<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 27, 2000
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
THE CHARLES SCHWAB CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 6211 94-3025021
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NO.) IDENTIFICATION NUMBER)
</TABLE>
THE CHARLES SCHWAB CORPORATION
120 KEARNY STREET
SAN FRANCISCO, CALIFORNIA 94108
(415) 627-7000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
CHRISTOPHER V. DODDS
EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
THE CHARLES SCHWAB CORPORATION
120 KEARNY STREET
SAN FRANCISCO, CALIFORNIA 94108
(415) 627-7000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
COPY TO:
LAWRENCE B. RABKIN, ESQ.
HOWARD, RICE, NEMEROVSKI, CANADY, FALK & RABKIN
A PROFESSIONAL CORPORATION
THREE EMBARCADERO CENTER, 7TH FLOOR
SAN FRANCISCO, CALIFORNIA 94111
TELEPHONE: (415) 434-1600
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this Registration Statement becomes effective.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
general instruction G, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
CALCULATION OF REGISTRATION FEE
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<S> <C> <C> <C> <C>
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TITLE OF EACH CLASS PROPOSED MAXIMUM PROPOSED MAXIMUM
OF SECURITIES TO BE AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
REGISTERED REGISTERED SHARE(1) PRICE(1) REGISTRATION FEE
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Common Stock, $0.01 par
value....................... 15,000,000 $30.7344 $461,016,000 $121,709
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) of the Securities Act of 1933, as amended, based
upon the average of the high and low sales price per share of the
registrant's common stock on October 26, 2000, as reported on the New York
Stock Exchange.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(a), MAY DETERMINE.
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<PAGE> 2
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
THESE SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS
IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER
TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
PROSPECTUS (Subject to Completion)
Dated October 27, 2000
THE CHARLES SCHWAB CORPORATION
15,000,000 SHARES OF COMMON STOCK
This Prospectus relates to an aggregate of 15,000,000 shares of common
stock, par value $0.01 per share, which we may offer and issue from time to time
in connection with our future direct or indirect acquisitions of other
businesses, properties or securities. Our offers and issuances will be in
accordance with Rule 415(a)(1)(viii) of Regulation C under the Securities Act of
1933 or as otherwise permitted under the Securities Act.
We expect that the terms upon which we may issue shares of our common stock
in business combination transactions will be determined through negotiations
with the security holders or principal owners of the businesses whose securities
or assets are to be acquired. It is expected that the shares that are issued
will be valued at prices reasonably related to market prices for our common
stock prevailing either at the time an acquisition agreement is executed or at
the time an acquisition is consummated.
This prospectus also relates to the offer for sale or other distribution of
shares of our common stock by persons who will acquire the shares in connection
with our acquisitions of other businesses. The shares may be sold or distributed
from time to time by or for the account of the selling stockholder through
underwriters or dealers, through brokers or other agents, or directly to one or
more purchasers, at market prices prevailing at the time of sale or at prices
otherwise negotiated. This prospectus also may be used, with our prior consent,
by persons who acquire shares of our common stock from the persons to whom we
originally issue the shares pursuant to this prospectus. We will receive no
portion of the proceeds from the sale of shares of common stock by any selling
stockholders, but will bear all expenses related to the registration of the
shares.
We intend to concentrate our acquisitions in areas related to or that would
complement or expand our current business. The consideration for any acquisition
may consist of shares of our common stock, cash, notes or other evidences of
debt, assumptions of liabilities or any combination of the preceding, as
determined by negotiations between us and the owners or controlling persons of
businesses, properties or securities to be acquired.
This prospectus will only be used in transactions in which the issuance of
our common stock would be exempt from registration with the SEC, other than for
the possibility of integration with other transactions. We will furnish this
prospectus to owners of the businesses, properties or securities to be acquired.
If an acquisition has a material financial effect upon us, a current report
on Form 8-K and/or a post-effective amendment to the registration statement of
which this prospectus is a part will be filed subsequent to the acquisition. The
current report and/or post-effective amendment will contain financial and other
information about the acquisition which is material to subsequent acquirers of
the common stock offered by this prospectus, including, if applicable, pro forma
information for us and historical financial information about the entity being
acquired.
A current report on Form 8-K and/or a post-effective amendment to the
registration statement of which this prospectus is a part will also be filed
when an acquisition does not itself have a material effect upon us, but if
aggregated with other acquisitions since the date of our most recent audited
financial statements would have a material effect on us.
