Sample Business Contracts


Separation Agreement and General Release - Charles Schwab Corp., Charles Schwab & Co. Inc. and John Philip Coghlan


                             SEPARATION AGREEMENT AND
                                 GENERAL RELEASE

     The Parties to this Separation Agreement and General Release  ("Agreement")
are John Philip Coghlan ("Mr.  Coghlan") and The Charles Schwab  Corporation and
Charles Schwab & Co., Inc.  (collectively  "Schwab").  This Agreement is for the
benefit of the Parties and certain "Releasees", defined in Paragraph 13 below.

                                    RECITALS

     A. Mr.  Coghlan  agrees that as of the close of business on May 2, 2003, he
voluntarily  stepped down from and was relieved of his current  responsibilities
as Vice-Chairman and President,  Schwab Individual  Investor.  For the period of
May 2, 2003 through July 25, 2003,  Mr. Coghlan will continue to work on special
projects at the sole  discretion of Schwab and will receive salary in accordance
with regular payroll practices.  On July 25, 2003, Mr. Coghlan will be deemed to
have resigned as an Officer and from any Schwab  directorships  he holds as well
as from the Executive  Committee.  Commencing on July 25, 2003, Mr. Coghlan will
begin a sabbatical  (in accordance  with the terms of the applicable  Sabbatical
Policy)  for eight (8)  weeks,  during  which time he will  continue  to receive
salary in accordance with regular  payroll  practices.  Beginning  September 19,
2003,  Mr.  Coghlan  will  enter a salary  continuation  period.  Mr.  Coghlan's
employment  with Schwab will end on the  earlier of: 1) March 15,  2005;  2) the
date Mr. Coghlan obtains an external  position or otherwise  becomes employed by
another employer, or becomes an independent  contractor,  consultant,  or a sole
proprietor of a business, or acts as an officer, director, or partner in another
public or privately  held  company  before March 15, 2005 (except as provided in
Paragraph 10 below with respect to approved outside business activity consistent
with continued Schwab employment); or 3) on a date resulting from a violation of
Mr.  Coghlan's  duties  arising  from  paragraphs  9 or 10  below.  The date Mr.
Coghlan's  employment  ends will be his  Termination  Date.  In the next  Schwab
payroll  cycle  following  the beginning of Mr.  Coghlan's  salary  continuation
period,  he will receive all accrued but unused  vacation and floating  holidays
accrued through the end of his sabbatical (September 19, 2003). Mr. Coghlan will
be entitled to exercise,  at his cost, any conversion  rights to which he may be
entitled under the law with respect to group health coverage.

     B. The  Parties now desire to settle  fully and  finally  all  differences,
disputes  and  claims Mr.  Coghlan  might have  against  Schwab and the  certain
Releasees  defined in paragraph 13 below  through the date of execution  hereof,
including,  but in no way limited to,  those  differences,  disputes  and claims
based upon, arising out of, or relating to Mr. Coghlan's employment relationship
with Schwab and the termination thereof.

     NOW,  THEREFORE,  in  consideration  of the mutual  covenants  and promises
herein contained, it is hereby agreed by and between the Parties as follows:

                                      -1-

<PAGE>


                              TERMS AND SETTLEMENT

     1. Compensation  Committee.  Mr. Coghlan acknowledges that the execution of
this Agreement and the payment of consideration  hereunder are subject to review
by the Compensation Committee of The Charles Schwab Corporation.

     2. Consideration.  In consideration for Mr. Coghlan's promises made herein,
Schwab agrees,  upon  satisfaction of the conditions  identified  herein, to the
following:

     (i)  salary continuation commencing September 19, 2003, at the monthly rate
          of fifty-two  thousand  eighty-three  dollars and  thirty-three  cents
          ($52,083.33)   less  usual  and  customary   taxes,   withholding  and
          authorized  deductions,  through the pay period  ending March 15, 2005
          (the "salary continuation period");

     (ii) a lump sum  payment  of  $50,000,  less  usual  and  customary  taxes,
          withholding and authorized  deductions,  which represents  payment for
          outplacement  services,  payable within 15 business days after receipt
          of Agreement  and  expiration  of the  revocation  period set forth in
          paragraph 23;

     (iii)continued  eligibility to participate in the Corporate Executive Bonus
          Plan for  calendar  year  2003 at the  current  target  bonus  rate in
          accordance with the terms of the Plan;

     (iv) continued  eligibility  for monthly  parking  (at his current  monthly
          parking rate) and financial planning benefits (not to exceed the gross
          amount of $25,000) in accordance  with the terms and conditions of the
          plan until his Termination Date;

     (v)  eight week sabbatical commencing on July 25, 2003 and ending September
          19, 2003,  payable in accordance with regular payroll practices at his
          current monthly salary rate; and

     (vi) continued  use of a  company  office  reasonably  consistent  with the
          Company's  standards  for  Senior  Vice-Presidents,   with  a  desktop
          computer  (office  location  and  selection  to  be  within  the  sole
          discretion of Schwab) until his Termination Date.

