Document:

Letter of Understanding between International Paper Company and Maximo Pacheco

 Exhibit 10.32 

 

			
		 	
 

  
 6400 POPLAR AVENUE

MEMPHIS, TN 38197

December 10, 2009 
 Mr. Maximo
Pacheco 
 International Paper Company 

6400 Poplar Avenue 
 Memphis, TN 38197

  

	Re:	Letter of Understanding for Maximo Pacheco’s Employment 

 (Including International Assignment in Brussels, Belgium) 
 Dear Maximo: 

The purpose of this letter is to summarize the terms and conditions of your employment with, and temporary international assignment by, International
Paper Company (“IP”). The details of many of the benefits we are providing are described in the International Paper Company Global Mobility Policy. This letter is intended to summarize the terms of your employment and also some of
those benefits related to your assignment. We recommend that you review and retain the attached copy of the Global Mobility Policy, which contains a full description of the benefits related to your international assignment. To the extent not
expressly stated in this letter, the terms of the Global Mobility Policy will be controlling. 
 Pending approval by the Management Development
and Compensation Committee (“MDCC”) of IP’s Board of Directors, you will be performing services as President, IP Europe, Middle East, Africa and Russia, effective January 1, 2010 (the “Effective Date”). In these
capacities, your duties and authorities in respect of IP’s operations in Europe, Middle East, Africa and Russia will include all such matters as are customary for a company’s senior executive officer. You will be based in Brussels,
Belgium. Your position level (“PL”) will be as previously communicated to you by IP, and may be reviewed by IP’s Chief Executive Officer and the MDCC from year to year in accordance with IP’s customary review procedures
(giving particular consideration to changes in your duties and responsibilities and/or any material changes in the nature of IP’s business operations in Europe, the Middle East, Africa or Russia). You will continue to serve as a Senior Vice
President of IP. 
 Each IP employee with an international assignment has both a “Country of Assignment” and a “Home
Country”, and these terms will be used to explain benefits throughout this letter. Your “Country of Assignment” will be Belgium and your “Home Country” has been designated as Brazil because you and your spouse have resided
in Brazil for the past five years. You and IP will both take certain actions to ensure that you are no longer deemed a resident of Brazil upon your termination of employment as President, IP Brazil, including your resignation from IP Brazil and such
other actions as may be recommended. Throughout this letter, we also refer to your “Point of Origin.” Because you are a citizen of Chile and anticipate visiting your home in 

 
Chile during the pendency of this assignment, we have designated your “Point of Origin” as Chile. 
 The terms and conditions in this letter that relate to the Global Mobility Policy are applicable only for the period of this international assignment. There is one exception, however, which is that you
will continue to receive certain tax preparation services and payments that apply to the taxable years of your international assignment. 
 For
the period of this international assignment, you will be placed on the payroll of International Paper Professional Services Corporation (“IPPSC”), which is a wholly owned subsidiary of IP. Even though you will be on the payroll of
IPPSC, you will continue to be covered by, and eligible for, the employee benefit plans and policies of IP. 
 If you have questions about
anything contained in this letter, please contact Paul J. Karre, Senior Vice President, Human Resources & Communications, in Memphis, Tennessee. 
 Overseas Compensation Philosophy 
 IP’s goal is to make sure that you enjoy a
reasonably comparable standard of living in your Country of Assignment as you do in your Home Country. You will receive a copy of your compensation schedule before you leave for your Country of Assignment. You will also receive updates whenever the
compensation is adjusted. You will be paid under a split payroll methodology in the U.S. and Belgium. This letter highlights some of the ways we attempt to provide for your comfortable standard of living. Additional benefits for which you will be
eligible are described in the Global Mobility Policy. 
 Base Salary, Variable and Other Annual Compensation 