Our common stock trades on the New York Stock Exchange under the symbol
"SCH." On October 26, 2000, the closing price of our common stock was $30.875.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
, 2000
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TABLE OF CONTENTS
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PAGE
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<S> <C>
Incorporation of Certain Documents by Reference............. 3
Note Regarding Forward-Looking Statements................... 4
Where You Can Find More Information......................... 4
The Charles Schwab Corporation.............................. 5
Use of Proceeds............................................. 5
Selected Historical Consolidated Financial Data............. 6
Market Prices and Dividends................................. 7
Selling Stockholders........................................ 8
Plan of Distribution........................................ 8
Description of Capital Stock................................ 9
Legal Matters............................................... 10
Experts..................................................... 10
</TABLE>
2
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We incorporate
by reference into this prospectus:
- Our Annual Report on Form 10-K for the year ended December 31, 1999
except for Item 6 "Selected Financial Data," Item 7 "Management's
Discussion and Analysis of Financial Condition and Results of
Operations," Item 7A "Quantitative and Qualitative Disclosures About
Market Risks," Item 8 "Financial Statements and Supplementary Data,"
Exhibit 12.1, Exhibit 13.1, Exhibit 21.1 and Exhibit 27.1 which have been
updated and incorporated by reference in this prospectus. Such items and
exhibits were restated by our Current Report on Form 8-K, filed with the
SEC on July 18, 2000, to give retroactive effect to the merger with U.S.
Trust Corporation, which was accounted for as a pooling of interest.
- Our Quarterly Report on Form 10-Q for the quarter ended June 30, 2000.
- Our Current Report on Form 8-K, filed on January 14, 2000.
- Our Current Report on Form 8-K, filed on February 22, 2000.
- Our Current Report on Form 8-K, filed on May 23, 2000.
- Our Current Report on Form 8-K, filed on July 18, 2000.
- Our Current Report on Form 8-K, filed on July 18, 2000.
Each future filing we make with the SEC under Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 after the date of this prospectus
and prior to the time all of the securities offered by this prospectus are sold
will be incorporated by reference into this prospectus on the date of filing.
We will furnish without charge to each person to whom this prospectus is
delivered, on the written or oral request of the person, a copy of any or all of
the documents incorporated by reference into this prospectus, except for the
exhibits to the documents. Requests should be made to:
The Charles Schwab Corporation
Investor Relations Department
101 Montgomery Street
San Francisco, California 94104
(415) 636-2787
Any statement contained in a document or information incorporated by
reference in this prospectus will be modified or superseded for purposes of this
prospectus to the extent that a statement contained in this prospectus or in any
subsequently filed document that also is incorporated by reference, modifies or
supersedes the statement. Any modified or superseded statement shall not, except
as so modified or superseded, constitute a part of this prospectus. The
modification or superseding of a statement does not mean that the statement,
when made, was untrue or misleading.
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with different information. We are not making an
offer of these securities in any state where
3
<PAGE> 5
the offer is not permitted. You should not assume that the information in this
prospectus or any prospectus supplement is accurate as of any date other than
the date on the front of these documents.
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus, including the information incorporated by reference,
contains "forward-looking statements" within the meaning of Section 27A of the
Securities Act, and Section 21E of the Exchange Act. Forward-looking statements
are identified by words such as "believe," "anticipate," "expect," "intend,"
"plan," "will," "may" and other similar expressions. In addition, any statements
that refer to expectations, projections or other characterizations of future
events or circumstances are forward-looking statements. These forward-looking
statements, which reflect management's beliefs, objectives and expectations as
of the date hereof or, in the case of documents which are incorporated by
reference, on the date of those documents, are necessarily estimates based on
the best judgment of our senior management. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of the
date of this prospectus or, in the case of documents incorporated by reference,
as of the date of those documents.