     (vii)Schwab agrees that if the sum of the amounts paid to Mr. Coghlan under
          the Corporate Executive Bonus Plan in 2003 under Section 2(iii) above,
          plus any consulting or outside board membership  payments  approved by
          the Company pursuant to Section 10 below,  totals less than $75,000 in
          any full calendar  quarter prior to his Termination  Date, then Schwab
          will pay Coghlan the difference  between  $75,000 and what he received
          under the Corporate  Executive  Bonus Plan under  Section  2(iii) (for
          2003),  plus any  consulting  or  outside  board  membership  payments
          approved by the Company pursuant to Section 10. Under no circumstances
          will  Schwab  pay Mr.  Coghlan  more than  $75,000  per full  calendar
          quarter  under this  subparagraph  and under Section  2(iii).  For any
          partial  calendar quarter prior to his Termination  date,  Schwab will
          pay Mr. Coghlan the pro-rated amount of what he would receive, if any,
          under this subparagraph.

                                      -2-

     3.  Entire  Consideration. Mr. Coghlan agrees that the amounts and promises
set forth in paragraph 2 shall constitute the entire  consideration  provided to
Mr. Coghlan under this Agreement, and that Mr. Coghlan will not seek any further
compensation  or other  consideration  for any other claimed  damage,  costs, or
attorneys' fees in connection with the matters encompassed in the Agreement.

     4.  Employee  Benefits.  Through the  Termination  Date,  Mr.  Coghlan will
continue to be eligible for all regular  employee  insured  benefits  (excluding
Short and Long Term Disability, except as otherwise required by law) on the same
terms and conditions as the other plan participants in accordance with the terms
of each plan. As set forth above, eligibility for parking and financial planning
assistance will continue during the salary  continuation period (up to a maximum
of $25,000 in financial planning assistance, which sum will be available for use
at any time during the salary continuation  period). Mr. Coghlan is not eligible
to receive  airline club  payments or  charitable  gift  matching  contributions
during the salary  continuation  period.  Mr.  Coghlan  will not be eligible for
vacation,  floating  holiday,  or sick time  accrual  or any other paid time off
during the salary  continuation  period.  Except as  provided  for  herein,  Mr.
Coghlan is not  entitled to any other  payments or  benefits  including  without
limitation  salary,   bonus,   incentive  payments,   vacation,   or  any  other
compensation or benefits. Upon reaching the Termination Date, in accordance with
federal and state  regulations,  Mr. Coghlan will be offered the  opportunity to
continue  receiving  certain  insured  group benefit  coverage,  such as medical
benefits,  for a period of time not to exceed eighteen (18)  additional  months,
provided Mr. Coghlan pays the  appropriate  premiums for the coverage and return
the necessary paperwork.

     5. Waiver of Benefits  under The Charles  Schwab  Severance  Pay Plan.  Mr.
Coghlan  agrees and  acknowledges  that the benefits under this Agreement are in
lieu of and a substitute for any severance benefits he may have been eligible to
receive under The Charles Schwab Severance Pay Plan or under any other agreement
he may have regarding  severance or other termination pay. Mr. Coghlan expressly
agrees  that he waives any  benefits  he  otherwise  may have been  eligible  to
receive  under The  Charles  Schwab  Severance  Pay Plan or other  agreement  in
exchange  for  receipt  of  benefits  under this  Agreement.  Mr.  Coghlan  also
acknowledges  and  agrees  that this  Agreement  providing  salary  continuation
defeats his eligibility to receive  benefits under The Charles Schwab  Severance
Pay Plan based on events that may arise during the salary continuation period.

