SCHWAB CHARLES CORP
EXHIBIT 10.219
<DOCUMENT>
<TYPE>EX-10.219
<SEQUENCE>3
<FILENAME>exh10_219.txt
<DESCRIPTION>EXHIBIT 10.219
<TEXT>

                                                                  Exhibit 10.219

                         THE CHARLES SCHWAB CORPORATION
                            2001 STOCK INCENTIVE PLAN


Article 1.  Introduction.

     The Plan was adopted by the Board of Directors  on February  28, 2001.  The
purpose of this Plan is to promote the long-term  success of the Company and the
creation  of  incremental  stockholder  value  by (a)  encouraging  Non-Employee
Directors and Key Employees to focus on long-range  objectives,  (b) encouraging
the  attraction and retention of  Non-Employee  Directors and Key Employees with
exceptional  qualifications  and  (c)  linking  Non-Employee  Directors  and Key
Employees  directly to  stockholder  interests.  The Plan seeks to achieve  this
purpose by providing  for Awards in the form of Restricted  Shares,  Performance
Share  Awards or  Options,  which may  constitute  incentive  stock  options  or
nonstatutory  stock  options.  The Plan shall be governed  by, and  construed in
accordance with, the laws of the State of Delaware.

Article 2.  Administration.

     2.1  The Committee. The Plan shall be  administered  by the Committee.  The
Committee shall consist of two or more Directors,  who shall be appointed by the
Board.

     2.2  Committee  Responsibilities.   The  Committee  shall  select  the  Key
Employees  who are to  receive  Awards  under the Plan,  determine  the  amount,
vesting  requirements  and other  conditions  of such Awards,  may interpret the
Plan,  and make all other  decisions  relating to the operation of the Plan. The
Committee  may  adopt  such  rules  or  guidelines  as it deems  appropriate  to
implement the Plan. The Committee's determinations under the Plan shall be final
and binding on all persons.

Article 3.  Limitations on Awards.

     The aggregate  number of Restricted  Shares,  Performance  Share Awards and
Options  awarded under the Plan shall not exceed  70,000,000.  If any Restricted
Shares, Performance Share Awards or Options are forfeited, or if any Performance
Share Awards terminate for any other reason without the associated Common Shares
being  issued,  or if any Options  terminate  for any other reason  before being
exercised,  then such  Restricted  Shares,  Performance  Share Awards or Options
shall again become available for Awards under the Plan.

     Subject to the overall limit on the aggregate  shares set forth above,  the
following limitations shall apply: (a) The maximum number of Common Shares which
may be  granted  subject to an Option to any one  Participant  in any one fiscal
year shall be  5,000,000;  and (b) The maximum  number of  Restricted  Shares or
Performance  Share Awards which may be granted to any one Participant in any one
fiscal  year shall be  1,000,000.  The  limitations  set forth in the  preceding
sentence shall be subject to adjustment pursuant to Article 10; and

     The  limitations  of this  Article 3 shall each be  subject  to  adjustment
pursuant to Article  10. Any Common  Shares  issued  pursuant to the Plan may be
authorized but unissued shares or treasury shares.

Article 4.  Eligibility.

     4.1  General  Rule.  Key  Employees  and  Non-Employee  Directors  shall be
eligible for designation as Participants by the Committee.

     4.2 Non-Employee  Directors.  In addition to any awards pursuant to Section
4.1,  Non-Employee  Directors  shall be entitled to receive the automatic  NQSOs
described in this Section 4.2.

           (a) Each  Non-Employee  Director  shall  receive  an  NQSO covering a
           number of Common  Shares for each Award Year with respect to which he
           or she serves  as a Non-Employee Director on the grant date described
           in subsection (b) below, to be calculated by dividing $150,000 by the
           Fair Market Value of the Common Shares on the grant date described in
           subsection (b) below; and

           (b) The  NQSO  for  a  particular Award Year shall be granted to each
           Non-Employee  Director as of May 15 of each Award Year, and if May 15
           is  not a business day, then the grant shall be made on and as of the
           next succeeding business day;

           (c) Each  NQSO  shall be  exercisable in full at all times during its
           term;

           (d) The  term of each NQSO shall be 10 years; provided, however, that
           any unexercised NQSO shall expire on the earlier of the date 10 years
           after the  date  of grant or three (3) months following the date that
           the Optionee   ceases to be a Non-Employee Director or a Key Employee
           for any reason  other than death or disability. If an Optionee ceases
           to be a Non-Employee  Director or Key Employee on account of death or
           disability,  any  unexercised NQSO shall expire on the earlier of the
           date 10 years  after  the date of grant or one year after the date of
           death or disability of such Director; and

           (e) The  Exercise  Price  under  each NQSO shall be equal to the Fair
           Market Value on the date of grant  and shall be payable in any of the
           forms described in Article 6.

     4.3 Ten-Percent Stockholders.  A Key Employee who owns more than 10 percent
of the total combined  voting power of all classes of  outstanding  stock of the
Company or any of its Subsidiaries shall not be eligible for the grant of an ISO
unless (a) the Exercise price under such ISO is at least 110 percent of the Fair
Market  Value  of a Common  Share  on the date of grant  and (b) such ISO by its
terms is not  exercisable  after the  expiration  of five years from the date of
grant.

     4.4 Attribution  Rules.  For purposes of Section 4.3, in determining  stock
ownership,  a Key Employee  shall be deemed to own the stock owned,  directly or
indirectly, by or for his or her brothers,  sisters, spouse, ancestors or lineal
descendants.  Stock  owned,  directly or  indirectly,  by or for a  corporation,
partnership,  estate or trust shall be deemed to be owned  proportionately by or
for its stockholders, partners or beneficiaries. Stock with respect to which the
Key Employee holds an option shall not be counted.