Achievement of the expressed beliefs, objectives and expectations is
subject to certain risks and uncertainties that could cause actual results to
differ materially from those beliefs, objectives and expectations, including,
but not limited to, those contained in our Annual Report on Form 10-K for the
year ended December 31, 1999 (except for Item 6 "Selected Financial Data," Item
7 "Management's Discussion and Analysis of Financial Condition and Results of
Operations," Item 7A "Quantitative and Qualitative Disclosures About Market
Risks," Item 8 "Financial Statements and Supplementary Data," Exhibit 12.1,
Exhibit 13.1, Exhibit 21.1 and Exhibit 27.1 which have been updated and
incorporated by reference in this prospectus. Such items and exhibits were
restated by our Current Report on Form 8-K, filed with the SEC on July 18, 2000,
to give retroactive effect to the merger with U.S. Trust Corporation, which was
accounted for as a pooling of interests), in our Quarterly Report on Form 10-Q
for the quarter ended June 30, 2000 and in our Current Reports on Form 8-K filed
with the Securities and Exchange Commission on January 14, 2000, February 22,
2000, May 23, 2000, July 18, 2000 and July 18, 2000 (which are incorporated into
this document by reference).
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. Our SEC file number is
1-9700. Our SEC filings are available to the public through commercial document
retrieval services and over the Internet at the SEC's website at
http://www.sec.gov. You may also read and copy any document we file at the SEC's
public reference rooms in Washington, D.C. at 450 Fifth Street, N.W.,
Washington, D.C. 20549. In addition, the SEC has public reference rooms in New
York, New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference rooms.
We encourage review of any documents and reports we will file after the
date of this prospectus as required by Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act.
4
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THE CHARLES SCHWAB CORPORATION
The Charles Schwab Corporation is a financial holding company engaged,
through its subsidiaries, in securities brokerage and related financial
services. Our operating subsidiaries include:
- Charles Schwab & Co., Inc., a securities broker-dealer with branch
offices nationwide as well as in the Commonwealth of Puerto Rico and the
U.S. Virgin Islands.
- U.S. Trust Corporation, an investment management firm that through its
subsidiaries also provides fiduciary services and private banking
services.
- Charles Schwab Europe, a retail securities brokerage firm located in the
United Kingdom.
- Charles Schwab Investment Management, Inc., the investment advisor for
our proprietary mutual funds.
- Schwab Capital Markets L.P., a market maker in Nasdaq and other
securities and provider of trade execution services to broker-dealers and
institutional clients.
- CyBerCorp Holdings, Inc., an electronic trading technology and brokerage
firm providing Internet-based services to highly active, online
investors.
We were incorporated in Delaware in November 1986. Charles Schwab & Co.,
Inc. was incorporated in California in 1971 and merged in 1983 with a subsidiary
of BankAmerica Corporation (currently, Bank of America Corporation). We acquired
Charles Schwab & Co., Inc. in a management-led leveraged buyout in March 1987
and became a publicly held company in September 1987. Our principal executive
offices are located at 120 Kearny Street, San Francisco CA 94108 (telephone
number (415) 627-7000). Our website is http://www.schwab.com. This reference to
our website address does not constitute incorporation by reference of the
information contained in the website.
All references to "we," "us" or to "Schwab" in this prospectus are to The
Charles Schwab Corporation.
USE OF PROCEEDS
This prospectus relates to shares of common stock being offered for sale or
exchange by us from time to time to acquire one or more businesses in negotiated
transactions not involving any public offering. This prospectus also relates to
the offer for sale or other distribution of shares of common stock by selling
stockholders who will acquire shares of our common stock in the acquisitions. We
will not receive any proceeds from the selling shareholders' sale of any shares
of our common stock, but will pay all expenses related to the registration of
the shares.
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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
The selected annual historical consolidated financial data of Schwab
presented below have been derived from Schwab's audited consolidated annual
financial statements and related notes. The interim historical consolidated
financial data have been derived from unaudited financial statements of Schwab.
We believe that the interim financial data include all adjustments of a normal,
recurring nature that are necessary for a fair presentation of the results for
the unaudited interim periods. Results for the interim periods do not
necessarily indicate results which may be expected for any other interim or
annual period. Schwab's consolidated balance sheets as of December 31, 1999 and
1998 and Schwab's statements of income for each of the three years in the period
ended December 31, 1999 are incorporated by reference in this prospectus.
Schwab's consolidated balance sheets and statements of income for the other
periods presented below are not incorporated by reference in this prospectus.
All selected historical consolidated financial data of Schwab contained in this
prospectus should be read in conjunction with Schwab's audited consolidated
financial statements and related notes and Schwab's "Management's Discussion and
Analysis of Results of Operations and Financial Condition" that are incorporated
by reference in this prospectus.
