Document:

Exhibit

Exhibit 10.362

THE CHARLES SCHWAB CORPORATION

DIRECTORS’ DEFERRED COMPENSATION PLAN II

(Effective December 9, 2004)
(Amended and Restated December 12, 2007)
(Amended and Restated October 23, 2008)
(Amended and Restated April 24, 2013)
	
			
	 
	 
	 

	 
	 
	 

	 
	TABLE OF CONTENTS

	Section
	 
	Page

	 
	 
	 

	Article I.
	   Purpose
	1

	1.1
	Establishment of the Plan
	1

	1.2
	Purpose of the Plan
	1

	Article II.
	   Definitions
	1

	2.1
	Definitions
	1

	2.2
	Gender and Number
	3

	Article III.
	   Administration
	3

	3.1
	Committee and Administrator
	3

	Article IV.
	   Participants
	3

	4.1
	Participants
	3

	Article V.
	   Deferrals
	3

	5.1
	Deferrals
	3

	5.2
	Timing of Elections
	3

	5.3
	Deferral Procedures
	4

	5.4
	Election of Time and Manner of Payment
	4

	5.5
	Accounts and Earnings
	5

	5.6
	Maintenance of Accounts
	5

	5.7
	Change in Control
	5

	5.8
	Payment of Deferred Amounts
	7

	5.9
	Payment on Certain Events
	7

	Article VI.
	   General Provisions
	8

	6.1
	Unfunded Obligation
	8

	6.2
	Informal Funding Vehicles
	8

	6.3
	Beneficiary
	8

	6.4
	Incapacity of Participant or Beneficiary
	8

	6.5
	Nonassignment
	9

	6.6
	No Right to Continued Service
	9

	6.7
	Tax Withholding
	9

	6.8
	Claims Procedure and Arbitration
	9

	6.9
	Termination and Amendment
	10

	6.10
	Applicable Law
	10

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 THE CHARLES SCHWAB CORPORATION
DIRECTORS’ DEFERRED COMPENSATION PLAN II

Article I. Purpose

1.1        Establishment of the Plan.  Effective as of December 9, 2004, The Charles Schwab Corporation (hereinafter, the “Company”) established The Charles Schwab Corporation Directors’ Deferred Compensation Plan II (the “Plan”), as set forth in this document.  This Plan shall apply to cash compensation that is earned, deferred and accrued by eligible Participants after December 31, 2004. This Plan is adopted by the Committee pursuant to its authority under the Company’s Stock Incentive Plan to prescribe procedures for Directors to elect to receive cash retainer payments and/or meeting fees from the Company in the form of Nonqualified Stock Options and Restricted Stock Units, among other awards, to be issued under the Stock Incentive Plan.

1.2              Purpose of the Plan. The Plan permits Directors to defer the payment of directors’ fees that they may earn. The opportunity to elect such deferrals is provided in order to help the Company attract and retain outside directors. This Plan is unfunded and is maintained primarily for the purpose of providing deferred compensation for its outside directors.  It is intended to be exempt from the requirements of the Employee Retirement Income Security Act of 1974, as amended.  The Plan also is intended to meet the requirements of section 409A of the Internal Revenue Code of 1986 and is to be construed in accordance with that section and any regulatory guidance issued thereunder.

Article II. Definitions

2.1        Definitions.  The following definitions are in addition to any other definitions set forth elsewhere in the Plan.  Whenever used in the Plan, the capitalized terms in this Section shall have the meanings set forth below unless otherwise required by the context in which they are used:

		
	(a)
	“Administrator” means the administrator described in Section 3.1 that is selected by the Committee to assist in the administration of the Plan.

		
	(b)
	“Beneficiary” means a person entitled to receive any benefit payments that remain to be paid after a Participant’s death, as determined under Section 6.3.

		
	(c)
	“Board” means the Board of Directors of the Company.

		
	(d)
	“Code” means the Internal Revenue Code of 1986, as amended.

		
	(e)
	“Company” means The Charles Schwab Corporation, a Delaware corporation.

		
	(f)
	“Committee” means the Compensation Committee of the Board.

		
	(g)
	“Deferral Account” means the account representing deferrals of cash compensation, plus investment adjustments, as described in Sections 5.5 and 5.6.

		
	(h)
	“Director” means each member of the Board who is not an employee of the Company or any of its subsidiaries.  The term “Director” shall also include each member of the board of directors of any subsidiary of the Company who is not an employee of the Company or any of its subsidiaries, but only if the Committee has approved participation in the Plan for such subsidiary’s non-employee directors.

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	(i)
	“Disability” means a condition such that an individual is “disabled” within the meaning of section 409A of the Code and any regulatory guidance promulgated thereunder.  Generally, an individual who is disabled (a) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; or (b) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than  12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Company or its subsidiaries.

		
	(j)
	“Nonqualified Stock Options” means nonqualified stock options as defined in and issued under the Company’s Stock Incentive Plan.

		
	(k)
	“Plan” means The Charles Schwab Corporation Directors’ Deferred Compensation Plan II, as in effect from time to time.

		
	(l)
	“Plan Year” means the calendar year.

		
	(m)
	“Restricted Stock Units” means restricted stock units as defined in and issued under the Company’s Stock Incentive Plan.

		
	(n)
	“Separation from Service” or “Separate(s) from Service” means “Separation from Service” within the meaning of section 409A of the Code and any regulatory guidance promulgated thereunder.  Generally, a separation from service occurs when an individual ceases to provide services for the Company and its affiliates.

		
	(o)
	“Specified Employee” means a “specified employee” within the meaning of section 409A of the Code and any regulatory guidance promulgated thereunder, provided that in determining the compensation of individuals for this purpose, the definition of compensation in Treas. Reg. § 1.415(c)-2(d)(2) shall be used.

		
	(p)
	“Stock Incentive Plan” means the Company’s 2004 Stock Incentive Plan, the Company’s 2013 Stock Incentive Plan, and any successor plan thereto.

		
	(q)
	“Termination” means the date a Participant ceases to be a Director and otherwise incurs a “Separation from Service”.

		
	(r)
	“Unforeseeable Emergency” means a severe financial hardship to the Participant resulting from (i) an illness or accident of the Participant, the Participant’s spouse, or the Participant’s dependent (as defined in section 152(a) of the Code); (ii) loss of the Participant’s property due to casualty; or (iii) other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, as determined in the sole discretion of the Administrator in accordance with section 409A of the Code.

		
	(s)
	“Valuation Date” means each December 31 and any other date designated from time to time by the Committee for the purpose of determining the value of a Participant’s Deferral Account balance pursuant to Section 5.5.

    

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2.2        Gender and Number.  Except when otherwise indicated by the context, any masculine or feminine terminology shall also include the neuter and other gender, and the use of any term in the singular or plural shall also include the opposite number.

                           
Article III. Administration

3.1        Committee and Administrator. The Committee shall administer the Plan and may select one or more persons to serve as the Administrator.  The Administrator shall perform such administrative functions as the Committee may delegate to it from time to time.  Any person selected to serve as the Administrator may, but need not, be a Committee member or an officer or employee of the Company. However, if a person serving as Administrator or a member of the Committee is a Participant, such person may not vote on a matter affecting his or her interest as a Participant.

The  Committee shall have discretionary authority to construe and interpret the Plan provisions and resolve any ambiguities thereunder; to prescribe, amend, and rescind administrative rules relating to the Plan; to determine eligibility for benefits under the Plan; and to take all other actions that are necessary or appropriate for the administration of the Plan.  Such interpretations, rules, and actions of the Committee shall be final and binding upon all concerned and, in the event of judicial review, shall be entitled to the maximum deference allowable by law.  Where the Committee has delegated its responsibility for matters of interpretation and Plan administration to the Administrator, the actions of the Administrator shall constitute actions of the Committee.

