Document:

Exhibit 10.222

                         THE CHARLES SCHWAB CORPORATION
                             1987 STOCK OPTION PLAN
           (Restated to include Amendments through September 20, 2001)

Article 1.  Introduction.

     The  purpose  of  the  1987 Stock Option Plan, as Amended and Restated (the
"Plan") is to enable The Charles  Schwab  Corporation  and its  subsidiaries  to
attract and retain directors,  officers,  and other key employees and to provide
such persons with additional  incentive to advance the interests of the Company.
The Plan was  initially  adopted on March 24, 1987,  and was amended on July 29,
1987,  April 17,  1989,  September  17, 1996 and October 22,  1997.  The Plan is
hereby  restated  and  amended as of  October  22,  1997,  and the terms of this
Restatement  shall apply to all awards  granted  under the Plan on or after such
date.  The Plan shall  terminate  not more than ten (10) years from the date the
Plan  initially  was  adopted.  The Plan will  provide for Awards in the form of
Restricted  Shares,  Performance  Share Awards or Options,  which may constitute
incentive  stock  options  or  nonstatutory  stock  options.  The Plan  shall be
governed  by,  and  construed  in  accordance  with,  the  laws of the  State of
Delaware.

Article 2.  Administration.

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

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

Article 3.  Limitation on Awards.

     The  aggregate  number  of  Restricted Shares, Performance Share Awards and
Options  awarded  under the Plan shall not  exceed  1,616,000  (including  those
shares awarded prior to the amendment of the Plan).  If any  Restricted  Shares,
Performance  Share Awards or Options are forfeited,  or if any Performance Share
Awards terminate for any other reason without the associated Common Shares being
issued, or if any Options terminate for any other reason before being exercised,
then such  Restricted  Shares,  Performance  Share Awards or Options shall again
become  available  for Awards under the Plan.  The  limitation of this Article 3
shall be subject to adjustment  pursuant to Article 10. Any Common Shares issued
pursuant to the Plan may be authorized but unissued shares or treasury shares.

Article 4. Eligibility.

     4.1       General Rule.  Key Employees shall be eligible for designation as
Participants by the Committee.

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

     4.3       Attribution Rules.  For  purposes  of Section 4.2, in determining
stock ownership, a Key Employee shall be deemed to own the stock owned, directly
or  indirectly,  by or for his or her brothers,  sisters,  spouse,  ancestors or
lineal  descendants.   Stock  owned,  directly  or  indirectly,   by  or  for  a
corporation,   partnership,  estate  or  trust  shall  be  deemed  to  be  owned
proportionately  by or for its stockholders,  partners or  beneficiaries.  Stock
with respect to which the Key Employee holds an option shall not be counted.

     4.4        Outstanding Stock.  For  purposes  of  Section 4.2, "outstanding
stock" shall include all stock actually issued and outstanding immediately after
the grant of the ISO to the Key Employee.  "Outstanding stock" shall not include
treasury shares or shares authorized for issuance under outstanding options held
by the Key Employee or by any other person.

Article 5. Options.

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

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

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

     5.4       Exercise Price.  Each  Stock  Option  Agreement shall specify the
Exercise  Price.  The Exercise  Price under an Option shall not be less than 100
percent of the Fair Market Value of a Common Share on the date of grant,  except
as otherwise  provided in Section 4.2.  Subject to the preceding  sentence,  the
Exercise  Price  under any Option  shall be  determined  by the  Committee.  The
Exercise Price shall be payable in accordance with Article 6.

