EXHIBIT 10.144
THE CHARLES SCHWAB CORPORATION
1992 STOCK INCENTIVE PLAN
INCENTIVE STOCK OPTION AGREEMENT
THIS AGREEMENT is entered into as of _______________,
19___ between THE CHARLES SCHWAB CORPORATION, a Delaware corporation (the
"Company"), and _____________________ (the "Optionee").
W I T N E S S E T H:
WHEREAS, the Board has adopted and the stockholders of
the Company have approved The Charles Schwab Corporation 1992
Stock Incentive Plan, as amended (the "Plan") in order to provide
selected Key Employees and Non-Employee Directors with an
opportunity to acquire Common Shares; and
WHEREAS, the Committee has determined that the Optionee
is a Key Employee and that it would be in the best interests of
the Company and its stockholders to grant the stock option
described in this Agreement (the "Option") to the Optionee as an
inducement to enter into or remain in the service of the Company
or its subsidiaries and as an incentive for extraordinary efforts
during such service:
NOW, THEREFORE, it is agreed as follows:
SECTION 1. GRANT OF OPTION.
(a) Option. On the terms and conditions stated below,
the Company hereby grants to the Optionee the option to purchase __________
Common Shares for the amount of $_______ per Common Share (the
"Exercise Price"), which is agreed to be 100% of the Fair Market
Value thereof on the Date of Grant. The number of Common Shares
subject to this Option and the Exercise Price shall be subject to
adjustment under certain limited circumstances as provided in
Article 10 of the Plan.
(b) 1992 Stock Incentive Plan. This Option is granted
pursuant to the Plan, the provisions of which are incorporated
into this Agreement by reference, and a copy of which is
available upon request at no charge to the Optionee from the
Office of the Corporate Secretary of the Company. In the event of
any inconsistency between the provisions of the Plan and the
provisions of this Agreement, the provisions of the Plan shall
prevail.
(c) Tax Treatment. This Option is intended to qualify
as an incentive stock option described in Section 422(b) of the
Code.
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(d) Expiration Date. Notwithstanding any other
provision contained herein, this Option shall expire not later
than the date immediately preceding the tenth anniversary of the
Date of Grant.
SECTION 2. NO TRANSFER OR ASSIGNMENT OF OPTION.
Except as otherwise provided in this Agreement or as
permitted by the Plan, this Option, and any interest therein,
shall not be transferred, assigned, pledged or hypothecated in
any way (whether by operation of law or otherwise) and shall not
be subject to sale under execution, attachment or similar
process.
SECTION 3. RIGHT TO EXERCISE OPTION.
(a) Vesting. This Option shall become exercisable by
the Optionee with respect to the total number of Common Shares
subject to this Option as set forth under Section 1(a) above (the
"Total Award Common Shares"), subject to the continued employment
of the Optionee by the Company or its subsidiaries on each date
set forth below, and subject to the provisions of Section 3(d)
hereof, in annual increments of the Total Award Common Shares
beginning on the first anniversary of the Date of Grant, such
that (i) no portion of this Option will be exercisable prior to
such first anniversary of the Date of Grant; (ii) upon and after
such first anniversary of the Date of Grant, the Optionee may
purchase up to ten percent (10%) of the Total Award Common
Shares; (iii) upon and after the second anniversary of the Date
of Grant, the Optionee may purchase an additional fifteen percent
(15%) of the Total Award Common Shares; (iv) upon and after the
third, fourth and fifth anniversaries of the Date of Grant,
respectively, the Optionee may purchase an additional twenty-five
percent (25%) of the Total Award Common Shares, so that this
Option shall become fully exercisable, subject to the Optionee's
continued employment with the Company or its subsidiaries, on the
fifth anniversary of the Date of Grant.
(b) Minimum Number of Shares. This Option shall be
exercisable for at least 100 Common Shares (without regard to
adjustments to the number of Common Shares subject to this Option
pursuant to Article 10 of the Plan) or, if less, (i) the number
of shares with respect to which this Option has become vested
under Section 3(a) above, or (ii) all of the remaining Common
Shares subject to this Option.
(c) Full Vesting on Change in Control.
Notwithstanding subparagraph (a) hereof, this Option shall become
fully exercisable as to the Total Award Common Shares immediately
preceding any Change in Control with respect to the Company. In
the event that the Committee determines that a Change in Control
is likely to occur, the Company shall so advise the Optionee, and
the provisions of this subparagraph (c) shall take effect as of
the date ten (10) days prior to the anticipated date of such
Change in Control.
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(d) Vesting Contingent on Satisfactory Performance.
Notwithstanding subparagraph (a) hereof, the continued accrual of
vesting pursuant to subparagraph (a) is contingent upon the
Optionee's satisfactory job performance, and the Company may, in
its sole discretion, upon notice to the Optionee suspend or delay
the vesting of Options and Performance Shares hereunder for any
period of time in the event that the Company determines, within
its sole discretion, that the Optionee's performance is
unsatisfactory.