Article IV. Participants

4.1          Participants.  Each Director shall be eligible to participate in this Plan.

  Article V. Deferrals

5.1          Deferrals.  Each Director may elect to defer up to 100 percent of the fees otherwise receivable from the Company for service as a Director.  Any such election must be made by entering a deferred compensation agreement with the Company in accordance with the procedures established by the Administrator on or before the applicable deadline under Section 5.2.  Deferral elections shall apply only to a single Plan Year and new deferral elections must be made with respect to each Plan Year. 

5.2          Timing of Elections.

(a)          Except as otherwise provided under subparagraph (b) below, compensation for services performed during a Plan Year may be deferred at the Participant’s election only if the election to defer such compensation is made not later than the close of the preceding Plan Year or, if permitted by the Administrator in its sole discretion, at such other time permitted under the Code.

(b)          To the extent permitted under section 409A of the Code and any regulatory guidance promulgated thereunder, in the case of the first Plan Year in which a Participant becomes eligible to participate in the Plan, the Administrator may, in its sole discretion, provide that the Participant may make an election to defer compensation for services to be performed subsequent to the election provided that such election is made not later than 30 days after the date the Participant becomes eligible to participate in the Plan.  The election 

3

shall only apply to compensation earned after the effective date of the election.

5.3          Deferral Procedures.  Subject to Section 5.2, Participants shall have an opportunity to elect deferrals with respect to each Plan Year.  Unless the Committee specifies other rules for the deferrals that may be elected, deferrals may be made in increments of 10 percent or in a fixed dollar amount.  If a deferral is elected, the election shall be irrevocable with respect to the applicable Plan Year. Deferral elections shall be made by following the procedures adopted by the Committee or the Administrator.  As provided in Section 6.7, any deferral is subject to any applicable tax withholding measures and may be reduced to satisfy any applicable tax withholding requirements.     

5.4        Election of Time and Manner of Payment.

(a)            When a Participant incurs a Separation from Service, the payment of the Participant’s entire Deferral Account of Restricted Stock Units shall be made in the year following the Participant’s Separation from Service in February.  Notwithstanding anything in the Plan to the contrary, if (i) the Participant is a Specified Employee at the time of the Separation from Service, and (ii) the Separation from Service occurs after July, such payment shall be made in the year following the Participant’s Separation from Service in July.

(b)            Notwithstanding anything to the contrary in this Plan, except as otherwise permitted under section 409A of the Code, a Participant’s Deferral Account shall not be distributed earlier than (i) Separation from Service or, in the case of a Specified Employee, the date that is at least six (6) months after Separation from Service; (ii) Disability; (iii) death; (iv) a specified time or schedule; (v) to the extent permitted under section 409A of the Code and any regulatory guidance promulgated thereunder, a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the assets of the Company; or (vi) the occurrence of an Unforeseeable Emergency.

(c)            The acceleration of the time or schedule of any payment under the Plan shall not be permitted unless permitted by the Administrator in accordance with the requirements of section 409A of the Code and any regulatory guidance promulgated thereunder.

(d)            Under procedures approved by the Committee and communicated to Participants, a Participant shall elect between the following two alternatives with respect to the deferred amounts at the same time that the Participant elects to defer the fees payable for a Plan Year. Once made, a Participant’s election for the method of payment may not be changed; however, a Participant may make a different election with respect to amounts that the Participant elects to defer in subsequent Plan Years.

(1)      Payment in Shares.  Under this alternative, a Participant automatically shall be granted fully vested Restricted Stock Units pursuant to the Company’s Stock Incentive Plan in a number equal to (i) the amounts deferred hereunder, divided by (ii) the closing price of the Common Stock of the Company on the date the fees deferred pursuant to Section 5.1 hereof would otherwise have been payable.  The Company shall issue a number of shares of Common Stock equal to the number of such Restricted Stock Units to one or more grantor trusts formed by the Company (“rabbi trusts”) pursuant to Section 6.2 hereof.  Any dividends paid on shares of the Common Stock of the Company issued to a rabbi trust shall be reinvested in Common Stock of the Company, which shall be credited to the Participant as additional Restricted Stock Units pursuant to the Company’s Stock Incentive Plan. Notwithstanding the foregoing, the issuance of shares of Common Stock to a rabbi trust and the crediting of assumed earnings shall not mean that any deferred compensation promised to a Participant is 

4

secured by particular investment assets or that the Participant is actually earning any form of investment income under the Plan.

(2)  Issuance of Stock Options Under Company’s Stock Incentive Plan. Under this alternative, a Participant automatically shall be granted fully vested Nonqualified Stock Options pursuant to the Company’s Stock Incentive Plan. A Participant who elects this alternative shall, on the date the fees deferred pursuant to Section 5.1 hereof would otherwise have been payable, automatically be granted a number of Nonqualified Stock Options with a fair market value equal to the amounts deferred, as determined under the valuation method used by the Company to value stock options at the time of the deferral. The option price shall be the closing price of a share of Common Stock of the Company, which is the Fair Market Value as defined in the Company’s Stock Incentive Plan under which the Nonqualified Stock Options are issued, on the grant date. After the grant date an award of Nonqualified Stock Options shall be subject only to the requirements of the Company’s Stock Incentive Plan under which it is issued and the terms and conditions of the Nonqualified Stock Option award agreement.

(3)  Requirements of the Company’s Stock Incentive Plan. The award of Restricted Stock Units and Nonqualified Stock Options shall be subject to all of the requirements of the Company’s Stock Incentive Plan under which such award is issued, including without limitation the limits on authorized shares and individual awards, and the terms and conditions of an individual Restricted Stock Unit or Nonqualified Stock Option award agreement in a form approved by the Committee pursuant to its authority under the Stock Incentive Plan.

5.5        Accounts and Earnings. The Company shall establish a Deferral Account for each Participant who has elected Restricted Stock Units under Section 5.1 above, and its accounting records for the Plan with respect to each such Participant shall include a separate Deferral Account or subaccount for each deferral election of the Participant involving Restricted Stock Units that could cause a payment made at a different time or in a different form from other payments of deferrals elected by the same Participant. Each Deferral Account balance of Restricted Stock Units shall reflect the Company’s obligation to pay a deferred amount to a Participant or Beneficiary as provided in this Article V.

5.6        Maintenance of Accounts. The Accounts of each Participant shall be entered on the books of the Company and shall represent a liability, payable when due under this Plan, from the general assets of the Company. Prior to benefits becoming due hereunder, the Company shall expense the liability for such accounts in accordance with policies determined appropriate by the Company’s auditors. Except to the extent provided under Section 5.4(d)(1), the Accounts created for a Participant by the Company shall not be funded by a trust or an insurance contract; nor shall any assets of the Company be segregated or identified to such account; nor shall any property or assets of the Company be pledged, encumbered, or otherwise subjected to a lien or security interest for payment of benefits hereunder.

5.7        Change in Control. In the event of a Change in Control (as defined below), the following rules shall apply:

		
	  (a) 
	All Participants shall continue to have a fully vested, nonforfeitable interest in their Deferral Accounts.

		
	  (b) 
	To the extent permitted under section 409A of the Code and any regulatory guidance issued thereunder when the Plan is terminated within 30 days preceding the Change in Control or the 12 months following the Change in Control, deferrals of amounts for the year that includes the Change in Control shall cease beginning with the first payment otherwise due that follows the termination of the Plan.

5

		
	(c) 
	To the extent permitted under section 409A of the Code and any regulatory guidance issued thereunder and notwithstanding the Participant’s election pursuant to Section 5.4(d)(1), Restricted Stock Units shall be settled no later than 30 days following the Change in Control.

