SCHWAB CHARLES CORP, S-3/A, 1999-06-24

SCHWAB CHARLES CORP
S-3/A, 1999-06-24
SECURITY BROKERS, DEALERS & FLOTATION COMPANIES

Previous: FLEETWOOD ENTERPRISES INC/DE/, 8-K, 1999-06-24

Next: PROVIDENT FINANCIAL GROUP INC, 424B2, 1999-06-24

<PAGE>

As filed with the Securities and Exchange Commission on June 23, 1999

Registration No. 333-77381
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------

AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
THE CHARLES SCHWAB CORPORATION
(Exact name of Registrant as specified in its charter)

<TABLE>
<S> <C>
Delaware 94-3025021
<CAPTION>
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
</TABLE>
120 Kearny Street
San Francisco, CA 94104
(415) 627-7000
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
----------------
Joseph R. Martinetto
Senior Vice President and Treasurer
THE CHARLES SCHWAB CORPORATION
120 Kearny Street
San Francisco, CA 94104
(415) 627-7000
(Name, address, including zip code, and telephone number, including area code,
of Agent for Service)

----------------
<TABLE>
<S> <C>
LAWRENCE B. RABKIN, ESQ. JOHN M. BRANDOW, ESQ.
JOHN E. STONER, ESQ. DAVIS POLK & WARDWELL
HOWARD, RICE, NEMEROVSKI, 450 Lexington Avenue
CANADY, FALK & RABKIN New York, New York 10017
A Professional Corporation
Three Embarcadero Center, 7th Floor
San Francisco, CA 94111
</TABLE>
----------------
Approximate date of commencement of proposed sale to the public: From time
to time after this Registration Statement becomes effective as determined by
market conditions.
If the securities being registered on the form are to be offered pursuant to
dividend or interest reinvestment plans, please check the following box. [_]
If any of the securities on this form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, check
the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
----------------
CALCULATION OF REGISTRATION FEE

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Proposed Maximum
Title of Each Class of Aggregate Amount of
Securities to be Registered Offering Price(1) Registration Fee
- -------------------------------------------------------------------------------
<S> <C> <C>
Debt Securities(2)(3)............ $250,000,000 $69,500
- -------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the registration fee.
(2) This Registration Statement also relates to offers and sales of Debt
Securities in connection with market-making transactions by and through
Charles Schwab & Co., Inc., an affiliate of the Registrant.

(3) Pursuant to Rule 429, the Prospectus in this Registration Statement also
relates to up to $145,000,000 of Debt Securities, covered by Registration
Statement No. 333-54001, upon which a registration fee of approximately
$42,775 has been paid, but which have not been offered or sold.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information contained in this prospectus is not complete and may be +
+changed. The Underwriters may not confirm sales of these securities until the +
+registration statement filed with the Securities and Exchange Commission +
+becomes effective. This prospectus is not an offer to sell these securities, +
+and is not soliciting an offer to buy these securities in any state where the +
+offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PROSPECTUS (Subject to Completion)

Dated June 23, 1999

$395,000,000

THE CHARLES SCHWAB CORPORATION

DEBT SECURITIES

We will provide specific terms of these securities in supplements to this
prospectus. You should read this prospectus and any supplement carefully before
you invest.

Unless we state otherwise in a prospectus supplement, we will not list any of
these securities on any securities exchange.

-----------

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.

-----------

Our wholly-owned subsidiary, Charles Schwab & Co., Inc., may use this
prospectus in connection with offers and sales of our debt securities that
Charles Schwab & Co., Inc. may make from time to time in market making
transactions at negotiated prices related to prevailing market prices at the
time of sale or otherwise. Charles Schwab & Co., Inc. has advised us that they
intend to make a market in our debt securities; however, they are not obligated
to do so. Charles Schwab & Co., Inc. may discontinue such market making
activity at any time, and we can give no assurance as to the liquidity of, or
trading market for, our debt securities. Charles Schwab & Co., Inc. may act as
principal or agent in such transactions, as discussed below in "Plan of
Distribution." We will not use this prospectus to confirm sales of any debt
securities unless it is attached to a prospectus supplement.

