United States
Securities and Exchange Commission
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 8)
The Charles Schwab Corporation
(Name of Issuer)
Common Stock ($.01 par value)
(Title of Class of Securities)
808513-10-5
(CUSIP Number)
Pamela E. Herlich, Assistant Secretary
The Charles Schwab Corporation
101 Montgomery Street
San Francisco, CA 94104
415/627-7533
(Name, Address and Telephone Number of
Person Authorized to Receive
Notices and Communications)
July 24, 1995
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the subject
of this Schedule 13D, and is filing this schedule because of
Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the
statement [ ].<PAGE>
808513-10-5 Schedule 13D Page 2 of 6 pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Charles R. Schwab
###-##-####
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP a [ ]
b [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
7 SOLE VOTING POWER
NUMBER OF SHARES 2,758,444
BENEFICIALLY
OWNED BY EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH 15,994,855
9 SOLE DISPOSITIVE POWER
2,758,444
10 SHARED DISPOSITIVE POWER
15,994,855
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
18,753,299
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
21.7%
14 TYPE OF REPORTING PERSON
IN<PAGE>
808513-10-5 Schedule 13D Page 3 of 6 pages
Item 1. Security and Issuer
Security: Common Stock ($.01 par value)
Issuer: The Charles Schwab Corporation
101 Montgomery Street
San Francisco, CA 94104
Item 2. Identity and Background
a) Charles R. Schwab
b) The Charles Schwab Corporation
101 Montgomery Street
San Francisco, CA 94104
c) Chairman, Chief Executive Officer and Director,
The Charles Schwab Corporation
101 Montgomery Street
San Francisco, CA 94104
d) Inapplicable
e) Inapplicable
f) United States of America
Item 3. Source and Amount of Funds
Inapplicable.
Item 4. Purpose of Transaction
The shares of Common Stock are held for personal
investment, except as noted in Item 5 below.
Item 5. Interest in Securities of Issuer
a) 18,753,299 shares of Common Stock (including 379,686
shares which may be acquired within sixty days upon
exercise of options) representing 21.7% of the Common
Stock outstanding.
b) The 18,753,299 shares of Common Stock referred to in
Item 5(a) above consist of (i) 2,758,444 shares of
Common Stock as to which Mr. Schwab has sole voting and
dispositive power (including 120,774 shares held by the
Trustee of the Charles Schwab Profit Sharing and
Employee Stock Ownership Plan and allocated to
Mr. Schwab's individual ESOP account; 336 shares held by
Mr. Schwab as custodian for his children; and 2,024<PAGE>
808513-10-5 Schedule 13D Page 4 of 6 pages
shares held by Mr. Schwab as trustee of the Schwab
Inter-Vivos Trust as to which he disclaims beneficial
ownership); and (ii) 15,994,855 shares of Common Stock
as to which Mr. Schwab has shared voting power and
shared dispositive power (including 771,199 shares held
by The Charles and Helen Schwab Foundation, a nonprofit
public benefit corporation as to which Mr. and
Mrs. Schwab, as two of three directors, have shared
voting and dispositive power but disclaim beneficial
ownership; 2,250,000 shares held by Mr. and Mrs. Schwab
as trustees of The Charles and Helen Schwab Living
Trust; 345,000 shares held by The Charles and Helen
Schwab Family Foundation, a nonprofit public benefit
corporation as to which Mr. and Mrs. Schwab, as two of
three directors, have shared voting and dispositive
power but disclaim beneficial ownership; 11,646,872
shares held by Mr. and Mrs. Schwab as community
property; 371,402 shares held by Mr. and Mrs. Schwab as
joint tenants; and 610,382 shares held by Mrs. Schwab).
c) The following transactions in Common Stock were effected
by Mr. Schwab in the sixty days prior to the filing of
this Amendment No. 8:
Date of # of Shares Nature of Price Per Where and
Transaction of Common Stock Transaction Per Share How Effected
6/29/95 48,000 Disposition N/A Gift
7/6/95 27,000 Disposition N/A Gift
7/24/95 95,100 Sale $44.06 Open Market
7/25/95 4,900 Sale $44.41 Open Market
7/25/95 52,685 Sale $42.236 Open Market
7/25/95 106,115 Sale $44.41 Open Market
7/26/95 41,200 Sale $45.24 Open Market
d) No other person has the right to receive or the power to
direct the receipt of dividends from, or the proceeds from
the sale of, the shares of Common Stock beneficially owned by
Mr. Schwab, except for The Charles and Helen Schwab
Foundation and The Charles and Helen Schwab Family
Foundation, as noted in Item 5(b) above.
e) Inapplicable.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to the Securities of the
Issuer
1. Registration Rights and Stock Restriction Agreement,
dated as of March 31, 1987 between Charles Schwab and
CL Acquisition Corporation requires that share transfers<PAGE>
808513-10-5 Schedule 13D Page 5 of 6 pages
be made in accordance with state and Federal securities
laws and subject to protection of the issuer's rights
and further provides for registration rights in certain
circumstances.
