Exhibit 10.209
















                         THE CHARLES SCHWAB CORPORATION
                      DIRECTORS' DEFERRED COMPENSATION PLAN
            (Restated to include Amendments through October 28, 1999)



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                         THE CHARLES SCHWAB CORPORATION
                      DIRECTORS' DEFERRED COMPENSATION PLAN


                                TABLE OF CONTENTS

    Section                                                               Page
                               Article I. Purpose

    1.1           Establishment of the Plan                                 2
    1.2           Purpose of the Plan                                       2

                             Article II. Definitions

    2.1           Definitions                                               3
    2.2           Gender and Number                                         3

                           Article III. Administration

    3.1           Committee and Administrator                               4

                            Article IV. Participants

    4.1           Participants                                              5

                              Article V. Deferrals

    5.1           Deferrals                                                 6
    5.2           Deferral Procedures                                       6
    5.3           Election of Time and Manner of Payment                    6
    5.4           Accounts and Earnings                                     7
    5.5           Maintenance of Accounts                                   9
    5.6           Change in Control                                         9
    5.7           Payment of Deferred Amounts                              13
    5.8           Acceleration of Payment                                  13

                         Article VI. General Provisions

    6.1           Unfunded Obligation                                      14
    6.2           Informal Funding Vehicles                                14
    6.3           Beneficiary                                              15
    6.4           Incapacity of Participant or Beneficiary                 15
    6.5           Nonassignment                                            16
    6.6           No Right to Continued Employment                         16
    6.7           Tax Withholding                                          16
    6.8           Claims Procedure and Arbitration                         16
    6.9           Termination and Amendment                                17
    6.10          Applicable Law                                           18



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                         THE CHARLES SCHWAB CORPORATION
                      DIRECTORS' DEFERRED COMPENSATION PLAN

                               Article I. Purpose

         1.1  Establishment  of the Plan.  Effective as of January 1, 1996,  The
Charles Schwab Corporation  (hereinafter,  the "Company") hereby establishes The
Charles Schwab Corporation  Directors' Deferred  Compensation Plan (the "Plan"),
as set forth in this document.

         1.2  Purpose  of the  Plan.  The Plan  permits  Directors  to defer the
payment of directors'  fees that they may earn.  The  opportunity  to elect such
deferrals  is provided in order to help the Company  attract and retain  outside
directors.  This Plan is unfunded and is maintained primarily for the purpose of
providing deferred compensation for its outside directors.  It is 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,  as
amended.


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                             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)        "Committee" means the Compensation Committee of the Board.
         (f)        "Deferral Account" means the account representing  deferrals
                    of   cash  compensation,  plus  investment  adjustments,  as
                    described in sections 5.4 and 5.5.
         (g)        "Director"  means each member of the Board of the  Directors
                    who  is  not  an  employee  of  the  Company  or  any of its
                    subsidiaries.
         (h)        "Plan"  means  The  Charles  Schwab  Corporation  Directors'
                    Deferred Compensation Plan, as in effect from time to time.
         (i)        "Plan Year" means the calendar year.
         (j)        "Termination" means the date a Participant ceases  to  be  a
                    Director.
         (k)        "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 5.4.

         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.


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                           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
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.


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                            Article IV. Participants

         4.1  Participants.  Each Director  shall be eligible to  participate in
this Plan.


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                              Article V. Deferrals

         5.1  Deferrals.  Each  Director may elect to defer up to 100 percent of
the fees otherwise  receivable  from the Company for service as a Director.  Any
such election must be made by entering a deferred  compensation  agreement  with
the Company, as evidenced by a form approved by and filed with the Administrator
on or before the deadline  specified by the Committee (which shall be no earlier
than one month  prior to the  beginning  of the  election  period  for which the
deferred  fees are to be earned;  provided  that for the first year in which the
Plan is in effect,  the deferral  election shall be made within the first thirty
days of the election period). 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 a Director 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 Director is an eligible  Participant.
Deferrals that have been elected shall occur  throughout the election  period in
pro rata increments.

         5.2 Deferral  Procedures.  Participants  shall have an  opportunity  to
elect  deferrals each year.  Unless the Committee  specifies other rules for the
deferrals that may be elected, deferrals may be made in increments of 10 percent
or in a fixed dollar  amount.  If a deferral is elected,  the election  shall be
irrevocable.  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 any applicable tax withholding measures and may be reduced to satisfy
any applicable tax withholding requirements.

