8-K

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington D.C. 20549


                                    FORM 8-K


                                 CURRENT REPORT

                         PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


                                  May 19, 2005
                Date of Report (Date of earliest event reported)




                         THE CHARLES SCHWAB CORPORATION
             (Exact Name of Registrant as Specified in Its Charter)



             Delaware                  1-9700                94-3025021
   (State or other jurisdiction      Commission           (I.R.S. Employer
 of incorporation or organization)   File Number       Identification Number)



                   120 Kearny Street, San Francisco, CA 94108
              (Address of principal executive offices and zip code)
       Registrant's telephone number, including area code: (415) 627-7000




     Check the  appropriate  box below if the Form 8-K  filing  is  intended  to
simultaneously  satisfy the filing obligation of the registrant under any of the
following provisions:

     |_| Written  communications  pursuant to Rule 425 under the  Securities Act
         (17 CFR 230.425)

     |_| Soliciting  material pursuant to Rule 14a-12 under the Exchange Act (17
         CFR 240.14a-12)

     |_| Pre-commencement  communications  pursuant to Rule  14d-2(b)  under the
         Exchange Act (17 CFR 240.14d-2(b))

     |_| Pre-commencement  communications  pursuant to Rule  13e-4(c)  under the
         Exchange Act (17 CFR 240.13e-4(c))







                         THE CHARLES SCHWAB CORPORATION



Item 1.01     Entry into a Material Definitive Agreement

Peter K. Scaturro Offer Letter
- ------------------------------

On May 19, 2005, the  Compensation  Committee (the  "Committee") of the Board of
Directors of The Charles Schwab Corporation  ("Schwab") approved an offer letter
to Peter K. Scaturro dated May 4, 2005  containing  the terms of Mr.  Scaturro's
employment  (the  "Offer  Letter")  as Chief  Executive  Officer  of U.S.  Trust
Corporation ("U.S. Trust"), a wholly owned subsidiary of Schwab. Under the Offer
Letter,  a copy of which is attached as Exhibit 10.275 to this current report on
Form 8-K,  Schwab and Mr.  Scaturro  agreed to the following  material terms and
conditions:

   -   Mr.  Scaturro will receive an initial  annual salary of $500,000.  During
       2005,  he will be  eligible  for an  annual  target  bonus of 400% of his
       annual  salary,  based  on  achievement  of  pre-determined   performance
       objectives.

   -   Mr. Scaturro will be granted options to purchase 500,000 shares of Schwab
       common stock,  at an exercise  price per share equal to the closing price
       of Schwab  stock on the date of  grant.  The  option  will vest over four
       years,  with 50% vesting on each of the third and fourth  anniversary  of
       the  grant  date.  Mr.  Scaturro  also  will be  granted  $2  million  in
       restricted shares of Schwab common stock (valued on the grant date of May
       19,  2005)  that vest on the  earlier of (1) the 5th  anniversary  of the
       grant date;  or (2) March 15, 2008,  provided that for each of the fiscal
       years  2005,  2006 and 2007,  U.S.  Trust  achieves  certain  performance
       targets  related to revenue  growth,  pre-tax profit margin,  and net new
       assets. These awards were granted by the Committee at the same meeting at
       which the offer letter was approved.

   -   Mr. Scaturro is entitled to participate in Schwab's  long-term  incentive
       program  ("LTIP")  for  officers  with a  target  grant  in the  range of
       $1 million to $1.25 million.

   -   Mr.  Scaturro  is  guaranteed  to receive at least  $2.5 million  in cash
       compensation  (salary  and  bonus)  during  the  first 12  months  of his
       employment ("Guarantee").  The Guarantee will not be paid if Mr. Scaturro
       resigns or is  terminated  for cause (the term  "cause" is defined in the
       Offer  Letter).  The  Guarantee is paid if Mr.  Scaturro is terminated by
       Schwab without cause.

