eTrade 2007 Annual Report Download - page 196

IV. Execution Speed Guarantee.
A. Standard.
1. Notwithstanding anything to the contrary herein, the Company shall use commercially reasonable efforts to
(a) execute all Eligible Orders (as defined below) within the specified time limit (measured from time that
E*TRADE Securities receives an Eligible Order to the time that E*TRADE Securities is notified of the execution by
the Company) under E*TRADE Securities’ order execution guarantee as in effect at the time of signing of the
Investment Agreement and set forth on Attachment 1 to this Schedule A (the “Execution Guarantee”), which may be
amended from time-to-time as mutually agreed upon by the Parties, and (b) provide the necessary mechanisms to
allow E*TRADE Securities’ customers to track the execution speed of Covered Orders subject to the Execution
Guarantee.
2. “Eligible Orders” shall mean Covered Orders that are market Orders in Equity Securities included within the S&P
Index or any exchange-traded fund, available through E*TRADE Securities to buy, sell or buy-to-cover from 100 to
500 shares, received between 9:45 a.m. (Eastern Time) and 3:59 p.m. (Eastern Time) (subject to adjustment if the
applicable market opens late or closes early).
3. “Ineligible Orders” shall mean (a) all Covered Orders that are not Eligible Orders and (b) all Eligible Orders that are
also short sales, canceled or changed Orders, Orders entered within 20 seconds on the same security on the same side
of the market, sell Orders which the account has a short option position, extended-hours Orders, Directed Orders, the
stock leg of complex option Orders, buy Orders for under $1 and broker-assisted Orders.
If E*TRADE Securities is notified by any of its customers that the execution of such customer’s Eligible Order failed to
meet the Execution Guarantee, E*TRADE Securities shall investigate such claim with the Company. If E*TRADE
Securities and the Company mutually determine in good faith that (a) such customer’s complaint is valid, (b) the failure to
meet the Execution Guarantee is proximately caused by a delay of the Company and (c) E*TRADE Securities is obligated,
under the terms of the Execution Guarantee, to provide the customer with one or more commission-free trades, E*TRADE
Securities may provide such commission-free trades, and the Company shall reimburse E*TRADE Securities for the
amount of those commission credits. Notwithstanding anything herein to the contrary, in no event shall the Company be
obligated to reimburse E*TRADE Securities for any refund if the applicable Covered Order is an Ineligible Order or if:
B. Customer Reimbursement.
1. there were interruptions to communications or other systems that impacted execution,
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