Restated Stock Incentive Plan – Schwab

THE CHARLES SCHWAB CORPORATION

2004 STOCK INCENTIVE PLAN

(Adopted by the Board on March 10, 2004)

(Approved by Stockholders on May 17, 2004)

(Amended by the Board on March 14, 2007)

(Amendment Approved by Stockholders on May 17, 2007)

(Amended and Restated December 12, 2007)

(Amended and Restated December 10, 2009)

TABLE OF CONTENTS

		Page
SECTION 1. ESTABLISHMENT AND PURPOSE		1
SECTION 2. ADMINISTRATION		1
(a) Committee Composition		1
(b) Committee Administration		1
SECTION 3. PARTICIPANTS		2
(a) General Rule		2
(b) Non-Employee Directors		2
SECTION 4. STOCK SUBJECT TO PLAN		3
(a) Basic Limitation		3
(b) Share Usage		3
(c) Participant Limits		4
(d) Adjustments		4
SECTION 5. AWARDS		4
(a) General		4
(b) Stock Options		4
(c) Stock Appreciation Rights		5
(d) Restricted Stock and Restricted Stock Units		5
(e) Performance Stock		5
(f) Other Stock or Cash Awards		5
(g) Performance Goals		5
SECTION 6. ADJUSTMENT OF SHARES		6
(a) Adjustments		6
(b) Corporate Transactions		6
(c) Substitution and Assumption of Benefits		6
(d) Reservation of Rights		6
SECTION 7. TERMS OF AWARDS		6
(a) Transferability		6
(b) Change in Control		7

---

(c) Taxes		8
(d) Effective Date, Amendment and Termination		8
(e) Fair Market Value		8
(f) Dividend Equivalents		8
(g) Other Provisions		8
(h) Non-U.S. Employees		9
(i) Governing Law		9
SECTION 8. PAYMENT OF DIRECTORS153 FEES DEFERRALS IN SECURITIES		9
SECTION 9. DEFERRAL OF AWARDS		9
SECTION 10. DEFINED TERMS		10

---

THE CHARLES SCHWAB CORPORATION

2004 STOCK INCENTIVE PLAN

SECTION 1. ESTABLISHMENT AND PURPOSE.

The Plan was adopted by the Board of Directors on March 10, 2004, subject to
stockholder approval, which was obtained on May 17, 2004 (the “Effective
Date“). The purposes of The Charles Schwab Corporation 2004 Stock
Incentive Plan (the “Plan“) are to promote the long-term success of The
Charles Schwab Corporation (“Schwab” or the “Company“) and the
creation of incremental stockholder value by (i) encouraging non-employee
directors, employees and consultants to focus on long-range objectives, (ii)
encouraging the attraction and retention of non-employee directors, employees
and consultants with exceptional qualifications and (iii) linking non-employee
directors, employees and consultants directly to stockholder interests by
providing them stock options and other stock and cash incentives.

This Plan is a successor to The Charles Schwab Corporation 2001 Stock
Incentive Plan, The Charles Schwab Corporation 1992 Stock Incentive Plan and The
Charles Schwab Corporation Employee Stock Incentive Plan (the “Prior
Plans“). As of the Effective Date, no further awards shall be made under the
Prior Plans. However, unless a contrary rule is stated, the provisions of the
Prior Plans shall continue to apply to awards granted to a participant under the
Prior Plans prior to the Effective Date. In the event that this Plan is not
approved by stockholders, awards shall continue to be made under the Prior Plans
in accordance with their terms.

SECTION 2. ADMINISTRATION.

(a) Committee Composition. The Plan will be administered by a
Committee (the “Committee“) of the Schwab Board of Directors (the
“Board“) consisting of two or more directors as the Board may designate
from time to time. The composition of the Committee shall satisfy such
requirements as:

(i) the Securities and Exchange Commission may establish for administrators
acting under plans intended to qualify for exemption under Rule 16b-3 or its
successor under the Securities Exchange Act of 1934 (the “Exchange
Act“);

(ii) may be established by the stock exchange or stock market on which
Schwab153s common stock may be listed pursuant to the rule-making authority of
such stock exchange or stock market; and

(iii) the Internal Revenue Service may establish for outside directors acting
under plans intended to qualify for exemption under section 162(m) of the
Internal Revenue Code of 1986, as amended (the “Code“).

