Exhibit 10.175
THE CHARLES SCHWAB CORPORATION
1992 STOCK INCENTIVE PLAN
RESTRICTED SHARES AWARD AGREEMENT
THIS AGREEMENT is entered into between The Charles Schwab Corporation,
a Delaware corporation (the "Company") and ______ (the "Employee").
WITNESSETH:
WHEREAS, the Company has adopted The Charles Schwab Corporation 1992
Stock Incentive Plan (the "Plan"), which provides for the granting of restricted
shares of Common Stock of the Company ("Restricted Shares") to key employees of
the Company and its Subsidiaries; and
WHEREAS, the Compensation Committee of the Board of Directors of the
Company (the "Committee"), which is responsible for the administration of the
Plan, has authorized the granting of an award of Restricted Shares to the
Employee, effective as of _______________, (the "Grant Date"); and
WHEREAS, this Agreement is prepared in conjunction with and pursuant to
the terms of the Plan and, although all of the terms of the Plan and the
definitions used in this Plan have not been set forth herein, such terms and
definitions are incorporated herein and made a part hereof by reference, and,
except as otherwise expressly stated herein, the provisions of the Plan shall
govern any interpretation of this Agreement; and
WHEREAS, the Employee has accepted the grant of Restricted Shares and
agreed to the terms and conditions hereinafter stated;
NOW, THEREFORE, the Employee and the Company agree to the provisions
set forth in the Agreement. The Employee signifies agreement with all of the
terms and conditions of this Agreement by failing to provide written objection
to the Company to any of the terms hereunder within 30 days of receipt of this
Agreement, and in any event by accepting any dividends paid with respect to the
Restricted Shares granted hereunder.
1. Grant of Restricted Shares. The Company hereby grants to the
Employee, as a separate incentive in connection with his or her employment and
not in lieu of any salary or other cash compensation for his or her services, an
award of ____ Restricted Shares, effective _______________, subject to all the
terms and conditions in this Agreement and the Plan.
2. Restriction on Transfer. The Restricted Shares awarded pursuant to
this Agreement shall be issued in the name of The Employee and held by the
Secretary of the Company as escrow agent (the "Escrow Agent"), and shall not be
sold, transferred, otherwise disposed of, pledged or otherwise hypothecated
until the date such Restricted Shares become vested pursuant to paragraph 3
hereof (the "Restriction on Transfer"). The Company may instruct the transfer
agent for its Common Stock to place a legend on the certificates representing
the Restricted Shares or otherwise note its records as to the restrictions on
transfer set forth in this Agreement and the Plan. The certificate or
certificates representing such shares shall be delivered by the Escrow Agent to
The Employee only after the shares become vested on the date specified in
paragraph 3 and after all other terms and conditions in this Agreement have been
satisfied.
3. Vesting of Shares. The Restricted Shares awarded by this Agreement
shall become vested as follows:
(I) Effective as of the date hereof (the "Grant Date"), the
Restricted Shares shall be 50% vested.
(II) 50% of the Restricted Shares shall become vested on the
third anniversary of the Grant Date (the "First Vesting Date") if (A)
the Employee is employed for a continuous period beginning on the Grant
Date and ending on the First Vesting Date, and (B) the Compound Annual
Total Shareholder Return exceeds the Market Index Total Shareholder
Return by at least two percentage points for the period beginning on
the Grant Date and ending on the First Vesting Date.
(III) 100% of the Restricted Shares (less any shares which
became vested pursuant to subparagraph (II) above) shall become vested
on the fourth anniversary of the Grant Date (the "Final Vesting Date")
if (A) the Employee is employed for a continuous period beginning on
the Grant Date and ending on the Final Vesting Date, and (B) the
Compound Annual Total Shareholder Return exceeds the Market Index Total
Shareholder Return by at least two percentage points for the period
beginning on the Grant Date and ending on the Final Vesting Date.
(IV) Any Restricted Shares that are not vested on the Final
Vesting Date will revert to the Company.
(V) Notwithstanding the foregoing, in the event of the
Employee's Retirement after the second anniversary of the Grant Date,
100% of the Restricted Shares shall be then vested. For purposes of
this Agreement, Retirement shall mean a termination of employment of
the Employee at any time after the Employee (i) has attained fifty (50)
years of age, and (ii) has completed seven (7) years of service, as
determined pursuant to the terms of the Charles Schwab Profit Sharing
and Employee Stock Ownership Plan.
