Sample Business Contracts

Employment Agreement - Charles Schwab Corp. and Charles R. Schwab

Employment Forms

  • Employment Agreement. Employers can customize an employment agreement that states the salary, benefits, working hours and other important provisions for their new or existing employee.
  • Consulting Agreement. Answer simple questions to build a contract with a consultant. Specify the services rendered, when payment is due, as well as IP rights.
  • Commission Agreement. Employers who compensate their sales employees based on commissions can prepare an agreement to reduce misunderstandings by specifying the base salary and how commissions are calculated.
  • Executive Employment Agreement. Companies may offer their business executives a contract that is different from the one provided to their regular employees. Executive employment agreements may be more complex because the compensation structure may include a combination of salary and commissions, provide for bonuses based on sales, stock or other financial targets, and include non-compete, confidentiality and severance provisions.
  • Sales Representative Contract. Independent sales representatives offer companies the potential to increase the sale of products or services without the burden of increasing headcount. Both parties should understand how commissions are calculated, when commissions will be paid, as well as how the representative will treat confidential information from the company and whether the representative may also sell a competing line of products or services.
  • More Employment Agreements

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                              EMPLOYMENT AGREEMENT

         This  Agreement  is made and  entered  into as of March 31, 1995 by and
between The Charles  Schwab  Corporation,  a Delaware  Corporation  (hereinafter
referred to as the "Company"), and Charles R. Schwab, an individual (hereinafter
referred to as the "Executive") effective March 31, 1995.


         WHEREAS, the Company desires to reward the Executive for his continuing
contribution  to the Company and provide  additional  security for the Executive
and to provide an inducement to the Executive to remain with the Company and not
to engage in competition with it.

         NOW  THEREFORE,  in  consideration  of the  mutual  obligations  herein
contained,  the parties hereto,  intending to be legally bound hereby,  covenant
and agree as follows:


         (a)  The Company hereby employs the Executive to render services to the
              Company  in the  positions  of  Chairman  of the  Board  and Chief
              Executive  Officer,  in the capacity defined in the By-laws of the
              Company,  as may be amended from time to time. The Executive shall
              perform such duties  commensurate with his position and shall have
              full authority and  responsibility,  subject to the control of the
              Board  of  Directors,   for  the  overall   strategic   direction,
              management, and leadership of the Company.

         (b)  Throughout the term of this Agreement,  the Executive shall devote
              his full business time and undivided attention to the business and
              affairs of the Company and its subsidiaries, except for reasonable
              vacations and except for illness or incapacity, but nothing in the
              Agreement  shall preclude the Executive  from devoting  reasonable
              periods  required  for  serving,  as  appropriate,  on  Boards  of
              Directors of other companies,  and from engaging in charitable and
              public  service   activities   provided  such  activities  do  not
              materially  interfere  with  the  performance  of his  duties  and
              responsibilities under this Agreement.

2.       TERM

         This  Agreement  shall  commence on March 31, 1995,  and shall continue
         through March 31, 2000,  subject to the terms and conditions herein set
         forth.  Beginning on March 31, 1996, and on each subsequent anniversary
         of this  date,  one year  shall be added to the term of the  Agreement,
         unless,  prior to such  anniversary,  the Company or the  Executive has
         notified  the other party  hereto that such  extension  will not become


         For  services  rendered  by the  Executive  during  the  term  of  this
         Agreement,  and for his  performance of all  additional  obligations of
         employment,  the Company  agrees to pay the Executive and the Executive
         agrees  to  accept  the  following  salary,  other  compensation,   and

         (a)  Base Salary. During the term of this Agreement,  the Company shall
              pay the Executive in periodic  installments,  a base salary at the
              annual rate of $800,000,  such base salary to be reviewed on March
              31, 1996, and on each subsequent anniversary, taking into account,
              among other things, individual performance,  competitive practice,
              and general business conditions.

         (b)  Annual  Incentive.  In  addition  to the base  salary  provided in
              Section 3(a) above,  the Executive shall be eligible to receive an
              annual  incentive  award based upon the  Company's  attainment  of
              pre-established   performance   targets   relative  to   specified
              performance standards. The performance standards upon which annual
              incentive  payments  will be earned  shall be  defined  to include
              consolidated  pretax profit  margin  (defined as net income before
              taxes,  divided by net revenue) and annual net revenue  percentage
              growth of the Company.

