SCHWAB CHARLES CORP
EXHIBIT 10.257
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>2
<FILENAME>exh10_257.txt
<DESCRIPTION>EXHIBIT 10.257
<TEXT>
                                                                  Exhibit 10.257

































================================================================================
                         THE CHARLES SCHWAB CORPORATION

                           DEFERRED COMPENSATION PLAN

                      (As Amended Through January 1, 2004)
================================================================================













<PAGE>

                                Table of Contents


Article I     Purpose.....................................................1
1.1     Establishment of the Plan.........................................1
1.2     Purpose of the Plan...............................................1
Article II    Definitions.................................................1
2.1     Definitions.......................................................1
2.2     Gender and Number.................................................2
Article III   Administration..............................................3
3.1     Committee and Administrator.......................................3
Article IV    Participants................................................3
4.1     Participants......................................................3
Article V Deferrals.......................................................3
5.1     Salary Deferrals..................................................3
5.2     Deferrals of Bonuses, Commissions and Other
         Cash Incentive Compensation......................................4
5.3     Deferral Procedures...............................................4
5.4     Election of Time and Manner of Payment............................4
5.5     Accounts and Earnings.............................................5
5.6     Maintenance of Accounts...........................................6
5.7     Change in Control.................................................6
5.8     Payment of Deferred Amounts.......................................8
5.9     Acceleration of Payment...........................................8
Article VI General Provisions.............................................9
6.1     Unfunded Obligation...............................................9
6.2     Informal Funding Vehicles.........................................9
6.3     Beneficiary.......................................................9
6.4     Incapacity of Participant or Beneficiary.........................10
6.5     Nonassignment....................................................10
6.6     No Right to Continued Employment.................................10
6.7     Tax Withholding..................................................10
6.8     Claims Procedure and Arbitration.................................10
6.9     Termination and Amendment........................................11
6.10    Applicable Law...................................................11

<PAGE>

                         THE CHARLES SCHWAB CORPORATION
                           DEFERRED COMPENSATION PLAN

                               Article I. Purpose

     1.1 Establishment of the Plan.

     Effective as of July 1, 1994, The Charles Schwab Corporation  (hereinafter,
the  "Company")  hereby  establishes  The Charles  Schwab  Corporation  Deferred
Compensation  Plan (the "Plan"),  as set forth in this document.

     1.2 Purpose of the Plan.

     The Plan  permits  participating  employees to defer the payment of certain
cash compensation that they may earn. The opportunity to elect such deferrals is
provided in order to help the Company  attract  and retain key  employees.  This
Plan is  unfunded  and is  maintained  primarily  for the  purpose of  providing
deferred  compensation  for a select group of management  or highly  compensated
employees.  It is  accordingly  intended  to be exempt  from the  participation,
vesting,  funding,  and  fiduciary  requirements  set  forth  in  Title I of the
Employee Retirement Income Security Act of 1974.

                            Article II. Definitions

     2.1 Definitions.

     The  following  definitions  are in addition to any other  definitions  set
forth elsewhere in the Plan. Whenever used in the Plan, the capitalized terms in
this section shall have the meanings set forth below unless  otherwise  required
by the context in which they are used:

          (a) "Administrator" the administrator described in section 3.1 that is
     selected by the Committee to assist in the administration of the Plan.

          (b)  "Beneficiary"  means a person  entitled  to receive  any  benefit
     payments that remain to be paid after a Participant's  death, as determined
     under section 6.3.

          (c) "Board" means the Board of Directors of the Company.

          (d)  "Company"  means  The  Charles  Schwab  Corporation,  a  Delaware
     corporation.

          (e) "Category 1 Participant"  and "Category 2 Participant"  each refer
     to a specific  Participant  group and have the meaning set forth in section
     4.1.

          (f) "Committee" means the Compensation Committee of the Board.

          (g) "Deferral  Account"  means the account  representing  deferrals of
     cash compensation,  plus investment  adjustments,  as described in sections
     5.5 and 5.6.

                                     - 1 -

          (h)  "Participant"  means  any  employee  who  meets  the  eligibility
     requirements  of the Plan, as set forth in Article 4, and  includes,  where
     appropriate to the context, any former employee who is entitled to benefits
     under this Plan.