                                      -3-

     6.  Retirement   Savings  and  Investment   Plan.  Mr.   Coghlan's   active
participation  in The  SchwabPlan  Retirement  Savings  &  Investment  Plan (the
"Plan") shall cease as of the date the salary continuation begins, September 19,
2003. Mr. Coghlan will not receive matching  contributions or any  discretionary
profit sharing for 2003. Mr. Coghlan's vested interest in Company  contributions
(other than matching  contributions,  which are automatically fully vested) will
be determined  based on his service through the Termination  Date (as defined in
this Agreement). Information regarding distribution of vested Plan benefits will
be  forwarded to Mr.  Coghlan  directly  from  SchwabPlan  at that time.  If Mr.
Coghlan  has any  outstanding  loans  from  the  Plan,  he has 90 days  from the
Termination Date to repay loan(s) in full to avoid a taxable event or imposition
of a tax penalty. Please refer to the Plan documents and your loan documents for
information  about repayment of loans and you should consult with an independent
advisor about the possible tax consequences if you fail to repay the loan within
the terms of the Plan.

     7. The Charles Schwab  Corporation  Stock Incentive Plans. Mr. Coghlan will
continue to vest in any stock options  previously  granted until his Termination
Date,  in  accordance  with the  terms and  conditions  of the  applicable  Plan
documents.  Under  the  provisions  of  The  Charles  Schwab  Corporation  Stock
Incentive  Plans, Mr. Coghlan retains the right to exercise vested options for a
specific period of time after his  Termination  Date. Any stock options that are
not vested as of his Termination Date are immediately  canceled.  The applicable
Stock Option  Agreement(s)  and Plan documents govern the vesting and exercising
of stock options.  Mr.  Coghlan will continue to vest in any  restricted  shares
granted  to him  until the  Termination  Date in  accordance  with the terms and
conditions of the applicable Plan documents.  Restricted shares not vested as of
Mr.  Coghlan's  Termination Date will be forfeited as provided by the applicable
Plan documents.  The Restricted Share Agreement(s) and Plan documents govern the
applicable restricted shares.

     8. Tax  Treatment.  Mr.  Coghlan  understands  and  agrees  that  Schwab is
providing no tax or legal  advice,  and makes no  representations  regarding tax
obligations or consequences,  if any, related to any part of this Agreement. Mr.
Coghlan  further  agrees  that  he will  assume  any  such  tax  obligations  or
consequences  that may  arise  from  this  Agreement,  and he shall not seek any
indemnification  from  Schwab in this  regard.  Mr.  Coghlan  further  agrees to
indemnify  and hold  Schwab  harmless  from any claims,  demands,  deficiencies,
levies, assessments, executions, judgments, penalties, taxes, attorneys' fees or
recoveries  by any  governmental  entity  against  Schwab for any failure by Mr.
Coghlan  to pay  taxes due and  owing,  if any,  on the  amounts  identified  in
Paragraph 2.

     9. Early  Termination  Date. Mr. Coghlan  understands and agrees that if he
accepts a position as an employee, acts as an independent contractor, consultant
or sole  proprietor,  or acts as an  officer,  director,  or  partner in another
public or  privately  held company  before his  Termination  Date,  he agrees to
notify Mary McLeod, EVP, Human Resources, at (415) 636-5859 immediately.  In the
event that Mr. Coghlan  accepts any such position,  or begins to act in any such
capacity,  except as provided  in  Paragraph  10

                                      -4-

below with  respect to approved  outside  business  activities  consistent  with
continued Schwab employment,  Mr. Coghlan's  Termination Date will be changed to
the next business day or to coincide with the  commencement  of the new position
and he will receive a lump sum payment for the unpaid  portion of the  remainder
of any  payments  due  under  paragraph  2,  less  usual  and  customary  taxes,
withholding and authorized deductions.  If Mr. Coghlan undertakes any activities
in violation of this paragraph, his Termination Date will be accelerated and all
payments under the Agreement shall cease.

     10. Outside Business Activity.  Regardless of the preceding paragraph,  Mr.
Coghlan acknowledges that during the salary continuation period he must continue
to seek  pre-approval  from the Company for any  outside  activities  with other
groups, organizations, companies, associations, etc., (non-profit or otherwise),
in accordance with Compliance  policies,  regardless of whether he would receive
compensation  for the  activity.  For  any  type of  proposed  outside  business
activity,  Mr.  Coghlan  will inform the  Company in advance of his  anticipated
compensation,  if any, for that activity.  Outside  business  activity is of two
forms.  The first is  participation  as a member of the Board of Directors of an
organization.  Mr.  Coghlan  will not be  approved  to serve as a member of the
Board of Directors of  financial services firms in areas that currently compete,
or intend to compete,  directly  and  materially  with the  Company.  While Mr.
Coghlan  will seek  pre-approval  to  participate  on the Board of  Directors of
non-profits and non-financial  services firms,  or financial services firms that
do not  currently  directly  compete with the  Company, that  approval  will not
unreasonably be withheld.  The second form of outside business  activity is as a
consultant.  Consulting  services  of  less  than  20  hours  a  week  will  not
necessarily result in acceleration of the Termination Date,  but Mr.  Coghlan is
required to seek  pre-approval for all such activities from Schwab's  Compliance
Department  in any  event.  Mr.  Coghlan  will  not  be  approved  to  consult
for financial  services  firms in areas  that  currently  compete,  or intend to
compete, directly and materially with the Company.  Schwab will not unreasonably
withhold  its  consent  to Mr.   Coghlan  performing   consulting  services  for
non-profits and non-financial services firms, or for financial services firms in
areas  that do not  currently  compete,  or  intend  to  compete,  directly  and
materially  with the Company. Mr. Coghlan agrees to continue complying with all
company  policies (human  resources,  information  security,  compliance  etc.),
including  but not  limited  to all  Compliance  policies  on  outside  business
activities,  up through his  Termination  Date.  If Mr.  Coghlan  undertakes any
activities  in violation of  paragraphs  9 or 10, his  Termination  Date will be
accelerated and all payments under this Agreement shall cease.