, 1999
<PAGE>

Table of Contents
<TABLE>
<S> <C> <C> <C>
The Charles Schwab Corporation........ 4 Description of Debt Securities........ 5
Consolidated Ratio of Earnings to Plan of Distribution.................. 12
Fixed Charges........................ 4 Legal Opinions........................ 13
Use of Proceeds....................... 4 Experts............................... 13

</TABLE>
----------------

About This Prospectus

This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission utilizing a "shelf" registration process.
Under this shelf process, we may sell any combination of the securities
described in this prospectus in one or more offerings up to a total dollar
amount of $395,000,000. This prospectus provides you with a general description
of the securities we may offer. Each time we sell securities, we will provide a
prospectus supplement that will contain specific information about the terms of
that offering. The prospectus supplement may also add, update or change
information contained in this prospectus. You should read both this prospectus
and any prospectus supplement together with the additional information
described under the heading "Where You Can Find More Information."

Where You Can Find More Information

We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. Our SEC filings are
available to the public over the Internet at the SEC's web site at
http://www.sec.gov. You may also read and copy any document we file at the
SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms.

The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings we
make with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities
Exchange Act of 1934 until the later of the date we sell all of the securities
or the date that our subsidiary Charles Schwab & Co., Inc. ceases offering
and/or selling previously issued debt securities:

Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 1-
9700)

Report on Form 10-Q for the quarter ended March 31, 1999 (File No. 1-9700)

You may request a copy of these filings, at no cost, by writing or
telephoning us at our principal executive offices at the following address:

The Charles Schwab Corporation
Investor Relations Department
120 Kearny Street
San Francisco, California 94104
415/627-8786

Our Common Stock, par value $.01 per share (the "Common Stock"), is listed
on the New York Stock Exchange and the Pacific Stock Exchange. Our reports,
proxy statements and other information can be inspected at the offices of the
NYSE, 20 Broad Street, New York, New York 10005 and the Pacific Stock Exchange,
301 Pine Street, San Francisco, California 94104 or 618 South Spring Street,
Los Angeles, California 90014.

2
<PAGE>

You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not
authorized anyone else to provide you with different information. We are not
making an offer of these securities in any state where the offer is not
permitted. You should not assume that the information in this prospectus or any
prospectus supplement is accurate as of any date other than the date on the
front of these documents.

We have filed or incorporated by reference exhibits with this registration
statement that include the form of proposed underwriting agreement and
indenture. You should read the exhibits carefully for provisions that may be
important to you.

3
<PAGE>

THE CHARLES SCHWAB CORPORATION

The Charles Schwab Corporation engages, through its subsidiaries, in
securities brokerage and related financial services, including retail
brokerage, mutual funds, support services for independent investment managers,
equity securities market-making and 401(k) defined contribution plans. Charles
Schwab & Co., Inc., our principal operating subsidiary, provides brokerage and
related investment services to approximately 5.9 million active investor
accounts through 298 offices nationwide. We provide similar services to
British investors through our subsidiary in the United Kingdom, Charles Schwab
Europe (formerly known as ShareLink). Our subsidiary Mayer & Schweitzer, Inc.,
a market maker in Nasdaq and other securities, provides trade execution
services to broker-dealers and institutional customers. Charles Schwab
Investment Management, Inc. is the investment adviser for Charles Schwab &
Co., Inc.'s proprietary mutual funds.

We were incorporated in Delaware in November 1986. Charles Schwab & Co.,
Inc. was incorporated in California in 1971 and merged in 1983 with a
subsidiary of BankAmerica Corporation. We acquired Charles Schwab & Co., Inc.
in a management-led leveraged buyout in March 1987 and became a publicly held
company in September 1987. Our principal executive offices are located at 120
Kearny Street, San Francisco, CA 94104 (telephone number 415/627-7000). Our
website is www.schwab.com.

All references to "we," "us," "our" or to "Charles Schwab" in this
prospectus are to The Charles Schwab Corporation.

CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES

The following table sets forth our consolidated ratio of earnings to fixed
charges for the periods indicated.