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

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

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

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

     5.9       Authorization of Replacement Options. Concurrently with the grant
of any  Option  to a  Participant,  the  Committee  may  authorize  the grant of
Replacement  Options.  If  Replacement  Options  have  been  authorized  by  the
Committee  with  respect  to a  particular  award of  Options  (the  "Underlying
Options"),  the Option Agreement with respect to the Underlying Options shall so
state, and the terms and conditions of the Replacement Options shall be provided
therein.  The grant of any Replacement  Options shall be effective only upon the
exercise of the Underlying  Options through the use of Common Shares pursuant to
Section 6.2 or Section 6.3. The number of  Replacement  Options  shall equal the
number of Common  Shares used to exercise the  Underlying  Options,  and, if the
Option  Agreement so provides,  the number of Common  Shares used to satisfy any
tax withholding  requirements incident to the exercise of the Underlying Options
in accordance  with Section 12.2.  Upon the exercise of the Underlying  Options,
the  Replacement  Options  shall be evidenced by an amendment to the  Underlying
Option Agreement.  Notwithstanding the fact that the Underlying Option may be an
ISO, a  Replacement  Option is not  intended to qualify as an ISO.  The Exercise
Price of a  Replacement  Option shall be no less than the Fair Market Value of a
Common Share on the date the grant of the Replacement  Option becomes effective.
The term of each Replacement  Option shall be equal to the remaining term of the
Underlying  Option.  No  Replacement  Options shall be granted to Optionees when
Underlying  Options  are  exercised  pursuant  to the  terms of the Plan and the
Underlying Option Agreement following termination of the Optionee's  employment.
The  Committee,  in its sole  discretion,  may  establish  such other  terms and
conditions for Replacement Options as it deems appropriate.

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

     5.11      Effect  of  Job  Elimination.  Notwithstanding  anything  to  the
contrary  contained in the Plan or in any Stock Option  Agreement or Stock Award
Agreement  entered  into with respect to an Award  pursuant to the Plan,  in the
case of a  Participant  who is an Officer,  and who becomes  entitled to receive
payments  with  respect to a Severance  Period  pursuant  to the Charles  Schwab
Severance Pay Plan (the "Severance  Plan") on account of a Job Elimination,  the
terms  of the Plan and any  Stock  Option  Agreement  or Stock  Award  Agreement
entered  into  with  respect  to an  Award  shall be  applied  by  treating  the
Participant as if the Participant had terminated employment on the Participant's
Termination  Date.  For purposes of applying  this Section,  the terms  Officer,
Severance Period,  Termination Date, and Job Elimination shall have the meanings
set forth in the Severance Plan.

Article 6.  Payment for Option Shares.

     6.1       General Rule.  The  entire Exercise Price of Common Shares issued
upon  exercise of  Options shall be payable in cash at the time when such Common
Shares are purchased, except as follows:

          (a)  In the case of an ISO granted under the Plan,  payment  shall  be
          made only pursuant to the express  provisions of the applicable  Stock
          Option  Agreement.  However,  the  Committee  may specify in the Stock
          Option  Agreement  that payment may be made pursuant to Section 6.2 or
          6.3.

          (b)  In  the  case  of  an  NSO, the  Committee may at any time accept
          payment  pursuant to Section 6.2 or 6.3.

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

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

Article 7.  Restricted Shares and Performance Share Awards.

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

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

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

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

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

Article 8.  Claims Procedures.

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

Article 9.  Voting Rights and Dividends.

     9.1       Restricted Shares.

     (a)  All holders of Restricted Shares who are not Named Executive  Officers
     shall have the same voting,  dividend,  and other  rights as the  Company's
     other stockholders.

     (b)  During the period of  restriction,  Named  Executive  Officers holding
     Restricted Shares granted hereunder shall be credited with all regular cash
     dividends  paid with  respect to all  Restricted  Shares  while they are so
     held. If a dividend is paid in the form of cash,  such cash dividend  shall
     be credited to Named Executive Officers subject to the same restrictions on
     transferability and forfeitability as the Restricted Shares with respect to
     which they were paid. If any dividends or distributions  are paid in shares
     of Common  Stock,  the shares of Common  Stock shall be subject to the same
     restrictions on transferability and forfeitability as the Restricted Shares
     with respect to which they were paid. Subject to the succeeding  paragraph,
     and to the  restrictions  on vesting  and the  forfeiture  provisions,  all
     dividends  credited to a Named Executive Officer shall be paid to the Named
     Executive Officer within forty-five (45) days following the full vesting of
     the Restricted Shares with respect to which such dividends were earned.

          In the event that any dividend constitutes a "derivative  security" or
     an "equity  security"  pursuant to Rule 16(a) under the Exchange  Act, such
     dividend  shall be subject to a vesting  period equal to the longer of: (i)
     the remaining vesting period of the Restricted Shares with respect to which
     the dividend is paid; or (ii) six (6) months. The Committee shall establish
     procedures for the application of this provision.