     11. No Filings. Mr. Coghlan represents that up to and including the date of
execution of this  Agreement,  he has not filed any action,  claim,  charge,  or
complaint against Schwab or any other Releasee identified in Paragraph 13 below,
with any local, state, or federal agency,  self-regulatory organization ("SRO"),
or court  and that he will not make such a filing  at any time  hereafter  based
upon any events or omissions  occurring prior to and up to the date of execution
of this Agreement. In the event that any agency or court assumes jurisdiction of
any  lawsuit,  claim,  charge or  complaint,  or  purports to bring any legal or
regulatory  proceedings  against  Schwab or any  other  Releasee  identified  in
Paragraph 13 below on Mr.  Coghlan's  behalf,  he promptly will

                                      -5-

request  that the agency,  SRO, or court  withdraw  from or dismiss the lawsuit,
claim, charge, or complaint with prejudice.

     12.  Covenant  Not to Sue. In  consideration  for the promises set forth in
this Agreement,  Mr. Coghlan covenants that he will not file, participate in, or
instigate the filing of any lawsuits, complaints or charges by himself or by any
other person or party in any state or federal  court or any  proceedings  before
any local, state, or federal agency, or SRO, except as required by law, claiming
that Schwab or any other Releasee  identified in Paragraph 13 below has violated
any law or obligation,  including, but not limited to, any claims that have been
made or that could have been made,  based  upon  events or  omissions  occurring
prior to and including the effective date of this Agreement.  Excepted from this
promise  by  Mr.  Coghlan  not  to  sue  are  claims,  if  any,  under  the  Age
Discrimination  in Employment Act (ADEA),  including a challenge to the validity
of this Agreement under that law, to the extent such an exception is required by
law. In the event Mr. Coghlan breaches the covenant contained in this paragraph,
other than by bringing a claim under the ADEA,  Mr.  Coghlan agrees that he will
indemnify Schwab and any other Releasee identified in Paragraph 13 below for all
damages and  expenses,  including  legal  fees,  incurred by Schwab or any other
Releasee  identified in Paragraph 13 below, in defending,  participating  in, or
investigating any matter or proceeding covered by this paragraph.

     13. Complete Release by Mr. Coghlan.  In consideration for the promises set
forth in this  Agreement,  Mr.  Coghlan  does  hereby - for  himself and for his
heirs, representatives,  attorneys, executors,  administrators,  successors, and
assigns  -  release,  acquit,  and  forever  discharge  Schwab,  and  all of its
affiliates,  subsidiaries,  divisions,  parent  corporations,  and stockholders,
officers,  directors,  partners,  servants, agents, employees,  representatives,
attorneys,  employee  welfare  and  retirement  plans  and the  respective  plan
administrators and fiduciaries,  past,  present,  and future, all persons acting
under,  by,  through,  or in concert with any of them,  and each of them (all of
whom are  hereinafter  referred to as  "Releasees"),  from any and all  actions,
causes of action,  grievances,  obligations,  costs, expenses,  damages, losses,
claims,  liabilities,  suits, debts, demands, and benefits (including attorneys'
fees and costs actually incurred),  of whatever character,  in law or in equity,
known or unknown, suspected or unsuspected, matured or unmatured, of any kind or
nature  whatsoever,   based  on  any  act,  omission,   event,  occurrence,   or
nonoccurrence  from the beginning of time to and including the effective date of
this  Agreement,  including  but not  limited  to any claims or causes of action
arising out of or in any way relating to Mr. Coghlan's  employment  relationship
with Schwab or any other Releasee.

