eTrade 2008 Annual Report Download - page 267

Exhibit 10.40
E*TRADE Financial Corporation
Severance Agreement
This Severance Agreement (the “Agreement”) is made and entered into by and between E*TRADE Financial Corporation (the
“Company”) and Greg Framke (“Employee”) as of November 14, 2007 (the “Effective Date”).
Section 1. Term of Agreement. This Agreement shall remain in effect for a period of two years from the Effective Date, and will
automatically renew for additional one year periods unless either party provides at least ninety days’ prior written notice of
termination of the Agreement; provided that in the event of a Change in Control during the term of this Agreement, this Agreement
may not be terminated until 24 months following such Change in Control.
Section 2. At-Will Employment. Nothing in this Agreement shall change the “at-will” nature of Employee’s employment.
Section 3. Termination Benefits.
(a) Eligibility for Severance Benefits. If Employee’s employment with the Company is terminated without Cause (other than by
reason of permanent and total disability, within the meaning of the Company’s disability program, or death) or by Employee for Good
Reason, then Employee shall be entitled to the following benefits, subject to his or her execution and non-revocation of a release
reasonably acceptable to the Company (the “Release”) within 30 days following termination of employment and compliance with the
other terms of this Agreement:
(i) a pro-rata share of Employee’s Target Bonus (as defined below) if, and only to the extent that, the Company has met its
target performance objectives for the year to date, as determined in the Company’s discretion based on its bonus accrual through
the most recently completed month;
(ii) a lump sum payment equivalent to one times or, if such termination occurs during a Change in Control Period, two
times Employee’s annualized base salary then in effect;
(iii) a lump sum payment equivalent to one times or, if such termination occurs during a Change in Control Period, two
times Employee’s target bonus under the Company’s performance bonus plan in effect for the year in which the termination
occurs (“Target Bonus”);
(iv) reimbursement for the cost of medical coverage at a level equivalent to that provided by the Company immediately
prior to termination of employment, through the earlier of; (A) 12 months or, if such termination occurs during a Change in
Control Period, 24 months following Employee’s termination of employment, or (B) the time Employee begins alternative
employment; provided that (x) it shall be the obligation of Employee to inform the Company that new employment has been
obtained and (y) such reimbursement shall be made by the Company subsidizing or reimbursing COBRA premiums or, if