SECTION 4. EXERCISE OF OPTION.
(a) Notice of Exercise. The Optionee or the
Optionee's representative may exercise this Option by giving
written notice to the Office of the Corporate Secretary of the
Company (or its designee) pursuant to Section 9(d). The notice
shall specify the election to exercise this Option, the date of
exercise, the number of Common Shares for which it is being
exercised and the form of payment. The notice shall be signed by
the person or persons exercising this Option. In the event that
this Option is being exercised by the representative of the
Optionee, the notice shall be accompanied by proof satisfactory
to the Company of the representative's right to exercise this
Option. The Purchase Price for Common Shares shall be paid in a
form that conforms to Sections 6.1 through 6.3 of the Plan at the
time such notice is given.
(b) Issuance of Shares. After receiving a proper
notice of exercise, the Company shall cause to be issued a
certificate or certificates for the Common Shares so purchased,
registered in the name of the person exercising this Option. The
Company shall cause such certificate or certificates to be
delivered to or upon the order of the person exercising this
Option.
SECTION 5. TERM.
(a) Basic Term. This Option shall in any event expire
on the date specified in Section 1(d).
(b) Termination of Employment. Upon the Optionee's
termination of employment with the Company and its subsidiaries
for any reason, whether as a result of death, Permanent
Disability or any other involuntary or voluntary event of
termination of employment (including a termination of employment
as may be provided for or determined under an employment
contract, if any, entered into between the Company or its
subsidiary and the Optionee) (each, a "Termination Event"), no
unvested portion of the Total Award Common Shares thereafter
shall vest or become exercisable. With respect to the vested or
exercisable portion of the Total Award Common Shares as of the
date of such a Termination Event, this Option shall expire on the
earlier of (i) the expiration date specified in Section 1(d) or
(ii) whichever of the following is applicable: (A) in the case
of a Termination Event resulting from death or Permanent
Disability, the date one year following such Termination Event;
or (B) in all other cases, the date three (3) months following
such Termination Event.
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(c) Divestment of Options. Notwithstanding anything
to the contrary contained herein, this Option shall immediately
become forfeited and expire in the event that the Company
terminates the Optionee's employment on account of conduct
inimical to the best interests of the Company, including, without
limitation, conduct constituting a violation of law or Company
policy, fraud, theft, conflict of interest, dishonesty or
harassment. The determination whether the Optionee's employment
has been terminated on account of conduct inimical to the best
interests of the Company shall be made by the Company in its
sole discretion.
SECTION 6. LEGALITY OF INITIAL ISSUANCE.
No Common Shares shall be issued upon the exercise of
this Option unless and until the Company has determined that:
(a) A registration statement for the Common Shares is
effective under the Securities Act or an exemption from the
registration requirements thereof has been perfected;
(b) Any applicable listing requirement of any stock
exchange on which Common Shares are listed has been
satisfied; and
(c) Any other applicable provisions of state or
federal law have been satisfied.
SECTION 7. NO REGISTRATION RIGHTS.
The Company may, but shall not be obligated to,
register or qualify the Common Shares for resale or other
disposition by the Optionee under the Securities Act or any other
applicable law.
SECTION 8. RESTRICTIONS ON TRANSFER OF SHARES.
(a) Restrictions. Regardless of whether the offering
and sale of Common Shares under the Plan have been registered
under the Securities Act or have been registered or qualified
under the securities laws of any state, the Company may impose
restrictions upon the sale, pledge or other transfer of such
Common Shares (including the placement of appropriate legends on
stock certificates) if, in the judgment of the Company and its
counsel, such restrictions are necessary or desirable in order to
achieve compliance with the provisions of the Securities Act, the
securities laws of any state or any other law.
(b) Investment Intent at Exercise. If the Common
Shares under the Plan are not registered under the Securities Act
but an exemption is available which requires an investment
representation or other representation, the Optionee shall
represent and agree at the time of exercise that the Common
Shares being acquired upon exercising this Option are being
acquired
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for investment, and not with a view to the sale or distribution thereof,
and shall make such other representations as are deemed necessary or
appropriate by the Company and its counsel.
(c) Administration. Any determination by the Company
and its counsel in connection with any of the matters set forth
in this Section 8 shall be conclusive and binding on the Optionee
and all other persons.
SECTION 9. MISCELLANEOUS PROVISIONS.
(a) Withholding Taxes. To the extent required by
applicable federal, state, local or foreign law the Optionee
shall make arrangements satisfactory to the Company for the
satisfaction of any withholding tax obligations that arise by
reason of the exercise of an Option hereunder and no Option may
be exercised unless such obligation is satisfied.