     4.5 Outstanding  Stock.  For purposes of Section 4.3,  "outstanding  stock"
shall include all stock actually  issued and outstanding  immediately  after the
grant of the ISO to the Key  Employee.  "Outstanding  stock"  shall not  include
treasury shares or shares authorized for issuance under outstanding options held
by the Key Employee or by any other person.

     4.6 Options Issued To Non-Employee  Directors In Lieu of Fee Deferrals.  In
addition to any awards pursuant to Sections 4.1 and 4.2, a Non-Employee Director
who  elects to defer the  receipt  of amounts  pursuant  to  Section  5.1 of The
Charles Schwab Corporation Directors' Deferred Compensation Plan (the "Directors
Deferred  Compensation  Plan") and elects to receive  stock options in lieu of a
Deferral  Account balance  pursuant to Section 5.4(2) of the Directors  Deferred
Compensation  Plan,  shall be entitled to receive a grant of NQSOs  hereunder on
the date the amounts would have been payable to the Non-Employee Director if the
Non-Employee  Director  had not made such  deferral  election.  Any NQSOs issued
pursuant  to this  Section  shall be issued  pursuant  to the terms set forth in
subsections (c), (d) and (e) of Section 4.2 hereof.

     4.7  Performance  Shares Issued To Non-Employee  Directors  Pursuant to Fee
Deferrals.  In  addition  to any  awards  pursuant  to  Sections  4.1 and 4.2, a
Non-Employee  Director  who elects to defer the  receipt of amounts  pursuant to
Section 5.1 of The Directors'  Deferred  Compensation Plan and elects to receive
payment  in  Shares  pursuant  to  Section  5.4(1)  of  the  Directors  Deferred
Compensation  Plan,  shall be entitled to receive a grant of Performance  Shares
hereunder on the date the amounts  would have been  payable to the  Non-Employee
Director if the Non-Employee  Director had not made such deferral election.  For
purposes of this  section,  the term  Non-Employee  Director  shall also include
non-employee  directors  of  any  Subsidiary,  if  the  Committee  has  approved
participation in the Directors Deferred  Compensation Plan for such Subsidiary's
non-employee directors.


Article 5. Options.

     5.1 Stock Option Agreement. Each grant of an Option under the Plan shall be
evidenced by a Stock Option Agreement between the Optionee and the Company. Such
Option shall be subject to all applicable  terms and conditions of the Plan, and
may be subject to any other terms and conditions which are not inconsistent with
the Plan and which the  Committee  deems  appropriate  for  inclusion in a Stock
Option Agreement.  The provisions of the various Stock Option Agreements entered
into under the Plan need not be  identical.  The  Committee may designate all or
any part of an  Option  as an ISO  (or,  in the  case of a Key  Employee  who is
subject to the tax laws of a foreign  jurisdiction,  as an option qualifying for
favorable tax treatment under the laws of such foreign jurisdiction), except for
Options granted to Non-Employee Directors.

     5.2 Options Nontransferability.  Subject to the provisions of Section 14.2,
no Option  granted under the Plan shall be  transferable  by the Optionee  other
than by will or the laws of descent and distribution. An Option may be exercised
during the  lifetime of the  Optionee  only by him or her. No Option or interest
therein may be  transferred,  assigned,  pledged or hypothecated by the Optionee
during his or her lifetime, whether by operation of law or otherwise, or be made
subject to execution, attachment or similar process.

     5.3 Number of Shares.  Each Stock Option Agreement shall specify the number
of Common Shares  subject to the Option and shall provide for the  adjustment of
such number in  accordance  with Article 10. Each Stock Option  Agreement  shall
also specify whether the Option is an ISO or an NQSO.

     5.4 Exercise Price.  Each Stock Option Agreement shall specify the Exercise
Price.  The Exercise Price under an Option shall not be less than 100 percent of
the Fair  Market  Value  of a Common  Share  on the  date of  grant,  except  as
otherwise  provided  in Section  4.3.  Subject to the  preceding  sentence,  the
Exercise  Price  under any Option  shall be  determined  by the  Committee.  The
Exercise Price shall be payable in accordance with Article 6.

     5.5  Exercisability and Term. Each Stock Option Agreement shall specify the
date when all or any  installment  of the Option is to become  exercisable.  The
Stock Option Agreement shall also specify the term of the Option. The term of an
ISO shall in no event  exceed 10 years from the date of grant,  and  Section 4.3
may require a shorter  term.  Subject to the preceding  sentence,  the Committee
shall  determine when all or any part of an Option is to become  exercisable and
when such Option is to expire;  provided that, in appropriate cases, the Company
shall have the  discretion  to extend  the term of an Option or the time  within
which,  following termination of employment,  an Option may be exercised,  or to
accelerate the exercisability of an Option. A Stock Option Agreement may provide
for expiration  prior to the end of its term in the event of the  termination of
the  Optionee's  employment and shall provide for the suspension of vesting when
an  employee  is on a leave of  absence  for a period in excess of six months in
appropriate  cases, as determined by the Company;  provided that,  except to the
extent  otherwise  specified  by the  Committee  at the time of  grant,  (i) the
exercisability of Options shall be accelerated in the event of the Participant's
death or Disability;  (ii) in the case of Retirement,  the exercisability of all
outstanding  Options shall be accelerated,  other than any Options that had been
granted  within two years of the date of the  Optionee's  Retirement;  and (iii)
vesting  shall be  suspended  when an  employee  is on a leave of absence  for a
period in excess  of six  months in  appropriate  cases,  as  determined  by the
Company.  Except as  provided  in  Section  4.2,  NQSOs may also be  awarded  in
combination with Restricted Shares, and such an Award may provide that the NQSOs
will not be exercisable unless the related  Restricted Shares are forfeited.  In
addition,  NQSOs  granted  under  this  Section  5 may  be  granted  subject  to
forfeiture  provisions  which  provide  for  forfeiture  of the Option  upon the
exercise of tandem awards,  the terms of which are established in other programs
of the Company.