          (i) "Plan" means The Charles Schwab Corporation Deferred  Compensation
     Plan, as in effect from time to time.

          (j) "Plan Year" means the calendar year.

          (k) "Retirement" shall mean:

               (l) any  termination  of  employment  with  the  Company  and its
          Subsidiaries  with the  exception of U.S.  Trust  Corporation  for any
          reason other than death at any time after the Participant has attained
          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; provided,  however, that with respect to any payments made on
          account  of a  deferral  election  made  prior to  November  1,  1994,
          Retirement  shall also mean any  termination  of  employment  with the
          Company and its Subsidiaries for any reason other than death after the
          Participant has attained age 55; and

               (m) any termination of employment from U.S. Trust Corporation for
          any reason other than death at any time after (i) the  Participant has
          attained age sixty-five  (65); (ii) the sum of the  Participant's  age
          and credited  Years of Service,  at the time of such  termination,  is
          equal to or greater than eighty  (80);  or (iii) the  Participant  has
          attained age sixty (60), but only if, at the time of such termination,
          the  Participant  has been  credited  with at least ten (10)  Years of
          Service.

          For  purposes of this  subparagraph  (k),  the term "Years of Service"
          shall  have  the  same  meaning  given  to  it  under  the  SchwabPlan
          Retirement Savings and Investment Plan (or any successor plan).

          (n) "Subsidiary" means a corporation or other business entity in which
     the Company  owns,  directly or  indirectly,  securities  with more than 80
     percent of the total voting power.

          (o)  "Valuation  Date"  means  each  December  31 and any  other  date
     designated  from  time  to  time  by  the  Committee  for  the  purpose  of
     determining the value of a Participant's  Deferral Account balance pursuant
     to section 5.5.

     2.2 Gender and Number.

     Except when otherwise  indicated by the context,  any masculine or feminine
terminology  shall also include the neuter and other gender,  and the use of any
term in the singular or plural shall also include the opposite  number.

                                      - 2 -

                          Article III. Administration

     3.1 Committee and Administrator.

     The Committee shall  administer the Plan and may select one or more persons
to  serve  as  the   Administrator.   The   Administrator   shall  perform  such
administrative  functions as the Committee may delegate to it from time to time.
Any  person  selected  to serve as the  Administrator  may,  but need not,  be a
Committee member or an officer or employee of the Company.  However, if a person
serving as  Administrator  or a member of the Committee is a  Participant,  such
person may not vote on a matter  affecting  his interest as a  Participant.  The
Committee shall have discretionary  authority to construe and interpret the Plan
provisions and resolve any  ambiguities  thereunder;  to prescribe,  amend,  and
rescind  administrative  rules relating to the Plan; to select the employees who
may participate and to terminate the future participation of any such employees;
to  determine  eligibility  for benefits  under the Plan;  and to take all other
actions that are necessary or appropriate  for the  administration  of the Plan.
Such  interpretations,  rules,  and actions of the Committee  shall be final and
binding  upon all  concerned  and,  in the event of  judicial  review,  shall be
entitled to the maximum  deference  allowable by law.  Where the  Committee  has
delegated   its   responsibility   for  matters  of   interpretation   and  Plan
administration  to the  Administrator,  the actions of the  Administrator  shall
constitute actions of the Committee.

                            Article IV. Participants

     4.1 Participants.

     Officers  and  other  key   employees  of  the  Company  and  each  of  its
Subsidiaries shall be eligible to participate in this Plan upon selection by the
Committee.  To be  nominated  for  participation,  an  employee  must be  highly
compensated or have  significant  responsibility  for the management,  direction
and/or success of the Company as a whole or a particular  business unit thereof.
Directors of the Company who are  full-time  employees  of the Company  shall be
eligible to participate in the Plan.  Participating  employees of the Company in
the  position  of  executive  vice  president  or  above  shall be  "Category  1
Participants."   All  other   participating   employees  shall  be  "Category  2
Participants."

