Contents:
Corporate Executive Bonus Plan
Annual Executive Individual Performance Plan
 
 
 
                         The Charles Schwab Corporation
 
                         Corporate Executive Bonus Plan
 
                 (Restated to include amendments approved at the
                 Annual Meeting of Stockholders on May 13, 2002)
 
 
 
 
 
 
 
 
I.   Purposes
 
     The purposes of this Corporate  Executive  Bonus Plan (the "Plan") are: (a)
     to provide greater incentive for key executives  continually to exert their
     best efforts on behalf of The Charles Schwab Corporation (the "Company") by
     rewarding them for services  rendered with compensation that is in addition
     to their  regular  salaries;  (b) to attract and to retain in the employ of
     the  Company  persons of  outstanding  competence;  and (c) to further  the
     identity  of  interests  of such  employees  with  those  of the  Company's
     stockholders through a strong performance-based reward system.
 
II.  Form of Awards
 
     1.   Incentive  compensation  awards  under  this Plan  shall be  generally
          granted in cash, less any applicable  withholding taxes; provided that
          the Committee may determine,  from time to time, that all or a portion
          of any  award may be paid in the form of an  equity  based  incentive,
          including  without  limitation stock options,  restricted  shares,  or
          outright  grants of  Company  stock.  The  number of shares  and stock
          options  granted  in any year,  when added to the number of shares and
          stock options  granted for such year pursuant to the Company's  Annual
          Executive Individual Performance Plan, shall in no event exceed .5% of
          the outstanding shares of the Company.
 
III. Determination of Awards
 
     1.   Incentive  awards for participants  other than the  President/Co-Chief
          Executive  Officer  shall  be  determined  quarterly  according  to  a
          Corporate  Performance  Payout  Matrix  that  shall be  adopted at the
          beginning of each year by the  Compensation  Committee of the Board of
          Directors  (the  "Committee").   The  Executive   Committee  Corporate
          Performance  Payout  Matrix  shall be based on  corporate  performance
          criteria  to be selected by the  Committee  from among the  following:
          revenue growth,  operating revenue growth,  consolidated pretax profit
          margin,  consolidated pretax operating margin,  customer net new asset
          growth,  stockholder return, return on net assets, earnings per share,
          return on equity, and return on investment. Awards shall be defined by
          reference to a target percentage of base salary determined,  from time
          to time, by the Committee.  Payouts described in this subsection shall
          be calculated  and paid on a quarterly  basis,  based on  year-to-date
          performance compared with the comparable period in the preceding year.
 
     2.   With respect to payments made pursuant to Section III.1, the amount of
          base salary included in the computation of incentive  awards shall not
          exceed 250% of the base  salary in effect for the officer  holding the
          same or substantially similar position on March 31, 2000. In addition,
          for all  participants  other  than  the  President/Co-Chief  Executive
          Officer,  (i) the maximum target incentive percentage shall be 100% of
          base  salary  and  (ii)  the  maximum  award  shall  be  400%  of  the
          participant's target award.
 
     3.   Incentive awards for the President/Co-Chief Executive Officer shall be
          determined in accordance  with a Corporate  Performance  Payout Matrix
          that shall be adopted at the beginning of each year by the  Committee.
          The  Committee  shall  determine  the   President/Co-Chief   Executive
          Officer's  award each year,  up to the maximum  amount  defined by the
          matrix for a given  level of  performance.  This  matrix  may,  if the
          Committee deems appropriate,  differ from that described in Subsection
          III.1. However, the performance criteria shall be the same as referred
          to above. Payouts for the  President/Co-Chief  Executive Officer shall
          be made on an annual  basis,  based on the  Company's  results for the
          full year.
 
     4.   The maximum award payable for the President/Co-Chief Executive Officer
          under  this plan  shall be no more than 500% of his  target  incentive
          award.  The target  incentive  amount shall be determined each year by
          the Committee,  but may not exceed 500% of base salary.  The amount of
          base salary taken into  account for  purposes of computing  the target
          incentive  award  may  not  exceed  250%  of  the   President/Co-Chief
          Executive Officer's base salary as of March 31, 2000.
 