         5.3 Election of Time and Manner of Payment.  At the time a  Participant
makes a  deferral  election  under  section  5.1,  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:
                  (i) a  lump  sum  payable  by  the  end  of  February  in  the
year  immediately  following  the Participant's Termination; or
                  (ii) a series of annual  installments,  commencing in the year
following the  Participant's  Termination 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.
         A  Participant  may modify an election  of the time for  payment  under
circumstances determined by the Committee,  provided that (i) 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 (ii)
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 do not otherwise meet any
applicable  requirements  of the Internal  Revenue Code 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.

         5.4  Accounts  and  Earnings.  The Company  shall  establish a Deferral
Account for each Participant who has elected a deferral under section 5.1 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  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  shall elect between the following two alternatives
with  respect  to the  deferred  amounts  at the same time that the  Participant
elects to defer the fees payable for a calendar year  (provided  that  elections
made for the 1999  calendar  year  shall be made  within 30 days of the date the
Participant  receives  notice of the  election,  or such  shorter time as may be
specified by the Committee).  Once made, a Participant's election for the method
of payment  may not be  changed;  however,  a  Participant  may make a different
election  with  respect  to  amounts  that the  Participant  elects  to defer in
subsequent periods.
                    (1) Payment in Shares. Under this alternative, a Participant
shall be credited with an award of Performance Shares pursuant to Section 4.7 of
the 1992 Stock  Incentive  Plan, in a number of Performance  Shares equal to (i)
the amounts deferred hereunder,  divided by (ii) the closing price of the Common
Stock of the  Company  on the date the  Deferral  occurred.  Performance  Shares
credited  hereunder  shall be issued to one or more grantor trusts formed by the
Company ("rabbi trusts")  pursuant to Section 6.2 hereof.  Any dividends paid on
shares of the  Common  Stock of the  Company  issued to a rabbi  trust  shall be
reinvested in Common Stock of the Company, which shall be treated as having been
issued to the Participant as additional  Performance Shares under the 1992 Stock
Incentive Plan. Notwithstanding the foregoing, 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 any form of investment income under the Plan.
                   (2) Issuance of Stock Options Under the 1992 Stock  Incentive
Plan. Under this alternative,  a Participant may elect, in lieu of receiving any
payments from the Plan,  to be issued  nonqualified  stock  options  pursuant to
Section 4.6 of The Charles  Schwab  Corporation  1992 Stock  Incentive  Plan.  A
Participant  who elects this  alternative  shall,  on the date the fees deferred
pursuant to Section 5.1 hereof would  otherwise  have been payable,  be issued a
number of  nonqualified  stock  options  with a fair  market  value equal to the
amounts deferred, as determined under the valuation methods set forth in Exhibit
A hereto.

         5.5 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,  from 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 5.5,  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.

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

         (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  payment
                  otherwise due that follows the Change in Control.
         (c)      A special  allocation  of earnings on all   Deferral  Accounts
                  shall be made under section 5.4 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 lump  sum no  later  than  30   days  following  the
                  Change in Control  and,  except as   provided  in section  5.3
                  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 fees 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)      The acquisition by any individual,  entity or group
                             (within the  meaning of Section  13(d) (3) or 14(d)
                             (2) of the  Securities  Exchange  Act of  1934,  as
                             amended  (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 (i) the then  outstanding  shares of
                             common stock of the Corporation  (the  "Outstanding
                             Corporation  Common  Stock")  or (ii) the  combined
                             voting  power  of  the  then   outstanding   voting
                             securities  of the  Corporation  entitled  to  vote
                             generally  in  the   election  of  directors   (the
                             "Outstanding   Corporation   Voting   Securities");
                             provided,   however,  that  for  purposes  of  this
                             paragraph (1), the following acquisitions shall not
                             constitute a Change of Control: (i) any acquisition
                             directly from the Company,  (ii) any acquisition by
                             the Company,  (iii) any acquisition by any employee
                             benefit  plan  (or  related  trust)   sponsored  or
                             maintained  by  the  Company  or  any   corporation
                             controlled by the Company,  or (iv) any acquisition
                             by any corporation  pursuant to a transaction which
                             complies  with  clauses  (i),  (ii)  and  (iii)  of
                             paragraph (3) hereof; or