          Named Executive Officers holding Restricted Shares shall have the same
     voting rights as the Company's other stockholders.

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

Article 10.  Protection Against Dilution; Adjustment of Awards.

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

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

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

Article 11. Limitation of Rights.

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

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

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

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

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

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

Article 12. Withholding Taxes.

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

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

Article 13.  Assignment or Transfer of Award.

     13.1      General Rule.  Any  Award  granted  under  the  Plan shall not be
anticipated,  assigned,  attached,  garnished,  optioned,  transferred  or  made
subject to any creditor's  process,  whether  voluntarily,  involuntarily  or by
operation of law, except to the extent specifically permitted by Section 13.2.

     13.2      Exceptions to General Rule.  Notwithstanding  Section  13.1, this
Plan shall not preclude (i) a Participant  from  designating  a  beneficiary  to
succeed,  after the Participant's  death, to those of the  Participant's  Awards
(including without limitation, the right to exercise any unexercised Options) as
may be determined by the Company from time to time in its sole discretion,  (ii)
a  transfer  of  any  Award  hereunder  by  will  or  the  laws  of  descent  or
distribution, or (iii) a voluntary transfer of an Award (other than an ISO) to a
trust or  partnership  for the  exclusive  benefit of one or more members of the
Participant's  family,  but only if the Participant has sole investment  control
over such trust or partnership.

Article 14.  Future of Plans.

     14.1      Term of the Plan.  The  Plan,  as  set forth herein, shall become
effective  on February  26,  1997.  The Plan shall  remain in effect until it is
terminated  under Section 15.2,  except that no Awards shall be made after March
24, 1997.

     14.2      Amendment  or  Termination.  The  Board may at any time terminate
this Plan, and the Board or the Committee make such modifications of the Plan as
it shall deem advisable; provided, however, that any amendment of the Plan shall
be subject to the approval of the Company's  stockholders to the extent required
by applicable laws, regulations or rules.

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

Article 15.  Definitions.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     15.14     "Key Employee"  means a key common-law employee of the Company or
any Subsidiary, as determined by the Committee.

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

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

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

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

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

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

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

     15.22     "Plan"  means  this  1987 Stock Option Plan of The Charles Schwab
Corporation, as it may be amended from time to time.

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

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

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

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

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

     15.28.    "Retirement"  shall  mean  any  termination  of  employment of an
Optionee  for any reason  other than  death at any time after the  Optionee  has
attained  fifty  (50),  but  only  if,  at the  time  of such  termination,  the
Participant has been credited with at least seven (7) Years of Service under the
Charles Schwab Profit Sharing and Employee Stock  Ownership  Plan. The foregoing
definition shall apply to all Stock Option  Agreements  entered into pursuant to
the Plan,  irrespective of any definition to the contrary  contained in any such
Stock Option Agreement.

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

<PAGE>

                                   ADDENDUM A

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

<PAGE>

                      NON-OUALIFIED STOCK OPTION AGREEMENT
                   (1987 Stock Option Plan, as first amended)

     THIS  AGREEMENT,  made as of this _____ of _________,  19__, by and between
The  Charles  Schwab  Corporation  a  Delaware  corporation   ("Company"),   and
_______________ ("Optionee").

                                   WITNESSETH:

     WHEREAS, there has been granted to Optionee,  effective as of _________ __,
19____, a non-qualified  stock option under the 1987 Stock Option Plan, as first
amended, of the Company ("Option Plan");

     NOW, THEREFORE, it is mutually agreed as follows:

     1. The Optionee  shall have a  non-qualified  stock option to acquire _____
shares of common stock of the Company (the "Shares"), at a price of $_______ per
share.

     2. Optionee  acknowledges  that  paragraph  5(a) of the Option Plan imposes
significant restrictions on Optionee's ability to exercise this option.

     3. This is a  non-statutory  stock option and the  provisions  of paragraph
5(b) of the Option Plan are inapplicable to this Option. With that exception and
except as  provided  in  paragraphs  4, 5 and 6 below,  the other  terms of this
option shall be the same as without limitation,  vesting of Shares,  limitations
on exercise and transfer,  and other  restrictions.  The Option Plan is attached
hereto as Exhibit A and is incorporated  herein by this reference.  Optionee has
read the Option Plan and, other than for the provisions of paragraph 5(b) of the
Option Plan and as provided in paragraphs  4, 5 and 6 below,  agrees to be bound
by  its  terms.  Without  limitation,  Optionee  specifically  acknowledges  the
representations,  warranties and  agreements  contained in paragraph 6(e) of the
Option Plan.