                              Article V. Deferrals

     5.1 Salary Deferrals.

     Each Category 2 Participant  selected  under Section 4.1 may elect to defer
up to 50 percent of his regular base salary  (subject to the  provisions of this
Article V). Any such election  must be made by entering a deferred  compensation
agreement  with the employer,  as evidenced by a form approved by and filed with
the  Administrator  on or before the  deadline  specified  by the  Administrator
(which shall be no earlier than one month prior to the beginning of the election
period for which the deferred  salary is to be earned).  For this  purpose,  the
election  period  shall be the calendar  year;  provided,  however,  that during
periods  in  which  the Plan is not in  effect  for a full  calendar  year or an
employee is not a Participant  for a full  calendar  year,  the election  period
shall be the portion of the calendar year during which the Plan is in effect and
the employee is an eligible Participant. Notwithstanding the foregoing, a person
who is not a  Participant  at the

                                      - 3 -

beginning  of a  calendar  year  shall not be  allowed  to elect a  deferral  of
compensation  that takes  effect  during  that year  without  the consent of the
Committee.  Salary  deferrals that have been elected shall occur  throughout the
election period in equal increments for each payroll period.

     5.2   Deferrals   of  Bonuses,   Commissions   and  Other  Cash   Incentive
Compensation.

     Each  Category 1 Participant  and each Category 2 Participant  may elect to
defer all or any portion  (subject to the  provisions  of this Article V) of (a)
his or her  commissions;  and (b) any amount that he or she  subsequently  earns
under  an  annual  cash  bonus  program   and/or  a  long-term   cash  incentive
compensation  program of the  Company or a  participating  Subsidiary.  Any such
election  must be made by entering a deferred  compensation  agreement  with the
employer,  as evidenced by a form approved by the  Committee  that is filed with
the Administrator on or before the deadline specified by the Administrator.  For
annual cash bonuses,  this deadline  shall be no earlier than one month prior to
the  beginning of year (or portion  thereof) for which the bonus will be earned.
For commissions and other cash incentive compensation,  this deadline shall be a
date no later  than six months  before  the end of the year or other  period for
which the commissions or incentive compensation will be earned. Rules similar to
those in 5.1  shall  apply in cases  where  the Plan is not in  existence  or an
employee is not a Participant for the full period in which an annual cash bonus,
commission or long-term incentive compensation award is earned.

     5.3 Deferral Procedures.

     Participants  eligible to elect salary  deferrals  under  section 5.1 shall
have an opportunity to do so each year. Participants eligible to elect deferrals
under section 5.2 shall have a separate  opportunity  to do so for each (a) cash
bonus under an annual bonus program; (b) cash bonus or incentive payment under a
long-term  incentive  plan;  and (c) commission  that they may earn.  Unless the
Committee  specifies  other rules for the  deferrals  that may be  elected,  the
minimum  deferral  shall be 20 percent of the  compensation  to which a deferral
election applies;  and, subject to the maximum  percentage allowed under section
5.1 or  5.2,  as  applicable,  deferrals  in  excess  of the  minimum  allowable
percentage  may be made only in  increments  of 10  percent.  If a  deferral  is
elected,  the  election  shall be  irrevocable  with  respect to the  particular
compensation that is subject to the election.  Deferral  elections shall be made
on a form  prescribed  by the  Committee  or the  Administrator.  As provided in
section 6.7, any deferral is subject to appropriate tax withholding measures and
may be reduced to satisfy tax withholding requirements.

     5.4 Election of Time and Manner of Payment.

     At the time a Participant  makes a deferral  election  under section 5.1 or
5.2, the Participant  shall also designate the manner of payment and the date on
which  payments  from his or her Deferral  Account  shall begin,  from among the
following options:

          (a) A lump sum  payable  by the end of  February  of any year that the
     Participant specifies;

          (b) a lump sum payable by the end of February in the year  immediately
     following the Participant's Retirement;

          (c) a series of annual  installments,  commencing in any year selected
     by the  Participant and payable each year on or before the end of February,
     over a period of four years; or

                                      - 4 -

          (d) a series of annual installments,  commencing in the year following
     the Participant's  Retirement and payable each year on or before the end of
     February,  over a period of five,  ten, or fifteen years,  as designated by
     the Participant.