     Mr. Coghlan agrees that this release of claims includes, but is not limited
to, claims for breach of any implied or express contract or covenant; claims for
promissory  estoppel;  claims of entitlement to any pay (other than the payments
promised in Paragraph  2);  claims of wrongful  denial of insurance and employee
benefits,  or any claims for wrongful  termination,  public  policy  violations,
defamation,  invasion  of privacy,  fraud,  misrepresentation,  unfair  business
practices,  emotional  distress or other common law or tort  matters;  claims of
harassment,  retaliation or discrimination  under

                                      -6-

federal,  state,  or local  law;  claims  based on any  federal,  state or other
governmental statute,  regulation or ordinance,  including,  without limitation,
Title VII of the  Civil  Rights  Act,  as  amended,  the Age  Discrimination  in
Employment Act, the Older Worker Benefit  Protection  Act, the Labor  Management
Relations Act, the Americans with Disabilities Act, the Family and Medical Leave
Act, the California Fair Employment and Housing Act, and the Employee Retirement
Income  Security Act. It is expressly  understood by Mr.  Coghlan that among the
various  rights and claims being  waived by Mr.  Coghlan in this  Agreement  are
those arising under the Age  Discrimination in Employment Act of 1967 (29 U.S.C.
sec. 621, et seq.), as amended.

     14. Release of Unknown  Claims.  For the purpose of implementing a full and
complete release, Mr. Coghlan expressly  acknowledges that the releases he gives
in this Agreement are intended to include in their effect,  without  limitation,
claims that he did not know or suspect to exist in his  respective  favor at the
time  of the  effective  date of  this  Agreement,  regardless  of  whether  the
knowledge  of such  claims,  or the facts upon which they might be based,  would
materially   have  affected  the  settlement  of  this  matter,   and  that  the
consideration  given by Schwab  under the  Agreement  is also for the release of
those claims and contemplates the  extinguishment  of any such unknown claims by
Mr.  Coghlan.  In furtherance of this  Agreement,  Mr. Coghlan waives any rights
provided by  California  Civil Code section  1542,  or other  similar  statutes.
Section 1542 states:

               A general  release does not extend to claims which
               the creditor  does not know or suspect to exist in
               his favor at the time of  executing  the  release,
               which  if  known  by  him  must  have   materially
               affected his settlement with the debtor.

     15. Successors. This Agreement shall be binding upon the Parties, and their
heirs, representatives,  executors,  administrators,  successors,  insurers, and
assigns, and shall inure to the administrators,  predecessors,  successors,  and
assignees of each of the Parties.

     16.  No  Attorney's  Fees and  Costs.  The  Parties  will  bear  their  own
respective costs and fees,  including  attorney's  fees,  incurred in connection
with the matter and the negotiation and execution of this Agreement, except that
Mr.  Coghlan  may submit  costs and fees for  financial  planning  reimbursement
pursuant to Paragraph 2(iv) above.

     17.  Non-Disparagement and Cooperation.

     17.1 Non-Disparagement.

     Mr.  Coghlan  agrees that he will not make any  disparaging  or  defamatory
statements,  either  orally  or in  writing  (and,  for  the  purposes  of  this
Agreement,  the  term  "writing"  includes  but is  not  limited  to  electronic
communications),  to any third party concerning Schwab or any corporate or other
affiliate of Schwab  (including,  but not limited to, the  Releasees  identified
above),  concerning its or their officers,  directors,

                                      -7-

employees or agents, or concerning its or their services,  products,  offerings,
quantitative  or other  research,  or methods of  communicating  such  services,
products or offerings,  or its or their method of doing business,  or employment
practices.  Mr. Coghlan agrees that he will direct his immediate  family members
and representatives not to make any disparaging or defamatory statements, either
orally or in writing,  to any third  party  concerning  Schwab or any  Releasee,
concerning its or their officers, directors,  employees or agents, or concerning
its or their services,  products,  quantitative or other research, or methods of
doing  business.  Mr. Coghlan  further agrees to refrain from acting as a source
(attributable or otherwise) or engaging in any formal or informal  dialogue with
the press or media regarding his  experiences  with or at Schwab that in any way
injure or are detrimental to any Schwab entity,  affiliated person, or Releasee,
or  regarding  any  information  Mr.  Coghlan may have  acquired  (first hand or
otherwise) concerning Schwab operations,  marketing or advertising strategies or
plans, financial performance,  recruitment or retention strategies,  or internal
policies and  procedures  or any other  Schwab  information  (including  but not
limited  to  Schwab  services,   products,   or  offerings  referenced  in  this
Agreement).  Nothing herein shall preclude Mr. Coghlan from  cooperating  with a
governmental or SRO, in an investigation initiated by such agency, or testifying
in a court of law if  compelled  by legal  process  to testify as a witness in a
lawsuit in which Schwab or any Releasee is a defendant.