(b) Committee Administration. The Committee shall have discretionary
authority to construe and interpret the Plan and any benefits granted under the
Plan, to establish, interpret and amend rules for Plan administration, to change
the terms and conditions of options and other benefits at or after grant, and to
make all other determinations which it deems necessary or advisable for the
administration of the Plan. The determinations of the Committee shall be made in
accordance with its judgment as to the best interests of Schwab and its
stockholders and in accordance with the purposes of the Plan, and shall be final
and conclusive on all persons. A majority of the members of the Committee shall
constitute a quorum, and all determinations of the Committee shall be made by a
majority of its members in person or by telephone. Any determination of the
Committee under the Plan may be made without notice or meeting of the Committee,
in writing signed by all the Committee members. The Committee may authorize one
or more officers of the Company to select employees to participate in the Plan
and to determine the number of option shares and other rights to be granted to
such participants, except with respect to awards to officers subject to section
16 of the Exchange Act or officers who are or may become “covered employees”
within the meaning of section 162(m) of the Code (“Covered Employees“)
and any reference in the Plan to the Committee shall include such officer or
officers. Subject to the requirements of applicable law, the Committee may also
authorize one or more officers of the Company to administer claims under the
Plan. No member of the Committee

1

---

shall be liable for any action that such member has taken or failed to take
in good faith with respect to the Plan or any award under the Plan.

SECTION 3. PARTICIPANTS.

(a) General Rule. Participants may consist of all employees and
consultants of Schwab and its subsidiaries, non-employee directors of the Board
of Directors of Schwab (“Non-Employee Directors“) and non-employee
directors of any subsidiary as determined by the Committee. Any corporation or
other entity in which a 50% or greater interest is at the time directly or
indirectly owned by Schwab shall be a subsidiary for purposes of the Plan.
Designation of a participant in any year shall not require the Committee to
designate that person to receive a benefit in any other year or to receive the
same type or amount of benefit as granted to the participant in any other year
or as granted to any other participant in any year. The Committee shall consider
all factors that it deems relevant in selecting participants and in determining
the type and amount of their respective benefits.

(b) Non-Employee Directors. In addition to any awards that may be
granted to them under Section 3(a), each Non-Employee Director shall receive an
automatic equity grant, subject to the terms of subparagraph (iv) below, as
follows:

(i) For each calendar year for which he or she serves as a Non-Employee
Director following the year in which the Non-Employee Director begins service,
each Non-Employee Director shall receive an equity grant with an aggregate value
equal to $125,000, consisting of 50 percent Stock Options and 50 percent
Restricted Stock Units covering shares of Schwab common stock. The number of
Stock Options granted shall be determined by dividing $62,500 by the binomial
value of a share of Schwab common stock on the date of grant and the number of
Restricted Stock Units shall be determined by dividing $62,500 by the fair
market value (defined as the average of the high and low price) of a share of
Schwab common stock on the date of grant.

(ii) In the first calendar year upon joining the Board, each Non-Employee
Director shall receive an automatic equity grant calculated in the manner
specified in Section 3(b)(i), except that the value of the grant shall be equal
to $125,000 multiplied by the number of months remaining in the calendar year
during which the Non-Employee Director will first serve as a Non-Employee
Director divided by twelve.

(iii) The awards described in subparagraph (i) for a particular calendar year
will be granted to each Non-Employee Director on the second business day
following each regular annual meeting of the Company153s stockholders, provided
that the Non-Employee Director continues to serve as a Non-Employee Director
through the date of such annual meeting. Otherwise, no award shall be granted
with respect to such calendar year. The awards described in subparagraph (ii)
for a particular calendar year will be granted to each Non-Employee Director
either (A) on the second business day following the regular annual meeting of
the Company153s stockholders for the calendar year in which the Non-Employee
Director is first appointed or elected to the Board, if the Non-Employee
Director is elected or appointed to the Board on or before the date of such
annual meeting or (B) on the date of the first meeting of the Board following
the date the Non-Employee Director is first appointed or elected to the Board,
if the Non-Employee Director is elected or appointed to the Board after the date
of the regular annual meeting of the Company153s stockholders.