   -   During  the  first  24  months  of his  employment,  if Mr.  Scaturro  is
       terminated  without  cause or  resigns  for good  reason  (the term "good
       reason" is defined in the Offer Letter),  Mr. Scaturro is entitled to one
       year's  salary and bonus,  and  vesting of his initial  stock  option and
       restricted stock awards based on years of service already  completed plus
       one  additional  year of  service.  In the event of the sale or merger of
       U.S. Trust, if Mr. Scaturro is not employed by the surviving entity,  Mr.
       Scaturro is entitled to two years'  salary and bonus,  and vesting of his
       initial  stock  option  and  restricted  stock  awards  based on years of
       service already  completed plus two additional  years of service.  If Mr.
       Scaturro  accepts an offer with the surviving  entity,  then Mr. Scaturro
       will be  entitled  to one  year's  salary  and bonus and  vesting  of his
       initial  stock  option  and  restricted  stock  awards  based on years of
       service already completed plus one additional year of service. Any amount
       paid under the  Guarantee  will not be taken into account in  determining
       any  payments  made in any of the above cases.  Payment of any  severance
       benefits  is in  lieu  of  benefits  under  any  other  Schwab  severance
       arrangement  and is subject to  execution of a severance  agreement  that
       includes, among other post-termination obligations, a release of claims.

                                     - 1 -

                         THE CHARLES SCHWAB CORPORATION


The  foregoing  description  of the Offer Letter is qualified in its entirety by
reference to the  provisions of the Offer Letter  attached as Exhibit  10.275 to
this current report on Form 8-K, which are incorporated by reference herein.

Alan J. Weber Separation Agreement
- ----------------------------------

On May 19,  2005, the Committee approved the following key terms of a separation
agreement  with Alan J. Weber in connection  with his retirement as Chairman and
Chief Executive Officer of U.S. Trust:

   -   Mr. Weber is deemed to have retired as a Schwab  officer and from any and
       all U.S. Trust and Schwab directorships he holds, effective as of May 19,
       2005.

   -   Mr. Weber is entitled to cash lump sum payments totaling $1.4 million.

   -   Mr.  Weber  will be  treated  as a  retiree  for  purposes  of all of his
       previously granted long-term awards, including stock options,  restricted
       stock and cash LTIP units. Accordingly, all such long-term awards granted
       more  than 2 years  ago  will be 100%  vested  and,  in the case of stock
       options, will be fully exercisable. Mr. Weber will have 2 years after his
       separation date to exercise vested nonqualified stock options.

   -   Schwab's  obligations  to provide the foregoing  benefits and payments to
       Mr.  Weber  pursuant  to the  separation  agreement  are  subject  to the
       satisfaction  by  Mr.  Weber  of  certain  post-termination   obligations
       including a release and waiver of claims.

Grant of Restricted Stock and Stock Options to U.S. Trust Non-Employee Director
- -------------------------------------------------------------------------------

On May 19, 2005, the Committee approved the following awards under Schwab's 2004
Stock  Incentive Plan to Mr. Robert N. Wilson for prior services during 2003 and
2004 as a  non-employee  director of U.S.  Trust (these awards are equivalent to
the value received by other U.S. Trust non-employee directors for such service):
(1) 2,640  restricted  shares with 50% vesting on the grant date and 50% vesting
on the 1st anniversary of the grant date; (2) 2,620  restricted  shares with 25%
vesting on the grant date, 25% vesting on the 1st  anniversary of the grant date
and 50%  vesting  on the 2nd  anniversary  of the grant  date;  (3) an option to
purchase  2,900 shares of Schwab common stock with 50% vesting on the grant date
and 50%  vesting  on the 1st  anniversary  of the grant  date;  (4) an option to
purchase 3,050 shares of Schwab common stock with 25% vesting on the grant date,
25% vesting on the 1st  anniversary of the grant date and 50% vesting on the 2nd
anniversary  of the  grant  date.  Each  option  has a term of 10  years  and an
exercise  price per share equal to the closing price of Schwab stock on the date
of grant. Mr. Wilson also serves as a non-employee director on Schwab's Board of
Directors.