     17.2 Cooperation.

     Mr.  Coghlan  agrees not to encourage or assist in any  litigation  against
Schwab or any Releasee or provide testimony in any matter in which Schwab or any
Releasee  has an interest  unless he is required by law. Mr.  Coghlan  agrees to
cooperate fully with any Releasee,  and any corporate affiliate of any Releasee,
specifically  including  any  attorney  retained  by any of  the  Releasees,  in
connection  with any  pending  or  future  litigation  or  investigatory  matter
(including but not limited to any Schwab  investigation into Compliance or other
policy  violations)  in which  and to the  extent  Schwab  reasonably  deems his
cooperation  to be  necessary.  Mr.  Coghlan  acknowledges  and agrees that such
cooperation  may include,  but shall in no way be limited to, Mr.  Coghlan being
available for an interview with any of the  Releasees,  or any attorney or agent
retained  by any of  the  Releasees,  providing  to  any  of the  Releasees  any
documents in his  possession or under his control  relating to the litigation or
investigatory matter, and providing truthful sworn statements in connection with
the litigation or investigatory  matter. He also agrees, upon request by Schwab,
to  provide  information  to Schwab  that he  learned  during  the course of his
employment  relationship  with  Schwab.  If Mr.  Coghlan is served with  process
concerning any matter in which Schwab or any Releasee has an interest, he agrees
to immediately  notify Schwab.  Schwab will reimburse you for reasonable  travel
expenses  in  accordance  with  the  travel   policies  then  in  effect.   This
reimbursement is for Mr. Coghlan's convenience.  Schwab confirms its expectation
that Mr.  Coghlan will provide  truthful  information  in  accordance  with this
paragraph.

     18. Confidential  Information.  Mr. Coghlan  acknowledges that by reason of
his  employment,  he had access to and did receive  knowledge of Schwab's  trade
secrets   and   proprietary   and   confidential   information    ("Confidential
Information").  Mr. Coghlan

                                      -8-

acknowledges and affirms his obligations and prior written agreement to maintain
the confidentiality of Confidential Information and not to use it or to disclose
it to any third party in the future. Mr. Coghlan understands and agrees that the
term  "Confidential  Information"  includes,  but is not  limited  to,  customer
identity,  customer account,  personal or business information,  customer lists,
lead  information,  employee  information  (employment,  personal,  financial or
account information),  employee lists,  know-how,  computer hardware or software
configuration or design, research and development, product designs, plans and/or
methods  (whether  currently in use or in  development),  source  codes,  future
developments,  costs, profits, account valuation, pricing and pricing structure,
technical, marketing, business, financial, or other information which constitute
trade secret  information,  or  information  not available to competitors of the
Company,  the use or  disclosure  of which might  reasonably  be construed to be
contrary to the interests of the Company. Mr. Coghlan agrees that this paragraph
is not intended to limit any  definition of  "Confidential  Information"  in any
prior written  confidentiality  agreement he signed as a condition of employment
with Schwab. Mr. Coghlan also agrees that Confidential Information is a valuable
and unique asset that Schwab actively  protects and that unauthorized use and/or
disclosure of  Confidential  Information  could cause  immediate and irreparable
harm to Schwab.

     19. Non-Compete  Agreement.  Mr. Coghlan agrees that, except as provided in
Paragraph  10  above  with  respect  to  approved  outside  business  activities
consistent with continued Schwab employment during the salary  continuation,  he
will not, directly or indirectly,  either as an employee, employer,  consultant,
agent,  principal,  partner,  stockholder (except in publicly traded companies),
corporate  officer,  director,  or in any  other  individual  or  representative
capacity, engage in or participate in any business that is in competition in any
manner whatsoever with the business of the Company, its parent, subsidiaries, or
affiliates.

     20.  Non-Solicitation of Employees.  Mr. Coghlan agrees that any attempt on
his part to induce any  employee,  consultant  or  contractor  to leave  his/her
assignment  or  employment  with any Schwab  entity,  or any other effort by Mr.
Coghlan to interfere in those  relationships will be harmful and damaging to the
Schwab entity.  Therefore Mr. Coghlan agrees that during the salary continuation
period and for a period of eighteen (18) months after the  Termination  Date, he
will not in any way (directly or indirectly),  on his own behalf or on behalf of
any other person or entity solicit,  induce or attempt to solicit or induce, any
employee,  consultant  or  contractor  of a Schwab  entity  to leave  his or her
employment or  assignment.  Nothing in this paragraph is intended to prevent Mr.
Coghlan from  discussing  possible  employment  with any employee or independent
contractor  who contacts  him  directly of his or her own  volition  without Mr.
Coghlan's solicitation or attempted solicitation of him or her.