		
	(d) 
	Subject to section 409A and any regulatory guidance promulgated thereunder, nothing in this Plan shall prevent a Participant from enforcing any rules in a contract or another plan of the Company or any subsidiary concerning the method of determining the amount of fees or other form of compensation to which a Participant may become entitled following a Change in Control, or the time at which that compensation is to be paid in the event of a Change in Control. 

		
	(e)             
	For purposes of this Plan, a “Change in Control” means any of the following but only to the extent that such change in control transaction is a change in the ownership or effective control of the Company or a change in the ownership of a substantial portion of the assets of the Company as defined in the regulations promulgated under Section 409A of the Code:

		
	(1)
	The acquisition by any individual, entity or group (within the meaning of Section 13(d) (3) or 14(d) (2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of the then outstanding shares of common stock of the Company (the “Outstanding Corporation Common Stock”) or 30% or more of the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Corporation Voting Securities”); provided, however, that for purposes of this paragraph (1), the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of paragraph (3) hereof; or

		
	(2)
	Individuals who, at the beginning of any one-year period, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to such date whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

		
	(3)        
	Consummation of a reorganization, merger or consolidation, or sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Corporation Common Stock and 

6

Outstanding Corporation Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Outstanding Corporation Common Stock and Outstanding Corporation Voting Securities, as the case may be, (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

A Change of Control shall occur on the first day on which any of the preceding conditions has been satisfied. However, notwithstanding the foregoing, this Section 5.7 shall not apply to any Participant who alone or together with one or more other persons acting as a partnership, limited partnership syndicate, or other group for the purpose of acquiring, holding or disposing of securities of the Company, triggers a “Change in Control” within the meaning of paragraphs (1) or (2) above. Moreover, no acquisition by (i) Charles Schwab and/or his spouse or any of his or her lineal descendants or (ii) any trust created by or for the benefit of Charles Schwab and/or his spouse or any of his lineal descendants or (iii) the Schwab Family Foundation shall constitute a Change of Control.

5.8        Payment of Deferred Amounts. A Participant shall have a fully vested, nonforfeitable interest in his or her Deferral Account balance at all times. However, vesting does not confer a right to payment. At the time provided for in Section 5.4(a) for Restricted Stock Units, the Company shall pay to such Participant an amount equal to the balance of the Participant’s Deferral Account. 

5.9    Payment on Certain Events. Notwithstanding any elections that have been made under Section 5.4(d)(1), a Participant’s Restricted Stock Units shall be paid in a lump sum within sixty (60) days in the event of the Participant’s death, Disability, or upon receipt of a written request from a Participant and the Administrator’s determination that the Participant has incurred an Unforeseeable Emergency; provided, that the amounts distributed because of an Unforeseeable Emergency shall not exceed the amounts necessary to satisfy such Unforeseeable Emergency plus amounts necessary to pay taxes reasonably anticipated as a result of the distribution, after taking into account the extent to which such Unforeseeable Emergency is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the individual’s assets (to the extent the liquidation of such assets would not itself cause severe financial hardship).

            

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Article VI. General Provisions

6.1        Unfunded Obligation. The deferred amounts to be paid to Participants pursuant to this Plan constitute unfunded obligations of the Company. Except to the extent specifically provided hereunder, the Company is not required to segregate any monies from its general funds, to create any trusts, or to make any special deposits with respect to this obligation. Title to and beneficial ownership of any investments, including any grantor trust investments which the Company has determined and directed the Administrator to make to fulfill obligetions under this Plan, shall at all times remain in the Company. Any investments and the creation or maintenance of any trust or Accounts shall not create or constitute a trust or a fiduciary relationship between the Administrator or the Company and a Participant, or otherwise create any vested or beneficial interest in any Participant or his or her Beneficiary or his or her creditors in any assets of the Company whatsoever. The Participants shall have no claim for any changes in the value of any assets which may be invested or reinvested by the Company in an effort to match its liabilities under this Plan.

6.2        Informal Funding Vehicles. To the extent required pursuant to Section 5.4(d)(1), the Company shall arrange for the establishment and use of a grantor trust or other informal funding vehicle to facilitate the payment of benefits and to discharge the liability of the Company under this Plan to the extent of payments actually made from such trust or other informal funding vehicle. In addition, the Company may, but need not, arrange for the establishment and use of such a grantor trust or other informal funding vehicle to the extent otherwise permitted pursuant to the Plan.

Any investments and any creation or maintenance of memorandum accounts or a trust or other informal funding vehicle shall not create or constitute a trust or a fiduciary relationship between the Committee or the Company and a Participant, or otherwise confer on any Participant or Beneficiary or his or her creditors a vested or beneficial interest in any assets of the Company whatsoever. Participants and Beneficiaries shall have no claim against the Company for any changes in the value of any assets which may be invested or reinvested by the Company with respect to this Plan.

6.3    Beneficiary. The term “Beneficiary” shall mean the person or persons to whom payments are to be paid pursuant to the terms of the Plan in the event of the Participant’s death. A Participant may designate a Beneficiary by following the procedures established by the Administrator, executed by the Participant, and delivered to the Administrator. The Administrator may require the consent of the Participant’s spouse to a designation if the designation specifies a Beneficiary other than the spouse. Subject to the foregoing, a Participant may change a Beneficiary designation at any time. Subject to the property rights of any prior spouse, if no Beneficiary is designated, if the designation is ineffective, or if the Beneficiary dies before the balance of the Account is paid, the balance shall be paid to the Participant’s surviving spouse, or if there is no surviving spouse, to the Participant’s estate.

6.4    Incapacity of Participant or Beneficiary. Every person receiving or claiming benefits under the Plan shall be conclusively presumed to be mentally competent and of age until the date on which the Administrator receives a written notice, in a form and manner acceptable to the Administrator, that such person is incompetent or a minor, for whom a guardian or other person legally vested with the care of his or her person or estate has been appointed; provided, however, that if the Administrator finds that any person to whom a benefit is payable under the Plan is unable to care for his or her affairs because of incompetency, or because he or she is a minor, any payment due (unless a prior claim therefor shall have been made by a duly appointed legal representative) may be paid to the spouse, a child, a parent, a brother or 

8

sister, or to any person or institution considered by the Administrator to have incurred expense for such person otherwise entitled to payment. To the extent permitted by law, any such payment so made shall be a complete discharge of liability therefor under the Plan.

If a guardian of the estate of any person receiving or claiming benefits under the Plan is appointed by a court of competent jurisdiction, benefit payments may be made to such guardian provided that proper proof of appointment and continuing qualification is furnished in a form and manner acceptable to the Administrator. In the event a person claiming or receiving benefits under the Plan is a minor, payment may be made to the custodian of an account for such person under the Uniform Gifts to Minors Act. To the extent permitted by law, any such payment so made shall be a complete discharge of any liability therefor under the Plan.

6.5        Nonassignment. The right of a Participant or Beneficiary to the payment of any amounts under the Plan may not be assigned, transferred, pledged or encumbered nor shall such right or other interests be subject to attachment, garnishment, execution or other legal process.

6.6        No Right to Continued Service. Nothing in the Plan shall be construed to confer upon any Participant any right to continue as a Director of the Company.

6.7        Tax Withholding. Any appropriate taxes shall be withheld from payments made to Participants pursuant to the Plan. To the extent tax withholding is payable in connection with the Participant’s deferral of income rather than in connection with the payment of deferred amounts, such withholding may be made from amounts currently payable to the Participant, or, as determined by the Administrator, the amount of the deferral elected by the Participant may be reduced in order to satisfy required tax withholding for any applicable taxes.

6.8        Claims Procedure and Arbitration. The Administrator shall establish a reasonable claims procedure. Following a Change in Control of the Company (as determined under Section 5.7) the claims procedure shall include the following arbitration procedure.