(iv) Each stock option shall be subject to the following terms and
conditions:

(A) Each stock option shall be designated as a non-qualified stock option
that is not intended to meet the specific requirements set forth in section 422
of the Code (“Nonqualified Stock Option“);

(B) The term of each Nonqualified Stock Option shall be 10 years; provided,
however, that any unexercised Nonqualified Stock Option shall expire on the
earlier of (I) the date 10 years after the date of grant; or (II) three (3)
months following the date that the participant ceases to be a Non-Employee
Director or an employee for any reason other than retirement (as defined in
subparagraph (v), below) death or disability. If a participant ceases to be a
Non-Employee Director or employee on account of death or disability, any
unexercised

2

---

Nonqualified Stock Option 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 if a participant ceases to be a Non-Employee Director or
employee on account of retirement, any unexercised Nonqualified Stock Option
shall expire on the earlier of the date 10 years after the date of grant or two
years after the date of retirement of such Non-Employee Director; and

(C) The exercise price under each Nonqualified Stock Option shall be equal to
the fair market value on the date of grant as determined by the Committee.

(v) The awards described in subparagraphs (i) and (ii) shall become vested
and exercisable in accordance with the following schedule

		Cumulative Vesting Percentage of Award
1st anniversary of grant date		25%
2nd anniversary of grant date		50%
3rd anniversary of grant date		100%

Notwithstanding the foregoing, the awards described in subparagraphs (i) and
(ii) shall be fully vested on the Non-Employee Director153s death, disability (as
such term is defined in the applicable award agreement) or retirement from the
Board. For purposes of this Section 3(b), “retirement” shall mean a Non-Employee
Director153s resignation or removal from the Board at any time after he or she has
either attained age 70 or completed five years of service as a Non-Employee
Director.

(vi) Each Restricted Stock Unit represents the right to receive a share of
Schwab common stock subject to the conditions set forth in the applicable award
agreement. If Schwab pays cash dividends on shares of Schwab common stock, each
Restricted Stock Unit shall receive a dividend equivalent payment equal to the
dividend paid per share of Schwab common stock multiplied by the number of
unvested Restricted Stock Units. Each such payment shall be made as soon as
practicable following the payment of the actual dividend, but in no event beyond
March 15^th of the year following the year the actual dividend is
paid.

SECTION 4. STOCK SUBJECT TO PLAN.

(a) Basic Limitation. There is hereby reserved for issuance under
the Plan an aggregate of:

(i) 45 million shares of Schwab common stock; plus

(ii) any shares of Schwab common stock subject to outstanding awards under
the Prior Plans as of the Effective Date that on or after the Effective Date
cease for any reason to be subject to such awards (other than by reason of
exercise or settlement of the awards to the extent they are exercised for or
settled in shares); plus

(iii) any shares of Schwab common stock that were issued under the Prior Plan
and are reacquired by Schwab after the Effective Date.

The aggregate maximum number of shares of Schwab common stock available under
subparagraphs (ii) and (iii) is 150 million.

(b) Share Usage. If there is a lapse, expiration, termination or
cancellation of any stock option issued under the Plan prior to the issuance of
shares under the Plan or if shares of common stock are issued under the Plan and
thereafter are reacquired by Schwab, the shares subject to those options and the
reacquired shares shall be added to the shares available for benefits under the
Plan. Shares covered by a benefit granted under the Plan or a Prior Plan shall
not be counted as issued unless and until they are actually issued and

3

---

delivered to a participant. Any shares covered by a Stock Appreciation Right
shall be counted as issued only to the extent shares are actually issued to the
participant upon exercise of the right. In addition, any shares of common stock
exchanged by a participant as full or partial payment to Schwab of the exercise
price under any Stock Option exercised under the Plan or a Prior Plan, any
shares retained by Schwab pursuant to a participant153s tax withholding election,
and any shares covered by a benefit which is settled in cash shall be added to
the shares available for benefits under the Plan. All shares issued under the
Plan may be either authorized and unissued shares or issued shares reacquired by
Schwab.