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<CAPTION>
SIX MONTHS
ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
----------------------------------------------- -----------------
1999 1998 1997(1) 1996 1995(2) 2000 1999
------- ------- ------- ------- ------- ------- -------
(UNAUDITED)
(IN MILLIONS, EXCEPT FOR PER SHARE AMOUNTS AND AS NOTED)
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues(3).................... $ 4,486 $ 3,178 $ 2,672 $ 2,174 $ 1,805 $ 3,130 $ 2,197
Net income(4).................. $ 666 $ 410 $ 321 $ 275 $ 122 $ 437 $ 332
Basic earnings per share(4,
5)........................... $ .51 $ .32 $ .25 $ .22 $ .10 $ .33 $ .25
Diluted earnings per share(4,
5)........................... $ .49 $ .31 $ .24 $ .21 $ .09 $ .31 $ .24
Dividends declared per common
share(5, 6).................. $ .0373 $ .0360 $ .0311 $ .0267 $ .0207 $ .0187 $ .0186
Weighted-average common shares
outstanding -- diluted(5).... 1,373 1,343 1,338 1,320 1,304 1,398 1,371
Pre-tax profit margin.......... 24.5% 21.3% 19.9% 21.3% 10.2% 24.4% 25.0%
After-tax profit margin........ 14.9% 12.9% 12.0% 12.6% 6.8% 14.0% 15.1%
Total assets (at period end)... $34,322 $26,407 $20,297 $17,256 $13,125 $34,926 $27,801
Long-term debt (at period
end)......................... $ 518 $ 419 $ 433 $ 310 $ 275 $ 829 $ 474
Stockholders' equity (at period
end)......................... $ 2,576 $ 1,673 $ 1,376 $ 1,069 $ 815 $ 3,799 $ 2,171
Long-term debt to total
financial capital (long-term
debt plus stockholders'
equity)...................... 17% 20% 24% 22% 25% 18% 18%
Return on stockholders'
equity....................... 31% 27% 26% 29% 16% 27% 35%
</TABLE>
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All periods have been restated to reflect our merger with U.S. Trust
Corporation. Additionally, certain prior years' revenues and expenses have been
reclassified to conform to the 1999 presentation.
(1) 1997 includes charges for a litigation settlement of $24 million after-tax
($.02 per share for both basic and diluted earnings per share).
(2) 1995 includes U.S. Trust Corporation's restructuring charges of $87 million
after-tax ($.07 per share for both basic and diluted earnings per share).
(3) Revenues are presented net of interest expense.
(4) 1999 reflects an accounting change, which increased net income by $41
million ($.03 per share for both basic and diluted earnings per share), for
certain internal-use software development
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costs to conform with Statement of Position 98-1 issued by the American
Institute of Certified Public Accountants.
(5) All periods have been restated for the following common stock splits:
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DATE SPLIT DISTRIBUTED SPLIT RATIO
---------------------- -----------
<S> <C>
March 1, 1995............................................... 3 for 2
September 1, 1995........................................... 2 for 1
September 15, 1997.......................................... 3 for 2
December 11, 1998........................................... 3 for 2
July 1, 1999................................................ 2 for 1
May 30, 2000................................................ 3 for 2
</TABLE>
(6) Dividends declared per common share represent dividends declared prior to
our merger with U.S. Trust Corporation.
MARKET PRICES AND DIVIDENDS
Our common stock is traded on the New York Stock Exchange under the symbol
"SCH" as well as on the Boston, Cincinnati, Chicago, Pacific and Philadelphia
stock exchanges and a facility of the National Association of Securities
Dealers, Inc. The following table lists, in per share amounts, for the calendar
quarters indicated, the high and low sales prices and the cash dividends
declared during each quarterly period for our common stock:
<TABLE>
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DIVIDENDS
HIGH LOW DECLARED
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<S> <C> <C> <C>
1998:
First Quarter.................................. $ 9.32 $ 7.58 $.0089
Second Quarter................................. 8.89 6.58 .0089
Third Quarter.................................. 10.22 6.17 .0089
Fourth Quarter................................. 22.83 7.03 .0093
1999:
First Quarter.................................. 32.67 16.96 .0093
Second Quarter................................. 51.67 26.67 .0093
Third Quarter.................................. 37.67 21.33 .0093
Fourth Quarter................................. 31.17 17.96 .0094
2000:
First Quarter.................................. 44.75 22.46 .0093
Second Quarter................................. 40.58 24.00 .0094
Third Quarter.................................. 40.50 30.00 .0110
Fourth Quarter (through October 25, 2000)...... 35.63 27.00 .0110
</TABLE>
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Our price and dividend data reflect the following common stock splits:
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DATE SPLIT DISTRIBUTED SPLIT RATIO
---------------------- -----------
<S> <C>
December 11, 1998........................................... 3 for 2
July 1, 1999................................................ 2 for 1
May 30, 2000................................................ 3 for 2
</TABLE>
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SELLING STOCKHOLDERS
This prospectus relates to an aggregate of 15,000,000 shares of our common
stock which may be offered for sale by us from time to time to acquire one or
more businesses in negotiated transactions not involving any public offering.