                    (2)      Individuals who, as of January 1, 1996,  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 January 1, 1996
                             whose  election,  or nomination for election by the
                             Company's  shareholders,  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  an  actual  or
                             threatened  election  contest  with  respect to the
                             election or removal of directors or other actual or
                             threatened  solicitation  of proxies or consents by
                             or on behalf of a Person other than the Board; or

                    (3)      Consummation   of  a   reorganization,   merger  or
                             consolidation,  or sale or other disposition of all
                             or  substantially  all of the assets of the Company
                             (a "Business  Combination"),  in each case, unless,
                             following  such  Business  Combination,  (i) all or
                             substantially  all of the  individuals and entities
                             who were the beneficial  owners,  respectively,  of
                             the  Outstanding   Corporation   Common  Stock  and
                             Outstanding     Corporation    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   or   all   or
                             substantially  all of the  Company's  assets 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 Corporation Common
                             Stock   and    Outstanding    Corporation    Voting
                             Securities,  as the  case  may be,  (ii) no  Person
                             (excluding  any  corporation  resulting  from  such
                             Business  Combination or any employee  benefit plan
                             (or   related   trust)  of  the   Company  or  such
                             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 existed prior to the Business Combination
                             and (iii) at least a majority of the members of the
                             board of  directors  of the  corporation  resulting
                             from such Business  Combination were members of the
                             Incumbent Board at the time of the execution of the
                             initial  agreement,  or of the action of the Board,
                             providing for such Business Combination; or

                    (4)      Approval  by the  shareholders  of the Company of a
                             complete liquidation or dissolution of the Company.

                    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 5.6 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. Moreover, no acquisition by
                    (i)  Charles  Schwab  and/or his spouse or any of his lineal
                    descendants  or (ii) any trust created by or for the benefit
                    of  Charles  Schwab  and/or  his spouse or any of his lineal
                    descendants  or (iii) the  Schwab  Family  Foundation  shall
                    constitute a Change of Control.

         5.7  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  5.3  (subject  to any
modification  that may occur  pursuant  to section  5.4,  5.6 or 5.8).  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  any  assumed  earnings  (determined  by the  Company
pursuant to section 5.4) thereon.

         5.8  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  death,  permanent  disability,  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.


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                         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.  To the extent  required  pursuant to
Section  5.4(1),  the Company shall 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. In addition,  the Company may, but need
not,  arrange  for the  establishment  and use of such a grantor  trust or other
informal funding vehicle to the extent otherwise permitted pursuant to the Plan.
         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.

         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  Service.  Nothing  in the  Plan  shall be
construed to confer upon any  Participant any right to continue as a Director of
the Company.

         6.7 Tax  Withholding.  Any  appropriate  taxes shall be  withheld  from
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 amounts 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 any  applicable
taxes.

         6.8 Claims  Procedure and  Arbitration.  The Company 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 Company (as  determined  under section 5.6) 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 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.  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.

<PAGE>



                                    Exhibit A


      For purposes of determining the number of Options to be granted Under
       the Stock Option Investment Election, Options will be valued under
          the Black-Scholes method, based on the following assumptions:



*  Assumed Option Term = 5 years
*  Volatility = Actual  volatility over the 3 year period immediately  preceding
   the grant
*  Risk Free Interest Rate = 5 year Treasury Note Rate
*  Dividend Yield = Current Annual Dividend Yield On Option Grant Date
   (Quarterly Dividend x 4) / Market Price on Option Grant Date = Dividend Yield
   Sample Calculation: ($.028 x 4)/ $55 = .2%
*  Fair Market Value = Closing Price Of Schwab Common Stock on Date of Grant
   (Same as Date of Retainer and Meeting Fee Payment)
*  Exercise Price = Same as above


Sample Stock Option Calculation

*  Fees Deferred / Black Scholes Valuation = Number of Stock Option  grants from
   Deferral Election

   Sample Calculation: $14,250 / $23.82 = 598.2368 Stock Options,  rounded up to
   nearest full option, = grant of 599 Stock Options.