rights or claims that may arise under ADEA after the Effective Date of this Agreement. Employee acknowledges that the consideration given for this waiver and release Agreement is in addition to anything of value to which Employee was already entitled. Employee further acknowledges that he has been advised by this writing that:
(a) he should consult with an attorney prior to executing this Agreement;
(b) he has up to twenty-one (21) days within which to consider this Agreement;
(c) he has seven (7) days following his execution of this Agreement to revoke this Agreement;
(d) this Agreement shall not be effective until the revocation period has expired; and,
(e) nothing in this Agreement prevents or precludes Employee from challenging or seeking a determination in good faith of the validity of this waiver under the ADEA, nor does it impose any condition precedent, penalties or costs for doing so, unless specifically authorized by federal law.
6. Unknown Claims. The Parties represent that they are not aware of any claim by either of them other than the claims that are released by this Agreement. Employee acknowledges that he has been advised by legal counsel and is familiar with the principle that a general release does not extend to claims which the releasor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the releasee. Employee, being aware of this principle, agrees to expressly waive any rights Employee may have to that effect, as well as under any other statute or common law principles of similar effect.
7. No Pending or Future Lawsuits. Employee represents that he has no lawsuits, claims, or actions pending in his name, or on behalf of any other person or entity, against the Company or any other person or entity referred to herein. Employee also represents that he does not intend to bring any claims on his own behalf or on behalf of any other person or entity against the Company or any other person or entity referred to herein.
8. Application for Employment. Employee understands and agrees that, as a condition of this Agreement, he shall not be entitled to any employment with the Company, its subsidiaries, or any successor, and he hereby waives any right, or alleged right, of employment or re-employment with the Company, its subsidiaries or related companies, or any successor.
9. Confidentiality. The Parties acknowledge that Employee's agreement to
keep the terms and conditions of this Agreement confidential was a material
factor on which all parties relied in entering into this Agreement. Employee
hereto agrees to use his best efforts to maintain in confidence: (i) the
existence of this Agreement, (ii) the contents and terms of this Agreement,
(iii) the consideration for this Agreement, and (iv) any allegations relating to
the Company or its officers or employees with respect to Employee's employment
with the Company, except as otherwise provided for in this Agreement
(hereinafter collectively referred to as "Settlement Information"). Employee
agrees to take every reasonable precaution to prevent disclosure of any
Settlement Information to third parties, and agrees that there shall be no
publicity, directly or indirectly, concerning any Settlement Information, in
each case, unless and until the Company first discloses Settlement Information,
at which time Employee shall be permitted to disclose only the Settlement
Information previously disclosed by the Company. Until the Company makes public
disclosure of the Settlement Information, Employee agrees to take every
precaution to disclose Settlement Information only to those attorneys,
accountants, governmental entities, and family members who have a reasonable
need to know of such Settlement Information. The Parties agree that if Company
proves that Employee breached this Confidentiality provision, it shall be
entitled to an award of its costs spent enforcing this provision, including all
reasonable attorneys' fees associated with the enforcement action, without
regard to whether the Company can establish actual damages from the breach by
Employee.
10. No Cooperation. Employee agrees he shall not act in any manner that might damage the business of the Company. Employee agrees that he shall not counsel or assist any attorneys or their clients in the presentation or prosecution of any disputes, differences, grievances, claims, charges, or complaints by any third party against the Company and/or any officer, director, employee, agent, representative, shareholder or attorney of the Company, unless under a subpoena or other court order to do so. Employee further agrees both to immediately notify the Company upon receipt of any court order, subpoena, or any legal discovery device that seeks or might require the disclosure or production of the existence or terms of this Agreement, and to furnish, within three (3) business days of its receipt, a copy of such subpoena or legal discovery device to the Company.
11. Non-Disparagement. Employee agrees to refrain from any defamation, libel or slander of the Company or tortious interference with the contracts and relationships of the Company. All inquiries by potential future employers of Employee shall be directed to the Company's Human Resources Department. Upon inquiry, the Company shall only state the following: Employee's last position and dates of employment.