     However, if a Participant  terminates  employment for any reason other than
Retirement,  the payment of the Participant's entire Deferral Account, including
any unpaid installments  pursuant to clause (c) above, shall be made in a single
lump sum by the end of February in the year next following the year in which the
Participant   terminates   employment,   notwithstanding   the   terms   of  the
Participant's election.

     Any election of a specified  payment  date  pursuant to clauses (a) or (b),
above,  shall be subject to any restrictions that the Committee may, in its sole
discretion,  choose  to  establish  in order to limit the  number  of  different
payment dates that a Participant may have in effect at one time.

     A  Participant  may  modify  an  election  of the  time for  payment  under
circumstances determined by the Committee,  provided that (a) a payment election
may not be modified in a manner  that would cause  payments to commence  earlier
than the date payments would have commenced  absent such  modification,  and (b)
all payment  elections  shall become  irrevocable  one year prior to the date on
which payment will commence under the election.

     If payment is due in the form of a lump sum,  the  payment  shall equal the
balance of the Deferral Account being paid,  determined as of the Valuation Date
coincident with or immediately  preceding the payment date. If payment is due in
the form of installments,  the amount of each installment payment shall be equal
to the  quotient  determined  by  dividing  (A) the value of the  portion of the
Deferral Account to which the installment  payment election applies  (determined
as of the Valuation Date coincident  with or immediately  preceding the date the
payment is to be made),  by (B) the  number of years over which the  installment
payments  are to be made,  less the  number  of  years in which  prior  payments
attributable to such installment payment election have been made.

     Notwithstanding  the foregoing,  however,  if earnings or any other amounts
credited   to   a   Participant's    Deferral   Account   are   not   considered
performance-based  compensation,  within the  meaning  of Section  162(m) of the
Internal  Revenue  Code,  and  do  not  otherwise  meet  Internal  Revenue  Code
conditions allowing the Company and its Subsidiaries to receive a federal income
tax deduction  for such amounts upon paying them at the time provided  under the
Participant's  election, the payment of such amounts, to the extent in excess of
the amount  that would be  currently  tax  deductible,  shall  automatically  be
deferred until the earliest year that the payment can be deducted.

     5.5 Accounts and Earnings.

     The Company shall establish a Deferral Account for each Participant who has
elected a deferral under section 5.1 or 5.2 above,  and its  accounting  records
for the Plan with  respect  to each such  Participant  shall  include a separate
Deferral  Account or subaccount  for each deferral  election of the  Participant
that could cause a payment made at a different  time or in a different

                                      - 5 -

form from other  payments of  deferrals  elected by the same  Participant.  Each
Deferral  Account  balance  shall  reflect  the  Company's  obligation  to pay a
deferred  amount to a Participant  or Beneficiary as provided in this Article V.
Under procedures  approved by the Committee and communicated to Participants,  a
Participant's Deferral Account balance shall be increased periodically (not less
frequently than annually) to reflect an assumed earnings increment,  based on an
interest rate or other benchmark  selected by the Committee and in effect at the
time. Until the time for determining the amount to be paid to the Participant or
Beneficiary,  such assumed earnings shall accrue from each Valuation Date on the
Deferral Account balance as of that date and shall be credited to the account as
of the next Valuation Date.The rate of earnings may, but need not, be determined
with  reference to the actual rate of earnings on assets held under any existing
grantor trust or other informal  funding  vehicle that is in effect  pursuant to
section 6.2. Any method of crediting earnings that is followed from time to time
may, with  reasonable  advance  notice to affected  Participants,  be revoked or
revised  prospectively  as of the beginning of any new Plan Year.  Earnings that
have been  credited  for any Plan Year,  like  deferred  amounts  that have been
previously  credited  to a  Participant,  shall  not be  reduced  or  eliminated
retroactively  unless they were  credited  in error.  The  crediting  of assumed
earnings shall not mean that any deferred  compensation promise to a Participant
is secured by particular  investment  assets or that the Participant is actually
earning  interest  or any  other  form of  investment  income  under  the  Plan.
Consistent with the foregoing authority to exercise  flexibility in establishing
a method for crediting assumed earnings on account balances,  the Committee may,
but need not, consult with Participants  about their investment  preferences and
may,  but need not,  institute  a program of assumed  earnings  that  tracks the
investment  performance in a Participant's  qualified defined  contribution plan
account or in an assumed participant-directed investment arrangement.