     21. Non-Solicitation of Customers.  Mr. Coghlan will not at any time during
the salary continuation period or for a period of eighteen (18) months after the
Termination  Date,  directly or indirectly,  either for himself or for any other
person or entity,  make known to any person,  firm, or corporation  the names or
addresses of any of the Company's customers or any other information  pertaining
to them or  divert or take

                                      -9-

away or attempt to divert or take away (and during  eighteen  (18) month  period
following  employment,  call on or solicit or attempt to call on or solicit) any
of the Company's customers, including without limitation those on whom he called
or whom he  solicited  or with whom he became  acquainted  while  engaged  as an
employee with the Company.

     22. Return of Confidential and Proprietary Information.  With the exception
of his cellular phone, Treo Handspring,  home-installed  desktop  computer,  and
laptop  computer,  Mr.  Coghlan agrees that he will return to Schwab any and all
property, files, materials,  records, manuals, written communications,  or other
items (including hard copy and electronic  documents,  disks, and files) that he
received,   obtained  and/or  created  as  part  of  his  employment  (excluding
information  Mr.  Coghlan  received  about  insured  benefits) or that is in his
possession or control belonging to Schwab or any of the Releasees, including but
not limited to company sponsored credit cards or calling cards, pagers, computer
software or hardware,  keys, and identity badges by no later than July 25, 2003.
Mr. Coghlan agrees that in the event he later locates any such document, he will
return it to Schwab immediately.

     23. Agreement is Knowing and Voluntary.  Mr. Coghlan understands and agrees
that he:

          a.   has had a reasonable time within which to consider this Agreement
               before executing it.

          b.   has carefully read and fully understands all of the provisions of
               this Agreement.

          c.   is,  through  this  Agreement,  releasing  Schwab  and the  other
               Releasees  from any and all claims he may have against Schwab and
               the other Releasees, as stated herein.

          d.   knowingly and voluntarily agrees to all of the terms set forth in
               this Agreement.

          e.   knowingly  and  voluntarily  intends to be  legally  bound by the
               same.

          f.   was  advised,  and hereby is advised in writing,  to consider the
               terms of this  Agreement  and  consult  with an  attorney  of his
               respective choice prior to executing this Agreement.

          g.   has, if Mr. Coghlan wishes, twenty-one (21) days to consider this
               Agreement  before  signing  it, and seven (7) days after  signing
               this Agreement to revoke his signature. Revocation can be made by
               delivering  written

                                      -10-

               notice of  revocation  to  Kathryn K.  Morrison,  Vice-President,
               Associate  General  Counsel,  Charles  Schwab  & Co.,  Inc.,  101
               Montgomery Street,  SF120KNY-4-105,  San Francisco, CA 94104. For
               this revocation to be effective,  written notice must be received
               by Kathryn  Morrison  no later than the close of  business on the
               seventh  (7th)   calendar  day  after  Mr.   Coghlan  signs  this
               Agreement. If Mr. Coghlan revokes this Agreement, it shall not be
               effective  or  enforceable  and Mr.  Coghlan will not receive the
               benefits provided herein.

     24. Full and Independent  Knowledge.  The Parties  represent that they have
discussed  thoroughly  all  aspects  of this  Agreement  with  their  respective
attorneys,  fully  understand all of the  provisions of the  Agreement,  and are
voluntarily entering into this Agreement.

     25. No  Representations.  The Parties acknowledge that, except as expressly
set forth herein, no  representations of any kind or character have been made to
induce the execution of this Agreement.

     26. Ownership of Claims. Mr. Coghlan represents that he has not transferred
or assigned,  or purported  to transfer or assign,  any claim  described in this
Agreement.  Mr.  Coghlan  further agrees to indemnify and hold harmless each and
all of the Releasees  against any and all claims based upon,  arising out of, or
in any way connected with any such actual or purported transfer or assignment.

     27. Non-Admission of Liability. Mr. Coghlan acknowledges that the execution
of this Agreement and the payment of  consideration  hereunder are not and shall
not be construed in any way as an  admission of  wrongdoing  or liability on the
part of  Schwab,  or any  other  person or  business  entity  arising  out of or
attributable to his employment at Schwab or the ending of that  employment.  Mr.
Coghlan further  acknowledges  that Schwab denies any and all such liability and
denies it has engaged in any wrongful act.