This prospectus may be supplemented to furnish the information necessary for a
particular negotiated transaction and the registration statement of which this
prospectus is a part will be amended or supplemented, where appropriate, to
supply information concerning an acquisition. This prospectus also relates to
the offer for sale or other distribution of shares of our common stock by
persons who will acquire the shares in connection with the acquisitions of
businesses. The selling stockholders will be identified from time to time by
filing supplements to this prospectus.
PLAN OF DISTRIBUTION
This prospectus relates to 15,000,000 shares of our common stock that may
be offered and issued by us from time to time for acquisitions of other
businesses. The shares covered by this prospectus may be issued in exchange for
shares of capital stock or other assets representing an interest, direct or
indirect, in other companies or other entities, in exchange for assets used in
or related to the business of such entities or otherwise pursuant to the
agreements providing for the acquisitions.
The terms of the acquisitions and of the issuance of shares of our common
stock under acquisition agreements will generally be determined by direct
negotiations with the owners or controlling persons of the businesses,
properties or securities to be acquired or, in the case of entities that are
more widely held, through exchange offers to stockholders or documents
soliciting the approval of statutory mergers, consolidations or sales of assets.
It is anticipated that the shares of our common stock issued in any acquisition
will be valued at a price reasonably related to the market value of our common
stock either at the time an acquisition agreement is executed or at the time an
acquisition is consummated.
All expenses of this registration will be paid by us. It is not expected
that underwriting discounts or commissions will be paid by us in connection with
issuances of shares of common stock under this prospectus. However, finders'
fees or brokers' commissions may be paid from time to time in connection with
specific acquisitions, and the fees may be paid through the issuance of shares
of common stock covered by this prospectus. Any person receiving a fee may be
deemed to be an underwriter within the meaning of the Securities Act.
Some stockholders may use this prospectus to sell or distribute some or all
of the shares of our common stock, which they acquired in our acquisitions of
businesses. These sales or distributions may be through underwriters, dealers or
brokers or other agents or directly to one or more purchasers in transactions on
the New York Stock Exchange, in privately negotiated transactions, in the
over-the-counter market, in brokerage transactions or in a combination of the
preceding. These transactions may be effected by the selling stockholders at
market prices prevailing at the time of sale, at prices related to the
prevailing market prices, at negotiated prices or at fixed prices, which may be
changed. Brokers, dealers, agents or underwriters participating in the
transactions as agents may receive compensation in the form of discounts,
concessions or commissions from the selling stockholders (and, if they act as
agent for the purchaser of the shares, from the purchaser). Discounts,
concessions or commissions for a particular broker, dealer, agent or underwriter
might be in excess of those customary in the type of transaction involved.
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This prospectus also may be used, with our consent, by persons acquiring
shares from the parties to whom we originally issued the shares pursuant to this
prospectus, and who wish to offer and sell the shares under circumstances
requiring or making desirable the use of this prospectus.
If required, we will file, during any period in which offers or sales are
being made, one or more supplements to this prospectus to list the names of
selling stockholders and any other material information with respect to the plan
of distribution not previously disclosed.
The selling stockholders and any underwriters, brokers, dealers or agents
that participate in the distribution may be deemed to be "underwriters" within
the meaning of the Securities Act. Any discounts, commissions or concessions
received by any underwriters, brokers, dealers or agents might be considered
underwriting discounts and commissions under the Securities Act. We cannot
presently estimate the amount of any compensation.
We will pay all of the expenses related to this registration of our shares
of common stock. Each selling stockholder may indemnify any broker, dealer,
agent or underwriter that participates in transactions involving sales of the
shares against liabilities, including liabilities arising under the Securities
Act.