Your base salary will be US$653,050 per year, which is US$54,420.84 per month. Your base salary will be reviewed by IP’s Chief Executive Officer and
the MDCC from year to year in accordance with IP’s customary review procedures. 
 An agreed-upon percentage of your base salary amount
will be payable into your U.S. bank account in 12 monthly installments, with one installment payable on the last day of each calendar month. The remaining amount will be payable into your Brussels bank account in 12 monthly installments, with one
installment payable on the last day of each calendar month. You may change such percentage no more than three (3) times per year, unless IP otherwise consents. 
 You will continue to be eligible to receive an award under IP’s Management Incentive Plan (“MIP”) in accordance with the terms of the MIP and based on your PL. Your MIP award will be
determined in accordance with normal MIP performance guidelines and, the target 2010 MIP award will be consistent with the MIP structure approved by the MDCC. 
 You will also continue to be eligible to receive awards under IP’s Performance Share Plan (“PSP”) in accordance with the terms of the PSP, and based on your PL at the time the award
is granted (provided that if the Company adopts any other equity-based award program to succeed or replace the PSP, then all references herein to the PSP will be deemed to refer to such 

 
program). Your PSP grant will not be affected by the grant of common stock described below, and the target 2010 PSP award will be consistent with the PSP structure approved by the MDCC.

 In addition to the PSP awards described above, you will receive a grant of 75,000 restricted shares/units in respect of IP common stock, as
will be further described in the grant award agreement to be entered into between you and IP on or about the Effective Date. The restrictions on the shares/units will be removed, and the award will vest, pursuant to the following schedule:
(i) 15,000 shares/units will be immediately vested upon grant; (ii) 15,000 shares/units will vest on January 1, 2011, and each anniversary thereafter through January 1, 2014, provided you continue to be employed by IP.
Further, the restrictions on the award will be removed, and the award will vest, upon your death or disability, upon the “change of control” of IP, or in the event of termination by IP without Cause. However, if you cease to be an active
employee of IP prior to January 1, 2014, for any reason other than death, disability, or termination without Cause, the remaining unvested portion of the shares/units will be forfeited. For purposes of this Agreement, the terms
“Cause” and “change of control” shall have the meaning ascribed to such terms in the COC Agreement referred to at the end of this letter; provided that any references to facts existing before or after a “Change of
Control” shall be deemed to refer to facts existing during your employment and before any change or modification in the terms of your employment. IP may deduct a sufficient number of shares necessary to cover estimated withholding obligations
of any U.S. or foreign tax jurisdiction. 
 You will also continue to receive equalization payments (the “Equalization
Payments”) in the amount of US$155,000 each, payable on January 31, 2010 and January 31, 2011, which will be deposited in your U.S. bank account. You acknowledge and agree that you will not be entitled to receive further such
Equalization Payments following any date on which you cease to provide services to IP or an affiliate; and, in no event after January 31, 2011. 
 Tax Equalization 
 It is IP’s policy that you should not pay more (or less) in
taxes on your compensation than you would be responsible for paying if you were still working in your Home Country. For this reason, we will work with local tax professionals to determine the applicable taxes in both your Home Country and Country of
Assignment. You will be required to pay an amount of taxes you would have paid in your Home Country. If your Country of Assignment tax rate is lower than your Home Country tax rate, you may be required to pay additional amounts to IP. IP will pay
for all income and similar tax return preparation, filing and audit-related costs and expenses in matters relating to compensation paid by IP (and taxes due) necessary for you in the United States, Brazil, Chile, Belgium, and any other jurisdiction
in which you perform services for any IP entity (it being understood that IP will arrange for a “Big Four” international accounting firm to prepare and file such returns in a manner consistent with the services provided for other
expatriates of IP.) As previously described to you, IP will pay for tax planning services only to the extent that such services are related to tax consequences of compensation paid to you by IP as an expatriate. Because you anticipate returning to
Chile upon your retirement from IP, this includes tax planning services of an accounting firm necessary to avoid double taxation in Chile resulting from your international assignment. Consistent with IP’s Global Mobility Policy, you will be tax
equalized on imputed income associated with tax planning services paid by IP on your behalf. 

 International Paper Health and Welfare Plans 

IP will continue to provide your health and welfare benefits. Your medical and dental coverage will be provided by Aetna Global Benefits. 

Similarly, you will continue to be eligible for IP’s Executive Supplemental Life Insurance Program (“ESIP”), which is provided to
certain other senior vice presidents of IP. Under this program, IP pays the annual insurance premium for the ESIP. Executives are not grossed up on the income tax associated with the imputed income. 