     5.6 Maintenance of Accounts.

     The  Accounts  of each  Participant  shall be  entered  on the books of the
Company and shall  represent a liability,  payable when due under this Plan, out
of the general assets of the Company.  Prior to benefits becoming due hereunder,
the Company shall  expense the  liability  for such accounts in accordance  with
policies determined appropriate by the Company's auditors.  Except to the extent
provided  pursuant to the second  paragraph  of this  section  5.6, the Accounts
created for a  Participant  by the Company  shall not be funded by a trust or an
insurance  contract;  nor  shall any  assets of the  Company  be  segregated  or
identified to such  account;  nor shall any property or assets of the Company be
pledged,  encumbered,  or otherwise subjected to a lien or security interest for
payment  of  benefits  hereunder.  Notwithstanding  that the  amounts to be paid
hereunder to Participants  constitute an unfunded obligation of the Company, the
Company may direct that an amount equal to any portion of the Accounts  shall be
invest by the Company as the Company,  in its sole discretion,  shall determine.
The Committee may in its sole discretion determine that all or any portion of an
amount equal to the Accounts  shall be paid into one or more grantor trusts that
may be  established  by the  Company  for the  purpose of  providing a potential
source of funds to pay Plan  benefits.  The Company may  designate an investment
advisor to direct  the  investment  of funds  that may be used to pay  benefits,
including the investment of the assets of any grantor trusts hereunder.

     5.7 Change in Control.

     In the event of a Change in Control (as defined below), the following rules
shall apply:

                                      - 6 -

          (a)  All   Participants   shall  continue  to  have  a  fully  vested,
     nonforfeitable interest in their Deferral Accounts.

          (b)  Deferrals  of amounts  for the year that  includes  the Change in
     Control shall cease  beginning  with the first payroll  period that follows
     the Change in Control.

          (c) A special allocation of earnings on all Deferral Accounts shall be
     made under  section  5.5 as of the date of the Change in Control on a basis
     no less favorable to  Participants  than the method being followed prior to
     the Change in Control.

          (d) All  payments of deferred  amounts  following a Change in Control,
     whether or not they have previously begun, shall be made in a cash lump sum
     no later  than 30 days  following  the  Change in  Control  and,  except as
     provided in section 5.4 with respect to  installment  payments in progress,
     shall be in an  amount  equal  to the full  Deferral  Account  balance,  as
     adjusted  pursuant to paragraph (c) above,  as of the date of the Change in
     Control.

          (e) Nothing in this Plan shall  prevent a Participant  from  enforcing
     any rules in a contract or another  plan of the  Company or any  Subsidiary
     concerning  the  method of  determining  the  amount of a bonus,  incentive
     compensation,  or other form of  compensation  to which a  Participant  may
     become  entitled  following a change in control,  or the time at which that
     compensation is to be paid in the event of a change in control.

          For  purposes  of this Plan,  a "Change in  Control"  means any of the
     following:

          (1)  Any "person"  who,  alone or together with all  "affiliates"  and
               "associates"  of such  person,  is or becomes  (A) an  "acquiring
               person" or (B) the  "beneficial  owner" of 35% of the outstanding
               voting   securities   of  the   Company   (the  terms   "person",
               "affiliates",  "associates"  and  "beneficial  owner" are used as
               such terms are used in the  Securities  Exchange  Act of 1934 and
               the General Rules and Regulations thereunder); provided, however,
               that a "Change in Control"  shall not be deemed to have  occurred
               if  such  "person"  is  Charles  R.  Schwab,  the  Company,   any
               subsidiary or any employee benefit plan or employee stock plan of
               the Company or of any  Subsidiary,  or any trust or other  entity
               organized,   established   or  holding   shares  of  such  voting
               securities by, for or pursuant to, the terms of any such plan; or

          (2)  Individuals who at the beginning of any period of two consecutive
               calendar years constitute the Board cease for any reason,  during
               such period,  to constitute at least a majority  thereof,  unless
               the  election,  or the  nomination  for election by the Company's
               Shareholders,  of each new Board Member was approved by a vote of
               at least  three-quarters (3/4) of the Board members then still in
               office who were Board members at the beginning of such period; or