     5.6  Limitation  on  Amount  of  ISOs.  The  aggregate  fair  market  value
(determined at the time the ISO is granted) of the Common Shares with respect to
which  ISOs are  exercisable  for the  first  time by the  Optionee  during  any
calendar year (under all incentive  stock option plans of the Company) shall not
exceed $100,000;  provided,  however, that all or any portion of an Option which
cannot be exercised as an ISO because of such limitation  shall be treated as an
NQSO.

     5.7 Effect of Change in Control. The Committee (in its sole discretion) may
determine,  at the time of granting an Option,  that such  Option  shall  become
fully  exercisable  as to all Common Shares  subject to such Option  immediately
preceding any Change in Control with respect to the Company.

     5.8  Restrictions  on Transfer of Common  Shares.  Any Common Shares issued
upon  exercise  of an  Option  shall  be  subject  to  such  special  forfeiture
conditions,  rights of  repurchase,  rights of first refusal and other  transfer
restrictions  as the Committee may  determine.  Such  restrictions  shall be set
forth in the  applicable  Stock Option  Agreement and shall apply in addition to
any general restrictions that may apply to all holders of Common Shares.

     5.9  Authorization of Replacement  Options.  Concurrently with the grant of
any Option to a Participant  (other than NQSOs granted pursuant to Section 4.2),
the Committee may authorize the grant of  Replacement  Options.  If  Replacement
Options have been authorized by the Committee with respect to a particular award
of Options (the "Underlying Options"),  the Option Agreement with respect to the
Underlying  Options  shall  so  state,  and  the  terms  and  conditions  of the
Replacement  Options  shall be provided  therein.  The grant of any  Replacement
Options  shall be  effective  only upon the exercise of the  Underlying  Options
through the use of Common  Shares  pursuant to Section 6.2 or Section  6.3.  The
number of  Replacement  Options  shall equal the number of Common Shares used to
exercise the Underlying Options,  and, if the Option Agreement so provides,  the
number  of  Common  Shares  used to  satisfy  any tax  withholding  requirements
incident to the exercise of the  Underlying  Options in accordance  with Section
13.2. Upon the exercise of the Underlying Options, the Replacement Options shall
be evidenced by an amendment to the Underlying Option Agreement. Notwithstanding
the fact that the Underlying  Option may be an ISO, a Replacement  Option is not
intended to qualify as an ISO. The Exercise Price of a Replacement  Option shall
be no less than the Fair Market Value of a Common Share on the date the grant of
the Replacement  Option becomes  effective.  The term of each Replacement Option
shall be equal to the remaining  term of the Underlying  Option.  No Replacement
Options  shall be granted to Optionees  when  Underlying  Options are  exercised
pursuant to the terms of the Plan and the Underlying Option Agreement  following
termination of the Optionee's employment. The Committee, in its sole discretion,
may establish  such other terms and  conditions  for  Replacement  Options as it
deems appropriate.

     5.10 Options Granted to Non-United States Key Employees. In the case of Key
Employees who are subject to the tax laws of a foreign jurisdiction, the Company
may issue Options to such Key Employees  that contain terms  required to conform
with any  requirements  for favorable tax treatment  imposed by the laws of such
foreign  jurisdiction,  or as  otherwise  may be  required  by the  laws of such
foreign  jurisdiction.  The terms of any such  Options  shall be governed by the
Plan,  subject to the terms of any Addendum to the Plan specifically  applicable
to such Options.

Article 6.  Payment for Option Shares.

     6.1 General Rule.  The entire  Exercise  Price of Common Shares issued upon
exercise of Options shall be payable in cash at the time when such Common Shares
are purchased,  except that the Company may at any time accept payment  pursuant
to Section 6.2 or 6.3.

     6.2 Surrender of Stock.  To the extent that this Section 6.2 is applicable,
payment for all or any part of the Exercise Price may be made with Common Shares
which are  surrendered  to the  Company.  Such Common  Shares shall be valued at
their Fair  Market  Value on the date when the new Common  Shares are  purchased
under the Plan.  In the event  that the  Common  Shares  being  surrendered  are
Restricted Shares that have not yet become vested,  the same restrictions  shall
be imposed upon the new Common Shares being purchased.

     6.3  Exercise/Sale.  To the extent this Section 6.3 is applicable,  payment
may be made by the  delivery  (in a  manner  prescribed  by the  Company)  of an
irrevocable  direction  to Charles  Schwab & Co.,  Inc.  to sell  Common  Shares
(including  the Common  Shares to be issued upon exercise of the Options) and to
deliver  all or part of the sales  proceeds  to the Company in payment of all or
part of the Exercise Price and any withholding taxes.


Article 7.  Restricted Shares and Performance Share Awards.

     7.1 Time,  Amount and Form of Awards.  The Committee  may grant  Restricted
Shares or  Performance  Share  Awards with  respect to an Award Year during such
Award Year or at any time  thereafter.  Each such Award shall be  evidenced by a
Stock Award Agreement between the Award recipient and the Company. The amount of
each Award of Restricted  Shares or Performance Share Awards shall be determined
by the Committee. Awards under the Plan may be granted in the form of Restricted
Shares  or  Performance  Share  Awards  or in any  combination  thereof,  as the
Committee  shall  determine  at its sole  discretion  at the time of the  grant.
Restricted Shares or Performance Share Awards may also be awarded in combination
with  NQSOs,  and such an  Award  may  provide  that the  Restricted  Shares  or
Performance  Share Awards will be forfeited in the event that the related  NQSOs
are exercised.