              For  each  fiscal  year  during  the term of this  Agreement,  the
              Executive's  incentive opportunity shall be computed as the amount
              of total cash  compensation  earned pursuant to the  formula-based
              matrix,  which  shall be  adopted  each  year by the  Compensation
              Committee  of the Board of  Directors  of the  Company,  minus the
              Executive's actual base salary paid during that year. For the 1995
              fiscal  year,  the target total  annual cash  compensation  amount
              (including  base salary) is $3,500,000;  therefore,  the incentive
              target is $2,700,000 for achieving  specified pretax profit margin
              and revenue growth objectives.

              The formula-based matrix, as amended at the sole discretion of the
              Board of Directors,  shall be the sole basis for  determining  the
              Executive's  annual  incentive  award.  For each calendar year for
              which this  Agreement  is in effect,  beginning  with the calendar
              year 1996, the interior values in the  formula-based  matrix shall
              be increased by a fraction, based on the U.S. Consumer Price Index
              (for  all   consumers,   as  published  by  the  Bureau  of  Labor
              Statistics);  provided  that no interior  value shall be increased
              above $12 million.  The  fractional  increase shall be the CPI for
              that  year  divided  by  the  CPI  for  calendar  year  1995.  The
              Compensation  Committee  of the Board  shall  annually  review and
              approve the performance  standards and targets with respect to the
              Executive's incentive opportunity, which review and approval shall
              be  completed no later than the 90th day of the  Company's  fiscal
              year for which such incentive opportunity may be earned.

         (c)  Long-Term  Incentive.  The Executive  will be considered for stock
              options in  accordance  with the  Company's  1992 Stock  Incentive
              Plan,  as  amended,   or  any  successor  thereto  ("Stock  Option
              Program")  and any other  long-term  incentives  offered  to other
              executives  of the  Company  from time to time  during the term of
              this Agreement.

         (d)  Benefits. The Executive shall be entitled to participate,  as long
              as he is an  employee  of  the  Company,  in  any  and  all of the
              Company's  present or future  employee  benefit  plans,  including
              without  limitation  pension  plans,  thrift  and  savings  plans,
              insurance plans, and other benefits that are generally  applicable
              to the Company's executives;  provided,  however, that the accrual
              and/or  receipt by the Executive of benefits under and pursuant to
              any  such  present  or  future  employee  benefit  plan  shall  be
              determined by the provisions of such plan.

         (e)  Perquisites.  The  Executive  will  be  provided  such  additional
              perquisites  as are customary  for senior level  executives of the
              Company  provided that each perquisite is approved by the Board of

         (f)  Business  Expenses.  The  Executive  will  be  reimbursed  for all
              reasonable expenses incurred in connection with the conduct of the
              Company's   business  upon   presentation   of  evidence  of  such
              expenditures,   including  but  not  limited  to  travel  expenses
              incurred  by the  Executive  in  the  performance  of his  duties,
              security for the Executive,  his family, and principal  residence,
              professional organization dues, and club initiation fees, dues and

         (g)  Any annual  incentive award earned by Executive under this Section
              3 shall be paid as soon as reasonably  practical  after the end of
              the Company's fiscal year end; provided, however, that if any such
              payment  would be  nondeductible  to the  Company  under  Internal
              Revenue Code Section 162(m), then any nondeductible  amounts shall
              be deferred from year to year until the payment of such amounts is
              deductible by the Company.


         (a)  Resignation.  Notwithstanding Section 2 hereof, this Agreement may
              be  terminated  by the  Executive  at any time upon six (6) months
              written notice of resignation by the Executive to the Company, and
              in such  event any  payments  pursuant  to Section 3 and 4 of this
              Agreement shall automatically  terminate (except for the Company's
              obligations   relation   to   voluntary   termination   under  its
              compensation  and benefit plans,  as specified in the various plan
              documents,  and the  Executive's  obligations set forth in Section
              5).  Subsequent  payments may be made to the Executive as provided
              pursuant to Section 6 of this Agreement.

         (b)  Termination  by the Company Other Than for Cause.  Termination  of
              the Executive by the Company  other than for Cause,  as defined in
              Section  4(c) below,  shall cause the Company to make  payments to
              the Executive hereunder pursuant to the provisions of this Section
              4(b).  Such a  termination  shall  require  at  least  sixty  (60)
              business  days'  prior  notice  and  must be  signed  by at  least
              three-fourths  (3/4) of all the non-employee  members of the Board
              of Directors.

              Notwithstanding anything to the contrary contained in Stock Option
              Program  or  any  agreement  or  document  related  thereto,   the
              Executive's  total  outstanding and unvested shares and/or options
              under the Stock  Option Plan shall at the date of  termination  be
              deemed to be 100%  vested.  No further  grants of stock or options
              shall be made under the Plan after such termination.