2. Secured Advised Line of Credit, dated January 24, 1991,
by Charles R. Schwab and Helen O. Schwab in the amount
of $500,000, secured (as of July 28, 1995) by 32,760
shares of Common Stock. As of the date of this
Amendment No. 8, the facility has not been used.
3. Secured Demand Promissory Note, dated January 10, 1992,
by Charles R. Schwab and Helen O. Schwab in the
currently outstanding principal amount of $500,000
secured (as of July 28, 1995) by 32,760 shares of Common
Stock.
4. Non-Qualified Stock Option Agreement, dated as of
September 16, 1992 between The Charles Schwab
Corporation and Charles R. Schwab pursuant to the 1992
Stock Incentive Plan.
5. Secured Demand Promissory Note, dated December 8, 1992,
by Charles R. Schwab, in the currently outstanding
principal amount of $2,000,000 secured (as of July 28,
1995) by 131,040 shares of Common Stock.
6. On February 25, 1993, Charles R. Schwab and Helen O.
Schwab, grantors of The Charles and Helen Schwab Living
Trust (the "Living Trust"), transferred 2,250,000 shares
of Common Stock into the Living Trust. (This number has
been adjusted for all splits that occurred before
July 24, 1995.) Section 8.2.1 of the Living Trust
provides that if neither Mr. nor Mrs. Schwab is serving
as trustee, three designated individuals will receive a
general proxy to vote all shares of Common Stock held
pursuant to the Living Trust.
Item 7. Exhibits
1. Registration Rights and Stock Restriction Agreement,
dated as of March 31, 1987, between Charles R. Schwab
and CL Acquisition Corporation (now named The Charles
Schwab Corporation).
2. Secured Advised Line of Credit, dated January 24, 1991,
between Charles R. Schwab and Helen O. Schwab and
Morgan Guaranty Trust Company of New York.
3. Secured Demand Promissory Note, dated January 10, 1992,
by Charles R. Schwab and Helen O. Schwab.*<PAGE>
808513-10-5 Schedule 13D Page 6 of 6 pages
4. Form of Non-Qualified Stock Option Agreement, dated as
of September 16, 1992, between The Charles Schwab
Corporation and Charles R. Schwab.**
5. Secured Demand Promissory Note, dated December 8, 1992,
by Charles R. Schwab.**
6. Section 8.2.1 of The Charles and Helen Schwab Living
Trust.**
* Incorporated by reference to Exhibit 5 to Amendment
No. 4 to Mr. Schwab's Schedule 13D dated February 18,
1992.
** Incorporated by reference to Exhibits 4, 5 and 7,
respectively, to Amendment No. 5 to Mr. Schwab's
Schedule 13D dated May 6, 1993.
After reasonable inquiry and to the best of my knowledge
and belief, I certify that the information set forth in this
statement is true, complete and correct.
Date: July 31, 1995
/s/ Charles R. Schwab
______________________
Charles R. Schwab<PAGE>
REGISTRATION RIGHTS AND
STOCK RESTRICTION AGREEMENT
This Registration Rights and Stock Restriction
Agreement ("Agreement") is made as of March 31, 1987, by and
between CL Acquisition Corporation, a Delaware corporation
("Acquisition" or the "Company"), and the undersigned holders
of common shares (the "Shareholders") in Acquisition.
NOW THEREFORE, in consideration of the premises and
the mutual covenants contained herein, the parties agree as
follows:
Section 1. Certain Definitions. As used in this
Agreement, the following terms shall have the following
respective meanings:
"Blue Sky Laws" shall mean the securities
regulation laws of any political subdivision of the United
States.
"Commission" shall mean the Securities and Exchange
Commission or any other federal agency at the time
administering the Securities Act.
"Holder" shall mean any holder of outstanding
Registrable Securities, provided that transferees of
Registrable Securities who do not receive an assignment of
registration rights pursuant to Section 8 will not be Holders
for the purposes of Section 3.
"Initial Public Offering" shall mean the first
underwritten public offering of the Common Stock of
Acquisition in which the proceeds of a portion thereof are
received by Acquisition.
The term "register," "registered" and
"registration" refer to a registration effected by preparing
and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
"Registrable Securities" means Shares held by a
Holder and shares of Common Stock issued by Acquisition in
respect of such Shares.
"Registration Expenses" shall mean all expenses
incurred by Acquisition in complying with Section 3 and
Section 5, including, by way of illustration only and without
limitation, all registration and filing fees, printing
expenses, fees and disbursements of counsel for Acquisition,
-1-<PAGE>
Blue Sky fees and expenses, and the expense of any audits or
financial statement reviews incident to or required by any
such registration (but excluding the compensation of regular
employees of Acquisition, which shall be paid in any event by
Acquisition), but in all events excluding Selling Expenses.