International Paper Retirement Plans 
 You will continue to participate in the Unfunded Supplemental Retirement Plan for Senior Managers (“SERP”). Your benefit under the SERP will be determined under the formula set forth in
Section 5(B) of the SERP based on your total period of service with IP and its affiliates, including without limitation, your service for any IP entity in Chile, Brazil and Brussels. To avoid any confusion, the parties agree that your service
with IP and its affiliates commenced on April 24, 1994, and has continued without interruption through the date of this letter. 

Housing 
 You will be living in
rental housing in your Country of Assignment during your international assignment. IP will pay the actual cost of your rental housing in Brussels, including home security expenses, and all utilities except local and long distance telephone service.

 With regard to your housing in your Country of Assignment, it is important to know that IP strongly discourages you from purchasing a house
in the Country of Assignment. If you choose to purchase a home in your Country of Assignment, IP will not offer any financial assistance to you at the time of purchase of the residence or at the time you subsequently sell the residence. 

Consistent with IP’s Global Mobility Policy, you will be tax equalized on imputed income associated with the housing allowance paid by IP.

 Goods and Services Differential Allowance 
 We recognize that the cost of living in your Country of Assignment may be higher for many everyday items. To assist you in meeting living expenses, IP will provide you with a Goods and Services
Differential Allowance. Major areas that we include in determining the amount of the allowance are common, everyday items such as food, household items, domestic help, personal care, clothing, recreation and entertainment. We calculate the allowance
based on an amount a family of your size would typically spend on such items. We have calculated your allowance based on your family size of two persons in your Country of Assignment. This monthly allowance will be US$8,036.42. 

This net allowance will be a fixed amount for the duration of your international assignment. We will begin paying this allowance on January 1, 2010.
You will no longer receive the allowance 

 
once you have moved out of your permanent housing in your Country of Assignment. Consistent with IP’s Global Mobility Policy, you will be tax equalized on income associated with the goods
and services differential allowance paid by IP. 
 It is important that you notify us when you move into, and when you leave, your permanent
housing in your Country of Assignment. It is also important that you notify us if the number of family members who reside with you full-time in your Country of Assignment changes. You will need to notify Rafael Durand at (901) 419-7851 as soon
as one of these events takes place. 
 Shipment/Storage of Personal Effects 

IP expects that you will want to furnish your new residence with many of your personal items. We will pay for the costs to ship your household goods to
your Country of Assignment or to your Point of Origin. A representative from AIReS will make all arrangements for shipment and storage on your behalf. 
 With regard to any pets you may have, we recommend that you not relocate them to your Country of Assignment. However, we realize this is not always possible, so we will reimburse the costs to ship two
household pets, if permitted by law, up to US$2,500. 
 Home Country Automobile(s) 

Your personal automobile(s) will not be shipped to your Country of Assignment. If you choose to sell your home country automobile(s), you will be eligible
for reimbursement for loss on sale for up to two personal automobiles. The loss on sale amount will be capped at US$3,500 for each automobile. 

Automobile in Country of Assignment  
 You will be provided with an automobile for business use while in your Country of Assignment, with IP responsible for all costs related thereto, including without limitation, maintenance in the ordinary
course, third-party liability insurance coverage, and fuel. You will be responsible for paying applicable taxes on the imputed income associated with personal use of the automobile that you may have while in your Country of Assignment. 

Annual Home Leave Trips 

Annually, you are entitled to one home leave trip for up to four (4) weeks. Your spouse is entitled to three (3) additional home leave trips
annually. IP will provide you and your spouse with direct route (if available), business class, round-trip airfare between Brussels and your Point of Origin for each home leave. 
 Limited but necessary and reasonable travel expenses en route and car rental during periods of home leave will also be covered. Lodging, meals and gasoline for the rental car during periods of home leave
will be your responsibility and will not be reimbursed. 

 Travel for Family Members 
 IP wants to encourage your children who attend college to visit you during your international assignment. For this reason, we will reimburse the airfare and limited but necessary and reasonable travel
expenses for two (2) trips for each child attending college during the school year that either you or your college student may use for a visit. 
 Cultural Training 
 IP believes that for you to be as effective as possible, it is
important that you understand the customs and manners of your Country of Assignment. For this reason, IP offers cultural training for both you and your spouse. You will be receiving additional information about this training from our international
relocation provider, AIReS. 
 Physical Examinations 
 Your health is very important to us and IP wants to be sure that you are physically able to take on this international assignment. For this reason, before you leave for your Country of Assignment, you and
your spouse will be required to have a basic physical examination, as well as any necessary vaccinations and inoculations as specified by your medical doctor. IP will pay for the costs of the examination and necessary vaccinations or inoculations.