For purposes of the foregoing, the Compound Annual Total Shareholder
Return for a period shall mean the annualized compound return (consisting of
both stock price appreciation and dividends, and assuming reinvestment of
dividends) to shareholders of the Company, and the Market Index Total
Shareholder Return for a period shall mean the average annualized compound
return (consisting of both stock price appreciation and dividends, and assuming
reinvestment of dividends) to shareholders of corporations comprising the
Standard & Poor's 500.
Notwithstanding the foregoing, however, the accrual of vesting pursuant
to this paragraph is contingent upon the Employee's satisfactory job
performance, and the Company may, in its sole discretion, upon notice to the
Employee, suspend or delay the vesting of the Restricted Shares hereunder for
any period of time in the event that the Company determines, within its sole
discretion, that the Employee's performance is unsatisfactory. Upon the vesting
of Restricted Shares hereunder, the certificate or certificates representing
such Restricted Shares shall be delivered to the Employee.
4. Supplemental Cash Payment. In the event any Restricted Shares become
vested pursuant to Section 3 above, the Employee shall be eligible to receive a
Supplemental Cash Payment on the Vesting Date, in an amount calculated pursuant
to the following table, equal to a multiple of the value of the Restricted
Shares on the Vesting Date, based upon the number of percentage points by which
the Compound Annual Total Shareholder Return exceeds the Market Index Total
Shareholder Return for the period beginning on the Grant Date and ending on the
Vesting Date ("Excess Annual Total Shareholder Return"), as follows:
Excess Annual Total Shareholder Return Multiple
Less than four percentage points 0%
At least four, but less than six percentage points 25%
At least six, but less than eight percentage points 50%
At least eight, but less than ten percentage points 100%
Ten percentage points or more 150%
5. Full Vesting on Change in Control. Upon the determination of the
Committee that a Change in Control of the Company has occurred, or in the event
of the liquidation or dissolution of the Company, the Restricted Shares shall
become fully vested and the Restriction on Transfer shall be lifted,
notwithstanding any other provision of this Agreement, and the certificate or
certificates representing such Restricted Shares shall be delivered to the
Employee.
6. Discretion of Committee. The Committee may decide, in its absolute
discretion, to lift at any time the Restriction on Transfer or to accelerate the
vesting of the Restricted Shares, and the certificate or certificates
representing such Restricted Shares shall be delivered to the Employee.
7. Delivery of Shares to Estate of Deceased Employee. Any distribution
or delivery to be made to the Employee under this Agreement shall, if the
Employee is then deceased, be made to the Employee's estate in accordance with
the terms of Section 7.5 of the Plan.
8. Conditions to Issuance of Shares. The Restricted Shares deliverable
to the Employee may be either previously authorized but unissued shares or
issued shares which have been reacquired by the Company. The Company shall not
be required to issue any certificate or certificates for Restricted Shares
hereunder prior to fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all stock
exchanges on which such class of stock is then listed;
(b) The completion of any registration or other qualification
of such shares under any State or federal law or under the rulings or
regulations of the Securities and Exchange Commission or any other
governmental regulatory body, which the Committee shall, in its
absolute discretion, deem necessary or advisable;
(c) The obtaining of any approval or other clearance from any
State or federal governmental agency, which the Committee shall, in its
absolute discretion, determine to be necessary or advisable; and
(d) The lapse of such reasonable period of time following the
date of the grant of the Restricted Shares as the Committee may
establish from time to time for reasons of administrative convenience.
Neither the Employee nor any person claiming under or through the
Employee shall be, or have any of the rights or privileges of, a stockholder of
the Company in respect of any Restricted Shares deliverable hereunder unless and
until certificates representing such shares shall have been issued, recorded on
the records of the Company or its transfer agents or registrars, and delivered
to the Employee or the Escrow Agent. Except as provided in paragraph 9, after
such issuance, recordation and delivery, the Employee shall have all rights of a
stockholder of the Company with respect to voting such Restricted Shares and
receipt of dividends and distributions on such Restricted Shares.