"Securities Act" shall mean the Securities Act of
1933, as amended, or any similar federal statute and the
rules and regulations of the Commission thereunder, all as
the same shall be in effect at the time.
"Selling Expenses" shall mean the underwriting
discounts and selling commissions applicable to the sale of
Registrable Securities and all fees and disbursements of
counsel employed by any Holder.
"Shares" shall mean the shares of Common Stock of
Acquisition as issued to each Shareholder as scheduled in
Schedule A, and as thereafter transferred in whole or in
part.
Section 2. Restrictions on Transfer.
a. Definitions. As used in this Agreement, the
term "Transfer" will include, but not be limited to, a
voluntary or involuntary sale, assignment, transfer, pledge,
hypothecation, encumbrance, disposal, loan, gift, attachment
or levy of Shares. A Transfer will be considered
"Involuntary" for purposes of this Agreement if it occurs
pursuant to any assignment of Shares for the benefit of
creditors or any Transfer by operation of law, including (but
not limited to) any Transfer by will or under the laws of
intestate succession; any execution of judgment against the
Shares or the acquisition of record or beneficial ownership
of Shares by a lender or creditor; any Transfer pursuant to
any decree of divorce, dissolution or separate maintenance,
any property settlement, any separation agreement or any
other agreement under which a part or all of any Shares are
Transferred or awarded to the spouse of a Shareholder or are
required to be sold; or any Transfer resulting from the
filing by a Shareholder of a petition for relief, or the
filing of an involuntary petition against a Shareholder,
under the bankruptcy laws of the United States or of any
other nation.
b. Required Undertaking. Any Transfer that would
otherwise be permitted under the terms of this Agreement is
prohibited unless the transferee executes such documents as
the Company may reasonably require to ensure that the
Company's rights under this Agreement are adequately
protected with respect to the Shares Transferred. Such
agreements may include (but are not limited to) the
-2-<PAGE>
transferee's agreement to be bound by all of the terms of
this Agreement as a Shareholder hereunder.
c. Permissible Transfer of Shares. Shares may be
Transferred, but in all events subject to any limitations on
Transfer imposed by applicable state or federal securities
laws (and satisfaction of the requirements set forth in
Section 2(e)), and subject to the requirements of Section
2(b).
d. Effect of Prohibited Transfer. Any Transfer
not in compliance with the terms hereof, whether Voluntary or
Involuntary, is void and of no effect. Should such a
Transfer purport to occur, the Company may refuse to carry
out the Transfer on its books, attempt to set aside the
Transfer, enforce any undertaking required under Section
2(b), or exercise any other legal remedy.
e. Additional Restrictions on Transfer. Each
Holder represents, warrants and agrees as follows:
(i) Securities Act. Each Holder understands
that the Shares have not been registered under the Securities
Act, and that the Shares are not freely tradeable and must be
held indefinitely unless registered under the Securities Act
or an exemption from such registration is available. Each
Holder understands that the Company is under no obligation to
register Shares except as expressly set forth herein. Each
Holder further understands that although an exemption from
registration may be available pursuant to Rule 144
promulgated under the Securities Act by the Commission,
satisfaction of a number of conditions is required to make a
sale under that exemption, and that, even if Rule 144 is
applicable in whole or in part, in no event may a Holder sell
the Shares to the public under such Rule prior to the
expiration of a two-year period after purchase, that any such
sales must be limited in amount and that sales can only be
made in full compliance with the provisions of the Rule.
Each Holder understands that Rule 144 contains specific
requirements that there be available to the public certain
information with respect to the Company's business and
financial affairs, and that the Company does not presently
comply with the information requirements of the Rule. Each
Holder acknowledges that there is no assurance that the
requirements will be met at the time the Holder may want to
make sales pursuant to the Rule.
Each Holder represents that it is purchasing the
Shares for its own account and not with a view to
distribution within the meaning of the Securities Act, other
than as may be effected in compliance with the Securities Act
and rules and regulations promulgated thereunder. No one
-3-<PAGE>
else has any beneficial interest in the Shares. Each Holder
has no present intention of disposing of the Shares at any
particular time or for any particular price and is not aware
of any particular occasion, event or circumstance upon the
occurrence of which such Holder intends to dispose of the
Shares. Each Holder understands that the Company is relying
upon the truth and accuracy of these representations in
issuing the Shares without first registering them under the
Securities Act.