     5.   Notwithstanding  anything to the contrary  contained in this Plan, the
          Committee shall have the power, in its sole discretion,  to reduce the
          amount  payable to any  Participant  (or to  determine  that no amount
          shall be payable to such  Participant) with respect to any award prior
          to the time the amount otherwise would have become payable  hereunder.
          In the event of such a reduction,  the amount of such reduction  shall
          not increase the amounts payable to other participants under the Plan.
 
IV.  Administration
 
     1.   Except  as  otherwise   specifically   provided,  the  Plan  shall  be
          administered  by  the  Committee.   The  Committee  members  shall  be
          appointed  pursuant  to the  Bylaws of the  Company,  and the  members
          thereof  shall be  ineligible  for awards under this Plan for services
          performed while serving on said Committee.
 
     2.   The decision of the Committee with respect to any questions arising as
          to interpretation  of the Plan,  including the severability of any and
          all of the  provisions  thereof,  shall be,  in its sole and  absolute
          discretion, final, conclusive and binding.
 
V.   Eligibility for Awards
 
     1.   Awards  under  the  Plan  may be  granted  by the  Committee  to those
          employees  who  have  contributed  the  most in a  general  way to the
          Company's   success  by  their  ability,   efficiency,   and  loyalty,
          consideration  being  given to ability  to  succeed in more  important
          managerial  responsibility in the Company. This is intended to include
          the  President/Co-Chief  Executive Officer,  Vice Chairmen,  Executive
          Vice Presidents,  and from time to time, certain other officers having
          comparable positions.
 
          No  award  may be  granted  to a  member  of the  Company's  Board  of
          Directors except for services performed as an employee of the Company.
 
     2.   Except  in the  event  of  retirement,  death,  or  disability,  to be
          eligible for an award an employee  shall be employed by the Company as
          of the date awards are calculated and approved by the Committee  under
          this Plan.
 
     3.   For  purposes  of this  Plan,  the term  "employee"  shall  include an
          employee  of a  corporation  or other  business  entity in which  this
          Company  shall   directly  or  indirectly  own  50%  or  more  of  the
          outstanding voting stock or other ownership interest.
 
VI.  Awards
 
     1.   The Committee  shall  determine each year the payments,  if any, to be
          made under the Plan. Awards for any calendar year shall be granted not
          later than the end of the first  quarter  of the  calendar  year,  and
          payments  pursuant  to the Plan  shall be made as soon as  practicable
          after  the  close of each  calendar  quarter  (or,  in the case of the
          President/Co-Chief Executive Officer, as soon as practicable after the
          close of each calendar year).
 
     2.   Upon the granting of awards under this Plan, each participant shall be
          informed  of his or her award by his or her  direct  manager  and that
          such award is subject to the applicable provisions of this Plan.
 
VII. Deferral of Awards
 
     1.   A participant  in this Plan who is also eligible to participate in The
          Charles Schwab  Corporation  Deferred  Compensation  Plan may elect to
          defer payments pursuant to the terms of that plan.
 
VIII. Recommendations and Granting of Awards
 
     1.   Recommendations  for  awards  shall  be made to the  Committee  by the
          Co-Chief  Executive  Officers,   except  that,  with  respect  to  the
          President/Co-Chief Executive Officer, recommendations for awards shall
          be made solely by the Chairman/Co-Chief Executive Officer.
 
     2.   Any award shall be made in the sole discretion of the Committee, which
          shall  take final  action on any such  award.  No person  shall have a
          right to an award  under this Plan until  final  action has been taken
          granting such award.
 