<TABLE>
<CAPTION>
Three Months
Ended March
31, Year Ended December 31,
-------------- ------------------------
1999 1998 1998 1997 1996 1995 1994
------ ------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges
(unaudited)......................... 2.3 1.7 1.8 1.8 1.9 1.7 2.0
Ratio of earnings to fixed charges as
adjusted (unaudited)................ 9.5 5.4 6.5 5.9 5.9 5.9 7.0
</TABLE>

For the purpose of calculating the ratio of earnings to fixed charges:

. earnings consist of earnings before taxes on income and fixed charges;
and

. fixed charges consist of interest expense incurred on payable to
customers, borrowings and one-third of rental expense, which we estimate
is representative of the interest factor.

For the purpose of calculating the ratio of earnings to fixed charges as
adjusted, interest expense incurred on payables to customers is eliminated as
a fixed charge. We consider interest expense incurred in connection with
payables to customers to be an operating expense, because such interest is
completely offset by interest revenue on related investments and margin loans.

USE OF PROCEEDS

We will use the net proceeds from the sale of the debt securities for
general corporate purposes, which may include additions to working capital,
investing in or extending credit to subsidiaries, capital expenditures, stock
repurchases, repayment of indebtedness or acquisitions. We may set forth
further details relating to the use of net proceeds in the applicable
prospectus supplement.

4
<PAGE>

DESCRIPTION OF DEBT SECURITIES

We may issue either senior debt securities or senior subordinated debt
securities. Senior debt securities and senior subordinated debt securities will
be issued in one or more series under either the senior indenture or the
subordinated indenture between us and The Chase Manhattan Bank (formerly
Chemical Bank), as Trustee. In the following discussion we sometimes refer to
the senior indenture and the senior subordinated indenture as the "indentures."

We are a holding company and we are thus dependent upon the earnings and
cash flow of our subsidiaries to meet our obligations under the debt
securities. Because the creditors of any of our subsidiaries would generally
have a right to receive payment that is superior to our right to receive
payment from the assets of that subsidiary, holders of our debt securities will
be effectively subordinated to creditors of our subsidiaries. In addition, the
Securities Exchange Act and the rules of certain exchanges and regulatory
bodies impose net capital requirements on some of our subsidiaries that limit
their ability to pay dividends and make loans and advances to us.

This prospectus briefly outlines the provisions of the indentures. The
indentures have been filed as exhibits to the registration statement and you
should read the indentures for provisions that may be important to you. The
indentures are substantially identical except for the subordination and
negative pledge provisions described below.

In the summary below, we have included references to section numbers of the
indentures so that you can easily locate these provisions.

General

The indentures do not limit the amount of additional indebtedness that we
may incur. The indentures provide that we may issue debt securities from time
to time in one or more series with the same or various maturities. The debt
securities will not be secured by any of our property or assets.

The prospectus supplement relating to any series of debt securities being
offered will contain the specific terms relating to the offering. These terms
will include some or all of the following:

. whether the debt securities are senior or senior subordinated;

. the total principal amount of the debt securities;

. the authorized denominations;

. the percentage of the principal amount at which we will issue the debt
securities and whether the debt securities will be "original issue
discount" securities for U.S. federal income tax purposes. If we issue
original issue discount debt securities (securities that are issued at a
substantial discount below their principal amount because they pay no
interest or pay interest that is below market rates at the time of
issuance), we will describe the special United States federal income tax
and other considerations of a purchase of original issue discount debt
securities in the prospectus supplement;

. the date on which principal will be payable and whether the debt
securities will be payable on demand by the holders on any date;

. interest rate or rates (or the method by which we will determine such
rate or rates) and whether the interest rate or rates are fixed or
floating;

. the interest payment dates;

. the place or places where we will pay the principal of, premium, if any,
and interest on the debt securities;

5
<PAGE>

. any applicable redemption, repayment or sinking fund provisions;

. any applicable United States federal income tax consequences; and

. any other specific terms of the debt securities, including any additional
events of default or covenants provided for with respect to such debt
securities, and any terms that may be required by or be advisable under
applicable laws or regulations.

Debt securities may be presented for exchange and registration of transfer
in the manner, at the places and subject to the restrictions set forth in the
debt securities and the applicable prospectus supplement. Subject to the
limitations provided in the applicable indenture, such services will be
provided without charge, other than any tax or other governmental charge
payable in connection therewith.