(ii) Legends and Stop Order. The Company may
affix to the certificates representing the Shares legends
substantially as follows and such additional legends as the
Company reasonably may determine:
These securities have not been registered
under the Securities Act of 1933, as
amended, and have been taken by the
issuee for his or her own account and not
with a view to their distribution. Said
securities may not be sold or transferred
unless (a) they have been registered
under said Act, or (b) the transfer agent
(or the Company, if it is then acting as
its own transfer agent) is presented with
either a written opinion of counsel
satisfactory to the Company or a
"no-action" letter of the Securities and
Exchange Commission to the effect that
such registration is not required under
the circumstances of such sale or
transfer.
These securities may not be sold or
transferred without compliance with all
limitations on transfer imposed by
applicable state and federal securities
laws. Under certain circumstances, these
securities may not be sold or transferred
during the 120-day period following the
effective date of a registration
statement filed by the Company under the
Federal Securities Act of 1933, as
amended.
The Company may place a "stop transfer" order against the
Shares until all restrictions and conditions set forth in
this Agreement and in the legends referred to in this
subparagraph have been complied with.
-4-<PAGE>
Section 3. Registration by Acquisition
a. If at any time, or from time to time,
Acquisition shall determine to register (other than a
registration effected solely to implement an employee benefit
plan or a transaction to which Rule 145 of the Commission is
applicable) any of its equity securities, either for its own
account or the account of a security holder or holders, other
than a registration on any registration form which would not
permit secondary sales by a Holder or does not include
substantially the same information as would be required to be
included in a registration statement covering the sale of
Registrable Securities, Acquisition will:
(i) promptly give to each Holder written
notice thereof (which shall include a list of the
jurisdictions in which Acquisition intends to attempt to
qualify such securities under the applicable Blue Sky laws);
and
(ii) include in such registration (any related
qualification or other compliance under Blue Sky laws), all
the Registrable Securities specified in a written request or
requests, made within 20 days after notice from Acquisition,
by any Holder or Holders, except as set forth in subsections
3(b) and 3(c) hereof.
b. The "piggyback" registration rights of Holders
under this Section 3 are limited in that Acquisition shall be
required to effect hereunder only three such registrations of
Registrable Securities for all Holders of Registrable
Securities as a group.
c. If the registration of which Acquisition gives
notice is for a registered public offering involving an
underwriting, Acquisition shall so advise the Holders as a
part of the written notice given pursuant to Section 3(a)
hereof and only securities which are to be included in the
underwriting maybe included in the registration. All holders
proposing to distribute their securities through such
underwriting will enter into (together with Acquisition and
the other holders distributing their securities through such
underwriting) an underwriting agreement in customary form
with the underwriter or underwriters selected for such
underwriting by Acquisition. Notwithstanding any other
provision of this Section 3, if the underwriter determines
that marketing factors require a limitation on the number of
shares to be underwritten or if contractual limitations
applicable to Acquisition require a limitation on the number
of shares to be underwritten for other than the account of
Acquisition, the underwriter or Acquisition may limit the
number of Registrable Securities to be included in the
-5-<PAGE>
registration and underwriting on a pro rata basis based on
the total number of the Registrable Securities held by the
Holders participating in the registration and based on the
total number of securities (other than Registrable
Securities) entitled to registration held by the Holders and
by other persons or organizations selling such securities
pursuant to registration rights granted them by the Company,
and provided that the number of Registrable Securities and
other securities deemed held by a particular Holder may be
deemed to be a lower number than the actual number so held
pursuant to agreements to which Acquisition is a party as
approved by such Holder. Acquisition will advise all Holders
or Registrable Securities which would otherwise be registered
and underwritten pursuant hereto of any such limitations, and
the number of shares of Registrable Securities that may be
included in the registration. If any Holder disapproves of
the terms of any such underwriting, he or she may elect to
withdraw therefrom by written notice to Acquisition and the
underwriter. The Registrable Securities so withdrawn also
will be withdrawn from registration. Acquisition, in its
sole discretion, for any reason may abandon or postpone the
proposed registration or withdraw the registration statement,
without liability to any Holder. To the extent requested by
Acquisition and any underwriter of securities of Acquisition
in a registered offering in which Holders of Registrable
Securities had a right to participate pursuant to this
Section 3, no such Holder will sell or otherwise transfer any
Registrable Securities or other securities which were not
included in such registration during the 120-day period
following the effective date of the registration statement.
Acquisition may impose stop-transfer restrictions in order to
enforce the foregoing agreement.
Section 4. Expense of Registration. All
Registration Expenses incurred in connection with
registration, qualification or compliance under Section 3
shall be borne by Acquisition. All Selling Expenses incurred
in connection with transactions under Section 3 shall be
borne by the Holders of the securities so registered pro rata
on the basis of the amount of Registrable Securities so
registered, with each Holder bearing its own expenses, if
any, for the fees and disbursements of counsel to such Holder
incurred in connection with such transaction(s). If any
jurisdiction in which Holders of Registrable Securities shall
request that such Securities be qualified shall require that
Registration Expenses incurred in connection with the
qualification of the Registrable Securities in that
jurisdiction be borne by the Holders thereof, then such
expenses shall be payable by such Holders pro rata to the
extent required by such jurisdiction.