 You and your spouse will receive an annual, basic physical examination once you are living in your Country of Assignment. IP will pay the
expense of these examinations. 
 For your continued good health, as soon as possible once you arrive in your Country of Assignment, please
establish a relationship with a local doctor and identify a local hospital to assist with any medical needs or emergencies that may arise. It is also important to have readily available information on the blood type, allergic reactions to
medications, and other important medical information for you and your immediate family members. 
 Work and Holiday Schedule

 The working hours and holiday schedule will be provided by your Country of Assignment. 

Conflicts of Interest 

International Paper’s Conflict of Interest Policy as stated in our Code of Ethics continues to apply to you in your Country of Assignment. For this
reason, it is critical that you understand that you may not engage in any employment or business enterprises that would in any way conflict with your service to, or the interests of, IP. 
 Country of Assignment Applicable Laws 
 In your new position, you are acting, in many
ways, as an ambassador of IP to your Country of Assignment. It is critical that you understand that you must comply with all applicable laws in 

 
your Country of Assignment, as well as any other country where you are doing business. It is also important that you understand you must refrain from engaging in political activities in your
Country of Assignment. 
 Termination and Severance 
 In the event your employment with IP is terminated for any reason while you are serving in your international assignment, or upon the end of your international assignment, IP will reimburse the costs to
move your household goods and personal effects, as well as travel for you and your spouse, back to your Point of Origin. It is important to note that IP will only pay these costs if you return within 60 days of the termination of your
employment. When your employment terminates, you will be required to immediately settle all outstanding advances, including travel, and any other financial arrangements you may have with IP. IP will also reimburse you for legal expenses incurred in
connection with your return to your Point of Origin, which must be approved by IP’s Senior Vice President, Human Resources & Communications (such approval not to be unreasonably withheld). 

You will be eligible for severance under the International Paper Salaried Severance Plan offered to other senior vice presidents of IP. 

International Paper Agreements 

As a senior vice president of IP, you have previously entered into certain agreements. The parties agree that the following previously executed agreements
remain in full force and effect (collectively, the “Other Continuing Agreements”): (i) Change of Control Agreement, dated October 15, 2008 (the “COC Agreement”); (ii) Non-Competition Agreement dated January 1,
2009; and (iii) Non-Solicitation Agreement dated January 1, 2009. 
 Indemnification 

IP will continue to provide indemnification to you to the same extent provided to other similarly-situated officers in accordance with IP’s By-laws,
which provide that IP will indemnify each Officer or Director of IP who is made, or threatened to be made, a party to any action by reason of the fact that he or she is or was serving at the request of IP in any capacity for IP or any other
enterprise, to the fullest extent permitted by applicable law. IP will also advance your costs and expenses in respect of any such action pending a final determination of your entitlement to indemnification, provided, however, that you will repay
the amount of such advance if it is ultimately be determined that you are not entitled to be indemnified against such costs and expenses. 

Letter of Agreement 
 This letter,
together with the compensation awards and plans specifically referenced in this letter, constitute the entire agreement between IP, its affiliates, and you in respect of your employment with IP or its affiliates. This letter supersedes and renders
void any oral promises or commitments, and any other agreement, whether written or oral, between you and the Company or any affiliate, including, without limitation, the Amended and Restated Executive Agreement

 
with International Paper Professional Services Corporation and you dated January 1, 2007, and the Amended and Restated Executive Agreement with International Paper do Brasil Ltda. and you
dated January 1, 2007, but expressly excluding the Other Continuing Agreements and outstanding PSP grants. 
 Subject to the terms hereof,
your employment may be terminated by either party upon thirty (30) days’ notice to the other party; provided that any provision of this letter providing you with rights to compensation or benefits after your employment term will continue
in full force and effect in accordance with the terms described in this letter. This letter may not be modified or amended except by prior written consent of each party. 
 You and IP are entering into this letter agreement in the State of Tennessee, United States of America. This letter agreement will be subject to the laws of the State of Tennessee and applicable United
States federal laws. If any provision of this letter agreement is found to be invalid or unenforceable by reason of law, such invalidity or unenforceability will apply only to those provisions and the other provisions of this letter agreement will
remain in effect. 