(c) Participant Limits. Under the Plan, no participant may receive
in any fiscal year:

(i) Stock Options or SARs relating to more than 5 million shares, or

(ii) Restricted Stock, Restricted Stock Units, Performance Stock or
Performance Units that are subject to the attainment of Performance Criteria
described in Section 5(g) relating to more than 1 million shares.

(d) Adjustments. The shares reserved for issuance and the
limitations set forth in this Section 4 shall be subject to adjustment in
accordance with Section 6.

SECTION 5. AWARDS.

(a) General. Benefits under the Plan shall consist of Stock Options,
Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance
Stock, Performance Units, and Other Stock or Cash Awards, all as described
below.

(b) Stock Options. Stock Options may be granted to participants at
any time as determined by the Committee. The Committee shall determine the
number of shares subject to each option and whether the option is an incentive
stock option described in section 422(b) of the Code (an “Incentive Stock
Option“); provided that only a common-law employee shall be eligible for the
grant of an Incentive Stock Option. The option price for each option shall be
determined by the Committee but shall not be less than 100% of the fair market
value of Schwab153s common stock on the date the option is granted. Each option
shall expire at such time as the Committee shall determine at the time of grant.
Options shall be exercisable at such time and subject to such terms and
conditions as the Committee shall determine; provided, however, that no option
shall be exercisable later than the tenth anniversary of its grant. The option
price, upon exercise of any option, shall be payable to Schwab in full by:

(i) cash payment or its equivalent;

(ii) surrendering, or attesting to the ownership of, shares of Schwab stock
that are already owned by the participant provided that such action would not
cause Schwab to recognize compensation expense (or additional compensation
expense) with respect to the option for financial reporting purposes;

(iii) delivery of a properly executed exercise notice, together with
irrevocable instructions to a broker to promptly deliver to Schwab the amount of
sale proceeds from the option shares or loan proceeds to pay the exercise price
and any withholding taxes due to Schwab; and

(iv) such other methods of payment as the Committee, at its discretion, deems
appropriate; provided, however, that no method of payment will be permitted if
it would result in a violation of applicable law, as determined by the Committee
in its sole discretion.

In no event shall the Committee cancel any outstanding Stock Option for the
purpose of reissuing the option to the participant at a lower exercise price or
reduce the option price of an outstanding option. A Stock Option agreement may
provide that a new Stock Option will be granted automatically to the participant
when he or she exercises a prior Option and pays the exercise price in the form
described in subparagraph (ii) above. The Committee may at any time (x) offer to
buy out for a payment in cash or cash equivalents an Option previously granted
or (y) authorize a participant to elect to cash out an Option previously
granted, in either case at such time and based upon such terms and conditions as
the Committee shall establish.

4

---

(c) Stock Appreciation Rights. Stock Appreciation Rights
(“SARs“) may be granted to participants at any time as determined by the
Committee. An SAR may be granted in tandem with a Stock Option granted under
this Plan or on a free-standing basis. The Committee also may, in its
discretion, substitute SARs for outstanding Stock Options. The grant price of a
tandem or substitute SAR shall be equal to the option price of the related
option. The grant price of a free-standing SAR shall be equal to the fair market
value of Schwab153s common stock on the date of its grant. An SAR may be exercised
upon such terms and conditions and for such term as the Committee in its sole
discretion determines; provided, however, that the term shall not exceed the
option term in the case of a tandem or substitute SAR or ten years in the case
of a free-standing SAR and the terms and conditions applicable to a substitute
SAR shall be substantially the same as those applicable to the Stock Option
which it replaces. Upon exercise of an SAR, the participant shall be entitled to
receive payment from Schwab in an amount determined by multiplying the excess of
the fair market value of a share of Schwab common stock on the date of exercise
over the grant price of the SAR by the number of shares with respect to which
the SAR is exercised. The payment may be made in cash or stock, at the
discretion of the Committee.