           Since time will be of the essence in determining whether any payments are due to the Participant under this Plan following a Change in Control, a Participant may submit any claim for payment to arbitration as follows: On or after the second day following the Change in Control or other event triggering a right to payment, the claim may be filed with an arbitrator of the Participant’s choice by submitting the claim in writing and providing a copy to the Company. The arbitrator must be:

		
	 (a)  
	a member of the National Academy of Arbitrators or one who currently appears on arbitration panels issued by the Federal Mediation and Conciliation Service or the American Arbitration Association; or

		
	 (b)   
	a retired judge of the State in which the claimant is a resident who served at the appellate level or higher. 

The arbitration hearing shall be held within 72 hours (or as soon thereafter as possible) after filing of the claim unless the Participant and the Company agree to a later date. No continuance of said hearing shall be allowed without the mutual consent of the Participant and the Company. Absence from or nonparticipation at the hearing by either party shall not prevent the issuance of an award. Hearing procedures which will expedite the hearing may be ordered at the arbitrator’s discretion, and the arbitrator may close the hearing in his or her sole discretion upon deciding he or she has heard sufficient evidence to satisfy issuance of an award. In reaching a decision, the arbitrator shall have no authority to ignore, change, modify, add to or delete from any provision of 

9

this Plan, but instead is limited to interpreting this Plan. The arbitrator’s award shall be rendered as expeditiously as possible, and unless the arbitrator rules within seven days after the close of the hearing, he will be deemed to have ruled in favor of the Participant. If the arbitrator finds that any payment is due to the Participant from the Company, the arbitrator shall order the Company to pay that amount to the Participant within 48 hours after the decision is rendered. The award of the arbitrator shall be final and binding upon the Participant and the Company. 

Judgment upon the award rendered by the arbitrator may be entered in any court in any State of the United States. In the case of any arbitration regarding this Agreement, the Participant shall be awarded the Participant’s costs, including attorney’s fees. Such fee award may not be offset against the deferred compensation due hereunder. The Company shall pay the arbitrator’s fee and all necessary expenses of the hearing, including stenographic reporter if employed.

6.9       Termination and Amendment. The Committee may from time to time amend, suspend or terminate the Plan, in whole or in part, and if the Plan is suspended, the Committee may reinstate any or all of its provisions. The Executive Vice President - Human Resources has the authority to amend the Plan to comply with the requirements of the Code, to avoid a plan failure under section 409A of the Code and to facilitate administration of the Plan to the extent that any such amendments will not materially increase the cost of the Plan. Except as otherwise required by law, the Committee may delegate to the Administrator all or any of its foregoing powers to amend or suspend the Plan. Any such amendment or suspension may affect future deferrals without the consent of any Participant or Beneficiary. However, with respect to deferrals that have already occurred, no amendment or suspension may impair the right of a Participant or a designated Beneficiary to receive payment of the related deferred compensation in accordance with the terms of the Plan prior to the effective date of such amendment or suspension, unless the affected Participant or Beneficiary gives his or her express written consent to the change; provided that such consent shall not be required if an amendment is required to avoid a plan failure under section 409A of the Code.

Subject to the requirements of section 409A of the Code and any regulatory guidance promulgated thereunder, the Committee may terminate the Plan at any time and in the Committee’s discretion the Deferral Accounts of Participants may be distributed within the period beginning twelve months after the date the Plan was terminated and ending twenty-four months after the date the Plan was terminated, or pursuant to Section 5.4, 5.7 or 5.9, if earlier. If the Plan is terminated and Deferral Accounts are distributed, the Company shall terminate all account balance non-qualified deferred compensation plans that are aggregated with the Plan under section 409A of the Code with respect to all participants and shall not adopt a new account balance non-qualified deferred compensation plan that is aggregated with the Plan under section 409A of the Code for at least three years after the date the Plan was terminated.

The Committee, in its discretion, may terminate the Plan upon a corporate dissolution of the Company that is taxed under section 331 of the Code or with the approval of a bankruptcy court pursuant to 11 U.S.C. section 503(b)(1(A), provided that the Participants’ Deferral Accounts are distributed and included in the gross income of the Participants at the time required under section 409A of the Code.

6.10    Applicable Law. The Plan shall be construed and governed in accordance with applicable federal law and, to the extent not preempted by such federal law, the laws of the State of California to the extent the application of such state laws would not result in the taxation of amounts deferred under the Plan until such amounts are distributed to participants under the Plan.

10Exhibit

Exhibit 10.393

THE CHARLES SCHWAB CORPORATION 
[2013 STOCK INCENTIVE PLAN]
NOTICE OF NONQUALIFIED STOCK OPTION GRANT 
    
You have been granted the following option to purchase common stock (“Shares”) of The Charles Schwab Corporation (“Schwab”) under [The Charles Schwab Corporation 2013 Stock Incentive Plan] (the “Plan”).  A stock option represents the right to purchase Shares at a fixed price, called the exercise price, within a certain period of time.  Your option is granted subject to the following terms:

	
		
	Name of Recipient:

	<first_name> <last_name>

	Total Number of 
Shares Granted:

	<shares_awarded>

	Exercise Price Per 
Share: 

	<award_price>

	Grant Date:

	<award_date>

	Expiration Date:

	<expire_date>

	Vesting Schedule
	So long as you remain employed in good standing by Schwab or its subsidiaries and subject to the terms of the Nonqualified Stock Option Agreement, you will acquire the right to exercise this option (become "vested" in this option) on the following dates and in the following amounts:

Number of Shares on Vesting Date:
<vesting_schedule>

You and Schwab agree that this option is granted under and governed by the terms and conditions of the Plan and the Nonqualified Stock Option Agreement, both of which are made a part of this notice.  Please review the Plan and the Nonqualified Stock Option Agreement carefully, as they explain the terms and conditions of this option.  You agree that Schwab may deliver electronically all documents relating to the Plan or this option (including, without limitation, prospectuses required by the Securities and Exchange Commission) and all other documents that Schwab is required to deliver to its stockholders.

 THE CHARLES SCHWAB CORPORATION 
[2013 STOCK INCENTIVE PLAN] 
NONQUALIFIED STOCK OPTION AGREEMENT 

	
		
	Tax Treatment
	This option is a nonqualified stock option and is not intended to qualify as an incentive stock option under federal tax laws.

	Vesting
	Subject to the provisions of this Nonqualified Stock Option Agreement (“Agreement”), this option becomes vested in installments as described in the Notice of Nonqualified Stock Option Grant.

	Accelerated
Vesting
	This option will become fully exercisable if your service with The Charles Schwab Corporation (“Schwab”) and its subsidiaries terminates on account of your death or disability. 
This option will become fully exercisable if your service with Schwab and its subsidiaries terminates on account of your retirement as defined below. 
If, prior to the date your service terminates, Schwab is subject to a “change in control” (as defined in [The Charles Schwab Corporation 2013 Stock Incentive Plan] (the “Plan”)), this option will become fully exercisable immediately preceding the change in control. If the Compensation Committee (or its delegate) (the “Compensation Committee”) of the Board of Directors of Schwab (the “Board”) determines that a change in control is likely to occur, Schwab will advise you and this option will become fully exercisable as of the date 10 days prior to the anticipated date of the change in control.

	Definition of
Disability
	For all purposes of this Agreement, "disability" means that you have a disability such that you have been determined to be eligible for benefits under Schwab’s long-term disability plan or if you are not covered by Schwab’s long-term disability plan, you are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which has lasted, or can be expected to last, for a continuous period of not less than 12 months or which can be expected to result in death as determined by Schwab in its sole discretion.