              With respect to base salary and annual incentive compensation, the
              Company's  obligation shall be to pay the Executive,  according to
              the terms of this  Agreement and for a period of  thirty-six  (36)
              months, an amount equal to the annual salary and incentive paid to
              the Executive [at the bonus level for the year prior to which such
              termination occurs unless performance of the Company as defined in
              the matrix  referenced  in  Section  3(b) is better in the year of
              termination,  in  which  event  such  bonus  shall be based on the
              matrix  calculation  as  described in Section  3(b)],  such annual
              amounts to be paid in equal monthly installments.

              During the 36-month  severance payment period, the Executive shall
              be entitled to all payments,  benefits and perquisites as provided
              for in this Agreement,  and office space and  secretarial  support
              comparable to that provided to the Executive during his employment
              by the Company.  The  Executive  shall be entitled to all payments
              and  benefits  as  provided  for in this  Section  for a period of
              thirty-six (36) months.

              If the Board of  Directors  fails to reelect  the  Executive  to a
              position  comparable  to that  described  in Section  1(a) of this
              Agreement or,  without  terminating  the  Executive's  employment,
              removes the  Executive  from his position  for reasons  other than
              Cause,   substantively   reduces   the   Executive's   duties  and
              responsibilities,   reduces  his  pay  and/or   benefits,   forces
              relocation,  or requires excessive travel, then the Executive may,
              by notice to the  Company,  treat  such  action  or  removal  as a
              termination  of the  Executive  by the  Company  pursuant  to this
              Section 4(b).

              In the event of the Executive's death before the completion of the
              payments  pursuant to this Section 4(b),  the  remaining  payments
              hereunder  shall  be  made  to the  beneficiary  or  beneficiaries
              designated  by the  Executive to the Company in writing or, absent
              such a designation, to his estate.

         (c)  Termination by the Company for Cause.  The Company  may  terminate
              the   Executive's  employment  for  Cause  if  the  Executive  has
              committed  a  felonious act, or the Executive, in carrying out his
              duties  hereunder  has been willfully and grossly negligent or has
              committed willful and gross misconduct resulting, in  either case,
              in  material  harm  to  the  Company.  An act or omission shall be
              deemed "willful" only if done, or omitted to be done, in bad faith
              and without reasonable belief  that it was in the best interest of
              the Company.  In the event of termination of  the Executive by the
              Company  for Cause,  the  Executive shall no longer be entitled to
              receive  any  payments or any other rights or  benefits under this

         (d)  Disability. In the event the Executive's employment terminates due
              to  total  and  permanent  disability  (for the  purposes  of this
              Agreement  "disability"  shall  have the same  meaning  as applies
              under the Company's  Long-Term  Disability Plan), he will continue
              to  receive  the  same  base  salary  and  benefits  which  he was
              receiving  prior  to such  disability  for 36  months,  offset  by
              payments  under  the  Company's  Long-Term   Disability  Plan.  In
              addition,  he shall receive a pro-rated annual  incentive  payment
              for the year in which is  employment is  terminated,  based on the
              formula described in Section3(b).

         (e)  Death. In the event of the death of the Executive  during the term
              of this Agreement,  the rights and benefits under employee benefit
              plans and programs of the Company,  including life insurance, will
              be determined in accordance  with the terms and conditions of such
              plans and  programs  as in  effect  on his date of death.  In such
              event,  the  Company  shall  pay in a lump sum to the  Executive's
              estate an amount  equal to five times the then current rate of the
              Executive's base salary, and no further payments shall be required
              pursuant to this Agreement.