     7.2 Payment for  Restricted  Share  Awards.  To the extent that an Award is
granted in the form of Restricted Shares, the Award recipient, as a condition to
the grant of such Award,  shall be required to pay the Company in cash an amount
equal to the par value of such Restricted Shares.

     7.3 Vesting or Issuance  Conditions.  Each Award of Restricted Shares shall
become vested,  in full or in installments,  upon satisfaction of the conditions
specified in the Stock Award  Agreement.  Common Shares shall be issued pursuant
to Performance  Share Awards in full or in installments upon satisfaction of the
issuance conditions specified in the Stock Award Agreement.  The Committee shall
select the vesting  conditions  in the case of  Restricted  Shares,  or issuance
conditions in the case of Performance Share Awards,  which may be based upon the
Participant's service, the Participant's performance,  the Company's performance
or such other criteria as the Committee may adopt; provided that, in the case of
an  Award  of  Restricted   Shares  where  vesting  is  based  entirely  on  the
Participant's service (except to the extent otherwise specified by the Committee
at the time of grant),  (i)  vesting  shall be  accelerated  in the event of the
Participant's death or Disability; (ii) in the case of Retirement, vesting shall
be  accelerated  for all  Restricted  Shares that had been granted more than two
years prior to the date of the Participant's Retirement; and (iii) vesting shall
be suspended when an employee is on a leave of absence for a period in excess of
six months in appropriate cases, as determined by the Company. The Committee, in
its sole discretion, may determine, at the time of making an Award of Restricted
Shares,  that such Award shall become fully vested in the event that a Change in
Control  occurs  with  respect  to the  Company.  The  Committee,  in  its  sole
discretion, may determine, at the time of making a Performance Share Award, that
the  issuance  conditions  set forth in such Award  shall be waived in the event
that a Change in Control occurs with respect to the Company.

     7.4  Form  of  Settlement  of  Performance  Share  Awards.   Settlement  of
Performance Share Awards shall only be made in the form of Common Shares.  Until
a Performance  Share Award is settled,  the number of  Performance  Share Awards
shall be subject to adjustment pursuant to Article 10.

     7.5 Death of Recipient. Any Common Shares that are to be issued pursuant to
a  Performance  Share Award after the  recipient's  death shall be  delivered or
distributed to the recipient's beneficiary or beneficiaries. Each recipient of a
Performance Share Award under the Plan shall designate one or more beneficiaries
for this purpose by filing the prescribed  form with the Company.  A beneficiary
designation may be changed by filing the prescribed form with the Company at any
time before the Award recipient's  death. If no beneficiary was designated or if
no designated  beneficiary survives the Award recipient,  then any Common Shares
that  are  to  be  issued  pursuant  to a  Performance  Share  Award  after  the
recipient's  death shall be delivered or distributed to the recipient's  estate.
The Committee, in its sole discretion,  shall determine the form and time of any
distribution(s) to a recipient's beneficiary or estate.

Article 8.  Claims Procedures.

     Claims  for  benefits  under the Plan  shall be filed in  writing  with the
Committee on forms supplied by the Committee.  Written notice of the disposition
of a claim shall be furnished to the claimant  within 90 days after the claim is
filed.  If the claim is denied,  the notice of  disposition  shall set forth the
specific  reasons for the denial,  citations to the pertinent  provisions of the
Plan, and, where appropriate,  an explanation as to how the claimant can perfect
the claim. If the claimant wishes further consideration of his or her claim, the
claimant may appeal a denied claim to the Committee  (or to a person  designated
by the Committee) for further review. Such appeal shall be filed in writing with
the  Committee  on a form  supplied by the  Committee,  together  with a written
statement of the claimant's position, no later than 90 days following receipt by
the  claimant  of  written  notice  of the  denial of his or her  claim.  If the
claimant so requests,  the  Committee  shall  schedule a hearing.  A decision on
review  shall be made  after a full and fair  review  of the  claim and shall be
delivered in writing to the claimant no later than 60 days after the Committee's
receipt of the notice of appeal,  unless  special  circumstances  (including the
need to hold a hearing)  require an extension of time for processing the appeal,
in which case a written decision on review shall be delivered to the claimant as
soon as possible  but not later than 120 days after the  Committee's  receipt of
the  appeal  notice.  The  claimant  shall be  notified  in  writing of any such
extension of time. The written decision on review shall include specific reasons
for the  decision,  written  in a  manner  calculated  to be  understood  by the
claimant, and shall specifically refer to the pertinent Plan provisions on which
it is based. All  determinations  of the Committee shall be final and binding on
Participants and their beneficiaries.

Article 9.  Voting Rights and Dividends.

     9.1 Restricted Shares. All holders of Restricted Shares shall have the same
voting, dividend, and other rights as the Company's other stockholders.

     9.2 Performance Share Awards. The holders of Performance Share Awards shall
have no voting or  dividend  rights  until  such time as any  Common  Shares are
issued pursuant thereto, at which time they shall have the same voting, dividend
and other rights as the Company's other stockholders.

Article 10.  Protection Against Dilution; Adjustment of Awards.