(d) Restricted Stock and Restricted Stock Units. Restricted Stock
and Restricted Stock Units may be awarded or sold to participants under such
terms and conditions as shall be established by the Committee. Restricted Stock
and Restricted Stock Units shall be subject to such restrictions as the
Committee determines, including, without limitation, any of the following (i) a
prohibition against sale, assignment, transfer, pledge, hypothecation or other
encumbrance for a specified period; or (ii) a requirement that the holder
forfeit (or in the case of shares or units sold to the participant resell to
Schwab at cost) such shares or units in the event of termination of employment
during the period of restriction. All restrictions shall expire at such times as
the Committee shall specify. Settlement of vested Restricted Stock Units may be
made in the form of (a) cash, (b) shares or Schwab common stock or (c) any
combination of both, as determined by the Committee. Restricted Stock Units may
be settled in a lump sum or in installments. The distribution may occur or
commence when all vesting conditions applicable to the Restricted Stock Units
have been satisfied or have lapsed, or it may be deferred to any later date in
accordance with Section 9.

(e) Performance Stock. The Committee shall designate the
participants to whom long-term performance stock (“Performance Stock“) or
long-term performance units (“Performance Units“) are to be awarded and
determine the number of shares or units, the length of the performance period
and the other terms and conditions of each such award. Each award of Performance
Stock or Performance Units shall entitle the participant to a payment in the
form of shares of common stock or cash (as provided in the award agreement) upon
the attainment of performance goals and other terms and conditions specified by
the Committee. Notwithstanding satisfaction of any performance goals, the number
of shares issued under Performance Stock or Performance Unit awards may be
adjusted by the Committee on the basis of such further consideration as the
Committee in its sole discretion shall determine. However, the Committee may
not, in any event, increase the number of shares or cash earned upon
satisfaction of any performance goal by any participant who is a Covered
Employee. The Committee may, in its discretion, make a cash payment equal to the
fair market value of shares of common stock otherwise required to be issued to a
participant pursuant to a Performance Stock award.

(f) Other Stock or Cash Awards. In addition to the incentives
described in subparagraphs (b) through (e) of this Section 5, the Committee may
grant other incentives payable in cash or in common stock under the Plan as it
determines to be in the best interests of Schwab and subject to such other terms
and conditions as it deems appropriate.

(g) Performance Goals. Awards of Restricted Stock, Restricted Stock
Units, Performance Stock, Performance Units and Other Stock or Cash Awards under
the Plan may be made subject to the attainment of performance goals for a
specified period of time relating to one or more business criteria within the
meaning of Section 162(m) of the Code, including, but not limited to, pre-tax
adjusted income; adjusted operating income; cash flow; stockholder return;
revenue; revenue growth; return on net assets; net income; net new assets;
earnings per share; return on stockholders153 equity; or return on investment
(“Performance Criteria“). Not later than the 90th day of such period, the
Committee shall select the participants for such period and establish in writing
(i) the objective performance goals for each participant for that period based
on one or more of the Performance Criteria, (ii) the specific award amounts that
will be paid to each

5

---

participant if his or her performance goals are achieved, subject to the
per-participant limit described in Section 4(c)(ii), and (iii) the method by
which such amounts will be calculated. Any Performance Criteria may be used to
measure the performance of the Company as a whole or any business unit of the
Company and may be measured relative to a peer group or index. The Committee may
not in any event increase the amount of compensation payable to a Covered
Employee upon the attainment of a performance goal. The Committee shall
determine and certify, for each participant, the extent to which the performance
goals have been met and the amount of the award, if any, to be made.

SECTION 6. ADJUSTMENT OF SHARES.

