UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 3.03 | Material Modification to Rights of Security Holders |
On April 30, 2020, The Charles Schwab Corporation (the “Company”) issued and sold 2,500,000 depositary shares (“Depositary Shares”), each representing a 1/100th ownership interest in a share of 5.375% fixed-rate reset non-cumulative perpetual preferred stock, Series G, $0.01 par value per share, with a liquidation preference of $100,000 per share (equivalent to $1,000 per Depositary Share) (the “Series G Preferred Stock”). The Company filed a Certificate of Designations (the “Certificate of Designations”) with the Secretary of State of the State of Delaware, establishing the voting rights, powers, preferences and privileges, and the relative, participating, optional or other rights, and the qualifications, limitations or restrictions thereof, of the Series G Preferred Stock on April 29, 2020. Holders of the Depositary Shares will be entitled to all proportional rights and preferences of the Series G Preferred Stock (including dividend, voting, redemption and liquidation rights).
Under the terms of the Series G Preferred Stock, the ability of the Company to pay dividends on, make distributions with respect to, or to repurchase, redeem or acquire its common stock or any preferred stock ranking on parity with or junior to the Series G Preferred Stock, is subject to restrictions in the event that the Company does not declare and either pay or set aside a sum sufficient for payment of dividends on the Series G Preferred Stock for the immediately preceding dividend period.
The terms of the Series G Preferred Stock are more fully described in the Certificate of Designations which is included as Exhibit 3.1 to this Current Report on Form 8–K and is incorporated by reference herein.
| Item 5.03 | Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year |
The Certificate of Designations became effective upon filing with the Secretary of State of the State of Delaware. The terms of the Series G Preferred Stock are more fully described in the Certificate of Designations which is included as Exhibit 3.1 to this Current Report on Form 8–K and is incorporated by reference herein.
| Item 8.01 | Other Events |
On April 27, 2020, the Company entered into an Underwriting Agreement (the “Underwriting Agreement”) with BofA Securities, Inc., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC, as the representatives of the several underwriters named therein (collectively, “Underwriters”), under which the Company agreed to sell to the Underwriters 2,500,000 shares of Depositary Shares, each representing a 1/100th ownership interest in a share of Series G Preferred Stock.
The Underwriting Agreement contains customary representations, warranties and agreements of the Company, conditions to closing, indemnification rights and obligations of the parties, and termination provisions. Under the terms of the Underwriting Agreement, the Company agreed to indemnify the Underwriters against certain specified types of liabilities, including liabilities under the Securities Act of 1933, as amended, and to contribute to payments the Underwriters may be required to make in respect of these liabilities.
The net proceeds of the offering of the 2,500,000 Depositary Shares were approximately $2.47 billion, after deducting underwriting discount and estimated offering expenses. The offering was made pursuant to the prospectus supplement dated April 27, 2020 and the accompanying prospectus dated December 14, 2017, filed with the Securities and Exchange Commission pursuant to the Company’s effective registration statement on Form S-3 (File No. 333-222063) (the “Registration Statement”). The following documents are being filed with this Current Report on Form 8-K and are incorporated by reference into the Registration Statement: (a) the Underwriting Agreement, (b) the Certificate of Designations to which the Form of Certificate Representing the Series G Preferred Stock is attached as Exhibit A, (c) the Deposit Agreement, dated April 30, 2020, between the Company and
Equiniti Trust Company, as Depositary, to which the Form of Depositary Share Receipt is attached as Exhibit A and (d) a validity opinion with respect to the Depositary Shares and the Series G Preferred Stock.
| Item 9.01 | Financial Statements and Exhibits |
| (d) | Exhibits |
| 1.1 |
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| 3.1 |
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| 4.1 |
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| 5.1 |
Opinion of Arnold & Porter Kaye Scholer LLP, dated April 30, 2020. | |||
| 23.1 |
Consent of Arnold & Porter Kaye Scholer LLP, dated April 30, 2020 (included in Exhibit 5.1). | |||
| 104 |
Cover Page Interactive Data File – the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
Signature(s)
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| THE CHARLES SCHWAB CORPORATION | ||||||
| Date: April 30, 2020 |
By: |
/s/ Peter Crawford Peter Crawford Executive Vice President and Chief Financial Officer |