         (f)  Change in Control.  In  the  event  of  a change in control of the
              Company,  as set forth below, the Executive may at any time and in
              his  complete  discretion  during  a  24-month  period following a
              change  in  control,  elect  to  terminate his employment with the
              Company.  For  purposes  of this  Agreement, a "change in control"
              shall  mean  a  change  in  ownership of the Company that would be
              required  to  be  reported  in  response to Item 1(a) of a Current
              Report on Form  8-K pursuant to the Securities and Exchange Act of
              1934  ("Exchange Act"),  as  in  effect on the date hereof, except
              that any  merger,  consolidation  or  corporate  reorganization in
              which  the  owners  of  the  capital stock entitled to vote in the
              election  of  directions  of the  Employer or the Company ("Voting
              Stock")  prior  to  said  combination,  own  75%  or  more of  the
              resulting entity's Voting Stock shall not be considered  a  change
              in control for the purposes  of  this  Agreement;  provided  that,
              without  limitation,  such a  change in control shall be deemed to
              have  occurred  if  (i)  any  "person"  (as  that term  is used in
              Sections  13(d)  and  14(d)(2) of  the Exchange Act), other than a
              trustee or other fiduciary holding  securities under an   employee
              benefit plan of the Company  is or becomes  the  beneficial  owner
              (as that is used in Section 13(d) of the Exchange  Act),  directly
              or indirectly, or 30% or more of the  Voting  Stock of the Company
              or its successor; or (ii) during  any  period  of  two consecutive
              years,  individuals who at the beginning of such period constitute
              the Board of Directors  of  the  Company ("Incumbent Board") cease
              for  any  reason  to  constitute  at  least  a  majority  thereof;
              provided, however,  that  any  person  becoming a  director of the
              Company  after  the  beginning  of  the  period whose election was
              approved  by  a  vote of at least  three-quarters of the directors
              comprising the incumbent Board shall, for  the purposes hereof, be
              considered as though he were a member of  the  incumbent Board; or
              (iii) there  shall  occur  the sale of all or substantially all of
              the  assets  of  the  Company.  Notwithstanding  anything  in  the
              foregoing  to  the  contrary,  no change in control of the Company
              shall be deemed to have occurred for purposes of this Agreement by
              virtue of any  transaction  which  results  in the Executive, or a
              group of persons which includes the Executive acquiring,  directly
              or indirectly,  more than 30 percent of the  combined voting power
              of the Company's  outstanding  securities.  If  any  of the events
              constituting  a change in  control shall  have occurred during the
              term  hereof,  the  Executive shall  be entitled  to the privilege
              provided in subparagraph (f) herein to terminate his employment.

              Any termination by the Executive pursuant to this Section shall be
              communicated by a written "Notice of Termination."

              If,  following a change in control,  the  Executive  shall for any
              reason  voluntarily  terminate his employment  during the 24-month
              period  following a change in control,  then the Company shall pay
              base salary up to the date of  termination  and a prorated  annual
              incentive  award  based on the  calculated  bonus  for the year in
              which termination  occurred, as defined in Section 3(b), in a lump
              sum on the thirtieth (30th) day following the Date of Termination.


         (a)  As a  material  inducement  to the  Company's  entering  into this
              Agreement,  the  Executive  agrees  that  during  the term of this
              Agreement,  he will not become  associated with, render service to
              or engage in any other business  competitive  with any existing or
              contemplated  business of the Company or its subsidiaries,  except
              that the Executive may serve as a member of the board of directors
              of other  companies or  organizations,  provided  that he provides
              written notice to the Board of each significant activity, and that
              he   will  do   nothing   inconsistent   with   his   duties   and
              responsibilities to the Company.

         (b)  If the  Executive  voluntarily  resigns  from  the  employ  of the
              Company prior to the expiration of the term of this Agreement,  he
              specifically agrees that for a period of five (5) years commencing
              with the date of his voluntary  resignation  he will not engage in
              or perform any services either on a full-time or a part-time or on
              a consulting or advisory basis for any business  organization that
              is in  competition  with the Company at the time such services are
              being performed by Executive, with the exception that this Section
              5(b)  shall  not  apply  in  the  event  the   Executive   resigns
              voluntarily  following  a change  in  control  of the  Company  as
              defined in Section 4(f).

         (c)  The Executive will not at any time,  whether while employed by the
              Company or after  voluntary or  involuntary  termination  or after
              retirement,  reveal to any  person,  firm or  entity  any trade or
              business   secrets  or   confidential,   secret,   or   privileged
              information  about the business of the Company or its subsidiaries
              or affiliates except as shall be required in the proper conduct of
              the Company's business.


         Following a voluntary  termination  of  employment  pursuant to Section
         4(a) and 4(f), or an involuntary  termination subsequent to a change in
         control of the  Company,  for any  reason but during a 24-month  period
         following  a change in control as  defined  in  Section4(f),  after the
         Executive ceases to render services as the Chief Executive Officer,  he
         may in his sole discretion  elect to act as a consultant to the Company
         for a period  of five (5)  years.  During  this  period  of  consulting
         services,  the Executive shall, at reasonable times and places,  taking
         into account any other  employment or activities he may then have, hold
         himself  available to consult with and advise the officers,  directors,
         and other  representatives of the Company. As compensation thereof, the
         Executive  shall be  entitled to  receive,  and  Company  shall pay, an
         annual  amount equal to  seventy-five  percent (75%) of his annual base
         salary  rate  in  effect   immediately  prior  to  his  termination  of
         employment,  but in no event an annual amount to exceed $1,000,000, for
         each year of such period, payable in equal monthly installments.