     28.  Verification.  Mr. Coghlan shall direct all inquiries from prospective
employers    to   Dave    Pottruck,    Mary   McLeod   or    TheWorkNumber    at
www.theworknumber.com  or call them at  800-996-7566.  The parties agree that in
the event an  inquiry is  directed  to someone  other than Dave  Pottruck,  Mary
McLeod,  or  TheWorkNumber  to respond to requests  for such  verifications  for
Schwab,  Schwab will not be liable for any disclosures  made in response to such
inquiries that deviate from the procedures set forth herein.

     29.  Employment  Records.  Within 30 days of the date the date Mr.  Coghlan
resigns under  Recital A, a Form U5 will be filed with the Central  Registration
Depository  terminating his license  registration.  The Form U5 will reflect the
change  of  status  and  statue   under  the   "Other"   category,   "Change  of
position-registration no longer required."

     30. Other Representations.  Mr. Coghlan represents that he has not suffered
any  job-related  wrongs or  injuries  for which he might  still be  entitled to
compensation or relief,  such as an injury for which he might receive a worker's
compensation award in the

                                      -11-

future.  Mr. Coghlan  understands that Schwab relied on this  representation  in
entering this Release with him.

     31.  Governing  Law. This  Agreement  shall be governed by and  interpreted
under the laws of the State of California applicable to contracts made and to be
performed entirely within such state.

     32. Arbitration. Any dispute or breach arising out of the interpretation or
performance of this Agreement shall be settled by arbitration in accordance with
the Commercial Arbitration Rules of the American Arbitration  Association in San
Francisco,  California,  and judgment upon the award  rendered by the arbitrator
may be entered in any court having jurisdiction thereof. Further, the prevailing
party  shall be entitled to recover its  reasonable  costs.  Excepted  from this
paragraph  are claims  under the ADEA,  including a challenge to the validity of
this  Agreement  under the law, to the extent such an  exception  is required by
law.

     33. Waiver. The failure of any Party to insist upon strict adherence to any
term of this  Agreement on any occasion shall not be considered a waiver thereof
or deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement.

     34. Miscellaneous.

          a.   The language of all parts in this Agreement shall be construed as
               a whole,  according to its fair meaning,  and not strictly for or
               against either party.

          b.   Should any provision in this  Agreement be declared or determined
               to be illegal or invalid,  the validity of the  remaining  parts,
               terms,  or  provisions  shall not be  affected  thereby,  and the
               illegal or invalid part,  term, or provision  shall be deemed not
               to be part of this Agreement,  and all remaining provisions shall
               remain valid and enforceable.

          c.   This  Agreement  sets  forth the  entire  agreement  between  the
               Parties and fully  supersedes  any and all prior  agreements  and
               understandings,   written   or   otherwise,   (except   for   any
               confidentiality  agreement(s))  between the Parties pertaining to
               the subject matter of this Agreement.

          d.   The  headings  used herein are for  reference  only and shall not
               affect the construction of this Agreement.

     35.   Counterparts.   This  Agreement  may  be  executed  in  one  or  more
counterparts,  by facsimile or original signature, each of which shall be deemed
an  original,  but all of  which  together  shall  constitute  one and the  same
instrument.

                                      -12-

     36.  Notification.  Notice to be given under this Agreement to Schwab shall
be to Kathryn K. Morrison,  Office of Corporate  Counsel,  Charles Schwab & Co.,
Inc., 101 Montgomery Street, SF 120KNY-4-105, San Francisco, CA 94104.

          PLEASE READ  CAREFULLY.  THIS  AGREEMENT  INCLUDES  THE RELEASE OF ALL
     KNOWN AND UNKNOWN CLAIMS.

JOHN PHILIP COGHLAN                           CHARLES SCHWAB & CO., INC.

/s/ John Philip Coghlan                       By:   /s/ Mary S. McLeod
----------------------------                  -----------------------------

                                              Its: Executive Vice President
                                              -----------------------------

Date: July 25, 2003                           Date: July 25, 2003
----------------------------                  -----------------------------



Approved as to Form and Content:              THE CHARLES SCHWAB CORPORATION

                                              By:   /s/ Mary S. McLeod
/s/ Richard Hill                              -----------------------------
----------------------------
Richard Hill                                  Its: Executive Vice President
Attorney for John Philip Coghlan              -----------------------------

                                              Date: July 25, 2003
                                              -----------------------------

                                      -13-

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