     4.  Notwithstanding  paragraph  6(b)  of the  Option  Plan,  in  the  event
Optionee's  employment,  service  as a  director  or  provision  of  independent
contractor  services with or for the Company and its subsidiaries  terminates by
reason of Optionee's death or permanent  disability,  all shares then not deemed
to be Vested  thereupon  will be deemed  immediately  Vested.  For this purpose,
"permanent  disability"  will mean the reasonable  determination  by a qualified
physician  acceptable  to the  Company  that  the  Optionee  has an  illness  or
incapacity that has disabled,  or will disable,  the Optionee from rendering his
or her normal services to the company and its  subsidiaries for a period of more
than six (6) consecutive months in any consecutive twelve (12) month period.

     5. If the Company fails to timely exercise its right to repurchase Unvested
Shares,  those  Shares  will be treated  as Vested  Shares.  Options  underlying
Unvested Shares may not be exercised once vesting ceases.

     6. Any  notice to be given by the  Optionee  under the terms of the  Option
Plan shall be deemed to have been duly given,  and effective  upon  receipt,  if
sent by Certified Mail, postage and certification prepaid, to The Charles Schwab
Corporation, 101 Montgomery Street, San Francisco,  California 94104, Attention:
Corporate  Secretary,  except as  superseded by a different  address  noticed to
Optionee.

     IN WITNESS  WHEREOF,  the parties have caused this Agreement to be executed
as of the day and year referred to above.

                                              BY:
                                                  ------------------------------
                                                  on Behalf of
                                                  The Charles Schwab Corporation
                                                  ("Company")

                                                  ------------------------------
                                                  Optionee

Attachments:      (1)      Spousal Consent
                  (2)      Exhibit A:  1987 Stock Option Plan, as first amended.Exhibit 10.223

                         THE CHARLES SCHWAB CORPORATION
                    1987 EXECUTIVE OFFICER STOCK OPTION PLAN
           (Restated to include Amendments through September 20, 2001)

Article 1.  Introduction.

     The  purpose of the 1987  Executive  Stock  Option  Plan,  as  Amended  and
Restated  (the  "Plan")  is to enable The  Charles  Schwab  Corporation  and its
subsidiaries to attract and retain directors,  officers, and other key employees
and to provide such persons with  additional  incentive to advance the interests
of the  Company.  The Plan was  initially  adopted  on March 24,  1987,  and was
amended on September 17, 1996 and October 22, 1997. The Plan is hereby  restated
and  amended as of October 22,  1997,  and the terms of this  Restatement  shall
apply to all awards granted under the Plan on or after such date. The Plan shall
terminate  not more than ten (10)  years  from the date the Plan  initially  was
adopted.  The  Plan  will  provide  Awards  in the  form of  Restricted  Shares,
Performance  Share  Awards  or  Options.  The Plan  shall be  governed  by,  and
construed in accordance with, the laws of the State of Delaware.

Article 2.  Administration.

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

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

Article 3.  Limitation on Awards.

     The aggregate  number of Restricted  Shares,  Performance  Share Awards and
Options  awarded  under the Plan shall not  exceed  1,284,000  (including  those
shares awarded prior to the amendment of the Plan).  If any  Restricted  Shares,
Performance  Share Awards or Options are forfeited,  or if any Performance Share
Awards terminate for any other reason without the associated Common Shares being
issued, or if any Options terminate for any other reason before being exercised,
then such  Restricted  Shares,  Performance  Share Awards or Options shall again
become  available  for Awards under the Plan.  The  limitation of this Article 3
shall be subject to adjustment  pursuant to Article 10. Any Common Shares issued
pursuant to the Plan may be authorized but unissued shares or treasury shares.

Article 4. Eligibility.

     4.1       General Rule.  Key Employees shall be eligible for designation as
Participants by the Committee.

Article 5. Options.

