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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 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 to be paid with the
statement [ ].
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SCHEDULE 13D
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NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Charles R. Schwab
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [_]
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SEC USE ONLY
3
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SOURCE OF FUNDS*
4
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
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CITIZENSHIP OR PLACE OF ORGANIZATION
6
United States of America
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SOLE VOTING POWER
7
NUMBER OF
2,758,444
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 15,994,855
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING
2,758,444
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
15,994,855
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
18,753,299
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
21.7%
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TYPE OF REPORTING PERSON*
14
IN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
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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
Charles R. Schwab
The Charles Schwab Corporation
101 Montgomery Street
San Francisco, CA 94104
Chairman, Chief Executive Officer and Director,
The Charles Schwab Corporation
101 Montgomery Street
San Francisco, CA 94104
Inapplicable
Inapplicable
United States of America
Item 3. Source and Amount of Funds
Inapplicable
Item 4. Purpose of Transaction
a) 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
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).
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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:
<TABLE>
<CAPTION>
Date of # of Shares of Nature of Price Where and
Transaction Common Stock Transaction Per Share How Effected
<S> <C> <C> <C> <C>
6/29/95 48,000 Disposition N/A Gift
7/06/95 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
</TABLE>
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 be made in accordance with state and
Federal securities laws and subject to protection of the issuer's
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 1992Stock 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.
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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.
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
** 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
5
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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 Registerable Securities,
provided that transferees of Registerable 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 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.
"Registerable 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 Acquisition, 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 Registerable 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.
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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 interstate succession; any succession; any execution of
judgment against the Shares or the acquisition of record or beneficial
ownership of Shares by 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
part or all of any Shares are Definitions. 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
their 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
ensuring 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 transferrees' 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 and tradable 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 Commission, satisfaction of a number of conditions is
required to make a sale under that exemption, and that, even if Rule144 is
applicable in whole or in part, in no event may a Holder sell the Shares to the
public under 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 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.
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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 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.
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 Registerable
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 Registerable 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.
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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 Registerable Securities for all Holders of
Registerable 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 may be 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 Registerable Securities
to be included in the registration and underwriting on a pro rata basis
based on the total number of The Registerable Securities held by the
Holders participating in the registration and based on the total number of
securities ( other than Registerable 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 Registerable 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
Registerable Securities which would otherwise be registered and
underwritten pursuant hereto of any such limitations, and the number of
shares of Registerable 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 Registerable 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 Registerable Securities had a
right to participate pursuant to this Section 3, no such Holder will sell
or otherwise transfer any Registerable 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 restriction in order to enforce the foregoing agreement.
Section 4. Expenses 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 Registerable
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 Registerable
Securities shall request that such Securities be qualified shall require that
Registration Expenses incurred in connection with the qualification of the
Registerable 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.
Section 5. Registration Procedures. In the case of each
registration, qualification or compliance effected by Acquisition pursuant to
this agreement, Acquisition
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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 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
executed by such Holder or underwriter and stated to be specifically for
use therein.
b. Each Holder will, if Registerable 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
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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 litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgement 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
Registerable 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
Registerable Securities only to a transferee or assignee of at least the
lesser of five thousand (5,000) shares of Registerable Securities or all of
the Registerable 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 Registerable 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 obliged to
effect any registration, qualification or compliance requested under
Section 3 by a Holder with respect to a proposed distribution of
Registerable Securities by a Holder thereof if Acquisition shall have
delivered to such Holder an opinion of counsel of Acquisition to the effect
that such Registerable 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 Registerable Securities in
accordance with this Agreement.
Section 11. Notices. Any notice or other communication to be given
hereunder by any party to another shall be in writing and delivered
personally or sent by certified mail, postage prepaid, as follows:
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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, 7/th /Floor
San Francisco, CA 94111
SHAREHOLDERS AND HOLDERS:
At the address 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.
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Section 12. Headings. The headings of the several sections of this
Agreement are inserted for the 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.
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 branch 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 the 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.
13
<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 R. Schwab
Chairman and
Chief Executive Officer
/s/ Helen O. Schwab
/s/ Charles R. Schwab
_____________________________________
A SHAREHOLDER
___________________________________________
14
<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
- ------------------- ------------------------
15
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
SHARES
<S> <C>
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 60,000
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
Barbara W. Wolfe, Trustee for 50,000
Charles Schwab & Co., Inc.
Profit Sharing Plan
</TABLE>
16
<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 Guarantee Trust Company of New York (the "Bank") the
aggregate unpaid principle 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 principle 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 principle 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. Principle 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 effectuate the interest payments due hereunder.
To secure payment of this note, and 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___________________________________________________________________________
________________________________________________________________________________
__________________________________________________________________
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 forgoing being hereinafter referred to as the
"Collateral").
The Bank may at any time demand that additional property of 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 property.
17
<PAGE>
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 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 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 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 that 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 of premium, to repay all or part of the unpaid principle amount
of the Advances outstanding hereunder.
This note shall be evidence of all Advances and payments of principle
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.
18
<PAGE>
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 of 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 delivered at 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
Address: 188 Fair Oaks Lane
Atherton, CA 94027
Signature: /s/ Helen O. Schwab
______________________
Helen O. Schwab
Address: 188 Fair Oaks Lane
Atherton, CA 94027
19