     10.1  General.  In the event of a  subdivision  of the  outstanding  Common
Shares, a declaration of a dividend payable in Common Shares, a declaration of a
dividend  payable  in  a  form  other  than  Common  Shares,  a  combination  or
consolidation  of  the  outstanding  Common  Shares  (by   reclassification   or
otherwise) into a lesser number of Common Shares, a recapitalization,  a spinoff
or a similar occurrence, the Committee shall make appropriate adjustments in one
or more of (a) the number of Options,  Restricted  Shares and Performance  Share
Awards  available for future  Awards under Article 3, (b) the maximum  number of
Common Shares which may be granted under Article 3 to any one Participant in any
one  fiscal  year  either  subject  to an  Option  or as  Restricted  Shares  or
Performance Share Awards, (c) the number of Performance Share Awards included in
any prior Award which has not yet been settled,  (d) the number of Common Shares
covered  by  each  outstanding  Option  or (e) the  Exercise  Price  under  each
outstanding Option.

     10.2  Reorganizations.  Subject to the  provisions  of Section  5.7, in the
event  that  the  Company  is a  party  to a  merger  or  other  reorganization,
outstanding  Options,  Restricted  Shares and Performance  Share Awards shall be
subject  to the  agreement  of  merger or  reorganization.  Such  agreement  may
provide,  without  limitation,  for the assumption of outstanding  Awards by the
surviving  corporation or its parent,  for their continuation by the Company (if
the  Company  is a  surviving  corporation),  for  accelerated  vesting  or  for
settlement in cash.

     10.3  Reservation  of Rights.  Except as  provided  in this  Article  10, a
Participant  shall have no rights by reason of any subdivision or  consolidation
of shares of stock of any class,  the payment of any stock dividend or any other
increase or decrease in the number of shares of stock of any class. Any issue by
the  Company of shares of stock of any class,  or  securities  convertible  into
shares of stock of any class,  shall not  affect,  and no  adjustment  by reason
thereof  shall be made with  respect to, the number or Exercise  Price of Common
Shares  subject to an Option.  The grant of an Award  pursuant to the Plan shall
not  affect in any way the right or power of the  Company  to make  adjustments,
reclassifications,  reorganizations  or  changes  of  its  capital  or  business
structure, to merge or consolidate or to dissolve,  liquidate,  sell or transfer
all or any part of its business or assets.

Article 11. Limitation of Rights.

     11.1  Employment  Rights.  Neither the Plan nor any Award granted under the
Plan shall be deemed to give any  individual  a right to remain  employed by the
Company or any Subsidiary. The Company and its Subsidiaries reserve the right to
terminate  the  employment of any employee at any time,  with or without  cause,
subject only to a written employment agreement (if any).

     11.2  Stockholders'  Rights.  A Participant  shall have no dividend rights,
voting or other  rights as a  stockholder  with  respect  to any  Common  Shares
covered by his or her Award prior to the issuance of such Common Shares, whether
by issuance of a certificate, book entry or other procedure. No adjustment shall
be made for cash dividends or other rights for which the record date is prior to
the date when such  certificate  is  issued,  except as  expressly  provided  in
Articles 7, 9 and 10.

     11.3 Creditors'  Rights. A holder of Performance Share Awards shall have no
rights other than those of a general creditor of the Company.  Performance Share
Awards represent unfunded and unsecured  obligations of the Company,  subject to
the terms and conditions of the applicable Stock Award Agreement.

     11.4   Government   Regulations.   Any   other   provision   of  the   Plan
notwithstanding, the obligations of the Company with respect to Common Shares to
be issued  pursuant to the Plan shall be subject to all applicable  laws,  rules
and  regulations,  and such  approvals  by any  governmental  agencies as may be
required.  The Company reserves the right to restrict,  in whole or in part, the
delivery of Common Shares pursuant to any Award until such time as:

           (a) Any  legal  requirements or regulations have been met relating to
           the  issuance  of  such  Common  Shares  or  to  their  registration,
           qualification  or  exemption from registration or qualification under
           the Securities  Act  of  1933,  as amended,  or any  applicable state
           securities laws; and

           (b) Satisfactory  assurances  have  been  received  that  such Common
           Shares,  when  issued,  will  be  duly  listed  on the New York Stock
           Exchange or any  other securities exchange on which Common Shares are
           then listed.

Article 12.  Limitation of Payments.

     12.1 Basic Rule. Any provision of the Plan to the contrary notwithstanding,
in the event that the independent  auditors most recently  selected by the Board
(the  "Auditors")  determine  that any  payment  or  transfer  in the  nature of
compensation to or for the benefit of a Participant, whether paid or payable (or
transferred or transferable)  pursuant to the terms of this 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 shall be reduced (but not
below zero) to the Reduced Amount; provided, however, that the Committee, at the
time of making an Award under this Plan or at any time  thereafter,  may specify
in writing  that such Award  shall not be so reduced and shall not be subject to
this Article 12. For purposes of this Article 12, the "Reduced  Amount" shall 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 the
Company because of section 280G of the Code.

     12.2  Reduction of Payments.  If the  Auditors  determine  that any Payment
would be  nondeductible  because of section  280G of the Code,  then the Company
shall  promptly  give the  Participant  notice to that  effect and a copy of the
detailed  calculation thereof and of the Reduced Amount, and the Participant may
then elect,  in his or her sole  discretion,  which and how much of the Payments
shall be  eliminated or reduced (as long as after such  election,  the aggregate
present  value of the Payments  equals the Reduced  Amount) and shall advise the
Company in writing of his or her  election  within 10 days of receipt of notice.
If no such election is made by the Participant  within such 10-day period,  then
the Company may elect which and how much of the Payments  shall be eliminated or
reduced  (as long as after such  election  the  aggregate  present  value of the
Payments equals the Reduced Amount) and shall notify the Participant promptly of
such  election.  For  purposes  of this  Article  12,  present  value  shall  be
determined in accordance with section 280G(d)(4) of the Code. All determinations
made by the Auditors under this Article 12 shall be binding upon the Company and
the  Participant  and  shall be made  within  60 days of the date when a Payment
becomes  payable or  transferable.  As promptly as  practicable  following  such
determination and the elections hereunder,  the Company shall pay or transfer to
or for the benefit of the Participant such amounts as are then due to him or her
under the Plan,  and shall promptly pay or transfer to or for the benefit of the
Participant  in the  future  such  amounts as become due to him or her under the
Plan.