12. Non-Competition; Non-Solicitation. Employee agrees to comply with the
provisions of the Employee's Employment Agreement with respect to the twelve
(12) months of non-competition and non-solicitation beginning on the Termination
Date.
13. No Admission of Liability. The Parties understand and acknowledge that this Agreement constitutes a compromise and settlement of disputed claims. No action taken by the Parties hereto, or either of them, either previously or in connection with this Agreement shall be deemed or construed to be: (a) an admission of the truth or falsity of any claims heretofore made or (b) an acknowledgment or admission by either party of any fault or liability whatsoever to the other party or to any third party.
14. No Knowledge of Wrongdoing. Employee represents that he has no knowledge of any wrongdoing involving improper or false claims against a federal or state governmental agency, or any other wrongdoing that involves Employee or other present or former Company employees.
15. Tax Consequences. The Company makes no representations or warranties with respect to the tax consequences of the payment of any sums to Employee under the terms of this Agreement. Employee agrees and understands that he is responsible for payment, if any, of local, state and/or federal taxes on the sums paid hereunder by the Company and any penalties or assessments thereon. Employee further agrees to indemnify and hold the Company harmless from any claims, demands, deficiencies, penalties, assessments, executions, judgments, or recoveries by any government agency against the Company for any amounts claimed due on account of Employee's failure to pay federal or state taxes or damages sustained by the Company by reason of any such claims, including reasonable attorneys' fees.
16. Costs. The Parties shall each bear their own costs, expert fees, attorneys' fees and other fees incurred in connection with this Agreement.
17. Indemnification. Employee agreed to indemnify and hold harmless the Company from and against any and all loss, costs, damages or expenses, including, without limitation, attorneys' fees or expenses incurred by the Company arising out of the breach of this Agreement by Employee, or from any false representation made herein by Employee, or from any action or proceeding which may be commenced, prosecuted or threatened by Employee or for Employee's benefit, upon Employee's initiative, or with Employee's aid or approval, contrary to the provisions of this Agreement. Employee further agrees that in any such action or proceeding, this Agreement may be pled by the Company as a complete defense, or may be asserted by way of counterclaim or cross-claim.
18. Cooperation in Litigation. Employee agrees to cooperate fully with the Company in any matters that have or may result in a legal claim against the Company, and of which Employee may have knowledge as a result of Employee's employment with the Company. This requires Employee, without limitation, to (1) make himself available upon reasonable request to provide information and assistance to the Company on such matters without additional compensation, except for Employee's out-of-pocket costs, and (2) notify the Company promptly of any requests to Employee for information related to any pending or potential legal claim or litigation involving the Company, reviewing any such request with a designated representative of the Company prior to disclosing any such information, and permitting the representative of the Company to be present during any communication of such information. Employee will remain eligible for indemnification as provided in the Company's Articles of Incorporation and By-Laws.
19. Arbitration. The Parties agree that any and all disputes arising out of, or relating to, the terms of this Agreement, their interpretation, and any of the matters herein released, shall be subject to binding arbitration in Omaha, Nebraska before the American Arbitration Association under its National Rules for the Resolution of Employment Disputes. The Parties agree that the prevailing party in any arbitration shall be entitled to injunctive relief in any court of competent jurisdiction to enforce the arbitration award. The Parties agree that the prevailing party in any arbitration shall be awarded its reasonable attorneys' fees and costs. THE PARTIES HEREBY AGREE TO WAIVE THEIR RIGHT TO HAVE ANY DISPUTE BETWEEN THEM RESOLVED IN A COURT OF LAW BY A JUDGE OR JURY. This section shall not prevent either party from seeking injunctive relief (or any other provisional remedy) from any court having jurisdiction over the Parties and the subject matter of their dispute relating to Employee's obligations under this Agreement and the agreements incorporated herein by reference.