 This contract is prepared and may be signed in counterparts, being one document for each party. 

 

	
	INTERNATIONAL PAPER PROFESSIONAL SERVICES CORPORATION 
	
	 /s/ Rafael Durand
 Director, Human Resources
 International and EHS&S

	
	MAXIMO PACHECO MATTE
	
	 /s/ Maximo Pacheco Matte
 Date: December 21, 2009

	
	Acknowledged and Agreed:
	
	INTERNATIONAL PAPER COMPANY
	
	 /s/ Paul J. Karre

	 Paul J. Karre
 SVP, Human
Resources & Communications
  
 Date: December 10,
2009Form of 2004 Stock Incentive Plan

 Exhibit 10.336 
 THE CHARLES SCHWAB CORPORATION 
 2004 STOCK INCENTIVE PLAN 

NOTICE OF RESTRICTED STOCK UNIT AWARD 
 (PERFORMANCE-BASED VESTING) 
 You have been granted Restricted Stock Units. A Restricted
Stock Unit represents the right to receive, subject to certain conditions, a share of Common Stock of The Charles Schwab Corporation (“Schwab”), under The Charles Schwab Corporation 2004 Stock Incentive Plan (the
“Plan”). Your Restricted Stock Units are granted subject to the following terms: 
  

			
	Name of Recipient:	  	
		
	 Total Number of

Restricted Stock Units

Granted:
	  	
		
	 Fair Market Value per
 Restricted Stock Unit:
	  	
		
	Grant Date:	  	
		
	Vesting Schedule:	  	 So long as you remain in service in good standing and subject to the terms of the Restricted Stock Unit Agreement and certification of
the Performance Goal by Schwab’s Compensation Committee, this award vests on the following Vesting Dates, subject to the restrictions below:
  

Number of Restricted Stock Units on Vesting Date:

  
 1 

 The number of Restricted Stock Units indicated will vest only if Schwab’s Compensation Committee
certifies that as of the Vesting Date next to the number of Restricted Stock Units, Schwab has satisfied the Performance Goal for the applicable performance period ending prior to such Vesting Date. The Performance Goal shall be established by the
Compensation Committee within the first 90 days of the applicable performance period. 
 [[If the Performance Goal is not met for any one-year
period, you will have a second opportunity to vest in the unvested portion of the award if [insert the performance goal for the second vesting opportunity.]] 
 Except as otherwise provided in the Restricted Stock Unit Agreement, if the Performance Goal is not met, any unvested portion of the award will be forfeited automatically and permanently on the date
established by the Compensation Committee. 
 Any vested Restricted Stock Units will be paid in shares of Common Stock of
The Charles Schwab Corporation (“Shares”) as soon as administratively possible after vesting, but in no event beyond March 15th of the year following the year of vesting. 
 You and Schwab agree that this award is granted under and governed by the terms and conditions of the Plan and the Restricted Stock Unit Agreement, both of which are made a part of this notice. Please
review the Restricted Stock Unit Agreement and the Plan carefully, as they explain the terms and conditions of this award. You agree that Schwab may deliver electronically all documents relating to the Plan or this award (including, without
limitation, prospectuses required by the Securities and Exchange Commission) and all other documents that Schwab is required to deliver to its stockholders. By accepting this award, you agree to all of the terms and conditions described above, in
the Restricted Stock Unit Agreement and in the Plan, and you have no right whatsoever to change or negotiate such terms and conditions. 

  
 2 

 THE CHARLES SCHWAB CORPORATION 

2004 STOCK INCENTIVE PLAN 
 RESTRICTED STOCK UNIT AGREEMENT 
 (PERFORMANCE-BASED VESTING)

  

			
	 Payment for

Units
	    	No payment is required for the Restricted Stock Units that you are receiving. Restricted Stock Units are an unfunded and unsecured obligation of Schwab.
		