Approval of an Amendment to the 2004 Stock Incentive Plan
- ---------------------------------------------------------

At  Schwab's  2005  Annual  Meeting  of   Stockholders  on  May  19,  2005,  the
stockholders  approved an amendment to Schwab's 2004 Stock  Incentive  Plan (the
"2004 Plan"). The amendment provides that non-employee directors will receive an
initial  grant of options on 10,000  shares of Schwab  common stock and that the
annual,  automatic grants to non-employee  directors will consist of (1) options
on 5,000 shares of Schwab common stock, and (2) a number of restricted shares of
Schwab common stock determined by dividing $60,000 by the fair market value of a
share of Schwab common stock on the grant date.

                                     - 2 -

                         THE CHARLES SCHWAB CORPORATION


Approval of an Amendment to the Corporate Executive Bonus Plan
- --------------------------------------------------------------

At  Schwab's  2005  Annual  Meeting  of  Stockholders   on  May 19,   2005,  the
stockholders  approved an amendment to Schwab's  Corporate  Executive Bonus Plan
(the "CEBP"). The CEBP, as amended, provides as follows:

   -   Bonuses to  executive  officers  will be based on  attainment  of certain
       performance  objectives.  Performance  criteria  may  be  measured  on  a
       corporate,   subsidiary,   enterprise  or  business  unit  basis,   or  a
       combination  thereof.  Performance  criteria may reflect  absolute entity
       performance  or a  relative  comparison  of  entity  performance  to  the
       performance of a peer group of entities or other external  measure of the
       selected  performance  criteria.  Performance  criteria  include  pre-tax
       operating  profit  margin,  pre-tax  reported  profit  margin,  after-tax
       operating  profit  margin,  after-tax  reported  profit  margin,  pre-tax
       operating profits, pre-tax reported profits, cash flow, revenues, revenue
       growth,  operating revenue growth, client net new asset growth, return on
       assets, return on equity, return on investment, stockholder return and/or
       value,  earnings  per share,  conversions  of and/or  increase  in client
       assets,  sales (of products,  offers,  or services)  and changes  between
       years  or  periods  that  are  determined  with  respect  to any of these
       performance criteria.

   -   The  maximum  award that may be paid to any  participant  (other than the
       Chief  Executive  Officer)  under the CEBP for any  calendar  year cannot
       exceed  $8  million.  The  maximum  award  that may be paid to the  Chief
       Executive  Officer  under the CEBP for any  calendar  year cannot  exceed
       $15 million.

                                     - 3 -





                         THE CHARLES SCHWAB CORPORATION


Exhibit Index

10.275 Peter K. Scaturro Offer Letter

                                     - 4 -




                         THE CHARLES SCHWAB CORPORATION


                                    SIGNATURE

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                           THE CHARLES SCHWAB CORPORATION
                                                 (Registrant)



Date:  May 25, 2005                              /s/ Christopher V. Dodds
       -----------------                         -----------------------------
                                                 Christopher V. Dodds
                                                 Executive Vice President and
                                                 Chief Financial Officer

                                     - 5 -

EX-10

                                                                  EXHIBIT 10.275





                                                           May 4, 2005


Peter K. Scaturro
[Address]



Dear Peter:

On behalf of Charles Schwab Corporation ("Schwab"), it is our pleasure to extend
this offer of  employment  to you. The position as discussed is Chief  Executive
Officer of U.S.  Trust and will report  directly to me. This offer is subject to
approval by the Compensation  Committee.  We would like you to start work on May
10, 2005 or another mutually agreeable date after the acceptance of this offer.

The annual base salary for the  position is  $500,000  (less  applicable  taxes,
withholdings,  and authorized deductions),  payable semi-monthly or as otherwise
consistent with our regular payroll practices.  Additionally, the position makes
you eligible to participate in the U.S. Trust Incentive Plan with a target bonus
of 400% of your base  annual  salary.  The  annual  bonus is  discretionary  and
dependent  upon  individual and Company  performance,  and/or other criteria and
conditions as set forth in the plan.