         All  amounts  payable  hereunder  which are or may  become  subject  to
         withholding  under pertinent  provisions of law or regulation  shall be
         reduced for applicable  income and/or  employment  taxes required to be


         (a)  This Agreement  supersedes any prior agreements or understandings,
              oral or written,  with respect to  employment of the Executive and
              constitutes the entire Agreement with respect  thereto;  provided,
              however,  that  nothing  contained  herein  shall  supercede  that
              certain  Assignment and License Agreement entered into as of March
              31,  1987,  as  amended.  This  Agreement  cannot  be  altered  or
              terminated orally and may be amended only by a subsequent  written
              agreement  executed by both of the  parties  hereto or their legal
              representatives,  and any material amendment must be approved by a
              majority of the voting shareholders of the Company.

         (b)  This Agreement  shall  be governed by and construed in  accordance
              with the laws of the State of California.

         (c)  This  Agreement  shall  be  binding  upon and  shall  inure to the
              benefit of the Company and its  successors  and  assigns.  In that
              this  constitutes  a  personal  service  agreement,  it may not be
              assigned by the  Executive  and any  attempted  assignment  by the
              Executive in violation of this covenant shall be null and void.

         (d)  For  the  purpose  of  this  Agreement,   the  phrase  "designated
              beneficiary  or  beneficiaries"  shall include the estates of such
              beneficiaries  in the event of their  death  before the receipt of
              all  payments  under this  Agreement  and shall also  include  any
              alternate or successor beneficiaries  designated in writing to the
              Company by the Executive.

         (e)  The  invalidity  or  unenforceability  of any  provision  of  this
              Agreement shall not affect the validity or  enforceability  of any
              other provisions, which shall remain in full force and effect.

         (f)  The  Section  and  Paragraph  headings  contained  herein  are for
              reference  purposes  only  and  shall  not in any way  affect  the
              meanings or interpretation of this Agreement.

         (g)  Any dispute or  controversy  arising under or in  connection  with
              this  Agreement  shall  be  settled  exclusively  by  arbitration,
              conducted  before a panel of  arbitrators  in accordance  with the
              rules of the  American  Arbitration  Association  then in  effect.
              Judgement  may be  entered on the  arbitrators  award in any court
              having  jurisdiction.  The  expense of such  arbitration  shall be
              borne by the Company.

         (h)  Any notices, requests or other communications provided for by this
              Agreement  shall  be  sufficient  if in  writing  and if  sent  by
              registered or certified  mail to the Executive at the last address
              he has filed in writing  with the  Company  or, in the case of the
              Company, at its principal offices.

              IN WITNESS  WHEREOF,  the parties have executed  this Agreement on
         the day and year first above written.


By: /s/ Mary B. Templeton         By: /s/ Luis E. Valencia
    -----------------------           ------------------------------------------
    Corporate Secretary        Title: Executive Vice President - Human Resources
                           Executive: /s/ Charles R. Schwab
                                      Charles R. Schwab


                                                                                                             EXHIBIT A

                                        Performance Standards and Target Incentive Matrix ($000)

                                                   Pre-Tax Profit Margin Percent*

                           than 7%        7%        10%        13%       15%        17%       20%       23%        25%
                    30%       $800    $1,625     $3,115    $5,120     $6,300    $7,415    $8,925    $10,950   $12,000
   Percent          25%        800     1,475      2,420     4,175      5,120     5,930     7,145      8,765     9,575
Annual Net          20%        800     1,340      1,880     3,500      4,175     4,715     6,200      7,550     8,360
   Revenue          15%        800     1,205      1,610     2,960      3,500     4,175     5,120      6,200     7,145
    Growth          10%        800     1,070      1,475     2,150      2,960     3,500     4,310      5,390     6,200
Over Prior           5%        800       900      1,070     1,475      2,150     2,960     3,500      4,590     5,525
      Year           0%        800       800        800     1,070      1,475     2,150     2,960      3,500     4,715
             (5%) to 0%        800       800        800       800        800     1,475     2,150      2,960     3,500
         less than (5)%        800       800        800       800        800       800       800        800       800

    *  All dollar amounts shown in the matrix are in thousands (000).

    In the matrix above,  where the value in any year is shown at an amount
    less than the  Executive's  actual base salary for that year, his total
    cash compensation  shall be no less than and no greater than his actual
    base salary.  If the Company's actual financial results are between the
    values shown here,  payments  earned will be calculated on the basis of
    an interpolated result. Pre-tax profit margin shall be determined on an
    LBO-adjusted basis.