     5.1       Stock Option Agreement.  Each  grant  of an Option under the Plan
shall be  evidenced  by a Stock  Option  Agreement  between the Optionee and the
Company.  Such Option shall be subject to all applicable terms and conditions of
the Plan,  and may be subject to any other  terms and  conditions  which are not
inconsistent  with  the Plan and  which  the  Committee  deems  appropriate  for
inclusion in a Stock  Option  Agreement.  The  provisions  of the various  Stock
Option Agreements entered into under the Plan need not be identical.

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

     5.3       Number of Shares.  Each  Stock Option Agreement shall specify the
number of  Common  Shares  subject  to the  Option  and  shall  provide  for the
adjustment of such number in accordance with Article 10.

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

     5.5       Exercisability  and  Term.  Each  Stock  Option  Agreement  shall
specify  the  date  when  all or any  installment  of the  Option  is to  become
exercisable.  The Stock  Option  Agreement  shall also  specify  the term of the
Option.  Subject to the preceding  sentence,  the Committee shall determine when
all or any part of an Option is to become exercisable and when such Option is to
expire;  provided  that,  in  appropriate  cases,  the  Company  shall  have the
discretion to extend the term of an Option or the time within  which,  following
termination  of  employment,  an Option may be exercised,  or to accelerate  the
exercisability of an Option. A Stock Option Agreement may provide for expiration
prior to the end of its term in the event of the  termination  of the Optionee's
employment  and shall provide for the  suspension of vesting when an employee is
on a leave of absence for a period in excess of six months in appropriate cases,
as determined by the Company;  provided that the exercisability of Options shall
be accelerated in the event of the Participant's death or Disability and, in the
case of  Retirement,  the  exercisability  of all  outstanding  Options shall be
accelerated,  other than any Options that had been  granted  within two years of
the  date  of  the  Optionee's  Retirement.  Options  may  also  be  awarded  in
combination  with  Restricted  Shares,  and such an Award may  provide  that the
Options  will not be  exercisable  unless  the  related  Restricted  Shares  are
forfeited.  In  addition,  Options  granted  under this Section 5 may be granted
subject to forfeiture provisions which provide for forfeiture of the Option upon
the  exercise  of tandem  awards,  the terms of which are  established  in other
programs of the Company.

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

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

     5.8       Authorization of Replacement Options. Concurrently with the grant
of any  Option  to a  Participant,  the  Committee  may  authorize  the grant of
Replacement  Options.  If  Replacement  Options  have  been  authorized  by  the
Committee  with  respect  to a  particular  award of  Options  (the  "Underlying
Options"),  the Option Agreement with respect to the Underlying Options shall so
state, and the terms and conditions of the Replacement Options shall be provided
therein.  The grant of any Replacement  Options shall be effective only upon the
exercise of the Underlying  Options through the use of Common Shares pursuant to
Section 6.2 or Section 6.3. The number of  Replacement  Options  shall equal the
number of Common  Shares used to exercise the  Underlying  Options,  and, if the
Option  Agreement so provides,  the number of Common  Shares used to satisfy any
tax withholding  requirements incident to the exercise of the Underlying Options
in accordance  with Section 12.2.  Upon the exercise of the Underlying  Options,
the  Replacement  Options  shall be evidenced by an amendment to the  Underlying
Option  Agreement.  The Exercise Price of a Replacement  Option shall be no less
than  the Fair  Market  Value  of a  Common  Share on the date the  grant of the
Replacement Option becomes effective.  The term of each Replacement Option shall
be equal to the remaining term of the Underlying Option. No Replacement  Options
shall be granted to Optionees when Underlying  Options are exercised pursuant to
the terms of the Plan and the Underlying Option Agreement following  termination
of the  Optionee's  employment.  The  Committee,  in its  sole  discretion,  may
establish such other terms and conditions  for  Replacement  Options as it deems
appropriate.