IX.  Amendments and Expiration Date
 
     While it is the present  intention of the Company to grant awards annually,
     the  Committee  reserves the right to modify this Plan from time to time or
     to repeal the Plan entirely,  or to direct the  discontinuance  of granting
     awards  either  temporarily  or  permanently;  provided,  however,  that no
     modification  of this plan shall  operate to annul,  without the consent of
     the beneficiary,  an award already granted hereunder;  provided, also, that
     no modification  without  approval of the  stockholders  shall increase the
     maximum amount which may be awarded as hereinabove provided.
 
X.   Miscellaneous
 
     All expenses and costs in connection  with the operation of this Plan shall
     be borne by the Company and no part  thereof  shall be charged  against the
     awards anticipated by the Plan. Nothing contained herein shall be construed
     as a guarantee of continued employment of any participant  hereunder.  This
     Plan shall be  construed  and governed in  accordance  with the laws of the
     State of California.
 
 
 
 
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                         The Charles Schwab Corporation
 
                  Annual Executive Individual Performance Plan
 
                 (Restated to include amendments approved at the
                 Annual Meeting of Stockholders on May 13, 2002)
 
 
 
 
 
I.   Purposes
 
     The  purposes of this Annual  Executive  Individual  Performance  Plan (the
     "Plan")  are:  (a) to  provide  greater  incentive  for key  executives  to
     continually  exert  their  best  efforts  on behalf of The  Charles  Schwab
     Corporation  (the  "Company") by rewarding them for services  rendered with
     incentive  compensation that is in addition to their regular salaries;  (b)
     to  attract  and  to  retain  in  the  employ  of the  Company  persons  of
     outstanding  competence;  and (c) to further  align the  interests  of such
     employees  with  those  of the  Company's  stockholders  through  a  strong
     performance-based reward system.
 
II.  Form of Awards
 
     Incentive compensation awards under this Plan shall be generally granted in
     cash, less any applicable  withholding  taxes;  provided that the Committee
     may determine, from time to time, that all or a portion of any award may be
     paid in the form of an equity based incentive, including without limitation
     stock options,  restricted shares, or outright grants of Company stock. The
     number of shares and stock options  granted in any year,  when added to the
     number of shares and stock  options  granted for such year  pursuant to the
     Company's  Corporate  Executive Bonus Plan, shall in no event exceed .5% of
     the outstanding shares of the Company.
 
III. Determination of Awards
 
     1.   Incentive awards for participants  shall be determined  annually.  The
          participants  in the Plan  shall  be the  executive  officers  who are
          selected by the Compensation  Committee of the Board of Directors (the
          "Committee") to participate in the Charles Schwab Corporate  Executive
          Bonus Plan (the "CEB Plan"),  except that the  President  and Co-Chief
          Executive  Officer shall not be eligible to  participate  in the Plan.
          Payouts  under  the CEB  Plan are  defined  by  reference  to a target
          percentage  of base  salary  determined,  from  time to  time,  by the
          Committee and pursuant to a payout  matrix,  adopted from time to time
          by the Committee,  that uses  corporate  performance  criteria,  to be
          selected by the Committee  from among the following:  revenue  growth,
          operating   revenue   growth,   consolidated   pretax  profit  margin,
          consolidated  pretax operating margin,  customer net new asset growth,
          stockholder return,  return on net assets,  earnings per share, return
          on equity,  and return on investment.  Each  participant  shall have a
          bonus target under the Plan equal to such  Participant's  bonus target
          under the CEB Plan,  multiplied  by 160%.  Payouts  described  in this
          subsection shall be calculated and paid on an annual basis.
 
     2.   With respect to payments made pursuant to Section III.1, the amount of
          base salary included in the  computation of incentive  awards pursuant
          to the CEB Plan shall not exceed 250% of the base salary in effect for
          the officer  holding  the same or  substantially  similar  position on
          March  31,  2000.  In  addition,  (i)  the  maximum  target  incentive
          percentage  pursuant  to the CEB Plan shall be 100% of base salary and
          (ii) the maximum  award  pursuant to the CEB Plan shall be 400% of the
          participant's target award.
 