	Vesting	    	Subject to the provisions of this Agreement, this award becomes vested as described in the Notice of Restricted Stock Unit Award, of which this Restricted Stock Unit Agreement is a
part. Unvested units will be considered “Restricted Stock Units.” If your service terminates for any reason, then your Restricted Stock Units will automatically and permanently be forfeited to the extent that they have not
vested before the termination date and will not vest as a result of the termination, unless otherwise noted below. This means that the Restricted Stock Units will immediately revert to Schwab. You will receive no payment for Restricted Stock Units
that are forfeited. Schwab determines when your service terminates for this purpose. For all purposes of this Agreement, “service” means continuous employment as a common-law employee of Schwab or a parent company or
subsidiary of Schwab, and “subsidiary” means a subsidiary corporation as defined in section 424(f) of the Internal Revenue Code of 1986, as amended (the “Code”).
		
	Accelerated Vesting	    	This award, to the extent not already forfeited, will become fully vested if your service terminates on account of your death or disability. If, prior to the date your service
terminates, Schwab is subject to a “change in control” (as defined in the Plan document), this award, to the extent not already forfeited, will become fully vested as of the date that the change in control
occurs.
		
	 Continued

Vesting
	    	If your service terminates on account of your retirement and your retirement occurs at least two years after the Grant Date indicated in the Notice of Restricted Stock Unit Award,
you will be treated as in service in good standing for purposes of determining further vesting of the award.

  
 1 

			
		    	If you are entitled to severance benefits under The Charles Schwab Severance Pay Plan (or any successor plan), then you may be treated as in service in good standing during your
Severance Period for purposes of determining further vesting of the award under the terms of that plan.
		
	Definition of Fair Market Value	    	Fair market value means the average of the high and low price of a Share (as defined below) as reported on the New York Stock Exchange on the applicable determination
date.
		
	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.
		
	Definition of Retirement	    	 If you are an employee of Schwab and its subsidiaries, “retirement” means termination of service for any
reason other than death at any time after you attain age 55, but only if, at the time of your termination, you have been credited with at least 10 years of service.
  

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).

		
	 Payment of

Shares
	    	Restricted Stock Units that vest will be paid in shares of Common Stock of The Charles Schwab Corporation (“Shares”) as soon as administratively possible
following vesting, but in no event beyond March 15th of
the year following the year of vesting.
		
	Restrictions on Restricted Stock Units	    	You may not sell, transfer, pledge or otherwise dispose of any Restricted Stock Units without Schwab’s written consent. Schwab will deliver Shares to you only after the
Restricted Stock Units vest and after all other terms and conditions in this Agreement have been satisfied.

  
 2 

			
		    	You may make a gift of Restricted Stock Units to your spouse, children or grandchildren or to a trust established by you for the benefit of yourself or your spouse, children or
grandchildren. However, a transferee of Restricted Stock Units must agree in writing on a form prescribed by Schwab to be bound by all provisions of this Agreement as a condition for the transfer prior to the Restricted Stock Units becoming
vested.
		
	 Delivery of
 Shares
After
 Death
	    	In the event of your death prior to the date your service terminates, your Shares will be delivered to your beneficiary or beneficiaries. You may designate one or more
beneficiaries by filing a beneficiary designation form. 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 Shares will be delivered to your estate. The Compensation Committee, in its sole discretion, will determine the form and time of the distribution of Shares to your estate. In no event will the payment be made beyond March 15th of the year following the year of death.
		
	Restrictions on Resale	    	You agree not to sell any Shares at a time when applicable laws, Schwab’s policies or an agreement between Schwab and its underwriters prohibit a sale. This restriction will
apply as long as your service continues and for such period of time after the termination of your service as Schwab may specify.
		
	 Withholding

Taxes
	    	The Restricted Stock Units will not be paid in Shares unless you have made acceptable arrangements to pay any applicable withholding of income and employment taxes that may be
due as a result of this award. With Schwab’s consent, these arrangements may include without limitation withholding Shares that otherwise would be issued to you when this award vests. In its sole discretion, Schwab may withhold the minimum
number of whole Shares, valued at the fair market value on the Vesting Date, required to satisfy such applicable withholding taxes. Any residual amount of applicable withholding taxes, i.e., amounts of less than the fair market value of a Share, may
be deducted from your pay. If withholding taxes are due and you have terminated employment, applicable withholding taxes will be deducted from your Schwab brokerage account. You are responsible for having sufficient funds in your Schwab brokerage
account to cover the withholding taxes at the time they are due.