     5.9       Effect  of  Job  Elimination.  Notwithstanding  anything  to  the
contrary  contained in the Plan or in any Stock Option  Agreement or Stock Award
Agreement  entered  into with respect to an Award  pursuant to the Plan,  in the
case of a  Participant  who is an Officer,  and who becomes  entitled to receive
payments  with  respect to a Severance  Period  pursuant  to the Charles  Schwab
Severance Pay Plan (the "Severance  Plan") on account of a Job Elimination,  the
terms  of the Plan and any  Stock  Option  Agreement  or Stock  Award  Agreement
entered  into  with  respect  to an  Award  shall be  applied  by  treating  the
Participant as if the Participant had terminated employment on the Participant's
Termination  Date.  For purposes of applying  this Section,  the terms  Officer,
Severance Period,  Termination Date, and Job Elimination shall have the meanings
set forth in the Severance Plan.

Article 6.  Payment for Option Shares.

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

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

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

Article 7.  Restricted Shares and Performance Share Awards.

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

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

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

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

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

Article 8.  Claims Procedures.

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

Article 9.  Voting Rights and Dividends.

     9.1       Restricted Shares.

     (a)  All holders of Restricted  Shares who are not Named Executive Officers
     shall have the same voting,  dividend,  and other  rights as the  Company's
     other stockholders.

     (b)  During the period of restriction,  Named  Executive  Officers  holding
     Restricted Shares granted hereunder shall be credited with all regular cash
     dividends  paid with  respect to all  Restricted  Shares  while they are so
     held. If a dividend is paid in the form of cash,  such cash dividend  shall
     be credited to Named Executive Officers subject to the same restrictions on
     transferability and forfeitability as the Restricted Shares with respect to
     which they were paid. If any dividends or distributions  are paid in shares
     of Common  Stock,  the shares of Common  Stock shall be subject to the same
     restrictions on transferability and forfeitability as the Restricted Shares
     with respect to which they were paid. Subject to the succeeding  paragraph,
     and to the  restrictions  on vesting  and the  forfeiture  provisions,  all
     dividends  credited to a Named Executive Officer shall be paid to the Named
     Executive Officer within forty-five (45) days following the full vesting of
     the Restricted Shares with respect to which such dividends were earned.

          In the event that any dividend constitutes a "derivative  security" or
     an "equity  security"  pursuant to Rule 16(a) under the Exchange  Act, such
     dividend  shall be subject to a vesting  period equal to the longer of: (i)
     the remaining vesting period of the Restricted Shares with respect to which
     the dividend is paid; or (ii) six (6) months. The Committee shall establish
     procedures for the application of this provision.

          Named Executive Officers holding Restricted Shares shall have the same
     voting rights as the Company's other stockholders.

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

Article 10.  Protection Against Dilution; Adjustment of Awards.

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

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

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

Article 11. Limitation of Rights.

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

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

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

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

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

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

Article 12. Withholding Taxes.

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

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

Article 13.  Assignment or Transfer of Award.

     13.1      General Rule.  Any  Award  granted  under  the  Plan shall not be
anticipated,  assigned,  attached,  garnished,  optioned,  transferred  or  made
subject to any creditor's  process,  whether  voluntarily,  involuntarily  or by
operation of law, except to the extent specifically permitted by Section 13.2.

     13.2      Exceptions to General Rule.  Notwithstanding  Section  13.1, this
Plan shall not preclude (i) a Participant  from  designating  a  beneficiary  to
succeed,  after the Participant's  death, to those of the  Participant's  Awards
(including without limitation, the right to exercise any unexercised Options) as
may be determined by the Company from time to time in its sole discretion,  (ii)
a  transfer  of  any  Award  hereunder  by  will  or  the  laws  of  descent  or
distribution,  or  (iii)  a  voluntary  transfer  of  an  Award  to a  trust  or
partnership   for  the  exclusive   benefit  of  one  or  more  members  of  the
Participant's  family,  but only if the Participant has sole investment  control
over such trust or partnership.

Article 14.  Future of Plans.

     14.1      Term of the Plan.  The  Plan,  as  set forth herein, shall become
effective  on February  26,  1997.  The Plan shall  remain in effect until it is
terminated  under  Section  14.2,  except that no Awards shall be granted  after
March 24, 1997.

     14.2      Amendment or Termination.  The  Board  may  at any time terminate
this Plan, and the Board or the Committee make such modifications of the Plan as
it shall deem advisable; provided, however, that any amendment of the Plan shall
be subject to the approval of the Company's  stockholders to the extent required
by applicable laws, regulations or rules.

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

Article 15.  Definitions.