-6-<PAGE>
Section 5. Registration Procedures. In the case
of each registration, qualification or compliance effected by
Acquisition pursuant to this Agreement, Acquisition will keep
each Holder advised in writing as to the initiation of each
registration, qualification and compliance and as to the
completion thereof. At its expense Acquisition will:
a. Keep such registration, qualification or
compliance effective until the Holder or Holders have
completed the distribution described in the registration
statement relating thereto, provided, however, that
Acquisition shall not be required to keep any such
registration, qualification or compliance effective following
90 days after the effective date thereof; and
b. Furnish such number of prospectuses and other
documents incident thereto as a Holder from time to time may
reasonably request.
Section 6. Indemnification.
a. Acquisition will indemnify each Holder, each
of its officers, directors, or partners, as the case may be,
and each person controlling such Holder, with respect to
which registration, qualification or compliance has been
effected pursuant to this Agreement, and each underwriter, if
any, and each person who controls any underwriter against all
claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact
contained in any prospectus, offering circular or other
document (including any related registration statement,
notification or the like) incident to any such registration,
qualification, or compliance, or based on any omission (or
alleged omission) to state therein a material fact required
to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading, or any violation by Acquisition of any
rule or regulation promulgated under the Securities Act
applicable to Acquisition and relating to action or inaction
required of Acquisition in connection with any such
registration, qualification or compliance, and will promptly
reimburse each such Holder, each of its officers, directors,
or partners, as the case may be, and each person controlling
such Holder, each such underwriter, for any legal and any
other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage,
liability or action, provided that Acquisition will not be
liable in any such case to the extent that any such claim,
loss, damage, liability or expense arises out of or is based
on any untrue statement or omission based upon written
information furnished to Acquisition by an instrument duly
-7-<PAGE>
executed by such Holder or underwriter and stated to be
specifically for use therein.
b. Each Holder will, if Registrable Securities
held by such Holder are included in the securities as to
which such registration, qualifications or compliance is
being effected, indemnify Acquisition, each of its directors
and officers, each underwriter, if any, of Acquisition's
securities covered by such a registration statement, each
person who controls Acquisition or such underwriter within
the meaning of the securities Act, and each other such
Holder, each of its officers and directors and each person
controlling such Holder, against all claims, losses, damages
and liabilities (or actions in respect thereof) arising out
of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any such
registration statement, prospectus, offering circular or
other document, or any omission (or alleged omission) to
state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and
will promptly reimburse Acquisition, such Holders, such
directors, officers, persons, underwriters or control persons
for any legal or any other expenses reasonably incurred in
connection with investigating or defending any such claim,
loss, damage, liability or action, in each case to the
extent, but only to the extent, that such untrue statement
(or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus,
offering circular or other document in reliance upon and in
conformity with written information furnished to Acquisition
by an instrument duly executed by such Holder and stated to
be specifically for use therein.
c. Each party entitled to indemnification under
this Section 6 (the "Indemnified Party") shall give notice to
the party required to provide indemnification (the
"Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may
be sought, and shall permit the Indemnifying Party to assume
the defense of any such claim or any litigation resulting
therefrom, provided that counsel for the Indemnifying Party,
who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval
shall not unreasonably be withheld), and the Indemnified
Party may participate in such defense at such party's
expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this
Agreement, except to the extent that such Indemnifying Party
is damaged as the result of the failure to give notice. No
Indemnifying Party, in defense of any such claim or
-8-<PAGE>
litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an
unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation.
Section 7. Information by Holder. The Holder or
Holders of Registrable Securities included in any
registration shall furnish to Acquisition such information
regarding such Holder or Holders and the distribution
proposed by such Holder or Holders as Acquisition may request
in writing and as shall be required in connection with any
registration, qualification or compliance referred to in this
Agreement.
Section 8. Transfer of Registration Rights. The
rights to cause Acquisition to register a Holder's securities
granted to a Holder by Acquisition under this Agreement may
be assigned by the holder of any Registrable Securities only
to a transferee or assignee of at least the lesser of five
thousand (5,000) shares of Registrable Securities or all of
the Registrable Securities held by such holder, provided that
Acquisition is given written notice by such Holder at the
time of or within a reasonable time after said transfer,
stating the name and address of said transferee or assignee
and identifying the Registrable Securities with respect to
which such registration rights are being assigned.
Section 9. Delay of Registration. The Holders
shall have no right to take any action to restrain, enjoin,
or otherwise delay any registration as the result of any
controversy that might arise with respect to the
interpretation or implementation of this Agreement.