If shares of our common stock are sold in an underwritten offering, the
shares may be acquired by the underwriters for their own account and may be
further resold from time to time in one or more transactions, including
negotiated transactions, at market prices prevailing at the time of sale, at
prices related to the prevailing market prices, at negotiated prices or at fixed
prices. The names of the underwriters for any offering and the terms of the
transactions, including any underwriting discounts, concessions or commissions
and other items constituting compensation of the underwriters, brokers and
dealers, if any, will be listed, if appropriate, in a supplement to this
prospectus relating to the offering. Any public offering price and any
discounts, concessions or commissions allowed or reallowed or paid to brokers
and/or dealers may be changed from time to time. Unless included in a supplement
to this prospectus, the obligations of the underwriters to purchase the shares
of common stock will be subject to conditions precedent and the underwriters
will be obligated to purchase all of the shares specified in the supplement if
any such shares are purchased.
Selling stockholders also may resell all or a portion of the shares they
receive in open market transactions in reliance upon Rule 144 under the
Securities Act, provided that they meet its criteria and conform to its
requirements.
DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock consists of 2,000,000,000 shares of common
stock, par value $0.01 per share, of which, as of October 25, 2000,
1,383,592,650 shares were issued and outstanding, and 9,940,000 shares of
preferred stock, par value $0.01 per share, of which, as of October 25, 2000, no
shares were issued and outstanding.
COMMON STOCK. Each holder of our common stock is entitled to one vote per
share for the election of directors and for all other matters to be voted upon
by our shareholders. Our certificate of incorporation does not provide for
cumulative voting. Our board of directors is divided into three classes.
Holders of shares of our common stock are entitled to receive dividends out
of funds legally available for distribution if and when declared by the board of
directors, and, subject to the rights of any preferred stock that may be
outstanding in the future, to share ratably in the assets legally available for
distribution to our shareholders in the event of our liquidation,
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<PAGE> 11
dissolution or winding-up. Holders of our common stock have no preemptive,
subscription, redemption or conversion rights. The shares being sold pursuant to
this prospectus are fully paid and nonassessable.
PREFERRED STOCK. Our board of directors has the power, without further
action by the shareholders, to issue preferred stock as a class without series,
or in one or more series, and to fix the voting rights, designations,
preferences and relative, participating, optional and other special rights, and
the qualifications, limitations and restrictions applicable to the preferred
stock.
The rights of holders of our common stock as described above will be
subject to, and may be adversely affected by, the rights of holders of any
preferred stock that may be issued in the future. The board of directors may
cause shares of preferred stock to be issued to obtain additional financing; in
connection with acquisitions; to our and our subsidiaries' officers, directors
and employees pursuant to benefit plans or otherwise; and for other proper
corporate purposes. Shares of preferred stock issued by us could, under certain
circumstances, make it more difficult for a third party to gain control of us.
We have no current plans or agreements to issue any series of preferred stock in
the future.
LEGAL MATTERS
Howard, Rice, Nemerovski, Canady, Falk & Rabkin, A Professional
Corporation, will pass on the legality of our common stock offered in this
document. Directors of that firm beneficially own an aggregate of less than 1%
of our common stock.
EXPERTS
The audited consolidated financial statements and the related consolidated
financial statement schedules of The Charles Schwab Corporation and subsidiaries
as of December 31, 1999 and 1998 and for each of the three years in the period
ended December 31, 1999 incorporated in this prospectus by reference from The
Charles Schwab Corporation's Current Report on Form 8-K filed on July 18, 2000
have been audited by Deloitte & Touche LLP, independent auditors, as stated in
their report, dated February 16, 2000 (July 17, 2000 as to Notes 1, 17 and 21),
which is incorporated by reference in this prospectus, and have been so
incorporated in reliance upon the report of Deloitte & Touche LLP given upon
their authority as experts in accounting and auditing. Their report on the
consolidated financial statements expresses an unqualified opinion, references
the report of other auditors and includes an explanatory paragraph related to an
accounting change to conform with Statement of Position 98-1.
The audited consolidated financial statements and the related consolidated
financial statement schedules of U.S. Trust Corporation and its subsidiaries as
of December 31, 1999 and 1998 and for each of the three years in the period
ended December 31, 1999 incorporated in this prospectus by reference from The
Charles Schwab Corporation's Current Report on Form 8-K filed on July 18, 2000
have been audited by PricewaterhouseCoopers LLP, independent accountants, as
stated in their report, which are incorporated by reference in this prospectus,
and have been so incorporated in reliance upon the reports of
PricewaterhouseCoopers LLP given upon their authority as experts in accounting
and auditing.