(a) Adjustments. If Schwab shall at any time change the number of
issued shares of common stock by stock dividend, stock split, spin-off,
split-off, spin-out, recapitalization, merger, consolidation, reorganization,
combination, or exchange of shares, then, in order to prevent unintended
dilution or enlargement of the benefits or potential benefits intended to be
made available under the Plan, the Committee shall equitably adjust the total
number of shares reserved for issuance under the Plan, the maximum number of
shares that may be made subject to an award in any fiscal year, and the number
of shares covered by each outstanding award and the price therefor, if any. The
Committee shall also adjust the terms and conditions of, and the criteria
included in, awards in recognition of unusual or nonrecurring events (including,
without limitation, the events described in the preceding sentence) affecting
the Company or the financial statements of the Company or of changes in
applicable laws, regulations, or accounting principles, whenever the Committee
determines that such adjustments are needed to prevent unintended dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan. The determination of the Committee as to the foregoing
adjustments, if any, shall be conclusive and binding on all participants under
the Plan.

(b) Corporate Transactions. In the event that the Schwab is a party
to a merger or other reorganization, outstanding awards shall be subject to the
agreement of merger or reorganization. Such agreement shall provide for (i) the
continuation of the outstanding awards by Schwab, if Schwab is a surviving
corporation, (ii) the assumption of the outstanding awards by the surviving
corporation or its parent or subsidiary, (iii) the substitution by the surviving
corporation or its parent or subsidiary of its own awards for the outstanding
awards under this Plan, (iv) full exercisability or vesting and accelerated
expiration of the outstanding awards or (v) settlement of the full value of the
outstanding awards in cash or cash equivalents followed by cancellation of such
awards.

(c) Substitution and Assumption of Benefits. Without affecting the
number of shares reserved or available hereunder the Board or the Committee may
authorize the issuance of benefits under this Plan in connection with the
assumption of, or substitution for, outstanding benefits previously granted to
individuals who become employees of Schwab or any subsidiary as a result of any
merger, consolidation, acquisition of property or stock, or reorganization, upon
such terms and conditions as the Committee may deem appropriate.

(d) Reservation of Rights. Except as provided in this Section 6, a
participant shall have no rights by reason of any subdivision or consolidation
of shares of stock of any class, the payment of any dividend or any other
increase or decrease in the number of shares of stock of any class. Any issue by
Schwab 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, kind or exercise price of shares subject to
a Stock Option or other award. 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.

SECTION 7. TERMS OF AWARDS.

(a) Transferability. Except as otherwise determined by the Committee
in the case of benefits other than Incentive Stock Options or SARs granted in
tandem with Incentive Stock Options, each benefit granted under the Plan shall
not be transferable otherwise than by will or the laws of descent and
distribution and

6

---

each Stock Option and SAR shall be exercisable during the participant153s
lifetime only by the participant or, in the event of disability, by the
participant153s personal representative. In the event of the death of a
participant, the exercise of any benefit or payment with respect to any benefit
shall be made only by or to the executor or administrator of the estate of the
deceased participant or the person or persons to whom the deceased participant153s
rights under the benefit shall pass by will or the laws of descent and
distribution.

(b) Change in Control. The Committee (in its sole discretion) may
determine at the time of (or at any time after) the grant of an award, that upon
a Change in Control of Schwab, that any outstanding Stock Option or SAR shall
become vested and exercisable; all restrictions on any Restricted Stock or
Restricted Stock Unit shall lapse; all performance goals shall be deemed
achieved at target levels and all other terms and conditions met; Performance
Stock shall be delivered; a Performance Unit and Restricted Stock Unit shall be
paid out as promptly as practicable; and any Other Stock or Cash Award shall be
delivered or paid; provided, however, that this Section 7(b) shall not apply to
awards pursuant to which a deferral election has been made in accordance with
Section 9. A “Change in Control” shall mean the occurrence of any of the
following events:

(i) Upon consummation of a reorganization, merger or consolidation (a
“Business Combination“), in each case, unless, following such Business
Combination:

(A) the individuals and entities who were the beneficial owners,
respectively, of the then outstanding shares of Common Stock of the Company (the
“Outstanding Common Stock“) and the then outstanding voting securities of
the Company entitled to vote generally in the election of directors (the
“Outstanding Voting Securities“) immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50% of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Company either
directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business Combination,
of the Outstanding Common Stock and Outstanding Voting Securities, as the case
may be; and