          (3)  Approval by the shareholders of the Company of:

                                      - 7 -

               (A)  the dissolution or liquidation of the Company;

               (B)  the sale or transfer of  substantially  all of the Company's
                    business  and/or assets to a person or entity which is not a
                    "subsidiary"  (any corporation or other entity a majority or
                    more of whose  outstanding  voting  stock or voting power is
                    beneficially  owned  directly or indirectly by the Company);
                    or

               (C)  an   agreement  to  merge  or   consolidate,   or  otherwise
                    reorganize,   with  one  or  more  entities  which  are  not
                    subsidiaries (as defined in (B) above), as a result of which
                    less than 50% of the  outstanding  voting  securities of the
                    surviving  or  resulting  entity are, or are to be, owned by
                    former shareholders of the Company; or

          (4)  The Board agrees by a majority vote that an event has or is about
               to occur that, in fairness to the Participants,  is tantamount to
               a Change in Control.


               A Change of Control  shall occur on the first day on which any of
          the preceding conditions has been satisfied. However,  notwithstanding
          the foregoing, this section 5.7 shall not apply to any Participant who
          alone  or  together  with  one  or  more  other  persons  acting  as a
          partnership,  limited partnership,  syndicate,  or other group for the
          purpose  of  acquiring,  holding or  disposing  of  securities  of the
          Company,  triggers  a  "Change  in  Control"  within  the  meaning  of
          paragraphs (1) and (2) above.

     5.8 Payment of Deferred Amounts.

     A Participant shall have a fully vested,  nonforfeitable interest in his or
her Deferral  Account balance at all times.  However,  vesting does not confer a
right to payment other than in the manner elected by the Participant pursuant to
section 5.4 (subject to any modification that may occur pursuant to section 5.5,
5.7  or  5.9).  Upon  the  expiration  of a  deferral  period  selected  by  the
Participant  in one or more  deferral  elections,  the Company shall pay to such
Participant  (or  to  the  Participant's   Beneficiary,   in  the  case  of  the
Participant's death) an amount equal to the balance of the Participant's Account
attributable  to  such  expiring  deferral  elections,   plus  assumed  earnings
(determined by the Company pursuant to section 5.5) thereon.

     5.9 Acceleration of Payment.

     The Committee, in its discretion,  upon receipt of a written request from a
Participant,  may  accelerate  the  payment of all or any  portion of the unpaid
balance of a Participant's  Deferral  Account in the event of the  Participant's
Retirement,   death,   permanent  disability,   resignation  or  termination  of
employment,  or upon its determination  that the Participant (or his Beneficiary
in the  case of his  death)  has  incurred  a  severe,  unforeseeable  financial
hardship creating an immediate and heavy need for cash that cannot reasonably be
satisfied  from sources other than an  accelerated  payment from this Plan.  The
Committee in making its determination may consider such factors and require such
information as it deems appropriate.

                                      - 8 -

                         Article VI. General Provisions

     6.1 Unfunded Obligation.

     The  deferred  amounts  to be paid to  Participants  pursuant  to this Plan
constitute   unfunded   obligations  of  the  Company.   Except  to  the  extent
specifically  provided  hereunder,  the Company is not required to segregate any
monies from its  general  funds,  to create any  trusts,  or to make any special
deposits with respect to this obligation.  Title to and beneficial  ownership of
any investments,  including any grantor trust  investments which the Company has
determined and directed the  Administrator to make to fulfill  obligations under
this Plan shall at all times  remain in the  Company.  Any  investments  and the
creation or  maintenance of any trust or Accounts shall not create or constitute
a trust or a fiduciary relationship between the Administrator or the Company and
a  Participant,  or otherwise  create any vested or  beneficial  interest in any
Participant  or his or her  Beneficiary or his or her creditors in any assets of
the Company whatsoever.  The Participants shall have no claim for any changes in
the value of any assets which may be invested or reinvested by the Company in an
effort to match its liabilities under this Plan.