Not  withstanding  the above,  if you have not received at least  $2,500,000  in
total compensation (which includes salary,  bonus,  special awards, spot awards,
or any other  payments)  attributable  to you for your first 12 months of active
and continuous  employment,  Schwab will pay you the difference between what you
received and $2,500,000,  less applicable  taxes,  withholdings,  and authorized
deductions. The difference will be determined at the end of the quarter in which
the 12 month period ends and will be paid to you  approximately  six weeks after
the end of that quarter; provided, however, if you are terminated for any reason
other  than  Cause,  as  defined  below,  within  the  first 12  months  of your
employment, the difference will be determined at the end of the quarter in which
your employment terminates and will be paid to you approximately six weeks after
the end of that quarter.  If you terminate your employment or are terminated for
Cause, as defined below,  and you are not employed for the full 12 month period,
the  guarantee  set forth  above will not apply,  and you will only be paid your
base salary and short-term incentive  compensation  actually earned by you while
employed during the period.  In the event that you are absent from your position
for any reason  (other than an approved  vacation) for a period in excess of one
week  during the first 12 months but are still  actively  employed at the end of
the 12 month

Letter to Peter K. Scaturro
May 4, 2005
Page 2



period,  any payments will be pro-rated in accordance with the actual time spent
performing the duties associated with your position as CEO of U.S. Trust.

We will recommend to the  Compensation  Committee of the Board of Directors that
you be granted  500,000  stock  options to buy shares of the common stock of The
Charles Schwab Corporation (Symbol:  SCH), and $2,000,000 (valued at the date of
the grant) in restricted  shares of SCH stock as soon as practicable  after your
hire date.  Both stock  option and  restricted  share  awards are subject to the
discretion and approval of the Compensation  Committee. We will recommend to the
Compensation Committee that the stock options vest at the end of years three and
four  (50% on each  date)  of the  anniversary  date of the  grant,  subject  to
continued  employment.  The exercise  (strike) price for the options will be the
closing  price of SCH stock on the date of the  grant,  which is the date of the
Compensation  Committee's  approval.   Subject  to  continued  employment,   the
restricted  shares will vest at the end of five years from the date of the grant
with accelerated vesting between the second and fourth grant date anniversaries,
if specified  performance  goals  established by the Compensation  Committee are
achieved. Grants of stock options and restricted shares are subject to the terms
and conditions of the particular plan(s) and agreement(s). For 2005, you will be
eligible to participate  in Schwab's  long-term  incentive  program for officers
with  a  target  long-term  incentive  grant  in  the  range  of  $1,000,000  to
$1,250,000.

During  the first 24  months  of your  employment,  if  Schwab  terminates  your
employment for any reason other than Cause,  as defined below,  or if you resign
all positions with Schwab and its affiliates for Good Reason,  as defined below,
then Schwab shall  immediately  make a lump sum  severance  payment to you in an
amount equal to your compensation  (salary and bonuses paid under the U.S. Trust
Incentive  Plan)  during the  previous  12 months and the vested  portion of the
stock  options and  restricted  shares set forth above will be at least equal to
(i) the whole  years of service  that you have  completed  with  Schwab plus one
additional  year of service;  over (ii) the total number of years of service for
the award to be fully  vested,  i.e.,  four, in the case of stock  options,  and
five,  in the case of  restricted  shares.  Any  amount  paid to you  under  the
guarantee set forth above (i.e.,  the difference,  if any, between what you were
paid in the first 12 months of your employment and $2,500,000) will not be taken
into account in determining  the amount of the lump sum severance  payment.  The
severance  benefits  under this paragraph will be in lieu of and not in addition
to any  severance  benefits that you may be eligible to receive under any Schwab
severance arrangement.