	Definition of
Retirement
	For all purposes of this Agreement, “retirement” will mean any termination of employment with Schwab and its subsidiaries for any reason other than death at any time after the earlier of when you attain age 55, but only if, at the time of your termination, you have been credited with at least 10 years of service or when you attain age 65, but only if, at the time of your termination, you have been credited with at least 5 years of service.

	 
	 

1

	
		
	 
	The phrase "years of service" above has the same meaning given to it under the SchwabPlan Retirement Savings and Investment Plan (or any successor plan).

	Exercise
Procedures
	You or your representative may exercise this option by following the procedures prescribed by Schwab.  If this option is being exercised by your representative, your representative must furnish proof satisfactory to Schwab of your representative’s right to exercise this option.  After completing the prescribed procedures, Schwab will cause to be issued the shares of common stock of Schwab (“Shares”) purchased, which will be registered in the name of the person exercising this option.

	Forms of
Payment
	When you submit your notice of exercise, you must pay the option exercise price for the Shares you are purchasing.  Payment may be made in one of the following forms:
•   Cash in your Schwab brokerage account in an amount sufficient to cover the option exercise price of the Shares and the required tax withholding. (This exercise method is sometimes referred to as “Exercise and Hold”).
•   Shares surrendered to Schwab. These Shares will be valued at their fair market value on the date when the new Shares are purchased. (This exercise method is sometimes referred to as a “Stock Swap.”)
•   By delivery (in a manner prescribed by Schwab) of an irrevocable direction to Charles Schwab & Co., Inc. to sell Shares (including Shares to be issued upon exercise of this option) and to deliver all or part of the sale proceeds to Schwab in payment of all or part of the exercise price.  (This exercise method is sometimes referred to as “Exercise and Sell” or “Sell to Cover.”)

	Term
	This option expires no later than the Expiration Date specified in the Notice of Nonqualified Stock Option Grant but may expire earlier upon your termination of service, as described below.

	Termination of
Service
	This option will expire on the date three months following the date of your termination of employment with Schwab and its subsidiaries for any reason other than on account of death, disability or retirement.  The terms “disability” and “retirement” are defined above. 
If you cease to be an employee of Schwab and its subsidiaries by reason of your disability or death, then this option will expire on the first anniversary of the date of your death or disability. 

2

	
		
	 
	If you cease to be an employee of Schwab and its subsidiaries by reason of your retirement and have been credited with at least 5 years of service, then this option will expire on the earlier of the fifth anniversary of the date of your termination or the Expiration Date specified in the Notice of Nonqualified Stock Option Grant.  If you cease to be an employee of Schwab and its subsidiaries by reason of your retirement and have been credited with at least 15 years of service, then this option will expire on the Expiration Date specified in the Notice of Nonqualified Stock Option Grant.

	Effect of
Entitlement to
Severance
	If you are entitled to severance benefits under The Charles Schwab Severance Pay Plan (or any successor plan) and have signed your Severance Agreement, then vesting of this option shall be determined under the terms of that plan.

	 
	 

	Cancellation of
Options
	To the fullest extent permitted by applicable laws, this option will immediately be cancelled and will expire in the event that Schwab terminates your employment on account of conduct contrary to the best interests of Schwab, including, without limitation, conduct constituting a violation of law or Schwab policy, fraud, theft, conflict of interest, dishonesty or harassment. The determination whether your employment has been terminated on account of conduct inimical to the best interests of Schwab shall be made by Schwab in its sole discretion.

	Withholding
Taxes and 
Stock
Withholding
	You will not be allowed to exercise this option unless you make arrangements acceptable to Schwab to pay any applicable withholding of income and employment taxes that may be due as a result of the option exercise. These arrangements may include without limitation withholding Shares that otherwise would be issued to you when you exercise this option.  In the event you do not elect to pay applicable withholding taxes in cash, Schwab shall withhold Shares.  Schwab may withhold the number of whole Shares, valued at the fair market value on the applicable date, required to satisfy such applicable withholding taxes.  Schwab will round up to the next whole Share to cover the applicable withholding taxes, and any amounts in excess of the applicable withholding taxes resulting from rounding up to the next whole Share will be added to your federal income tax withholdings.  While Schwab will withhold to satisfy applicable withholding taxes, you acknowledge that, regardless of any action taken by Schwab, the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to your participation in the Plan and legally applicable to you, is and remains your responsibility and may exceed the amount, if any, actually withheld by Schwab.

	Restrictions on
Exercise and 
	You cannot exercise this option and no Shares may be issued under this option if the issuance of Shares at that time would violate any 

3

	
		
	Issuance or
Transfer of
Shares
	applicable law, regulation, or rule.  Schwab may impose restrictions upon the sale, pledge, or other transfer of Shares (including the placement of appropriate legends on stock certificates) if, in the judgment of Schwab and its counsel, such restrictions are necessary or desirable to comply with applicable law, regulations or rules.

	 
	 

	No
Stockholder
Rights
	You, or your estate or heirs, have no rights as a stockholder of Schwab until you have exercised this option by giving the required notice to Schwab and paying the exercise price.  No adjustments are made for dividends or other rights if the applicable record date occurs before you exercise this option, except as described in the Plan.

	 
	 

	No Right to
Employment
	Nothing in this Agreement will be construed as giving you the right to be retained as an employee, consultant, or director of Schwab and its subsidiaries for any specific duration or at all.

	 
	 

	Transfer of
Option
	In general, only you may exercise this option prior to your death. You may not transfer or assign this option, except as provided below. For instance, you may not sell this option or use it as security for a loan. If you attempt to do any of these things, this option will immediately become invalid.
You may dispose of this option in your will or in a beneficiary designation. You may designate one or more beneficiaries by filing a beneficiary designation form with Schwab.  You may change your beneficiary designation by filing a new form with Schwab at any time prior to your death.  If you do not designate a beneficiary or if your designated beneficiary predeceases you, then your options will be exercisable by your estate. 
Schwab may, in its sole discretion, allow you to transfer this option under a domestic relations order in settlement of marital or domestic property rights.
In order to transfer this option, you and the transferee(s) must follow the procedures prescribed by Schwab, and the transferee(s) must follow the terms of this Agreement. 

	Limitation on
Payments
	If a payment from the Plan would constitute an excess parachute payment or if there have been certain securities law violations, then your grant may be reduced or cancelled and you may be required to disgorge any profit that you have realized from your grant. 

If a disqualified individual receives a payment or transfer under the Plan that would constitute an excess parachute payment under the Internal Revenue Code of 1986, as amended (the “Code”), such payment will be reduced, as described below.  Generally, someone is a 

4

	
		
	 
	“disqualified individual” under section 280G if he or she is (a) an officer of Schwab, (b) a member of the group consisting of the highest paid 1% of the employees of Schwab or, if less, the highest paid 250 employees of Schwab, or (c) a 1% stockholder of Schwab.  
For purposes of this section on “Limitation on Payments,” the term “Schwab " will include affiliated corporations to the extent determined by the Auditors (as defined below) in accordance with section 280G(d)(5) of the Code.
In the event that the independent auditors most recently selected by the Board (the “Auditors”) determine that any payment or transfer in the nature of compensation to or for your benefit, whether paid or payable (or transferred or transferable) pursuant to the terms of the Plan or otherwise (a “Payment”), would be nondeductible for federal income tax purposes because of the provisions concerning “excess parachute payments” in section 280G of the Code, then the aggregate present value of all Payments will be reduced (but not below zero) to the Reduced Amount (as defined below); provided, however, that the Compensation Committee may specify in writing that the grant will not be so reduced and will not be subject to reduction under this section. 
For this purpose, the “Reduced Amount” will be the amount, expressed as a present value, which maximizes the aggregate present value of the Payments without causing any Payment to be nondeductible by Schwab because of section 280G of the Code.
If the Auditors determine that any Payment would be nondeductible because of section 280G of the Code, then Schwab will promptly give you notice to that effect and a copy of the detailed calculation and of the Reduced Amount.  You may then elect, in your discretion, which and how much of the Payments will be eliminated or reduced (as long as after such election, the aggregate present value of the Payments equals the Reduced Amount, and your election is consistent with any mandatory eliminations or reductions that apply under other agreements or the Plan).  You will advise Schwab in writing of your election within 10 days of receipt of the notice.  If you do not make such an election within the 10-day period, then Schwab may elect which and how much of the Payments will be eliminated or reduced (as long as after such election the aggregate present value of the Payments equals the Reduced Amount).  Schwab will notify you promptly of its election. Present value will be determined in accordance with section 280G(d)(4) of the Code.  The Auditors’ determinations will be binding upon you and Schwab and will be made within 60 days of the date when a Payment becomes payable or transferable.