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

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

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

     15.4      "Change in Control"  means the occurrence of any of the following
events after the effective date of the Plan as set out in Section 14.1:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     15.13     "Key Employee"  means a key common-law employee of the Company or
any Subsidiary, as determined by the Committee.

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

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

     15.16     "Option" means an employee stock option not described in sections
422 through 424 of the Code,  including  a Replacement Option, granted under the
Plan and entitling the holder to purchase one Common Share.

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

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

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

     15.20     "Plan" means this 1987 Executive Stock Option Plan of The Charles
Schwab Corporation, as it may be amended from time to time.

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

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

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

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

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

     15.26.    "Retirement"  shall  mean  any  termination  of  employment of an
Optionee  for any reason  other than  death at any time after the  Optionee  has
attained  fifty  (50),  but  only  if,  at the  time  of such  termination,  the
Participant has been credited with at least seven (7) Years of Service under the
Charles Schwab Profit Sharing and Employee Stock  Ownership  Plan. The foregoing
definition shall apply to all Stock Option  Agreements  entered into pursuant to
the Plan,  irrespective of any definition to the contrary  contained in any such
Stock Option Agreement.

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

<PAGE>

                      NON-QUALIFIED STOCK OPTION AGREEMENT
                  (Executive Officer Stock Option Plan (1987))

     THIS  AGREEMENT  made as of this  ____  day of  _________,  19____,  by and
between The Charles Schwab Corporation,  a Delaware corporation  ("Company") and
______________________________ ("Optionee").

                                   WITNESSETH:

     WHEREAS,  there has been granted to Optionee,  effective as of  __________,
19___,  a  non-qualified  stock option under the Executive  Officer Stock Option
Plan (1987) of the Company ("Option Plan");

     NOW THEREFORE, it is mutually agreed as follows:

     1. The Optionee shall have a non-qualified stock option to acquire ________
shares of common stock of the company (the "Shares"), at a price of $_______ per
share.

     2. Except as provided in paragraphs 3 and 4 below,  the other terms of this
option shall be the same as all of those provided for in the Option Plan,  which
include,  without  limitation,  vesting of Shares,  limitations  on exercise and
transfer, and other restrictions.  The Option Plan is attached hereto as Exhibit
A and is  incorporated  herein by this  reference.  Optionee has read the Option
Plan and, other than as provided in paragraphs 3 and 4 below, agrees to be bound
by  its  terms.  Without  limitation,  Optionee  specifically  acknowledges  the
representations,  warranties and  agreements  contained in paragraph 6(e) of the
Option Plan.

     3.  Notwithstanding  paragraph  6(b)  of the  Option  Plan,  in  the  event
Optionee's  employment  or service as a director with or for the Company and its
subsidiaries  terminates by reason of Optionee's death or permanent  disability,
all Shares  then not deemed to be Vested  thereupon  will be deemed  immediately
Vested.  For this  purpose,  "permanent  disability"  will  mean the  reasonable
determination  by a  qualified  physician  acceptable  to the  company  that the
Optionee has an illness or incapacity  that has disabled,  or will disable,  the
Optionee  from  rendering  his or her normal  services  to the  Company  and its
subsidiaries  for a  period  of more  than  six (6)  consecutive  months  in any
consecutive twelve (12) month period.

     4. Upon  exercise of this  Option,  the Company will extend to the Optionee
rights under that certain  Registration  Rights and Stock Restriction  Agreement
dated as of March 31, 1987, as amended,  subject to the Optionee's  agreement to
be bound by the terms thereof.

     5. Any  notice to be given by the  Optionee  under the terms of the  Option
Plan shall be deemed to have been duly given, and effective upon the receipt, if
sent by Certified Mail, postage and certification prepaid, to The Charles Schwab
Corporation,  101  Montgomery,  San  Francisco,   California  94104,  Attention:
Corporate  Secretary,  except as  superseded by a different  address  noticed to
Optionee.

     IN WITNESS  WHEREOF,  the parties have caused this Agreement to be executed
as of the day and year referred to above.

                           THE CHARLES SCHWAB CORPORATION ("Company")

                           By:
                              ----------------------------------------------

                           -------------------------------------------------
                           "Optionee"

Attachment (1) Spousal Consent
           (2) Exhibit A:  1987 Stock Option Plan

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