     12.3  Overpayments  and  Underpayments.  As a result of  uncertainty in the
application of section 280G of the Code at the time of an initial  determination
by the Auditors  hereunder,  it is possible that Payments will have been made by
the  Company  which  should  not  have  been  made  (an  "Overpayment")  or that
additional Payments which will not have been made by the Company could have been
made (an  "Underpayment"),  consistent in each case with the  calculation of the
Reduced  Amount  hereunder.  In the  event  that the  Auditors,  based  upon the
assertion of a deficiency by the Internal Revenue Service against the Company or
the Participant  which the Auditors  believe has a high  probability of success,
determine that an Overpayment has been made, such  Overpayment  shall be treated
for all purposes as a loan to the Participant which he or she shall repay to the
Company on  demand,  together  with  interest  at the  applicable  federal  rate
provided in section 7872(f)(2) of the Code;  provided,  however,  that no amount
shall be payable by the  Participant  to the  Company 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  shall  promptly  be  paid  or
transferred  by the Company to or for the benefit of the  Participant,  together
with interest at the applicable  federal rate provided in section  7872(f)(2) of
the Code.

     12.4  Related  Corporations.  For  purposes  of this  Article  12, the term
"Company" shall include affiliated  corporations to the extent determined by the
Auditors in accordance with section 280G(d)(5) of the Code.

Article 13. Withholding Taxes.

     13.1 General. To the extent required by applicable federal, state, local or
foreign law, the recipient of any payment or  distribution  under the Plan shall
make  arrangements  satisfactory  to the  Company  for the  satisfaction  of any
withholding   tax   obligations   that  arise  by  reason  of  such  payment  or
distribution.  The  Company  shall  not be  required  to make  such  payment  or
distribution until such obligations are satisfied.

     13.2 Nonstatutory  Options,  Restricted Shares or Performance Share Awards.
The Committee may permit an Optionee who exercises NQSOs, or who receives Awards
of Restricted  Shares,  or who receives Common Shares pursuant to the terms of a
Performance  Share Award,  to satisfy all or part of his or her  withholding tax
obligations  by having the Company  withhold a portion of the Common Shares that
otherwise  would be issued to him or her under such Awards.  Such Common  Shares
shall be valued at their  Fair  Market  Value on the date when  taxes  otherwise
would be withheld  in cash.  The payment of  withholding  taxes by  surrendering
Common Shares to the Company, if permitted by the Committee, shall be subject to
such  restrictions  as the  Committee  may impose,  including  any  restrictions
required by rules of the Securities and Exchange Commission.

Article 14.  Assignment or Transfer of Award.

     14.1  General  Rule.  Any  Award  granted  under  the  Plan  shall  not  be
anticipated,  assigned,  attached,  garnished,  optioned,  transferred  or  made
subject to any creditor's  process,  whether  voluntarily,  involuntarily  or by
operation of law, except to the extent specifically permitted by Section 14.2.

     14.2  Exceptions to General Rule.  Notwithstanding  Section 14.1, this Plan
shall not preclude (i) a Participant  from designating a beneficiary to succeed,
after the Participant's  death, to those of the Participant's  Awards (including
without  limitation,  the right to exercise any  unexercised  Options) as may be
determined  by the  Company  from  time to time in its sole  discretion,  (ii) a
transfer of any Award hereunder by will or the laws of descent or  distribution,
or (iii) a  voluntary  transfer  of an Award  (other  than an ISO) to a trust or
partnership   for  the  exclusive   benefit  of  one  or  more  members  of  the
Participant's  family,  but only if the Participant has sole investment  control
over such trust or partnership.

Article 15.  Future of Plans.

     15.1  Term of the  Plan.  The  Plan,  as set  forth  herein,  shall  become
effective on May 7, 2001. The Plan shall remain in effect until it is terminated
under Section 15.2, except that no ISOs shall be granted after May 6, 2011.

     15.2 Amendment or  Termination.  The Committee may, at any time and for any
reason,  amend or terminate the Plan; provided,  however,  that any amendment of
the Plan shall be subject to the approval of the Company's  stockholders  to the
extent required by applicable laws, regulations or rules.

     15.3 Effect of Amendment or  Termination.  No Award shall be made under the
Plan  after  the  termination  thereof.  The  termination  of the  Plan,  or any
amendment thereof, shall not affect any Option,  Restricted Share or Performance
Share Award previously granted under the Plan.

Article 16.  Definitions.

     16.1  "Award"  means  any  award  of an  Option,  a  Restricted  Share or a
Performance Share Award under the Plan.

     16.2  "Award  Year"  means a fiscal  year  beginning  January 1 and  ending
December 31 with respect to which an Award may be granted.

     16.3 "Board" means the Company's  Board of Directors,  as constituted  from
time to time.