5

	
		
	 
	As promptly as practicable following these determinations and elections, Schwab will pay or transfer to or for your benefit such amounts as are then due to you under the Plan, and will promptly pay or transfer to or for your benefit in the future such amounts as become due to you under the Plan.
As a result of uncertainty in the application of section 280G of the Code at the time of an initial determination by the Auditors, it is possible that Payments will have been made by Schwab that should not have been made (an “Overpayment”) or that additional Payments that will not have been made by Schwab could have been made (an “Underpayment”) consistent in each case with the calculation of the Reduced Amount.  In the event the Auditors, based upon the assertion of a deficiency by the Internal Revenue Service against you or Schwab that the Auditors believe has a high probability of success determine that an Overpayment has been made, such Overpayment will be treated for all purposes as a loan to you that you will repay to Schwab on demand, together with interest at the applicable federal rate provided in section 7872(f)(2) of the Code.  However, no amount will be payable by you to Schwab if and to the extent that such payment would not reduce the amount that is subject to taxation under section 4999 of the Code. In the event the Auditors determine that an Underpayment has occurred, such Underpayment will promptly be paid or transferred by Schwab to or for your benefit, together with interest at the applicable federal rate provided in section 7872(f)(2) of the Code.

	Plan
Administration
	The Plan administrator has discretionary authority to make all determinations related to this option and to construe the terms of the Plan, the Notice of Nonqualified Stock Option Grant, and this Agreement. The Plan administrator’s determinations are conclusive and binding on all persons, and they are entitled to deference upon any review.

	Adjustments
	In the event of a stock split, a stock dividend or a similar change in Shares, the Compensation Committee, in its discretion, may adjust the number of Shares covered by this option and the exercise price per Share.

	Severability
	In the event that any provision of this Agreement is held invalid or unenforceable, the provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of this Agreement.

	Applicable 
Law
	This Agreement will be interpreted and enforced under the laws of the State of Delaware (without regard to their choice-of-law provisions), as such laws are applied to contracts entered into and performed in Delaware.

6

	
		
	The Plan and
Other
Agreements
	The text of the Plan is incorporated in this Agreement by reference. This Agreement (including the Additional Terms and Conditions for Non-U.S. Recipients and the Country-Specific Provisions), the Notice of Nonqualified Stock Option Grant, and the Plan constitute the entire understanding between you and Schwab regarding this option.  Any prior agreements, commitments or negotiations concerning this option are superseded.  This Agreement may be amended only by another written agreement approved by the Compensation Committee and signed by both parties.  If there is any inconsistency or conflict between any provision of this Agreement and the Plan, the terms of the Plan will control.  Nothing in this Agreement gives you the ability to negotiate or change the key terms and conditions described above, in the Notice of Nonqualified Stock Option Grant and in the Plan.

7

ADDITIONAL TERMS AND CONDITIONS FOR NON-U.S. RECIPIENTS

The additional (or, if so indicated, different) terms and conditions set forth below are specifically incorporated into the Nonqualified Stock Option Agreement (the “Agreement”) for awards granted outside the United States (“U.S.”). These terms and conditions govern this option granted under the Plan if you reside or work outside of the U.S. Due to the complexities of legal, regulatory and tax issues, you should seek appropriate professional advice as to how the relevant laws in the applicable country may apply to your individual situation.

Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Plan and/or the Agreement.

Withholding Taxes and Stock Withholding: The following provisions supplement the Withholding Taxes and Stock Withholding section of the Agreement: 

You acknowledge that, regardless of any action taken by Schwab or, if different, your employer (“Employer”), the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to your participation in the Plan and legally applicable to you (“withholding taxes”), is and remains your responsibility and may exceed the amount, if any, actually withheld by Schwab or your Employer. You further acknowledge that Schwab and/or your Employer (1) make no representations or undertakings regarding the treatment of any withholding taxes in connection with any aspect of this option, including, but not limited to, the grant, vesting or exercise of this option, the subsequent sale of Shares acquired pursuant to such exercise and the receipt of any dividends; and (2) do not commit to and are under no obligation to structure the terms of the grant or any aspect of this option to reduce or eliminate your liability for withholding taxes or achieve any particular tax result. Further, if you are subject to withholding taxes in more than one jurisdiction, you acknowledge that Schwab and/or your Employer (or former employer, as applicable) may be required to withhold or account for withholding taxes in more than one jurisdiction.

Prior to any relevant taxable or tax withholding event, as applicable, you agree to make adequate arrangements satisfactory to Schwab and/or the Employer to satisfy all withholding taxes.

In this regard, you authorize Schwab and/or the Employer, or their respective agents, at their discretion, to satisfy any applicable withholding obligations with regard to all withholding taxes by one or a combination of the following:  (a) withholding from your wages or other cash compensation paid to you by Schwab and/or the Employer; (b) withholding from funds in your Schwab brokerage account; (c) requiring you to make a cash payment in an amount equal to the withholding obligations for withholding taxes; (d) withholding from proceeds of the sale of Shares acquired upon exercise of this option either through a voluntary sale or through a mandatory sale arranged by Schwab (on your behalf pursuant to this authorization without further consent); (e) withholding in Shares to be issued upon exercise of this option; or (f) any other method of withholding determined by Schwab and permitted by applicable law.

8

Depending on the withholding method, Schwab may withhold or account for withholding taxes by considering applicable minimum statutory withholding amounts or other applicable withholding rates, including maximum applicable rates in your jurisdiction(s), in which case you may receive a refund of any over-withheld amount in cash and will have no entitlement to the equivalent in Shares. If the obligation for withholding taxes is satisfied by withholding in Shares, for tax purposes, you are deemed to have been issued the full number of Shares subject to the exercised option, notwithstanding that a number of the Shares are held back solely for the purpose of paying the withholding taxes.