(B) no Person (as defined in subparagraph (iii) below) (excluding any
corporation resulting from such Business Combination or any employee benefit
plan (or related trust) sponsored or maintained by the Company or such other
corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 20% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting
securities of such corporation, except to the extent that such ownership of
Outstanding Common Stock or Outstanding Voting Securities existed prior to the
Business Combination; and

(C) at least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of the Board
at the time of the execution of the initial agreement, or of the action of the
Board, providing for such Business Combination; or

(ii) If individuals who, as of the Effective Date, constitute the Board (the
“Incumbent Board“) cease for any reason to constitute at least a majority
of the Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by the
Company153s stockholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of (A) an actual or threatened election contest with respect to the
election or removal of directors; (B) an actual or threatened solicitation of
proxies or consents; or (C) any other actual or threatened action by, or on
behalf of, any Person other than the Board; or

(iii) Upon the acquisition after the Effective Date by any individual, entity
or group (within the meaning of section 13(d)(3) or 14(d)(2) of the Exchange Act
(a “Person“) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 20% or more of either

7

---

(A) the then Outstanding Common Stock or (B) the combined voting power of the
Outstanding Voting Securities; provided, however, that the following
acquisitions shall not be deemed to be covered by this subparagraph (iii): (x)
any acquisition of Outstanding Common Stock or Outstanding Voting Securities by
the Company, (y) any acquisition of Outstanding Common Stock or Outstanding
Voting Securities by any employee benefit plan (or related trust) sponsored or
maintained by the Company or (z) any acquisition of Outstanding Common Stock or
Outstanding Voting Securities by any corporation pursuant to a transaction which
complies with clauses (A), (B) and (C) of subparagraph (i) above; or

(iv) The consummation of the sale of all or substantially all of the assets
of the Company or approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.

(c) Taxes. Schwab shall be entitled to withhold the amount of any
tax attributable to any amounts payable or shares deliverable under the Plan,
after giving the person entitled to receive such payment or delivery notice and
Schwab may defer making payment or delivery as to any award, if any such tax is
payable until indemnified to its satisfaction. A participant may pay all or a
portion of Schwab153s minimum statutory withholding obligation arising in
connection with the exercise of a Stock Option or SAR or the receipt or vesting
of shares hereunder by electing to have Schwab withhold shares of common stock
having a fair market value equal to such amount.

(d) Effective Date, Amendment and Termination. The Plan is effective
on the Effective Date and shall automatically terminate one day before the 10th
anniversary of the date on which the Board approved the Plan. The Board or the
Committee may amend the Plan from time to time or terminate the Plan at any
time. However, no such action shall reduce the amount of any existing award or
change the terms and conditions thereof without the participant153s consent.
Stockholder approval shall be obtained for any Plan amendment to the extent
necessary and desirable to comply with applicable laws, regulations or rules.

(e) Fair Market Value. The fair market value of a share of Schwab153s
common stock on a given determination date shall equal:

(i) The closing sales price of a share as reported on the NASDAQ Stock Market
(NASDAQ) on the applicable determination date (except in the case of a share of
restricted stock, which shall be the average of the high and low price of a
share as reported on NASDAQ on the applicable determination date), or

(ii) If no sales of shares are reported for such date, the mean between the
bid and asked price of a share on NASDAQ at the close of the market on such
date, or

(iii) In the event that the method for determining fair market value
described in clauses (i) and (ii) is not practicable, the fair market value of a
share determined in accordance with any other reasonable method as the
Committee, in its discretion, may deem equitable, or as required by applicable
law or regulation.

(f) Dividend Equivalents. Any participant selected by the Committee,
in its sole discretion, may be granted dividend equivalents based on the
dividends declared on shares that are subject to any award, to be credited as of
dividend payment dates, during the period between the date the award is granted
and the date the award is exercised, vests or expires, as determined by the
Committee. Such dividend equivalents shall be converted to cash or additional
shares by such formula and at such time and subject to such limitations as may
be determined by the Committee. Notwithstanding the foregoing, no dividend
equivalents will be paid contingent on the exercise of a Stock Option or SAR.