     6.2 Informal Funding Vehicles.

     Notwithstanding section 6.1, the Company may, but need not, arrange for the
establishment  and use of a grantor trust or other informal  funding  vehicle to
facilitate the payment of benefits and to discharge the liability of the Company
and participating  Affiliates under this Plan to the extent of payments actually
made from such trust or other informal funding vehicle.  Any investments and any
creation or  maintenance  of  memorandum  accounts or a trust or other  informal
funding  vehicle  shall  not  create  or  constitute  a  trust  or  a  fiduciary
relationship  between  the  Committee  or  the  Company  or an  affiliate  and a
Participant, or otherwise confer on any Participant or Beneficiary or his or her
creditors  a vested or  beneficial  interest in any assets of the Company or any
Affiliate whatsoever. Participants and Beneficiaries shall have no claim against
the Company or any  Affiliate  for any changes in the value of any assets  which
may be invested or reinvested  by the Company or any  Affiliate  with respect to
this Plan.

     6.3 Beneficiary.

     The term  "Beneficiary"  shall mean the person or persons to whom  payments
are to be  paid  pursuant  to  the  terms  of  the  Plan  in  the  event  of the
Participant's  death.  A  Participant  may  designate  a  Beneficiary  on a form
provided by the Administrator, executed by the Participant, and delivered to the
Administrator.  The  Administrator  may require the consent of the Participant's
spouse to a designation if the  designation  specifies a Beneficiary  other than
the spouse.  Subject to the  foregoing,  a Participant  may change a Beneficiary
designation at any time.  Subject to the property rights of any prior spouse, if
no Beneficiary  is designated,  if the  designation  is  ineffective,  or if the
Beneficiary dies before the balance of the Account is paid, the balance shall be
paid to the Participant's  surviving spouse, or if there is no surviving spouse,
to the Participant's estate.

                                      - 9 -

     6.4 Incapacity of Participant or Beneficiary.

     Every  person  receiving  or  claiming  benefits  under  the Plan  shall be
conclusively  presumed  to be  mentally  competent  and of age until the date on
which  the  Administrator  receives  a  written  notice,  in a form  and  manner
acceptable to the Administrator, that such person is incompetent or a minor, for
whom a guardian or other  person  legally  vested with the care of his person or
estate has been appointed;  provided,  however,  that if the Administrator finds
that any person to whom a benefit  is  payable  under the Plan is unable to care
for his or her affairs because of incompetency, or because he or she is a minor,
any payment due  (unless a prior claim  therefor  shall have been made by a duly
appointed legal  representative) may be paid to the spouse, a child, a parent, a
brother  or  sister,  or  to  any  person  or  institution   considered  by  the
Administrator  to have incurred  expense for such person  otherwise  entitled to
payment.  To the extent  permitted  by law,  any such payment so made shall be a
complete discharge of liability therefor under the Plan.

     If a guardian of the estate of any person  receiving  or claiming  benefits
under  the Plan is  appointed  by a court  of  competent  jurisdiction,  benefit
payments may be made to such guardian  provided that proper proof of appointment
and continuing qualification is furnished in a form and manner acceptable to the
Administrator.  In the event a person  claiming or receiving  benefits under the
Plan is a minor,  payment  may be made to the  custodian  of an account for such
person  under the Uniform  Gifts to Minors Act. To the extent  permitted by law,
any such payment so made shall be a complete discharge of any liability therefor
under the Plan.

     6.5 Nonassignment.

     The right of a  Participant  or  Beneficiary  to the payment of any amounts
under the Plan may not be assigned, transferred, pledged or encumbered nor shall
such right or other interests be subject to attachment,  garnishment, execution,
or other legal process.

     6.6 No Right to Continued Employment.

     Nothing in the Plan shall be construed to confer upon any  Participant  any
right to continued  employment with the Company, nor shall the Plan interfere in
any way with the  right of the  Company  to  terminate  the  employment  of such
Participant at any time without assigning any reason therefor.

     6.7 Tax Withholding.

     Appropriate taxes shall be withheld from cash payments made to Participants
pursuant to the Plan.  To the extent tax  withholding  is payable in  connection
with the  Participant's  deferral of income rather than in  connection  with the
payment of deferred  amounts,  such withholding may be made from other wages and
salary  currently  payable  to  the  Participant,   or,  as  determined  by  the
Administrator,  the amount of the  deferral  elected by the  Participant  may be
reduced in order to satisfy  required tax withholding  for employment  taxes and
any other taxes.

