Exhibit 10.239
The Charles Schwab Corporation
Annual Executive Individual Performance Plan
(Restated to include amendments approved at the
Annual Meeting of Stockholders on May 13, 2002)
I. Purposes
The purposes of this Annual Executive Individual Performance Plan (the
"Plan") are: (a) to provide greater incentive for key executives to
continually exert their best efforts on behalf of The Charles Schwab
Corporation (the "Company") by rewarding them for services rendered with
incentive compensation that is in addition to their regular salaries; (b)
to attract and to retain in the employ of the Company persons of
outstanding competence; and (c) to further align the interests of such
employees with those of the Company's stockholders through a strong
performance-based reward system.
II. Form of Awards
Incentive compensation awards under this Plan shall be generally granted in
cash, less any applicable withholding taxes; provided that the Committee
may determine, from time to time, that all or a portion of any award may be
paid in the form of an equity based incentive, including without limitation
stock options, restricted shares, or outright grants of Company stock. The
number of shares and stock options granted in any year, when added to the
number of shares and stock options granted for such year pursuant to the
Company's Corporate Executive Bonus Plan, shall in no event exceed .5% of
the outstanding shares of the Company.
III. Determination of Awards
1. Incentive awards for participants shall be determined annually. The
participants in the Plan shall be the executive officers who are
selected by the Compensation Committee of the Board of Directors (the
"Committee") to participate in the Charles Schwab Corporate Executive
Bonus Plan (the "CEB Plan"), except that the President and Co-Chief
Executive Officer shall not be eligible to participate in the Plan.
Payouts under the CEB Plan are defined by reference to a target
percentage of base salary determined, from time to time, by the
Committee and pursuant to a payout matrix, adopted from time to time
by the Committee, that uses corporate performance criteria, to be
selected by the Committee from among the following: revenue growth,
operating revenue growth, consolidated pretax profit margin,
consolidated pretax operating margin, customer net new asset growth,
stockholder return, return on net assets, earnings per share, return
on equity, and return on investment. Each participant shall have a
bonus target under the Plan equal to such Participant's bonus target
under the CEB Plan, multiplied by 160%. Payouts described in this
subsection shall be calculated and paid on an annual basis.
2. With respect to payments made pursuant to Section III.1, the amount of
base salary included in the computation of incentive awards pursuant
to the CEB Plan shall not exceed 250% of the base salary in effect for
the officer holding the same or substantially similar position on
March 31, 2000. In addition, (i) the maximum target incentive
percentage pursuant to the CEB Plan shall be 100% of base salary and
(ii) the maximum award pursuant to the CEB Plan shall be 400% of the
participant's target award.
3. Notwithstanding anything to the contrary contained in this Plan, the
Committee shall have the power, in its sole discretion, to reduce the
amount payable to any Participant (or to determine that no amount
shall be payable to such Participant) with respect to any award prior
to the time the amount otherwise would have become payable hereunder.
In the event of such a reduction, the amount of such reduction shall
not increase the amounts payable to other participants under the Plan.
IV. Administration
1. Except as otherwise specifically provided, the Plan shall be
administered by the Committee. The Committee members shall be
appointed pursuant to the Bylaws of the Company, and the members
thereof shall be ineligible for awards under this Plan for services
performed while serving on said Committee.
2. The decision of the Committee with respect to any questions arising as
to interpretation of the Plan, including the severability of any and
all of the provisions thereof, shall be, in its sole and absolute
discretion, final, conclusive and binding.
V. Eligibility for Awards
1. Awards under the Plan shall be granted by the Committee to those
employees who are eligible to participate in the CEB Plan. This is
intended to include the Vice Chairmen, Executive Vice Presidents, and
other officers having comparable positions.
No award may be granted to a member of the Company's Board of
Directors except for services performed as an employee of the Company.
2. Except in the event of retirement, death, or disability, to be
eligible for an award an employee must be employed by the Company as
of the date awards are calculated and approved by the Committee under
this Plan.
3. For purposes of this Plan, the term "employee" shall include an
employee of a corporation or other business entity in which this
Company shall directly or indirectly own 50% or more of the
outstanding voting stock or other ownership interest.
VI. Awards
1. The Committee shall determine each year the payments, if any, to be
made under the Plan. Awards for any calendar year shall be granted not
later than the end of the first quarter of the calendar year, and
payments pursuant to the Plan shall be made as soon as practicable
after the close of the calendar year.
2. Upon the granting of awards under this Plan, each participant shall be
informed of his or her award by his or her direct manager and that
such award is subject to the applicable provisions of this Plan.
VII. Deferral of Awards
1. A participant in this Plan who is also eligible to participate in The
Charles Schwab Corporation Deferred Compensation Plan may elect to
defer payments pursuant to the terms of that plan.
VIII.Recommendations and Granting of Awards
1. Recommendations for awards shall be made to the Committee by the
Co-Chief Executive Officers.
2. Any award shall be made in the sole discretion of the Committee, which
shall take final action on any such award. No person shall have a
right to an award under this Plan until final action has been taken
granting such award.
IX. Amendments and Expiration Date
While it is the present intention of the Company to grant awards annually,
the Committee reserves the right to modify this Plan from time to time or
to repeal the Plan entirely, or to direct the discontinuance of granting
awards either temporarily or permanently; provided, however, that no
modification of this plan shall operate to annul, without the consent of
the beneficiary, an award already granted hereunder; provided, also, that
no modification without approval of the stockholders shall increase the
maximum amount which may be awarded as hereinabove provided.
X. Miscellaneous
All expenses and costs in connection with the operation of this Plan shall
be borne by the Company and no part thereof shall be charged against the
awards anticipated by the Plan. Nothing contained herein shall be construed
as a guarantee of continued employment of any participant hereunder. This
Plan shall be construed and governed in accordance with the laws of the
State of California.