LPL and Arnold on Dec. 8 agreed to a settlement that allows Arnold to retain 47,994 of his non-forfeited options, which amount to $12 million as of the market's close on Dec. 6, according to a company filing also dated Dec. 8. The non-forfeited options are Arnold's vested options to purchase LPL common stock and equal to about 15% of the value of the severance benefits and equity awards Arnold would have been entitled to had he been terminated "without cause," according to the filing.

Arnold was terminated "for cause" and thus was not entitled to receive severance benefits, and his outstanding equity awards -- both vested and unvested -- were subject to forfeiture, according to a filing LPL made at the time of Arnold's termination. The firm's board, on a recommendation by its compensation and human resources committee, deferred the automatic forfeiture of a portion of Arnold's vested options to purchase LPL common stock, subject to Arnold's agreement to a settlement, according to the filing.

Arnold violated LPL's "commitment to a respectful workplace," LPL said in an announcement at the time of Arnold's firing. Arnold was found to have made statements to employees that violated LPL's code of conduct and was terminated by the board on the recommendation of a special committee of board directors following an investigation by an external law firm, according to the same announcement.

LPL said it discharged Arnold for making "unprofessional verbal communications" that violated its code of conduct, according to Arnold's CRD Snapshot report maintained by state regulators.

LPL's board appointed Managing Director and Chief Growth Officer Rich Steinmeier to the role of interim CEO at the time of its announcement of Arnold's termination and subsequently promoted him to chief executive officer permanently.

Arnold will be permitted to exercise his non-forfeited options between Dec. 16, 2024, and Dec. 31, 2024, per the Dec. 8 filing.

The agreement also contains a "general release" of claims by Arnold against the firm, as well as non-competition, non-disparagement and non-solicitation provisions. The non-competition and non-solicitation provisions will apply until Sept. 30, 2025.

An LPL spokesperson did not respond to a request for additional comment on the settlement by this publication's deadline.