     6.8 Claims Procedure and Arbitration.

     The Senior Vice President, Specialty Services of Charles Schwab & Co., Inc.
shall establish a reasonable  claims procedure  consistent with the requirements
of the Employee Retirement Income Security Act of 1974, as amended.  Following a
Change in Control of the

                                     - 10 -

Company (as determined under section 5.8) the claims procedure shall include the
following  arbitration  procedure.  Following a Change in Control of the Company
(as  determined  under  section  5.8) the claims  procedure  shall  include  the
following  arbitration  procedure.   Since  time  will  be  of  the  essence  in
determining  whether any  payments  are due to the  Participant  under this Plan
following a Change in Control, a Participant may submit any claim for payment to
arbitration as follows:  On or after the second day following the termination of
the Participant's  employment or other event triggering a right to payment,  the
claim may be filed with an arbitrator of the Participant's  choice by submitting
the claim in writing and providing a copy to the Company. The arbitrator must be
(a) a member of the National Academy of Arbitrators or one who currently appears
on arbitration  panels issued by the Federal Mediation and Conciliation  Service
or the American Arbitration Association;  or (b) a retired judge of the State in
which the  claimant is a resident who served at the  appellate  level or higher.
The arbitration  hearing shall be held within 72 hours (or as soon thereafter as
possible) after filing of the claim unless the Participant and the Company agree
to a later date. No  continuance  of said hearing  shall be allowed  without the
mutual   consent  of  the   Participant   and  the  Company.   Absence  from  or
nonparticipation  at the hearing by either  party shall not prevent the issuance
of an award.  Hearing  procedures which will expedite the hearing may be ordered
at the arbitrator's discretion,  and the arbitrator may close the hearing in his
or her sole discretion upon deciding he or she has heard sufficient  evidence to
satisfy issuance of an award. In reaching a decision,  the arbitrator shall have
no authority to ignore,  change,  modify, add to or delete from any provision of
this Plan, but instead is limited to  interpreting  this Plan. The  arbitrator's
award shall be rendered as expeditiously as possible,  and unless the arbitrator
rules  within  seven days after the close of the  hearing,  he will be deemed to
have ruled in favor of the Participant. If the arbitrator finds that any payment
is due to the  Participant  from the  Company,  the  arbitrator  shall order the
Company to pay that amount to the Participant within 48 hours after the decision
is  rendered.  The award of the  arbitrator  shall be final and binding upon the
Participant and the Company.  Judgment upon the award rendered by the arbitrator
may be entered in any court in any State of the  United  States.  In the case of
any arbitration  regarding this Agreement,  the Participant shall be awarded the
Participant's costs, including attorney's fees. Such fee award may not be offset
against the  deferred  compensation  due  hereunder.  The Company  shall pay the
arbitrator's  fee  and  all  necessary   expenses  of  the  hearing,   including
stenographic reporter if employed.

     6.9 Termination and Amendment.

     The Committee  may from time to time amend,  suspend or terminate the Plan,
in whole or in part, and if the Plan is suspended or  terminated,  the Committee
may reinstate any or all of its provisions. Except as otherwise required by law,
the  Committee  may delegate to the  Administrator  all or any of its  foregoing
powers to amend, suspend, or terminate the Plan. Any such amendment, suspension,
or  termination  may  affect  future  deferrals   without  the  consent  of  any
Participant or Beneficiary. However, with respect to deferrals that have already
occurred,  no  amendment,  suspension or  termination  may impair the right of a
Participant  or a  designated  Beneficiary  to receive  payment  of the  related
deferred  compensation  in  accordance  with the terms of the Plan  prior to the
effective date of such amendment, suspension or termination, unless the affected
Participant or Beneficiary gives his express written consent to the change.

     6.10 Applicable Law.

                                     - 11 -

     The Plan shall be construed  and  governed in  accordance  with  applicable
federal law and, to the extent not  preempted  by such  federal law, the laws of
the State of California.




</TEXT>
</DOCUMENT>
