eTrade 2012 Annual Report Download - page 204

(iii) Except as expressly provided otherwise herein, no reimbursement payable to Executive pursuant to any
provisions of this Agreement or pursuant to any plan or arrangement of the Company covered by this Agreement shall be
paid later than the last day of the calendar year following the calendar year in which the related expense was incurred, and
no such reimbursement during any calendar year shall affect the amounts eligible for reimbursement in any other calendar
year, except, in each case, to the extent that the right to reimbursement does not provide for a “deferral of compensation”
within the meaning of Section 409A.
(iv) For purposes of this Agreement, the terms “terminate,” “terminated” and “termination” mean a termination of
Executive’s employment that constitutes a “separation from service” within the meaning of the default rules of
Section 409A; provided, however, that, in the event of Executive’s Permanent Disability, to the extent required under
Section 409A, “separation from service” means the date that is six months after the first day of disability.
(b) 280G Limitation. If the payments and benefits provided to Executive under this Agreement, either alone or together
with other payments and benefits provided to him from the Company (including, without limitation, any accelerated vesting
thereof) (the “Total Payments”), would constitute a “parachute payment” (as defined in Section 280G of the Code) and be
subject to the excise tax (the “Excise Tax”) imposed under Section 4999 of the Code, the Total Payments shall be reduced if and
to the extent that a reduction in the Total Payments would result in Executive retaining a larger amount than if Executive
received all of the Total Payments, in each case measured on an after-tax basis (taking into account federal, state and local
income taxes and, if applicable, the Excise Tax). The determination of any reduction in the Total Payments shall be made at the
Company’s cost by the Company’s independent public accountants or another firm designated by the Company and reasonably
approved by Executive, and may be determined using reasonable, good faith interpretations concerning the application of
Sections 280G and 4999 of the Code. The Company shall pay Executive’s costs incurred for tax, accounting and other
professional advice in the event of a challenge of any such reasonable, good faith interpretations by the Internal Revenue
Service.
7. Certain Definitions. For the purposes of this Agreement, the following capitalized terms shall have the meanings set forth
below:
(a) “Cause” shall mean any of the following:
(i) Executive’s theft, dishonesty, willful misconduct in the performance of his duties, breach of fiduciary duty for
personal profit, or falsification of any material employment or Company records;
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