     16.4  "Change in  Control"  means the  occurrence  of any of the  following
events after the effective date of the Plan as set out in Section 15.1:

           (a) A change in control required to be reported pursuant to Item 6(e)
           of Schedule 14A of Regulation 14A under the Exchange Act;

           (b) A  change  in  the composition of the Board, as a result of which
           fewer  than  two-thirds  of the incumbent directors are directors who
           either (i) had been directors  of the Company 24 months prior to such
           change or (ii) were elected,  or nominated for election, to the Board
           with the affirmative votes of  at  least  a majority of the directors
           who had been directors of the  Company 24 months prior to such change
           and who were still in office at the time of the election or
           nomination;

           (c) Any  "person"  (as  such term is used in sections 13(d) and 14(d)
           of  the  Exchange  Act)  becomes  the  beneficial owner,  directly or
           indirectly,  of securities  of the Company representing 20 percent or
           more of the  combined  voting power of the Company's then outstanding
           securities  ordinarily  (and apart from rights accruing under special
           circumstances)  having  the  right  to vote at elections of directors
           (the "Base Capital Stock"); provided, however, that any change in the
           relative  beneficial ownership  of securities of any person resulting
           solely from a reduction in the aggregate number of outstanding shares
           of  Base  Capital Stock, and any decrease thereafter in such person's
           ownership  of  securities,  shall  be  disregarded  until such person
           increases  in  any  manner,  directly  or  indirectly,  such person's
           beneficial ownership of any securities of the Company.

     16.5 "Code" means the Internal Revenue Code of 1986, as amended.

     16.6  "Committee"  means  the  Compensation  Committee  of  the  Board,  as
constituted from time to time.

     16.7 "Common Share" means one share of the common stock of the Company.

     16.8   "Company"   means  The  Charles  Schwab   Corporation,   a  Delaware
corporation.

     16.9 "Disability" means the inability to engage in any substantial  gainful
activity  considering the  Participant's  age,  education and work experience by
reason  of any  medically  determined  physical  or mental  impairment  that has
continued without  interruption for a period of at least six months and that can
be expected to be of long, continued and indefinite duration. All determinations
as to  whether a  Participant  has  incurred a  Disability  shall be made by the
Employee Benefits Administration Committee of the Company, the findings of which
shall be final, binding and conclusive.

     16.10 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

     16.11 "Exchange Act" means the Securities Exchange Act of 1934, as amended.

     16.12  "Exercise  Price" means the amount for which one Common Share may be
purchased  upon  exercise of an Option,  as  specified  by the  Committee in the
applicable Stock Option Agreement.

     16.13  "Fair  Market  Value"  means  the  market  price of a Common  Share,
determined by the committee as follows:

           (a) If the Common Share was traded on a stock exchange on the date in
           question,  then  the  Fair Market Value shall be equal to the closing
           price  reported  by  the applicable composite-transactions report for
           such date;

           (b) If  the  Common  Share was traded over-the-counter on the date in
           question and was classified as a national market issue, then the Fair
           Market Value shall be  equal  to the last transaction price quoted by
           the NASDAQ system for such date;

           (c) If the Common Share  was  traded  over-the-counter on the date in
           question but was not classified as a  national market issue, then the
           Fair  Market  Value  shall  be  equal  to  the  mean between the last
           reported  representative  bid  and  asked prices quoted by the NASDAQ
           system for such date; and

           (d) If none of the foregoing provisions  is applicable, then the Fair
           Market Value shall be determined by the  Committee  in  good faith on
           such basis as it deems appropriate.

     16.14 "ISO" means an incentive stock option  described in section 422(b) of
the Code.

     16.15 "Key Employee" means (1) a key common-law  employee of the Company or
any Subsidiary,  as determined by the Committee,  or (2) a non-employee director
of any Subsidiary, as determined by the Committee.

     16.16 "Named Executive  Officer" means a Participant who, as of the date of
vesting of an Award is one of a group of "covered  employees," as defined in the
Regulations promulgated under Code Section 162(m), or any successor statute.

     16.17  "Non-Employee  Director"  means a member  of the  Board who is not a
common-law employee.

     16.18 "NQSO" means an employee  stock option not  described in sections 422
through 424 of the Code.

     16.19  "Option"  means an ISO or NQSO or, in the case of a Key Employee who
is subject to the tax laws of a foreign  jurisdiction,  an option qualifying for
favorable  tax  treatment  under  the  laws of such  jurisdiction,  including  a
Replacement Option,  granted under the Plan and entitling the holder to purchase
one Common Share.

     16.20  "Optionee"  means an  individual,  or his or her estate,  legatee or
heirs at law that holds an Option.

     16.21 "Participant"  means a Non-Employee  Director or Key Employee who has
received an Award.

     16.22  "Performance  Share Award" means the conditional right to receive in
the future one Common Share, awarded to a Participant under the Plan.

     16.23 "Plan"  means this 1992 Stock  Incentive  Plan of The Charles  Schwab
Corporation, as it may be amended from time to time.

     16.24  "Replacement  Option"  means  an  Option  that  is  granted  when  a
Participant  uses a Common  Share held or to be acquired by the  Participant  to
exercise an Option and/or to satisfy tax  withholding  requirements  incident to
the exercise of an Option.

     16.25  "Restricted  Share"  means a Common Share  awarded to a  Participant
under the Plan.

     16.26  "Retirement" shall mean any termination of employment of an Optionee
for any reason  other than death at any time  after the  Optionee  has  attained
Retirement Age. For this purpose,  Retirement Age shall mean age fifty (50), but
only if, at the time of such termination, the Participant has been credited with
at least seven (7) Years of Service under the SchwabPlan  Retirement Savings and
Investment Plan; provided, however, that if at the time of grant of an Option an
Optionee  is a  Participant  in a  qualified  retirement  plan  maintained  by a
Subsidiary (other than the SchwabPlan  Retirement  Savings and Investment Plan),
then Retirement Age shall have the same meaning as the Normal Retirement Date as
defined in such plan.