Section 10. Certain Opinions. Acquisition shall
not be obligated to effect any registration, qualification or
compliance requested under Section 3 by a Holder with respect
to a proposed distribution of Registrable Securities by a
Holder thereof if Acquisition shall have delivered to such
Holder an opinion of counsel of Acquisition to the effect
that such Registrable Securities proposed to be disposed of
may lawfully be so disposed of without such registration,
qualification or compliance. A request for registration,
qualification or compliance that is mooted by this Section 10
shall not serve to count against the limited number of
registrations otherwise granted with respect to Registrable
Securities in accordance with this Agreement.
Section 11. Notices. Any notice or other
communication to be given hereunder by any party to another
-9-<PAGE>
shall be in writing and delivered personally or sent by
certified mail, postage prepaid, as follows:
ACQUISITION:
CL Acquisition Corporation
101 Montgomery Street
San Francisco, CA 94104
Attention: Lawrence J. Stupski,
President
with copies to:
Lawrence B. Rabkin, Esq.
Howard, Rice, Nemerovski, Canady,
Robertson & Falk
A Professional Corporation
3 Embarcadero Center, 7th Floor
San Francisco, CA 94111
SHAREHOLDERS AND HOLDERS:
At the addresses set forth on the books
and records of the Company.
or to such other persons as may be designated in writing by
the parties, by a notice given as aforesaid.
Section 12. Headings. The headings of the several
sections of this Agreement are inserted for convenience of
reference only and are not intended to affect the meaning or
interpretation of this Agreement.
Section 13. Counterparts. This Agreement may be
executed in counterparts, and when so executed each
counterpart will be deemed to be an original, and said
counterparts together will constitute one and the same
instrument.
Section 14. Binding Nature. Except as provided
herein, this Agreement will be binding upon and inure to the
successors and assigns of the parties hereto, and in the
event any party hereto or any successors or assigns of such
party (i) consolidates with or merges into any other person
and is not the continuing or surviving corporation or entity
of such consolidation or merger, or (ii) transfer all or
substantially all of its properties or assets to any person,
then, and in each such case, proper provision will be made so
that the successors and assigns of such party assume all of
the obligations of such party set forth in this Agreement.
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Section 15. Waiver. Any party hereto may, by
written notice to the other, (i) waive any of the conditions
to its obligations hereunder or extend the time for the
performance of any of the obligations or actions of the
other, (ii) waive any inaccuracies in the representations of
the other contained in this Agreement or in any documents
delivered pursuant to this Agreement, (iii) waive compliance
with any of the covenants of the other contained in this
Agreement, and (iv) waive or modify performance of any of the
obligations of the other. No action taken pursuant to this
Agreement, including without limitation any investigation by
or on behalf of any party, will be deemed to constitute a
waiver by the party taking such action of compliance with any
representation, warranty, condition or agreement contained
herein. Waiver of the breach of any one or more provisions
of this Agreement will not be deemed or construed to be a
waiver of other breaches or subsequent breaches of the same
provisions.
Section 16. Further Assurances. Each party hereto
will, whenever and as often as requested to do so by another
party hereto, do, execute, acknowledge, and deliver, or cause
to be done, executed, acknowledged, delivered, filed, or
recorded, all such further acts, deeds, assignments,
transfers, conveyances, powers of attorney, instruments, and
assurances as such other party may reasonably request in
order to carry out fully the terms and provisions of this
Agreement.
Section 17. Attorneys' Fees. In the event any
party hereto initiates any legal action to enforce the
provisions hereof, the party(ies) prevailing in such action
will be entitled to recover from the other party(ies) to such
action all reasonable attorneys' fees and expenses incurred
in connection therewith.
Section 18. Applicable Law. This Agreement will
be governed by the laws of the State of California applicable
to agreements wholly entered and carried out in California.
Section 19. Severability. The invalidity or
unenforceability of any provision or portion of this
Agreement shall not affect the validity or enforceability of
the other provisions or portions hereof.
Section 20. Additional Shareholders. At its
option from time to time, the Company, without approval of
Shareholders or Holders, may add additional Shareholders
and/or Holders to this Agreement, whereupon the Company will
amend Schedule A hereto.
-11-<PAGE>
Section 21. Counterparts. This Agreement may be
executed in one or more counterparts, each of which will
constitute an original hereof.
WITNESS the due execution of this Agreement by the
parties hereto as of the date first above written.