20. Authority. The Company represents and warrants that the undersigned has the authority to act on behalf of the Company and to bind the Company and all who may claim through it to the terms and conditions of this Agreement. Employee represents and warrants that he has the capacity to act on his own behalf and on behalf of all who might claim through him to bind them to the terms and conditions of this Agreement. Each party warrants and represents that there are no liens or claims of lien or assignments in law or equity or otherwise of or against any of the claims or causes of action released herein.
21. No Representations. Each party represents that it has had the opportunity to consult with an attorney, and has carefully read and understands the scope and effect of the provisions of this Agreement. Neither party has relied upon any representations or statements made by the other party hereto which are not specifically set forth in this Agreement.
22. Severability. In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision so long as the remaining provisions remain intelligible and continue to reflect the original intent of the Parties.
23. Entire Agreement. This Agreement represents the entire agreement and understanding between the Company and Employee concerning the subject matter of this Agreement and Employee's relationship with the Company, and supersedes and replaces any and all prior agreements and understandings between the Parties concerning the subject matter of this Agreement and Employee's relationship with the Company, with the exception of the Restricted Stock Unit Agreements, and the applicable Sections of the Employment Agreement.
24. No Waiver. The failure of any party to insist upon the performance of any of the terms and conditions in this Agreement, or the failure to prosecute any breach of any of the terms and conditions of this Agreement, shall not be construed thereafter as a waiver of any such terms or conditions. This entire Agreement shall remain in full force and effect as if no such forbearance or failure of performance had occurred.
25. No Oral Modification. Any modification or amendment of this Agreement, or additional obligation assumed by either party in connection with this Agreement, shall be effective only if placed in writing and signed by both Parties or by authorized representatives of each party.
26. Governing Law. This Agreement shall be deemed to have been executed and delivered within the state of New York, and it shall be construed, interpreted, governed, and enforced in accordance with the laws of the state of New York, without regard to conflict of law principles. To the extent that either party seeks injunctive relief in any court having jurisdiction for any claim relating to the alleged misuse or misappropriation of trade secrets or confidential or proprietary information, each party hereby consents to personal and exclusive jurisdiction and venue in the state and federal courts of the state of New York.
27. Attorneys' Fees. In the event that either Party brings an action to enforce or effect its rights under this Agreement, the prevailing party shall be entitled to recover its costs and expenses, including the costs of mediation, arbitration, litigation, court fees, plus reasonable attorneys' fees, incurred in connection with such an action.
28. Effective Date. This Agreement is effective after it has been signed
by both parties and after eight (8) days have passed since Employee has signed
the Agreement (the "Effective Date"), unless revoked by Employee within seven
(7) days after the date the Agreement was signed by Employee.
29. Counterparts. This Agreement may be executed in counterparts, and each counterpart shall have the same force and effect as an original and shall constitute an effective, binding agreement on the part of each of the undersigned.
30. Voluntary Execution of Agreement. This Agreement is executed voluntarily and without any duress or undue influence on the part or behalf of the Parties hereto, with the full intent of releasing all claims. The Parties acknowledge that:
(a) they have read this Agreement;
(b) they have been represented in the preparation, negotiation, and execution of this Agreement by legal counsel of their own choice or that they have voluntarily declined to seek such counsel;
(c) they understand the terms and consequences of this Agreement and of the releases it contains; and
(d) they are fully aware of the legal and binding effect of this Agreement.
IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective dates set forth below.
TD AMERITRADE HOLDING CORPORATION
Dated: September 10, 2008 By: /s/ FRED TOMCZYK ---------------------------------- Fred Tomczyk Chief Operating Officer |
Bryce Engel, an individual
Dated: September 9, 2008 /s/ BRYCE B. ENGEL -------------------------------------- |
EXHIBIT A
(1) March 10, 2006 Performance Restricted Stock Unit Grant:
Pursuant to Section 5 of the Performance Restricted Stock Unit Agreement, this March 10, 2006 award has been fully accelerated and settlement of the award shall occur, based on actual performance, on the original Settlement Date set forth in the Performance Restricted Stock Unit Agreement.