"Good  Reason"  means that you have not been  terminated  for Cause and elect to
resign  after there has been a material  diminution  or reduction of your title,
authority,   position,  duties  or  responsibilities.   "Cause"  is  defined  as
termination of employment  based on a determination by the Board of Directors of
Schwab that  employment be  terminated  for any of the  following  reasons:  (i)
indictment, conviction, or admission of (including a plea of guilty or nolo

Letter to Peter K. Scaturro
May 4, 2005
Page 3



contendere  to)  any  felony  or of any  crime  involving  dishonesty  or  moral
turpitude;  (ii)  violation  of any  law,  rule,  regulation  or  by-law  of any
securities  exchange or association or other  regulatory or self regulatory body
or agency applicable to Schwab or any of its affiliates;  (iii) participation in
any act of fraud,  embezzlement,  theft,  or  malfeasance  against  Schwab,  its
affiliates  or  customers;  (iv) breach of any agreement to which you and Schwab
are  parties;   (v)  violation  of  Schwab's  policy   prohibiting   harassment,
discrimination,  or retaliation in the workplace, Schwab's Compliance Manual, or
Schwab's Code of Business Conduct and Ethics;  (vi) use of alcohol or drugs that
interferes  with  the  performance  of your  duties  or  which  compromises  the
integrity or reputation of Schwab, its affiliates, employees, or products; (vii)
willful  failure by you,  after given  notice and a  reasonable  opportunity  to
correct, to perform your duties, other than failure resulting from your complete
or partial  incapacity due to a physical or mental illness;  (viii)  intentional
damage to any property of Schwab or its  affiliates;  and (ix) absence from your
employment, other than as a result of disability pursuant to Schwab's short-term
disability  plan,  vacation,  or  sabbatical  for a period of more than four (4)
weeks without my prior  consent.  This  provision  does not alter or modify your
at-will employment  relationship.  Your employment  relationship with Schwab and
its  affiliates  will be "at will," which means that your  employment  is for no
definite  period  of time and  that you and  Schwab  are free to  terminate  the
employment  relationship at any time, with or without advance  warning,  notice,
investigation, or cause.

In the  event of a sale of  substantially  all of the  assets  of U.S.  Trust by
Schwab or a merger or  consolidation  in which U.S.  Trust is not the  surviving
entity and if you do not remain employed by Schwab or a related entity, you will
receive  a  lump  sum  cash  payment  in an  amount  equal  to  two  times  your
compensation  (salary  and  bonuses  actually  paid to you under the U.S.  Trust
Incentive  Plan)  during the  previous 12 months  before such sale,  merger,  or
consolidation  and the vested portion of the stock options and restricted shares
set forth above will be at least  equal to (i) the whole  years of service  that
you have completed with Schwab plus two additional  years of service;  over (ii)
the total  number of years of service  for the award to be fully  vested,  i.e.,
four,  in the  case  of  your  stock  options,  and  five,  in the  case of your
restricted  shares.  If you accept an offer of  employment  with such  surviving
entity,  you will  receive a lump sum cash  payment  in an amount  equal to your
compensation  (salary  and bonuses  paid under the U.S.  Trust  Incentive  Plan)
during the previous 12 months before such sale, merger, or consolidation and the
vested portion of the stock options and  restricted  shares set forth above will
be at least equal to (i) the whole years of service that you have completed with
Schwab plus one additional year of service;  over (ii) the total number of years
of service for the award to be fully  vested,  i.e.,  four,  in the case of your
stock options,  and five, in the case of your restricted shares. Any amount paid
to you under the  guarantee  set forth  above  (i.e.,  the  difference,  if any,
between  what you  were  paid in the  first 12  months  of your  employment  and
$2,500,000) will not be taken into account in determining the amount of

Letter to Peter K. Scaturro
May 4, 2005
Page 4



the lump sum cash payments under this  paragraph.  The severance  benefits under
this paragraph will be in lieu of and not in addition to any severance  benefits
that you may be  eligible  to receive  under any Schwab  severance  arrangement;
provided,  however, if such severance  arrangement  provides greater benefits to
you, you may elect to receive the benefits under such arrangement in lieu of the
benefits provided under this paragraph.