-------------------------
No dealer, salesperson or other person has been authorized to give any
information or to make any representations other than those contained in or
incorporated by reference in this
10
<PAGE> 12
prospectus in connection with the offer made by this prospectus and, if given or
made, such information or representations must not be relied upon as having been
authorized by us or the selling stockholders, if any. Neither the delivery of
this prospectus nor any sale made using this prospectus shall, under any
circumstances, create any implication that there has not been any change in the
facts included in this prospectus or in our affairs since the date of this
prospectus. This prospectus does not constitute an offer or solicitation by
anyone in any jurisdiction in which an offer or solicitation is not authorized
or in which the person making the offer or solicitation is not qualified to do
so or to anyone to whom it is unlawful to make the offer or solicitation.
11
<PAGE> 13
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our Fourth Restated Certificate of Incorporation provides that, pursuant to
Delaware law, our directors will not be personally liable to us or our
stockholders for monetary damages arising from a breach or alleged breach of a
director's fiduciary duty, with specific exceptions. The exceptions relate to
(i) any breach of the director's duty of loyalty to us or our stockholders, (ii)
acts or omissions that are not in good faith or that involve intentional
misconduct or a knowing violation of law, (iii) approval by a director of
certain unlawful dividend payments, distributions or stock redemptions or
repurchases or (iv) engaging in a transaction from which a director derives an
improper personal benefit. Among the types of breaches for which directors will
not be liable are those resulting from negligent or grossly negligent behavior.
Our Second Restated Bylaws also provide for the indemnification of both our
directors and officers within the limitations provided by Delaware law. Section
145 of the Delaware General Corporation Law authorizes indemnification of
directors and officers for actions taken in good faith and in a manner such
person reasonably believed to be in, or not opposed to, our best interests. This
provision is sufficiently broad to permit indemnification under certain
circumstances for liabilities (and for reimbursement of expenses incurred)
arising under the Securities Act of 1933, as amended. We have entered into
indemnity agreements with our directors that contain provisions that are in some
respects broader than the specified indemnification provisions contained in
Delaware law.
We have obtained directors' and officers' liability and corporate
reimbursement insurance covering all of our officers and directors and the
officers and directors of our subsidiaries and providing for the reimbursement
of amounts paid by us or our subsidiaries to directors and officers pursuant to
indemnification arrangements, subject to certain deductibles and coinsurance
provisions.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
a. Exhibits.
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT TITLE
----------- -------------
<C> <S>
3.1 Fourth Restated Certificate of Incorporation, effective July
30, 1999, of the Registrant, which includes amendments
through May 20, 1999, filed as Exhibit 3.10 to the
Registrant's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1999 and incorporated herein by
reference.
3.2 Second Restated Bylaws, as amended on September 22, 1998, of
the Registrant filed as Exhibit 3.9 to the Registrant's Form
10-Q for the quarter ended September 30, 1998 and
incorporated herein by reference.
5.1* Opinion of Howard, Rice, Nemerovski, Canady, Falk & Rabkin,
A Professional Corporation.
23.1 Consent of Deloitte & Touche LLP, independent auditors.
23.2 Consent of PricewaterhouseCoopers LLP, independent
accountants.
</TABLE>
II-1
<PAGE> 14
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT TITLE
----------- -------------
<C> <S>
23.3* Consent of Howard, Rice, Nemerovski, Canady, Falk & Rabkin,
A Professional Corporation (contained in its opinion filed
as Exhibit 5.1 to this Registration Statement).
24.1 Powers of Attorney (included on signature page).
</TABLE>
-------------------------
* To be filed by amendment.
b. Financial Statement Schedules.
None.
ITEM 22. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information in this
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in this Registration Statement
or any material change to such information in this Registration
Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the registration statement is on Form S-3, Form S-8 or Form F-3 and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in this
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act that is incorporated by
II-2
<PAGE> 15
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be initial bona fide
offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
(d) The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
(e) The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
(f) The undersigned Registrant hereby undertakes as follows: that prior to
any public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
Registrant undertakes that such reoffering prospectus will contain the
information called for by the applicable registration form with respect to
reofferings by persons who may be deemed underwriters, in addition to the
information called for by the other items of the applicable form.