9. Certain Adjustments to Shares. In the event that as a result of a
stock dividend, stock split, reclassification, recapitalization, combination of
shares or the adjustment in capital stock of the Company or otherwise, or as a
result of a merger, consolidation, spin-off or other reorganization, the
Company's Common Stock shall be increased, reduced or otherwise changed, and by
virtue of any such change the Employee shall in his or her capacity as owner of
Restricted Shares which have been awarded to him or her (the "Prior Shares") be
entitled to new or additional or different shares or securities (other than
rights or warrants to purchase securities), such new or additional or different
shares or securities shall thereupon be considered to be Restricted Shares and
shall be subject to all of the conditions and restrictions which were applicable
to the Prior Shares pursuant to the Plan. If the Employee receives rights or
warrants with respect to any Prior Shares, such rights or warrants may be held
or exercised by the Employee, provided that until such exercise any such rights
or warrants and after such exercise any shares or other securities acquired by
the exercise of such rights or warrants shall be considered to be Restricted
Shares and shall be subject to all of the conditions and restrictions which were
applicable to the Prior Shares pursuant to the Plan. The Committee in its
absolute discretion at any time may lift the Restriction on Transfer of all or
any portion of such new or additional shares of stock or securities, rights or
warrants to purchase securities or shares or other securities acquired by the
exercise of such rights or warrants.
10. Contribution of Par Value to Capital of the Company.
Notwithstanding the provisions of Section 7.2 of the Plan, the Company will
contribute to the capital of the Company on behalf of the Employee, as an Award
recipient, an amount equal to the par value of the Restricted Shares issued to
the Employee hereunder.
11. Tax Withholding. To the extent required by applicable federal,
state, local or foreign law, the Employee shall make arrangements satisfactory
to the Company for the satisfaction of any withholding tax obligations that
arise by reason of the awarding or vesting of the Restricted Shares hereunder,
or by reason of any election made by the Employee pursuant to Section 83(b) of
the Internal Revenue Code, and no Share certificates shall be issued to the
Employee unless such obligation is satisfied.
12. Plan Shall Control. This Agreement is subject to all the terms and
provisions of the Plan. In the event of a conflict between any provisions of
this Agreement and any provisions of the Plan, the provisions of the Plan shall
govern. Terms used in this Agreement that are not defined in this Agreement
shall have the meaning set forth in the Plan.
13. Powers of the Committee. The Committee shall have the power to
interpret and construe the Plan and this Agreement and to adopt such rules for
the administration, interpretation and application of the Plan as are consistent
therewith and to interpret or revoke any such rules. All actions taken and all
interpretations and determinations made by the Committee in good faith shall be
final and binding upon the Employee, the Employee's estate, the Company and all
other interested persons. No member of the Committee shall be personally liable
for any action, determination or interpretation made in good faith with respect
to the Plan or this Agreement.
14. No Effect on Other Benefit Plans. Nothing herein contained shall
affect the Employee's right to participate in and receive benefits under and in
accordance with the then current provisions of any pension, insurance or other
the Employee welfare plan or program of the Company or any Subsidiary.
15. Nonassignability. So long as the Restriction on Transfer is in
effect, the Restricted Shares herein granted and the rights and privileges
conferred hereby shall not be transferred, assigned, pledged or hypothecated in
any way (whether by operation or law or otherwise) and shall not be subject to
sale under execution, attachment or similar process. Upon any attempt to
transfer, assign, pledge, hypothecate or otherwise dispose of such award or any
right or privilege conferred hereby, contrary to the provisions hereof, or upon
any attempted sale under any execution, attachment or similar process upon the
rights and privileges conferred hereby, such award and the rights and privileges
conferred hereby shall immediately become null and void.
16. Successors and Assigns. Subject to the limitation on the
transferability of the Restricted Shares contained herein, this Agreement shall
be binding upon and inure to the benefit of the heirs, legatees, legal
representatives, successor and assigns of the Employee and the Company.
17. Notices. Any notice to be given to the Company under the terms of
this Agreement shall be addressed to the Company, in care of its Secretary, at
101 Montgomery Street, San Francisco, California 94104, or at such other address
as the Company may hereafter designate in writing. Any notice to be given to the
Employee shall be addressed to the Employee at the address set forth beneath the
Employee's signature hereto, or at such other address as the Employee may
hereafter designate in writing. Any such notice shall be deemed to have been
duly given if and when enclosed in a properly sealed envelope, addressed as
aforesaid, registered or certified and deposited, postage and registry fee
prepaid, in a United States post office.
18. Severability. In the event that any provision of this Agreement
shall be held invalid or unenforceable, such provision shall be severable from,
and such invalidity or unenforceability shall not be construed to have any
effect on, the remaining provisions of this Agreement.
19. Governing Law. This Agreement shall be construed in accordance with
the laws of the State of California.