     16.27 "Stock Award Agreement"  means the agreement  between the Company and
the recipient of a Restricted  Share or  Performance  Share Award which contains
the terms,  conditions and  restrictions  pertaining to such Restricted Share or
Performance Share Award.

     16.28 "Stock Option  Agreement" means the agreement between the Company and
an Optionee which contains the terms,  conditions and restrictions pertaining to
his or her option.

     16.29  "Subsidiary"  means any corporation or other entity,  if the Company
and/or one or more other  Subsidiaries own not less than 50 percent of the total
combined  voting power of all classes of outstanding  stock of such  corporation
(or ownership interest of such other entity). A corporation or other entity that
attains  the status of a  Subsidiary  on a date after the  adoption  of the Plan
shall be considered a Subsidiary commencing as of such date.

<page>

                                   ADDENDUM A

     The  provisions  of the Plan,  as amended by the terms of this  Addendum A,
shall apply to the grant of Approved Options to Key U.K. Employees.

     1. For purposes of this Addendum A, the following  definitions  shall apply
in addition to those set out in section 16 of the Plan:

     Approved Option Means a stock option designed to qualify as
     an approved executive share option under the Taxes Act;

     Inland Revenue means the Board of the Inland Revenue in the
     United Kingdom.

     Key U.K. Employee means a designated employee of  Sharelink
     Investment Services plc or any subsidiary (as that  term is
     defined in the Companies Act 1985 of the United Kingdom, as
     amended) of  which  Sharelink  Investment  Services plc has
     control for the purposes of section 840 of the Taxes Act;

     Taxes Act means the Income and Corporation Taxes  Act  1988
     of the United Kingdom.

     2. An Approved Option may only be granted to a Key U.K. Employee who:

        (i)   is employed on a full-time basis; and

        (ii)  does not fall within the provisions of paragraph 8
              or Schedule 9 to the Taxes Act.

     For purposes of this section 2(i) of Addendum A, "full-time"  shall mean an
employee who is required to work 20 hours per week, excluding meal breaks.

     3. No  Approved  Option may be granted to a Key U.K.  Employee  if it would
cause the aggregate of the exercise  price of all  subsisting  Approved  Options
granted to such employee under the Plan, or any other subsisting options granted
to such employee  under any other share option scheme  approved under Schedule 9
of the Taxes Act and  established  by the Company or an associated  company,  to
exceed the higher of (a) one hundred thousand pounds sterling and (b) four times
such  employee's  relevant  emoluments  for the  current  or  preceding  year of
assessment  (whichever is greater);  but where there were no relevant emoluments
for the  previous  year of  assessment,  the  limit  shall be the  higher of one
hundred  thousand  pounds  sterling  or  four  times  such  employee's  relevant
emoluments  for the period of twelve months  beginning with the first day during
the  current  year  of  assessment  in  respect  of  which  there  are  relevant
emoluments.  For the  purpose  of this  section  3 of  Addendum  A,  "associated
company"  means an associated  company  within the meaning of section 416 of the
Taxes Act;  "relevant  emoluments"  has the meaning given by paragraph  28(4) of
Schedule 9 to the Taxes Act and "year of  assessment"  means a year beginning on
any April 6 and ending on the following April 5.

     4. Common Shares issued  pursuant to the exercise of Approved  Options must
satisfy the  conditions  specified in  paragraphs  10 to 14 of Schedule 9 to the
Taxes Act.

     5.  Notwithstanding the provisions of Section 5.4 of the Plan, the exercise
price of an  Approved  Option  shall not be less than 100 percent of the closing
price of a Common  Share as  reported in the New York Stock  Exchange  Composite
Index on the date of grant.

     6. No Approved  Option may be exercised at any time by a Key U.K.  Employee
when that Key U.K.  Employee  falls  within the  provisions  of  paragraph  8 of
Schedule 9 to the Taxes Act. If at any time the shares under an Approved  Option
cease to comply with the  conditions in paragraphs 10 to 14 of Schedule 9 to the
Taxes Act, then all Approved Options then  outstanding  shall lapse and cease to
be exercisable from the date of the shares ceasing so to comply, and no optionee
shall  have any  cause of  action  against  the  Company,  Sharelink  Investment
Services  plc or any  subsidiary  of the Company or any other  person in respect
thereof.

     7. An  Approved  Option  may  contain  such  other  terms,  provisions  and
conditions  as may be  determined  by the  Committee  consistent  with the Plan,
provided that the approved option  otherwise  complies with the requirements for
approved executive option schemes specified in Schedule 9 of the Taxes Act.

     8. In relation to an Approved Option,  notwithstanding the terms of section
10.1 of the Plan,  no  adjustment  shall be made pursuant to section 10.1 of the
Plan to any  outstanding  Approved  Options  without  the prior  approval of the
Inland Revenue.

     9. In  relation  to an  Approved  Option any Key U.K.  Employee  shall make
arrangements  satisfactory  to the  Company  for  the  satisfaction  of any  tax
withholding or deduction -- at -- source obligations that arise by reason of the
grant to him or her of such option, or its subsequent exercise.

     10. In relation to an Approved  Option,  in addition to the  provisions set
out  in  section  15.2  of the  Plan,  no  amendment  which  affects  any of the
provisions  of the Plan relating to Approved  Options  shall be effective  until
approved by the Inland  Revenue,  except for such  amendment  as are required to
obtain and maintain the approval of Inland Revenue pursuant to Schedule 9 to the
Taxes Act.



</TEXT>
</DOCUMENT>