(g) The Registrant undertakes that every prospectus: (i) that is filed
pursuant to paragraph (f) immediately preceding, or (ii) that purports to meet
the requirements of Section 10(a)(3) of the Securities Act and is used in
connection with an offering of securities subject to Rule 415, will be filed as
a part of an amendment to the registration statement and will not be used until
such amendment is effective, and that, for purposes of determining any liability
under the Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at the time shall be deemed to be the initial
bona fide offering thereof.
II-3
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of San Francisco, California
on this 26th day of October, 2000.
THE CHARLES SCHWAB CORPORATION
By: /s/ CHRISTOPHER V. DODDS
-----------------------------------
Christopher V. Dodds
Executive Vice President and
Chief Financial Officer
POWERS OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints each of Charles R. Schwab, David S.
Pottruck and Christopher V. Dodds, his or her true and lawful attorney-in-fact
and agent, each with full power of substitution and resubstitution, for and in
his or her name, place and stead, in any and all capacities, to sign and execute
on behalf of the undersigned, any and all amendments (including post-effective
amendments) to this Registration Statement (and to any Registration Statement
filed pursuant to Rule 462(b) under the Securities Act), and to file the same,
with all exhibits thereto, and all other documents in connection therewith, with
the Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection with any such amendments as
fully to all intents and purposes as he or she might or could do in person, and
hereby does ratify and confirm all that said attorney-in-fact and agent, or his
or her other substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on October 26, 2000.
<TABLE>
<CAPTION>
NAME AND SIGNATURE TITLE
------------------ -----
<C> <C> <S>
/s/ CHARLES R. SCHWAB Chairman, Co-Chief
--------------------------------------------- Executive Officer and
Charles R. Schwab Director (principal
executive officer)
/s/ DAVID S. POTTRUCK Co-Chief Executive
--------------------------------------------- Officer, President and
David S. Pottruck Director (principal
executive officer)
/s/ CHRISTOPHER V. DODDS Executive Vice President
--------------------------------------------- and Chief Financial
Christopher V. Dodds Officer (principal
financial and accounting
officer)
/s/ NANCY H. BECHTLE Director
---------------------------------------------
Nancy H. Bechtle
</TABLE>
II-4
<PAGE> 17
<TABLE>
<CAPTION>
NAME AND SIGNATURE TITLE
------------------ -----
<C> <C> <S>
/s/ C. PRESTON BUTCHER Director
---------------------------------------------
C. Preston Butcher
/s/ DONALD G. FISHER Director
---------------------------------------------
Donald G. Fisher
/s/ ANTHONY M. FRANK Director
---------------------------------------------
Anthony M. Frank
/s/ FRANK C. HERRINGER Director
---------------------------------------------
Frank C. Herringer
/s/ JEFFREY S. MAURER Director
---------------------------------------------
Jeffrey S. Maurer
/s/ STEPHEN T. MCLIN Director
---------------------------------------------
Stephen T. McLin
/s/ CONDOLEEZZA RICE Director
---------------------------------------------
Condoleezza Rice
/s/ ARUN SARIN Director
---------------------------------------------
Arun Sarin
/s/ H. MARSHALL SCHWARZ Director
---------------------------------------------
H. Marshall Schwarz
/s/ GEORGE P. SHULTZ Director
---------------------------------------------
George P. Shultz
/s/ ROGER O. WALTHER Director
---------------------------------------------
Roger O. Walther
</TABLE>
II-5
<PAGE> 18
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
3.1 Fourth Restated Certificate of Incorporation, effective July
30, 1999, of the Registrant, which includes amendments
through May 20, 1999, filed as Exhibit 3.10 to the
Registrant's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1999 and incorporated herein by
reference.
3.2 Second Restated Bylaws, as amended on September 22, 1998, of
the Registrant filed as Exhibit 3.9 to the Registrant's Form
10-Q for the quarter ended September 30, 1998 and
incorporated herein by reference.
5.1* Opinion of Howard, Rice, Nemerovski, Canady, Falk & Rabkin,
A Professional Corporation.
23.1 Consent of Deloitte & Touche LLP, independent auditors.
23.2 Consent of PricewaterhouseCoopers LLP, independent
accountants.
23.3* Consent of Howard, Rice, Nemerovski, Canady, Falk & Rabkin,
A Professional Corporation (contained in its opinion filed
as Exhibit 5.1 to this Registration Statement).
24.1 Powers of Attorney (included on signature page).
</TABLE>
-------------------------
* To be filed by amendment.