(g) Other Provisions. The award of any benefit under the Plan may
also be subject to other provisions (whether or not applicable to the benefit
awarded to any other participant) as the Committee determines appropriate,
including provisions intended to comply with applicable securities laws and
stock exchange or stock market requirements, understandings or conditions as to
the participant153s employment, requirements or inducements for continued
ownership of common stock after exercise or vesting of benefits, forfeiture of
awards in the event of termination of employment shortly after exercise or
vesting, or breach of

8

---

noncompetition or confidentiality agreements following termination of
employment, or provisions permitting the deferral of the receipt of a benefit
for such period and upon such terms as the Committee shall determine.

(h) Non-U.S. Employees. In the event any benefit under this Plan is
granted to an employee who is employed or providing services outside the United
States and who is not compensated from a payroll maintained in the United
States, the Committee may, in its sole discretion, modify the provisions of the
Plan as they pertain to such individuals to comply with applicable law,
regulation or accounting rules.

(i) Governing Law. The Plan and any actions taken in connection
herewith shall be governed by and construed in accordance with the laws of the
state of Delaware (without regard to applicable Delaware principles of conflict
of laws).

SECTION 8. PAYMENT OF DIRECTORS153 FEES DEFERRALS IN SECURITIES.

In the event a Non-Employee Director elects pursuant to and in accordance
with the terms of Schwab153s Directors153 Deferred Compensation Plan II (or any
predecessor or successor to such plan) to defer receipt of the payment of his or
her annual cash retainer from Schwab in the form of Restricted Stock Units,
Nonqualified Stock Options, Restricted Stock, Other Stock Awards or a
combination thereof, such Nonqualified Stock Options, Restricted Stock Units,
Restricted Stock, and Other Stock Awards shall be issued under this Plan. For
purposes of this Section 8, the term “Non-Employee Director” shall also include
a non-employee director of any Subsidiary, if the Committee has approved
participation by such non-employee director in Schwab153s deferred compensation
plan for directors. The number of each such form of award to be granted to
Non-Employee Directors pursuant to this Section 8 in connection with a deferral
election under the Directors153 Deferred Compensation Plan II (or any predecessor
or successor to such plan) shall be determined in accordance with the provisions
of that plan, but the terms of each such award shall be determined by the
Committee or its delegate in accordance with the provisions of this Plan.

SECTION 9. DEFERRAL OF AWARDS.

Subject to the requirements of section 409A of the Internal Revenue Code, the
Committee (in its sole discretion) may permit or require a participant to have
cash or shares that otherwise would be paid to such participant as a result of
the settlement of a restricted stock unit or performance unit award credited to
a deferred compensation account established for such participant by the
Committee as an entry on Schwab153s books. A deferred compensation account may be
credited with interest or other forms of investment return, as determined by the
Committee. A participant for whom such an account is established shall have no
rights other than those of a general creditor of Schwab. Such an account shall
represent an unfunded and unsecured obligation of Schwab and shall be subject to
the terms and conditions of the applicable agreement between such participant
and Schwab. If the deferral or conversion of awards is permitted or required,
the Committee (in its sole discretion) may, consistent with the requirements of
section 409A of the Internal Revenue Code, establish rules, procedures and forms
pertaining to such awards, including (without limitation) the settlement of
deferred compensation accounts established under this Section 9 and such rules
and procedures shall be set forth in detail in the applicable stock award
agreement or other deferral agreement.

9

---

SECTION 10. DEFINED TERMS.

“Board“		1
“Business Combination“		7
“Change in Control“		7
“Code“		1
“Committee“		1
“Company“		1
“Covered Employees“		1
“Effective Date“		1
“Exchange Act“		1
“Incentive Stock Option“		4
“Incumbent Board“		7
“Non-Employee Directors“		2
“Nonqualified Stock Option“		2
“Outstanding Common Stock“		7
“Outstanding Voting Securities“		7
“Performance Criteria“		5
“Performance Stock“		5
“Performance Units“		5
“Person“		7
“Plan“		1
“Prior Plans“		1
“SARs“		5
“Schwab“		1

10