Exhibit 10.240
The Charles Schwab Corporation
Corporate Executive Bonus Plan
(Restated to include amendments approved at the
Annual Meeting of Stockholders on May 13, 2002)
I. Purposes
The purposes of this Corporate Executive Bonus Plan (the "Plan") are: (a)
to provide greater incentive for key executives continually to exert their
best efforts on behalf of The Charles Schwab Corporation (the "Company") by
rewarding them for services rendered with 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 the
identity of interests of such employees with those of the Company's
stockholders through a strong performance-based reward system.
II. Form of Awards
1. 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 Annual
Executive Individual Performance Plan, shall in no event exceed .5% of
the outstanding shares of the Company.
III. Determination of Awards
1. Incentive awards for participants other than the President/Co-Chief
Executive Officer shall be determined quarterly according to a
Corporate Performance Payout Matrix that shall be adopted at the
beginning of each year by the Compensation Committee of the Board of
Directors (the "Committee"). The Executive Committee Corporate
Performance Payout Matrix shall be based on 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. Awards shall be defined by
reference to a target percentage of base salary determined, from time
to time, by the Committee. Payouts described in this subsection shall
be calculated and paid on a quarterly basis, based on year-to-date
performance compared with the comparable period in the preceding year.
2. With respect to payments made pursuant to Section III.1, the amount of
base salary included in the computation of incentive awards 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,
for all participants other than the President/Co-Chief Executive
Officer, (i) the maximum target incentive percentage shall be 100% of
base salary and (ii) the maximum award shall be 400% of the
participant's target award.
3. Incentive awards for the President/Co-Chief Executive Officer shall be
determined in accordance with a Corporate Performance Payout Matrix
that shall be adopted at the beginning of each year by the Committee.
The Committee shall determine the President/Co-Chief Executive
Officer's award each year, up to the maximum amount defined by the
matrix for a given level of performance. This matrix may, if the
Committee deems appropriate, differ from that described in Subsection
III.1. However, the performance criteria shall be the same as referred
to above. Payouts for the President/Co-Chief Executive Officer shall
be made on an annual basis, based on the Company's results for the
full year.
4. The maximum award payable for the President/Co-Chief Executive Officer
under this plan shall be no more than 500% of his target incentive
award. The target incentive amount shall be determined each year by
the Committee, but may not exceed 500% of base salary. The amount of
base salary taken into account for purposes of computing the target
incentive award may not exceed 250% of the President/Co-Chief
Executive Officer's base salary as of March 31, 2000.
5. 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 may be granted by the Committee to those
employees who have contributed the most in a general way to the
Company's success by their ability, efficiency, and loyalty,
consideration being given to ability to succeed in more important
managerial responsibility in the Company. This is intended to include
the President/Co-Chief Executive Officer, Vice Chairmen, Executive
Vice Presidents, and from time to time, certain 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 shall 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 each calendar quarter (or, in the case of the
President/Co-Chief Executive Officer, as soon as practicable after the
close of each 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, except that, with respect to the
President/Co-Chief Executive Officer, recommendations for awards shall
be made solely by the Chairman/Co-Chief Executive Officer.
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.