CL ACQUISITION CORPORATION
/s/ Charles R. Schwab
__________________________
By: Charles B. Schwab
Chairman and
Chief Executive Officer
/s/ Helen O. Schwab
/s/ Charles R. Schwab
__________________________
A SHAREHOLDER
-12-<PAGE>
SPOUSAL CONSENT
The undersigned ("Consenting Spouse") is the spouse
of a Shareholder referred to in the attached Registration
Rights and Stock Restriction Agreement and has read and
understood its terms. The Consenting Spouse hereby consents
to the agreement and to the sale of the Shares, and agrees to
cooperate in enabling his or her spouse to meet all
obligations provided in such Agreement. The Consenting
Spouse understands that the Company is relying upon this
consent in entering into the Agreement and in not taking
further steps to protect its interests.
Date Signature
3/26/87 /s/ Helen O. Schwab
______________________ ____________________________________
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SCHEDULE A
SHARES
Barbara A. Wolfe, and Thomas Wolfe, 90,000
Joint Tenants
Robert Fivis and Barbara A. Fivis 85,000
as Community Property
Hugo W. Quackenbush 50,000
Anthony M. Frank 5,263
First Nationwide Bank, FBO Anthony M. Frank 19,737
Charles R. Schwab and Helen O. Schwab 2,105,000
as Community Property
David S. Pottruck 100,000
James F. Wiggett 15,000
Elizabeth Gibson Sawi 15,000
Phyllis Kay Dryden 15,000
Woodson M. Hobbs IV and Elena E. Hobbs 100,000
as Community Property
Richard W. Arnold and Vivian L. Arnold 77,500
as Community Property
DLJSC FBO Richard W. Arnold 7,500
Barry Snowbarger and Edie R. Snowbarger 40,000
as Community Property
Bartlett A. Jackson 15,000
George R. Roberts, Nominee for 22,500
Saul Fox
George R. Roberts, Nominee for 37,500
Michael W. Michelson
Lawrence B. Rabkin 25,000
as Community Property
Lawrence J. Stupski in Trust for 460,000
Lawrence J. and Linda N. Stupski
George R. Roberts, Nominee for 46,875
Robert I. MacDonnell
Robert L. Jacobson 15,000
George R. Roberts, Nominee for 272,813
Henry R. Kravis
George R. Roberts, Nominee for 272,812
George R. Roberts
George R. Roberts, Nominee for 52,500
Paul E. Raether
George R. Roberts, Nominee for 22,500
R.T. Ammon
George R. Roberts, Nominee for 7,500
Thomas W. Hudson, Jr.
George R. Roberts, Nominee for 15,000
Michael T. Tokarz
Barbara W. Wolfe, Trustee for 650,000
Charles Schwab & Co., Inc. Profit
Sharing Plan
-14-<PAGE>
SCHEDULE A CONT'D
SHARES
Barbara A. Wolfe, Trustee for 50,000
Charles Schwab & Co., Inc. Profit
Sharing Plan
-15-<PAGE>
THE
MORGAN SECURED ADVISED LINE OF CREDIT
BANK PROMISSORY NOTE
U.S. $500,000 New York, New York
ON DEMAND, the undersigned (the "Borrower") hereby
promises to pay to the order of Morgan Guaranty Trust Company
of New York (the "Bank") the aggregate unpaid principal
amount of all advances made hereunder (the "Advances") by the
Bank to the Borrower pursuant to a Secured Advised Line of
Credit established by the Bank in favor of the Borrower and
to pay interest on the aggregate unpaid principal amount of
the Advances from time to time outstanding, for each from the
date the initial Advance is made until the Advances are paid
in full, at a rate per annum equal to the following: ________
_______________________Prime Rate___________________________.
The interest rate set forth above is subject to any
limitations imposed by applicable law. If used herein, the
term "Prime Rate" shall mean the rate of interest publicly
announced by the Bank in New York City from time to time as
its Prime Rate.
Interest hereunder shall be computed on the basis
of a year of 365/366 days and paid for the actual number of
days elapsed.
Interest on the principal amount hereof outstanding
during each calendar month shall be payable monthly in
arrears, commencing one month after the initial Advance or
one month after any subsequent Advance when no other Advance
is outstanding and upon payment in full. Principal and
interest shall be payable in lawful money of the United
States of America at the office of the Bank at 23 Wall
Street, New York, New York 10015 and if the Borrower
maintains one or more accounts at the Bank in which cash
balances are kept, the Borrower hereby authorizes the Bank on
behalf of the Borrower to debit such accounts in order to
effectuate the interest payments due hereunder.
To secure payment of this Note, and of any other
liability or liabilities of the Borrower to the Bank due or
to become due or that may hereafter be contracted or
existing, howsoever acquired by the Bank, the Borrower hereby
grants to the Bank a lien upon and security interest in the
following property (all of which has been delivered to or is
in the possession of the Bank)
_______120,000 shares of Charles Schwab & Co., Inc. stock____
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
-1-<PAGE>
and in all proceeds and products thereof, accessions thereto,
and substitutions therefor, any deposit or other sums at any
time credited by, or due from the Bank to the Borrower and
any securities or other property of the Borrower in the
possession of the Bank (all of the foregoing being
hereinafter referred to as the "Collateral").
