8-KLeadership ChangesExhibits & Filings

SCHWAB CHARLES CORP 8-K Report, Executive Changes (Dec 16, 2014)

Filed December 16, 2014For Securities:SCHWSCHW-PDSCHW-PJ

Summary

This SEC filing (8-K) pertains to a Separation Agreement, General Release, and Waiver of Claims between John Clendening and The Charles Schwab Corporation. The agreement, effective upon the expiration of a seven-day revocation period, details the terms of Mr. Clendening's departure from his officer and director positions. Key aspects include his resignation from remaining officer positions by December 31, 2014, and the end of his employment relationship on March 31, 2015, or earlier under certain conditions. The agreement outlines specific financial considerations for Mr. Clendening, including his base salary, a 2014 annual bonus, expense reimbursements, and continued benefits through his Separation Date. A significant component is a lump-sum payment of $5,167,000, contingent on him not joining a competitor before December 31, 2015. An additional payment of $2,583,500 is also detailed, subject to the execution of a supplemental release and similar non-compete conditions.

Key Highlights

  • 1Formal separation agreement executed between John Clendening and Charles Schwab Corporation, detailing terms of departure.
  • 2Mr. Clendening's employment officially ends on March 31, 2015, with resignation from officer positions by December 31, 2014.
  • 3Schwab to provide Mr. Clendening with his base salary, 2014 annual bonus, expense reimbursements, and benefits through his Separation Date.
  • 4A payment of $5,167,000 is stipulated, conditional upon Mr. Clendening not commencing employment with a "Competitor Business" before December 31, 2015.
  • 5An additional payment of $2,583,500 is contingent upon signing a supplemental waiver and release and adhering to non-compete clauses.
  • 6Mr. Clendening agrees to a broad release of claims against Schwab and its affiliates.
  • 7The agreement includes non-disparagement and cooperation clauses, along with provisions for indemnification and return of company property.

Frequently Asked Questions

The primary purpose of this 8-K filing is to announce and provide details of a Separation Agreement, General Release, and Waiver of Claims entered into by John Clendening and The Charles Schwab Corporation. This agreement outlines the terms and conditions under which Mr. Clendening is leaving his positions at the company.

Mr. Clendening will continue to receive his base salary, the 2014 annual bonus, reimbursement for business expenses, and employee benefits until his Separation Date. Additionally, he is set to receive a payment of $5,167,000, with a portion advanced and the remainder contingent on not joining a competitor before December 31, 2015. A further payment of $2,583,500 is possible if he signs a supplemental agreement and adheres to non-compete terms.

Mr. Clendening agrees to a broad release of claims against Schwab. He is also subject to non-disparagement clauses, meaning he cannot make negative statements about the company. Furthermore, he must cooperate with Schwab on certain matters and is restricted from joining a "Competitor Business" before December 31, 2015, to receive full separation benefits. He also agrees to return all company property and confidential information.

Yes, Mr. Clendening would have to repay the $5,167,000 payment if he commences employment with or acts in any capacity for a "Competitor Business" on or before December 31, 2015, as this payment is considered earned only after that date if he has not worked for a competitor. Similar conditions apply to the additional consideration.