(2) October 25, 2006 Performance Restricted Stock Unit Grant:
Pursuant to Section 5 of the Performance Restricted Stock Unit Agreement, this October 25, 2006 award has been fully accelerated and settlement of the award shall occur, based on actual performance, on the original Settlement Date set forth in the Performance Restricted Stock Unit Agreement.
(3) October 25, 2007 Time Based Restricted Stock Unit Grant:
Pursuant to Section of the Restricted Stock Unit Agreement, this October 25, 2007 award has been fully accelerated and settlement of the award shall be delayed as provided in Section 1(e) of this Agreement and Section 27 of the Restricted Stock Unit Agreement, as required by Section 409A of the Code to avoid the imposition of additional tax on the Employee.
.
.
.
EXHIBIT 21.1
Subsidiaries of the Registrant
Subsidiary State or Other Jurisdiction of Domicile ---------- --------------------------------------- Ameritrade Advisory Services, LLC Delaware Ameritrade International Company, Inc. Cayman Islands Amerivest Investment Management, LLC Delaware Datek Online Management Corp. Delaware Financial Passport, Inc. Delaware TD AMERITRADE Trust Company Maine National Investor Services Corp. Delaware Nebraska Hudson Company, Inc. New York T2 API Technologies, LLC Delaware TD AMERITRADE Clearing, Inc. Nebraska TD AMERITRADE, Inc. New York TD AMERITRADE IP Company, Inc. Delaware TD AMERITRADE Online Holdings Corp. Delaware TD AMERITRADE Services Company, Inc. Delaware* TD Waterhouse Canadian Call Center, Inc. Canada TD Waterhouse Capital Markets, Inc. Delaware TenBagger, Inc. Nevada ThinkTech, Inc. Delaware** TradeBridge, Inc. Maryland |
* In Texas this entity does business as Ameritrade Support Services Corporation
** In Texas this entity does business as T2 Technology Support, Inc.
Unless otherwise noted, each subsidiary does business under its actual name.
EXHIBIT 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in Registration Statement Numbers 333-132016, 333-105336, 333-99481, 333-99353, 333-86164 and 333-77573 on Form S-8, Number 333-87999 on Form S-3 and Post Effective Amendment No. 1 to Registration Statement Number 333-88632 on Form S-3 to Form S-4 of TD AMERITRADE Holding Corporation of our reports dated November 25, 2008, relating to the consolidated financial statements of TD AMERITRADE Holding Corporation and the effectiveness of internal control over financial reporting of TD AMERITRADE Holding Corporation appearing in this Annual Report on Form 10-K of TD AMERITRADE Holding Corporation for the year ended September 30, 2008.
/s/ ERNST & YOUNG LLP Chicago, Illinois November 25, 2008 |
EXHIBIT 31.1
CERTIFICATION
I, Fredric J. Tomczyk, certify that:
1. I have reviewed this annual report on Form 10-K of TD AMERITRADE Holding Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors:
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: November 26, 2008 /s/ FREDRIC J. TOMCZYK --------------------------------------- Fredric J. Tomczyk President, Chief Executive Officer |
EXHIBIT 31.2
CERTIFICATION
I, William J. Gerber, certify that:
1. I have reviewed this annual report on Form 10-K of TD AMERITRADE Holding Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors:
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: November 26, 2008 /s/ WILLIAM J. GERBER ------------------------------------------------- William J. Gerber Executive Vice President, Chief Financial Officer |
EXHIBIT 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
The undersigned hereby certify that the Annual Report on Form 10-K for the
year ended September 30, 2008 filed by TD AMERITRADE Holding Corporation with
the Securities and Exchange Commission fully complies with the requirements of
Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that
information contained in the report fairly presents, in all material respects,
the financial condition and results of operations of TD AMERITRADE Holding
Corporation.
Dated: November 26, 2008 /s/ FREDRIC J. TOMCZYK -------------------------------------- Fredric J. Tomczyk President, Chief Executive Officer Dated: November 26, 2008 /s/ WILLIAM J. GERBER -------------------------------------- William J. Gerber Executive Vice President, Chief Financial Officer |