In the event that it is determined  that any payment or distribution of any type
to or for your benefit made by Schwab,  by any of its affiliates,  by any person
who  acquires  ownership or  effective  control or  ownership  of a  substantial
portion of Schwab's  assets  (within the meaning of Section 280G of the Internal
Revenue Code of 1986, as amended,  and the regulations  thereunder (the "Code"))
or by any affiliate of such person,  whether paid or payable or  distributed  or
distributable  pursuant to the terms of an  employment  agreement or  otherwise,
would be subject to the  excise tax  imposed by Section  4999 of the Code or any
interest or penalties with respect to such excise tax (such excise tax, together
with any such interest or penalties, are collectively referred to as the "Excise
Tax"),  then such payments or  distributions or benefits shall be payable either
(i) in full;  or (ii) as to such lesser  amount which would result in no portion
of such payments or  distributions  or benefits being subject to the Excise Tax.
You shall receive the greater, on an after-tax basis, of (i) or (ii). Unless you
and Schwab agree  otherwise in writing,  any  determination  required under this
paragraph  will be made in  writing  by  Schwab's  independent  accountant  (the
"Accountant")  whose  determination  shall be  conclusive  and binding.  You and
Schwab will  furnish the  Accountant  such  documentation  and  documents as the
Accountant may reasonably request in order to make a determination. Schwab shall
bear all costs that the  Accountant  may  reasonably  incur in  connection  with
performing any calculations contemplated by this paragraph.

As a  condition  to the  receipt of any  severance  benefits  described  in this
Agreement,  you will be required to execute a severance  agreement.  In Schwab's
sole  discretion,  such  agreement may include  without  limitation,  but is not
limited to, provisions  relating to (i)  non-disparagement  and  non-disclosure;
(ii)  non-solicitation  of  customers,  clients  and  employees;  (iii)  use  of
confidential and proprietary  information;  (iv) return of company property; (v)
cooperation with investigations,  arbitrations, and litigation; (vi) release and
waiver of all legal claims; and (vii) authorized deductions (if any).

We are  pleased to offer our  regular  employees  a valuable  benefits  package.
Regular,   full-time  employees  are  eligible  for  medical,   dental,  vision,
disability, and life insurance coverage.  Eligibility begins on the first of the
month  following  the start date and,  if your start date is May 16,  2005,  the
eligibility  date  will be June 1,  2005.  A benefit  email  will be sent to you
approximately  4-5  days  after  all of your  paperwork  has been  processed  by
Payroll.  (Regardless of when an employee  enrolls,  benefits coverage begins on
the eligibility date,

Letter to Peter K. Scaturro
May 4, 2005
Page 5



even if hired late in the month.) You must enroll for benefits  coverage  within
31 days of your start date, or you will automatically be enrolled in the default
plan,  which  provides  reduced  coverage for the employee  only.  If you do not
receive  your  benefit   email  within  10  days  of  your  start  date,   email
HRDirect@Schwab.com  or call  800-725-3535.  If you have questions about company
benefits, please contact Bryan Allen, Managing Director, Human Resources.  Since
there is a brief waiting period for benefits coverage,  you may want to consider
electing  health  insurance  continuation  (COBRA)  coverage  from your previous
employer.

Regular,  full-time  employees also are eligible to enroll in our 401(k) plan on
the  first  day of  the  month  following  three  complete  calendar  months  of
employment.  If you begin work on May 16, 2004 you will be eligible to enroll in
the  401(k)  plan  on  September  1,  2005.  The  401(k)  plan  has  a  matching
contribution  component for enrolled  employees who are employed on the last day
of the calendar year. Eligibility and benefits under the 401(k) plan are subject
to the terms and conditions of the plan.

As an executive  officer of Schwab,  you will be eligible to  participate in any
employee benefits,  long term incentive plans, and other programs  applicable to
other Schwab/US Trust executive officers.  Additionally, as an executive officer
of  Schwab,  you will be  eligible  to  receive  an annual  flexible  perquisite
allowance of  $36,000.00,  less  applicable  taxes,  withholding  and authorized
deductions,  which is paid monthly,  to cover certain  costs.  This program will
give you the flexibility to spend your  perquisite  dollars in the way that best
meets your individual needs. Such benefits,  plans, and programs may change from
time to time.  Schwab also will provide a driver and car service for your use in
commuting to and from work as well as for  business  related  travel.  Commuting
expenses  represent  personal use and will be taxable to you and Schwab will not
provide a tax gross-up on this amount.