 
     3.   Notwithstanding  anything to the contrary  contained in this Plan, the
          Committee shall have the power, in its sole discretion,  to reduce the
          amount  payable to any  Participant  (or to  determine  that no amount
          shall be payable to such  Participant) with respect to any award prior
          to the time the amount otherwise would have become payable  hereunder.
          In the event of such a reduction,  the amount of such reduction  shall
          not increase the amounts payable to other participants under the Plan.
 
IV.  Administration
 
     1.   Except  as  otherwise   specifically   provided,  the  Plan  shall  be
          administered  by  the  Committee.   The  Committee  members  shall  be
          appointed  pursuant  to the  Bylaws of the  Company,  and the  members
          thereof  shall be  ineligible  for awards under this Plan for services
          performed while serving on said Committee.
 
     2.   The decision of the Committee with respect to any questions arising as
          to interpretation  of the Plan,  including the severability of any and
          all of the  provisions  thereof,  shall be,  in its sole and  absolute
          discretion, final, conclusive and binding.
 
V.   Eligibility for Awards
 
     1.   Awards  under the Plan  shall be  granted  by the  Committee  to those
          employees  who are eligible to  participate  in the CEB Plan.  This is
          intended to include the Vice Chairmen,  Executive Vice Presidents, and
          other officers having comparable positions.
 
          No  award  may be  granted  to a  member  of the  Company's  Board  of
          Directors except for services performed as an employee of the Company.
 
     2.   Except  in the  event  of  retirement,  death,  or  disability,  to be
          eligible  for an award an employee  must be employed by the Company as
          of the date awards are calculated and approved by the Committee  under
          this Plan.
 
     3.   For  purposes  of this  Plan,  the term  "employee"  shall  include an
          employee  of a  corporation  or other  business  entity in which  this
          Company  shall   directly  or  indirectly  own  50%  or  more  of  the
          outstanding voting stock or other ownership interest.
 
VI.  Awards
 
     1.   The Committee  shall  determine each year the payments,  if any, to be
          made under the Plan. Awards for any calendar year shall be granted not
          later than the end of the first  quarter  of the  calendar  year,  and
          payments  pursuant  to the Plan  shall be made as soon as  practicable
          after the close of the calendar year.
 
     2.   Upon the granting of awards under this Plan, each participant shall be
          informed  of his or her award by his or her  direct  manager  and that
          such award is subject to the applicable provisions of this Plan.
 
VII. Deferral of Awards
 
     1.   A participant  in this Plan who is also eligible to participate in The
          Charles Schwab  Corporation  Deferred  Compensation  Plan may elect to
          defer payments pursuant to the terms of that plan.
 
VIII.Recommendations and Granting of Awards
 
     1.   Recommendations  for  awards  shall  be made to the  Committee  by the
          Co-Chief Executive Officers.
 
     2.   Any award shall be made in the sole discretion of the Committee, which
          shall  take final  action on any such  award.  No person  shall have a
          right to an award  under this Plan until  final  action has been taken
          granting such award.
 
IX.  Amendments and Expiration Date
 
     While it is the present  intention of the Company to grant awards annually,
     the  Committee  reserves the right to modify this Plan from time to time or
     to repeal the Plan entirely,  or to direct the  discontinuance  of granting
     awards  either  temporarily  or  permanently;  provided,  however,  that no
     modification  of this plan shall  operate to annul,  without the consent of
     the beneficiary,  an award already granted hereunder;  provided, also, that
     no modification  without  approval of the  stockholders  shall increase the
     maximum amount which may be awarded as hereinabove provided.
 
X.   Miscellaneous
 
     All expenses and costs in connection  with the operation of this Plan shall
     be borne by the Company and no part  thereof  shall be charged  against the
     awards anticipated by the Plan. Nothing contained herein shall be construed
     as a guarantee of continued employment of any participant  hereunder.  This
     Plan shall be  construed  and governed in  accordance  with the laws of the
     State of California.
 
 
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