Nature of Grant: In accepting this option, you acknowledge, understand and agree that:

		
	(1)
	the Plan is established voluntarily by Schwab, it is discretionary in nature and it may be modified, amended, suspended or terminated by Schwab at any time, to the extent permitted by the Plan;

		
	(2)
	the grant of this option is exceptional, voluntary and occasional and does not create any contractual or other right to receive future grants of options, or benefits in lieu of options, even if options have been granted in the past; 

		
	(3)
	all decisions with respect to future options or other grants, if any, will be at the sole discretion of Schwab; 

		
	(4)
	you are voluntarily participating in the Plan; 

		
	(5)
	this option, any Shares acquired under this option, and the income and value of same, are not intended to replace any pension rights or compensation;

		
	(6)
	this option and any Shares acquired under this option, and the income and value of same, are not part of normal or expected compensation for any purpose, including calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, holiday pay, long-service awards, pension or retirement or welfare benefits or similar mandatory payments; 

		
	(7)
	unless otherwise agreed with Schwab, this option and the Shares acquired under this option, and the income and value of same, are not granted as consideration for, or in connection with, the service you may provide as a director of a subsidiary of Schwab;

		
	(8)
	the future value of the underlying Shares is unknown, indeterminable and cannot be predicted with certainty; 

		
	(9)
	if the underlying Shares do not increase in value, this option will have no value;

		
	(10)
	if you exercise this option and acquire Shares, the value of such Shares may increase or decrease in value, even below the exercise price;

		
	(11)
	for purposes of this option, your employment or service relationship will be considered terminated as of the date you are no longer actively providing 

9

services to Schwab and its subsidiaries (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any), and unless otherwise expressly provided in this Agreement or determined by Schwab, (i) your right to vest in this option under the Plan, if any, will terminate as of such date and will not be extended by any notice period (e.g., your period of service would not include any contractual notice period or any period of “garden leave” or similar period mandated under employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any); and (ii) the period (if any) during which you may exercise this option after such termination of your employment or service relationship will commence on the date you cease to actively provide services and will not be extended by any notice period mandated under employment laws in the jurisdiction where you are employed or terms of your employment agreement, if any; the Plan administrator shall have the exclusive discretion to determine when you are no longer actively providing services for purposes of this option grant (including whether you may still be considered to be providing services while on a leave of absence);

		
	(12)
	unless otherwise provided in the Plan or by Schwab in its discretion, this option and the benefits evidenced by this Agreement do not create any entitlement to have this option or any such benefits transferred to, or assumed by, another company nor to be exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the Shares; and 

		
	(13)
	neither Schwab, its subsidiaries nor your Employer shall be liable for any foreign exchange rate fluctuation between your local currency and the United States Dollar that may affect the value of this option or of any amounts due to you pursuant to the exercise of this option or the subsequent sale of any Shares acquired upon exercise.

No Advice Regarding Grant: Schwab is not providing any tax, legal or financial advice, nor is Schwab making any recommendations regarding your participation in the Plan, or your acquisition or sale of the underlying Shares. You should consult with your own personal tax, legal and financial advisors regarding your participation in the Plan before taking any action related to the Plan.

Compliance with Law: Notwithstanding any other provision of the Plan or this Agreement, unless there is an available exemption from any registration, qualification or other legal requirement applicable to the Shares, Schwab shall not be required to deliver any Shares issuable upon exercise of this option prior to the completion of any registration or qualification of the Shares under any local, state, federal or foreign securities or exchange control law or under rulings or regulations of the U.S. Securities and Exchange Commission (“SEC”) or of any other governmental regulatory body, or prior to obtaining any approval or other clearance from any local, state, federal or foreign governmental agency, which registration, qualification or approval Schwab shall, in its absolute discretion, deem necessary or advisable. You understand that Schwab is under no obligation to register or qualify the Shares with the SEC or any state or foreign 

10

securities commission or to seek approval or clearance from any governmental authority for the issuance or sale of the Shares. Further, you agree that Schwab shall have unilateral authority to amend the Agreement without your consent to the extent necessary to comply with securities or other laws applicable to issuance of Shares.

Insider Trading/Market Abuse Laws: You acknowledge that you may be subject to insider trading restrictions and/or market abuse laws based on the exchange on which the Shares are listed and in applicable jurisdictions including the United States and your country or your broker’s country, if different, which may affect your ability to accept, acquire, sell, attempt to sell or otherwise dispose of Shares, rights to Shares (e.g., this option) or rights linked to the value of Shares during such times you are considered to have “inside information” regarding Schwab (as defined in the laws or regulations in applicable jurisdictions).  Local insider trading laws and regulations may prohibit the cancellation or amendment of orders you placed before you possessed inside information.  Furthermore, you could be prohibited from (i) disclosing the inside information to any third party, including fellow employees and (ii) “tipping” third parties or causing them otherwise to buy or sell securities.  Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Schwab insider trading policy. You acknowledge that it is your responsibility to comply with any applicable restrictions and are advised to speak to your personal advisor on this matter.

Foreign Asset/Account Reporting: Please be aware that your country may have certain foreign asset and/or account reporting requirements which may affect your ability to acquire or hold Shares under the Plan or cash received from participating in the Plan (including from any dividends received or sale proceeds arising from the sale of Shares) in a brokerage or bank account outside your country. You may be required to report such accounts, assets or transactions to the tax or other authorities in your country. You acknowledge that it is your responsibility to be compliant with such regulations, and you should speak to your personal advisor on this matter.

Data Privacy:  

		
	(1)
	Declaration of Consent.  You hereby agree with the data processing practices described in this Agreement and consent to the collection, processing and use, in electronic or other form, of your personal data as described herein and the transfer of such personal data to the recipients mentioned below, including recipients located in countries which may not have a similar level of protection from the perspective of your country’s data protection laws.

		
	(2)
	Data Collection and Usage.  Schwab and your Employer will collect, process and use certain personal information about you, including, but not limited to, your name, home address and telephone number, email address, date of birth, social insurance, passport or other identification number, salary, nationality, job title, any Shares or directorships held in Schwab, details of all options or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding in your favor (“Data”), for the purposes of implementing, administering and managing the Plan.  The legal basis, where required, for 

11

the processing of Data is your consent.  Where required under applicable law, Data may also be disclosed to certain securities or other regulatory authorities where Schwab’s securities are listed or traded or regulatory filings are made and the legal basis, where required, for such disclosure are the applicable laws.

		
	(3)
	Stock Plan Administration Service Providers.  Schwab transfers Data to certain of its subsidiaries providing stock plan and broker services, or such other third party stock plan service provider as may be selected by Schwab in the future, which is assisting Schwab with the implementation, administration and management of the Plan.  You may be asked to agree on separate terms and data processing practices, with such agreement being a condition of the ability to participate in the Plan.

		
	(4)
	Other Service Provider Data Recipients.  Schwab also may transfer Data to other third party service providers, if necessary to ensure compliance with applicable tax, exchange control, securities and labor law.  Such third party service providers may include Schwab’s legal counsel as well as Schwab’s auditor, accountant, or other third party vendor (currently Deloitte & Touche LLP).  Wherever possible, Schwab will anonymize Data, but you understand that your Data may need to be transferred to such providers to ensure compliance with applicable law and/or tax requirements.

		
	(5)
	International Data Transfers.  Schwab and its other service providers described above under (4) are located in the United States.  The United States may have different data privacy laws and protections than your country.  For example, the European Commission has issued a limited adequacy finding with respect to the United States that applies only to the extent companies register for the EU-U.S. Privacy Shield program, which is open to companies subject to Federal Trade Commission jurisdiction. Schwab’s legal basis, where required, for the transfer of Data is your consent.

		
	(6)
	Data Retention.  Schwab will hold and use the Data only as long as is necessary to implement, administer and manage your participation in the Plan, or as required to comply with legal or regulatory obligations, including under tax and securities laws.  When Schwab no longer needs the Data, Schwab will remove it from its systems.  If Schwab keeps Data longer, it would be to satisfy legal or regulatory obligations and Schwab’s legal basis would be relevant laws or regulations.

		
	(7)
	Data Subject Rights.  You understand that data subject rights vary depending on applicable law and that, depending on where you are based and subject to the conditions set out under applicable law, you may have, without limitation, the rights to (i) request access to or copies of Data that Schwab processes, (ii) rectify or supplement Data that is incorrect, incomplete or out-of-date in light of the purposes underlying the processing, (iii) delete Data, (iv) restrict processing of Data, (v) restrict portability of Data, (vi) lodge complaints with competent authorities in your jurisdiction and/or (vii) receive a list with the 

12

names and addresses of any potential recipients of Data.  To receive clarification regarding these rights or to exercise these rights, you understand that you can contact your local human resources representative.