The Bank may at any time demand that additional
property of a quality and value satisfactory to the Bank be
delivered, pledged, and transferred to it and the Borrower
hereby grants to the Bank a lien upon and security interest
in such additionally delivered properly.
Upon demand by the Bank for payment of this Note or
upon nonpayment of any other liability of the Borrower to the
Bank when due, the Bank shall have the rights and remedies
provided in the Uniform Commercial Code in force in New York
at the date of execution of this Note and in addition to, in
substitution for, in modification of, or in conjunction with
those rights and remedies, the Bank or its agents may, in its
discretion, sell, assign and deliver all or any part of the
Collateral at any broker's board or at public or private sale
without notice or advertisement, and bid and become
purchasers at any public sale or at any broker's board; and,
if notice to the Borrower is required by law, give written
notice to the Borrower five days prior to the date of public
sale of the Collateral or prior to the date after which
private sale of the Collateral will be made by mailing such
notice to the Borrower in the manner set forth below; and, if
the Collateral includes insurance policies with a cash
surrender value, stocks, bonds, other securities,
instruments, or documents which will be redeemed by the
issuer upon surrender, the Bank may realize upon such
Collateral without notice to the Borrower. The Borrower
agrees that the proceeds of the disposition of the Collateral
may be applied by the Bank to the satisfaction of the
liabilities of the Borrower to the Bank in any order of
preference which the Bank, in its sole discretion, chooses,
and that the surplus, if any, be returned to the Borrower,
who shall continue to be liable to the Bank for any
deficiency remaining with interest thereon.
The Bank may at any time transfer the Collateral to
its own name or the name of one or more of its nominees and
the Borrower agrees, at the request of the Bank, from time to
time to execute in blank a sufficient number of stock powers
and/or bond powers to effectuate the foregoing. The Bank may
at any time demand, sue for, collect or make any compromise
or settlement with reference to the Collateral as the Bank in
its sole discretion chooses.
The Bank at its election and in its sole
discretion, may permit any substitutions, exchanges or
releases of the Collateral and/or any liens and/or security
-2-<PAGE>
interests relating thereto. If any of the Collateral is
released to the Borrower, the Borrower agrees, if requested
by the Bank, to execute whatever financing or other
statements and security agreements or trust receipts are
required to continue the Bank's security interest in the
Collateral.
If this Note is not paid in full upon demand, the
Borrower agrees to pay all costs and expenses of collection,
including reasonable attorneys' fees.
Each and every party to the Note, either as maker,
endorser, guarantor, accommodation party or otherwise, hereby
waives presentment, notice of dishonor and protest with
respect to this Note and assents to any extension or
postponement of the time of payment or other indulgence and
to any substitution, exchange or release of collateral
granted or permitted by the Bank.
The undersigned, if more than one, shall be jointly
and severally liable hereunder and the term "Borrower" shall
mean the undersigned or any one or more of them and their
heirs, executors, administrators, successors and assigns.
The Borrower shall have the right, at any time or
from time to time, without penalty or premium, to repay all
or part of the unpaid principal amount of the Advances
outstanding hereunder.
This Note shall be evidence of all Advances and
payments of principal made hereunder until it is surrendered
to the Borrower by the Bank and it shall continue to be used
even though there may be periods prior to such surrender when
no amount of principal or interest is owing hereunder.
No failure or delay by the Bank in exercising any
right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights
and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.
The Borrower hereby agrees that all notices,
demands and other communications to the Borrower hereunder
shall be in writing and shall be given to the Borrower at the
address set forth herein or such other address as the
Borrower may hereafter designate to the Bank in writing,
which written designation shall only become effective upon
receipt by the Bank. Each such notice, demand or other
communication to the Borrower hereunder shall be effective
(i) if given by mail, three days after such communication is
deposited in the mail with first class postage, prepaid,
addressed as aforesaid or (ii) if personally delivered, when
-3-<PAGE>
delivered at the Borrower's address as specified in this
paragraph.
This Note shall be governed by and construed in
accordance with the law of the State of New York. By
executing and delivering this Note to the Bank, the Borrower
is deemed to have agreed to be bound by the terms and
conditions set forth in the Terms and Conditions of Secured
Advised Line of Credit and any changes or revisions made
thereto pursuant to paragraph 7 thereof.
Date: January 24, 1991 Signature /s/ Charles R. Schwab
_____________________
Charles R. Schwab
188 Fair Oaks Lane
Address Atherton, CA 94027
Signature /s/ Helen O. Schwab
____________________
Helen O. Schwab
188 Fair Oaks Lane
Address Atherton, CA 94027
-4-<PAGE>