  
 3 

			
	 No

Stockholder
 Rights
	    	Your Restricted Stock Units carry no voting or other stockholder rights. You have no rights as a Schwab stockholder until your units are settled by issuing Shares.
		
	 Contribution of
 Par
Value
	    	On your behalf, Schwab will contribute to its capital an amount equal to the par value of the Shares issued to you.
		
	 Dividend

Equivalent Rights
	    	If Schwab pays cash dividends on Shares, each Restricted Stock Unit will accrue a dividend equivalent equal to the cash dividend paid per Share, subject to the same vesting and
forfeiture provisions as the associated Restricted Stock Units, to be paid in cash without interest at the time the associated Restricted Stock Units vest and Shares are released. In no event will the accumulated dividend equivalent be paid beyond
March 15th of the year following the year in which the
associated Restricted Stock Units vest.
		
	 No Right to

Remain
 Employee
	    	Nothing in this Agreement will be construed as giving you the right to be retained as an employee, contingent worker or director of Schwab and its subsidiaries for any specific
duration or at all.
		
	Limitation on Payments	    	 If a payment from the Plan would constitute an excess parachute payment under section 280G of the Code or if there have been certain
securities law violations, then your award may be reduced or forfeited and you may be required to disgorge any profit that you have realized from your award.
  

If a disqualified individual receives a payment or transfer under the Plan that would constitute an excess parachute payment under 280G of the Code, such
payment will be reduced, as described below. Generally, someone is a “disqualified individual” 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 the section on “Limitation on Payments,” the term “Schwab” will include affiliated corporations to the extent
determined by the independent auditors most recently selected by the Schwab Board of Directors (the “Auditors”) in accordance with section 280G(d)(5) of the Code.

  
 4 

			
		    	In the event that 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; provided, however, that the Compensation Committee may specify in writing that the award 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 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). 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.
		
		    	As promptly as practicable following these determination 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 which should not have been made (an “Overpayment”) or that additional

  
 5 

			
		    	 Payments which 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 that the Auditors, based upon the assertion of a deficiency by the Internal Revenue Service against you or Schwab which the Auditors believe has a high probability of success, determine
that an Overpayment has been made, the amount of such Overpayment will be paid by you 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 which is subject to taxation under section 4999 of the Code. In the event that 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.
  

Notwithstanding the foregoing, in no event will a payment be made under this Section beyond March 15th of the year following the year in which the amount ceases to be
subject to a substantial risk of forfeiture.

		
	Claims Procedure	    	You may file a claim for benefits under the Plan by following the procedures prescribed by Schwab. If your claim is denied, generally you will receive written or electronic
notification of the denial within 90 days of the date on which you filed the claim. If special circumstances require more time to make a decision about your claim, you will receive notification of when you may expect a decision. You may appeal the
denial by submitting to the Plan Administrator a written request for review within 30 days of receiving notification of the denial. Your request should include all facts upon which your appeal is based. Generally, the Plan Administrator will provide
you with written or electronic notification of its decision within 90 days after receiving the review request. If special circumstances require more time to make a decision about your request, you will receive notification of when you may expect a
decision.
		
	Plan Administration	    	The Plan Administrator has discretionary authority to make all determinations related to this award and to construe the terms of the Plan, the Notice of Restricted Stock Unit Award
and this Agreement. The Plan Administrator’s determinations are conclusive and binding on all persons.

  
 6 

			
	Adjustments	    	In the event of a stock split, a stock dividend or a similar change in Schwab stock, the number of Restricted Stock Units that remain subject to forfeiture shall be adjusted
accordingly.
		
	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.
		
	 The Plan and

Other
 Agreements
	    	The text of the Plan is incorporated in this Agreement by reference. This Agreement, the Notice of Restricted Stock Unit Award and the Plan constitute the entire understanding
between you and Schwab regarding this award. Any prior agreements, commitments or negotiations concerning this award are superseded. This Agreement may be amended only by another written agreement, signed by both parties and approved by the
Compensation Committee. If there is any inconsistency or conflict between any provision of this Agreement and the Plan, the terms of the Plan will control.

  
 7

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