		
	(8)
	Voluntariness and Consequences of Consent Denial or Withdrawal.  Participation in the Plan is voluntary and you are providing the consents herein on a purely voluntary basis.  If you do not consent, or if you later seek to revoke your consent, your employment status or service with your Employer will not be affected; the only consequence of refusing or withdrawing your consent is that Schwab would not be able to grant you options or other equity awards or administer or maintain such awards.

		
	(9)
	Declaration of Consent. By accepting the options and indicating consent via Schwab’s online acceptance procedure, you are declaring that you agree with the data processing practices described herein and consent to the collection, processing and use of Data by Schwab and the transfer of Data to the recipients mentioned above, including recipients located in countries which do not adduce an adequate level of protection from a European (or other non-U.S.) data protection law perspective, for the purposes described above. 

		
	(10)
	Alternative Basis for Data Processing and Transfer.  You understand that Schwab may rely on a different legal basis for the processing or transfer of Data in the future and/or request that you provide another data privacy consent form.  If applicable and upon request of Schwab, you agree to provide an executed acknowledgement or data privacy consent form to your Employer or Schwab (or any other acknowledgements, agreements or consents that may be required by your Employer or Schwab) that Schwab and/or your Employer may deem necessary to obtain under the data privacy laws in your country, either now or in the future.  You understand that you will not be able to participate in the Plan if you fail to execute any such acknowledgement, agreement or consent requested by Schwab and/or your Employer.

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COUNTRY-SPECIFIC PROVISIONS

Terms and Conditions

These additional terms and conditions govern this option granted to you under the Plan if you are an employee and reside and/or work in one of the countries listed below.
 
Notifications

These provisions may also include information regarding exchange controls and certain other issues of which you should be aware with respect to your participation in the Plan.  The information is based on the securities, exchange control and other laws in effect in the respective countries as of September 2018.  These laws are often complex and change frequently.  As a result, you should not rely on the information in these additional terms and conditions as the only source of information relating to your participation in the Plan.

In addition, the information contained herein is general in nature and may not apply to your particular situation, and Schwab is not in a position to assure you of a particular result.  Accordingly, you should seek appropriate professional advice as to how the relevant laws in your country may apply to your situation.

You understand that if you are a citizen or resident of a country other than the one in which you currently reside and/or work, transfer to another country after the date of grant, or are considered a resident of another country for local law purposes, Schwab shall, in its discretion, determine the extent to which the special terms and conditions contained herein shall be applicable to you.  In addition, the notifications contained herein may not be applicable to you in the same manner.

AUSTRALIA

Notifications

Offer Document: The offer of the option is intended to comply with the provisions of the Corporations Act 2001, ASIC Regulatory Guide 49 and ASIC Class Order CO 14/1000. Additional details are set forth in the Offer Document for the Offer of Stock Options and Restricted Stock Units to Australian Residents, which was distributed to you with this Agreement.

Tax Information:  Subdivision 83A-C of the Income Tax Assessment Act 1997 (Cth) applies to the option granted under the Plan, such that this option is intended to be subject to deferred taxation.

Exchange Controls: If you are an Australian resident, exchange control reporting is required for cash transactions exceeding A$10,000 and international fund transfers. The Australian bank assisting with the transaction will file the report. If there is no Australian bank involved in the transfer, you will be required to file the report.

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HONG KONG

Terms and Conditions

Sale Restriction: Any Shares acquired pursuant to exercise of this option are accepted as a personal investment. In the event that you exercise this option and Shares are issued to you (or your heir) within 6 months of the date of grant, you (or your heir) agree that such Shares will not be offered to the public or otherwise disposed of prior to the 6-month anniversary of the date of grant.

Notifications

Securities Law: WARNING: The contents of this document have not been reviewed by any regulatory authority in Hong Kong. You are advised to exercise caution in relation to the offer. If you are in any doubt about any of the contents of this document, you should obtain independent professional advice. Neither the grant of the options nor the issuance of Shares upon exercise constitutes a public offering of securities under Hong Kong law and are available only to employees of Schwab and its subsidiaries. This Agreement, the Plan and other incidental communication materials distributed in connection with the options (i) have not been prepared in accordance with and are not intended to constitute a “prospectus” for a public offering of securities under the applicable securities legislation in Hong Kong and (ii) are intended only for the personal use of each eligible employee of Schwab or its subsidiaries and may not be distributed to any other person. 

Nature of Scheme. Schwab specifically intends that the Plan will not be an occupational retirement scheme for purposes of the Occupational Retirement Schemes Ordinance (“ORSO”). 

SINGAPORE

Terms and Conditions

Sale Restriction:  You agree that any Shares acquired pursuant to this option will not be offered for sale in Singapore within 6 months from the date of grant, unless such offer or sale is made pursuant to one or more exemptions under Part XIII Division (1) Subdivision (4) (other than section 280) of the Securities and Futures Act (Chap. 289, 2006 Ed.) (“SFA”) or pursuant to, and in accordance with the conditions of, any other applicable provision(s) of the SFA.

Notifications

Securities Law: This option grant is being made in reliance on section 273(1)(f) of the SFA, on which basis it is exempt from the prospectus and registration requirements under the SFA and is not made to you with a view to this option or the Shares being subsequently offered for sale to any other party. The Plan has not been lodged or registered as a prospectus with the Monetary Authority of Singapore. 

15

Chief Executive Officer and Director Notification Obligation. The Chief Executive Officer (“CEO”) and the directors of a Singapore subsidiary of Schwab are subject to certain notification requirements under the Singapore Companies Act. The CEO and the directors must notify the Singapore subsidiary in writing of an interest (e.g., this option, Shares) in Schwab or any subsidiary or parent of Schwab within two business days of (i) its acquisition or disposal, (ii) any change in a previously-disclosed interest (e.g., upon exercise of this option or subsequent sale of Shares acquired under the Plan), or (iii) becoming a director or the CEO.

UNITED KINGDOM

Terms and Conditions 

Withholding Taxes and Stock Withholding: This section supplements the “Withholding Taxes and Stock Withholding” section of the Agreement:

Without limitation to the “Withholding Taxes and Stock Withholding” section of the Agreement, you agree that you are liable for all withholding taxes and hereby covenant to pay all such withholding taxes as and when requested by Schwab or your Employer or by Her Majesty’s Revenue and Customs (“HMRC”) (or any other tax authority or any other relevant authority). You also agree to indemnify and keep indemnified Schwab and your Employer against any taxes that they are required to pay or withhold or have paid or will pay to HMRC (or any other tax authority or any other relevant authority) on your behalf.

Notwithstanding the foregoing, if you are an executive officer or director (as within the meaning of Section 13(k) of the Exchange Act), you understand that you may not be able to indemnify Schwab or your Employer for the amount of any income tax not collected from or paid by you, as it may be considered a loan. In the event that you are an executive officer or director and income tax due is not collected from or paid by you within 90 days after the end of the United Kingdom tax year in which the event giving rise to the income tax occurs, the amount of any income tax due may constitute a benefit to you on which additional income tax and national insurance contributions may be payable. You will be responsible for reporting and paying any income tax due on this additional benefit directly to HMRC under the self-assessment regime and for paying Schwab or your Employer (as appropriate) for the value of any employee national insurance contributions due on this additional benefit, which Schwab or your Employer may recover from you by any means referred to in this Agreement.

Retirement: Notwithstanding the terms and conditions set forth in the Agreement, the options of employees in the United Kingdom will not vest upon retirement and any options that are vested prior to retirement will terminate on the earlier of the date three months following the date of your retirement or the Expiration Date specified in the Notice of Nonqualified Stock Option Grant.

BY ACCEPTING THIS OPTION GRANT, YOU AGREE TO ALL OF THE TERMS AND CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.

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