(b) Rights as a Stockholder. Neither the Optionee nor
the Optionee's representative shall have any rights as a
stockholder with respect to any Common Shares subject to this
Option until certificates for such Common Shares have been issued
in the name of the Optionee or the Optionee's representative.
(c) No Employment Rights. Nothing in this Agreement
shall be construed as giving the Optionee the right to be
retained as an employee of the Company or its subsidiaries. The
Company reserves the right to terminate the Optionee's employment
at any time for any reason, subject only to the terms of any
written employment contract entered into between the Company and
the Optionee.
(d) Notice. Any notice required by the terms of this
Agreement shall be given in writing and shall be deemed effective
upon personal delivery or upon deposit with the appropriate
postal service, by registered or certified mail with postage and
fees prepaid and addressed to the party entitled to such notice
at the address shown below such party's signature on this
Agreement, or at such other address as such party may designate
by ten (10) days advance written notice to the other party to
this Agreement. Notwithstanding the foregoing, no notice of
exercise, as required by Section 4(a), shall be effective until
actual receipt thereof by the Office of the Corporate Secretary
of the Company or its designee.
(e) Entire Agreement. This Agreement and the Plan
constitute the entire agreement between the parties hereto with
regard to the subject matter hereof; provided, however, that in
the event of any inconsistency or conflict between any provision
hereof and the terms of the Plan, the terms of the Plan shall
control.
(f) Choice of Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of
California, as such laws are applied to contracts entered into
and performed in such State.
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SECTION 10. DEFINITIONS.
(a) Capitalized terms defined in the Plan shall have
the same meaning when used in this Agreement.
(b) "Change in Control" shall mean the occurrence of
any of the following events after the effective date of the Plan
as set out in Section 15.1 of the Plan:
(1) A change in control required to be reported
pursuant to Item 6(e) of Schedule 14A of Regulation 14A under the
Securities Exchange Act of 1934, as amended (the "Exchange Act");
(2) A change in the composition of the Company's
Board of Directors (the "Board"), as a result of which fewer than
two-thirds of the incumbent directors are directors who either
(i) had been directors of the Company 24 months prior to such
change or (ii) were elected, or nominated for election, to the
Board with the affirmative votes of at least a majority of the
directors who had been directors of the Company 24 months prior
to such change and who were still in office at the time of the
election or nomination;
(3) Any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act) becomes the
beneficial owner, directly or indirectly, of securities of the
Company representing 20 percent or more of the combined voting
power of the Company's then outstanding securities ordinarily
(and apart from rights accruing under special circumstances)
having the right to vote at elections of directors (the "Base
Capital Stock"); provided, however, that any change in the
relative beneficial ownership of securities of any person
resulting solely from a reduction in the aggregate number of
outstanding shares of Base Capital Stock, and any decrease
thereafter in such person's ownership of securities, shall be
disregarded until such person increases in any manner, directly
or indirectly, such person's beneficial ownership of any
securities of the Company.
(c) "Common Share" shall mean one share of the common
stock of the Company.
(d) "Date of Grant" shall mean the date of this
Agreement, which is the date first written above.
(e) "Fair Market Value" shall mean the market price of
a Common Share, determined by the Committee as follows:
(1) If the Common Share was traded on a stock
exchange on the date in question, then the Fair Market Value
shall be equal to the closing price reported by the applicable
composite-transactions report for such date;
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(2) If the Common Share was traded over-the
counter on the date in question and was classified as a national
market issue, then the Fair Market Value shall be equal to the
last transaction price quoted by the NASDAQ system for such date;
(3) If the Common Share was traded over-the-
counter on the date in question but was not classified as a
national market issue, then the Fair Market Value shall be equal
to the mean between the last reported representative bid and
asked prices quoted by the NASDAQ system for such date; and
(4) If none of the foregoing provisions is
applicable, then the Fair Market Value shall be determined by the
Committee in good faith on such basis as it deems appropriate.
(f) "Permanent Disability" shall mean that the
Optionee is unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental
impairment which has lasted, or can be expected to last, for a
continuous period of not less than twelve (12) months or which
can be expected to result in death.
(g) "Purchase Price" shall mean the Exercise Price
multiplied by the number of Common Shares with respect to which
this Option is being exercised.
(h) "Securities Act" shall mean the Securities Act of
1933, as amended.
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IN WITNESS WHEREOF, the Company has caused this
Agreement to be executed on its behalf by its officer duly
authorized to act on behalf of the Committee, and the Optionee
has personally executed this Agreement.
THE CHARLES SCHWAB CORPORATION
By:
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Its: Chairman and Chief Executive Officer
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Company's Address:
101 Montgomery Street
San Francisco, California 94104
OPTIONEE
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Signature
Full Name (please print): -------
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Date: ----------------------------
Optionee's Address (please print):
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Optionee's Social Security Number:
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