This letter Agreement is the entire  agreement  between you and Schwab as to the
terms of your offer of employment (including severance, if any) and the duration
or  continuation  of your  employment  relationship  and supersedes any prior or
contemporaneous agreements,  representations,  understandings,  or arrangements,
whether written or oral, that may be inconsistent with the at-will nature of the
relationship and the terms of the offer of employment. The at-will agreement can
not be modified without the express written agreement signed by me.

Nothing in this  letter  Agreement  is intended to  constitute  a  "nonqualified
deferred  compensation  plan"  within the  meaning of Section  409A of the Code.
Notwithstanding  the foregoing,  in the event this Agreement or any benefit paid
to you under this offer is deemed to be subject to Section 409A of the Code, you
consent to Schwab's  adopting such conforming  amendments as it deems necessary,
in its sole  discretion,  to  comply  with  Section  409A of the  Code,  without
reducing the amounts of any benefits due to you under this Agreement.

Letter to Peter K. Scaturro
May 4, 2005
Page 6



It is  important  that your  employment  with  Schwab  not  conflict  with or be
constrained by any prior employment.  We wish to impress upon you that we do not
want you to bring  with you any  confidential  or  proprietary  material  of any
former employer or to violate any other obligation to your former employers.  In
addition, by signing this letter, you represent and acknowledge that you are not
subject to any agreement that would prevent or materially impair your ability to
accept and perform the employment duties contemplated by this offer. You further
agree to indemnify  Schwab  against any  liability and hold it harmless from and
pay any loss,  damage,  cost and expense  which  Schwab  incurs from a judgment,
arbitration  award,  or settlement in which payment for damages are made against
any claims made by any former employer arising out of or in connection with your
hiring  by  Schwab.  Additionally,  in the event you are named as a party in any
enforcement  proceeding  by the  Securities  and  Exchange  Commission  or other
regulatory agency in connection with or arising out of your previous employment,
Schwab may take disciplinary action, up to and including immediate  termination.
This  provision  is not  intended  to alter or  modify  your  at-will  status of
employment with Schwab.

Your offer of employment is contingent on your cooperation in providing relevant
personal  knowledge or other  necessary  information  to complete the background
screening,  as well as the completion and return of the required  documents that
are conditions of employment.

Schwab has developed  numerous  policies and procedures  relating to Compliance,
Human Resources, Information Security and other areas (which may be changed from
time to time in the sole  discretion  of  Schwab  and/or  its  affiliates).  All
employees are expected to be familiar with these  policies and procedures and to
review them on a periodic basis throughout their employment.  These policies and
procedures  contain  important  information about Schwab's  prohibition  against
harassment  and  discrimination  in  the  workplace,   compliance  requirements,
confidentiality and security of information, leave programs, and other important
information.

At the end of this letter are  important  notices  about  several  conditions of
employment for your review.  In addition,  there are several  attached forms and
notices (also  conditions of  employment),  which must be signed and returned on
your first day of employment to Bryan Allen to enable prompt payroll processing.

If you have any questions feel free to contact Bryan Allen at [telephone].

Letter to Peter K. Scaturro
May 4, 2005
Page 7




Peter,  I hope that you elect to accept  this offer of  employment.  Kindly sign
your name at the end of this letter to signify your understanding and acceptance
of these  terms and that no one at Schwab has made any other  representation  to
you.


Sincerely,



/s/ Charles Schwab

Charles Schwab
Chairman and Chief Executive Officer
The Charles Schwab Corporation



Accepted:  /s/ Peter K. Scaturro                           Date:  May 8, 2005
           --------------------------------------------           -----------
               Peter K. Scaturro