Global Securities

We may issue debt securities under a book-entry system in the form of one or
more global securities. We will describe the specific terms of the depositary
arrangement with respect to any portion of a series of debt securities
represented by a global security in the prospectus supplement relating to such
series. We anticipate that the following description will apply to all
depositary arrangements.

We will register the global securities in the name of a depositary or its
nominee and deposit the global securities with that depositary. Following the
issuance of a global security in registered form, the depositary will credit
the accounts of its participants with the debt securities upon our
instructions. Only persons who hold directly or indirectly through financial
institutions that are participants in the depositary can hold beneficial
interests in the global securities. Because the laws of some jurisdictions
require certain types of purchasers to take physical delivery of such
securities in definitive form, you may encounter difficulties in your ability
to own, transfer or pledge beneficial interests in a global security.

So long as the depositary or its nominee is the registered owner of a global
security, Charles Schwab and the Trustee will treat the depositary as the sole
owner or holder of the debt securities for purposes of the applicable
indenture. Therefore, except as set forth below, you will not be entitled to
have debt securities registered in your name or to receive physical delivery of
certificates representing the debt securities. Accordingly, you will have to
rely on the procedures of the depositary and the participant in the depositary
through whom you hold your beneficial interest in order to exercise any rights
of a holder under the indenture. We understand that under existing practices,
the depositary would act upon the instructions of a participant or authorize
that participant to take any action that a holder is entitled to take.

We will make all payments of principal, premium and interest on the debt
securities to the depositary. We expect that the depositary will then credit
participants' accounts proportionately with these payments on the payment date
and that the participants will in turn credit their customers in accordance
with their customary practices. Neither Charles Schwab nor the Trustee will be
responsible for making any payments to participants or customers of
participants or for maintaining any records relating to the holdings of
participants and their customers and you will have to rely on the procedures of
the depositary and its participants.

Global securities are generally not transferable. We will issue physical
certificates to beneficial owners of a global security if:

. the depositary notifies us that it is unwilling or unable to continue as
depositary and we do not appoint a successor within 90 days;

. the depositary ceases to be a clearing agency registered under the
Securities Exchange Act and we do not appoint a successor within 90 days;
or

. we decide in our sole discretion that we do not want to have the debt
securities of that series represented by global securities.

6
<PAGE>

Senior Debt

The debt securities that will constitute part of our senior debt will be
issued under the senior debt indenture and will rank equally with all of our
other unsecured and unsubordinated debt.

Senior Subordinated Debt

We will issue senior subordinated debt securities under the senior
subordinated debt indenture. Senior subordinated debt securities will be
subordinate and junior in right of payment, as described in the senior
subordinated debt indenture, to all of our "Senior Indebtedness."

In the event:

. of any insolvency or bankruptcy proceedings, or any receivership,
liquidation, reorganization or other similar proceedings in respect of
Charles Schwab or a substantial part of its property;

. that Charles Schwab defaults with respect to the payment of principal of
(and premium, if any) or any interest on or other monetary amounts due
and payable on any Senior Indebtedness;

. that an event of default exists (other than a default in the payment of
principal, premium, if any, or interest, or other monetary amount due and
payable) with respect to any Senior Indebtedness that permits the holder
or holders of that Senior Indebtedness to accelerate the maturity thereof
(with notice or lapse of time, or both), and such event of default shall
have continued beyond the period of grace, if any, in respect thereof,
and such default or event of default shall not have been cured or waived
or shall not have ceased to exist; or

. that the principal of and accrued interest on the senior subordinated
debt securities shall have been declared due and payable upon an "Event
of Default" pursuant of Section 5.1 of the senior subordinated debt
indenture and such declaration shall not have been rescinded and annulled
as provided therein;

then the holders of all Senior Indebtedness shall first be entitled to be paid
in full, or we shall make provision for such payment in money or money's worth,
before the holders of any of the senior subordinated debt securities are
entitled to receive a payment on account of the principal of (and premium, if
any) or any interest on the senior subordinated debt securities. Holders of
senior subordinated debt would, however, have the right, even if we have not
paid or provided for the Senior Indebtedness, to accept a payment in shares of
our stock, as we may be reorganized or readjusted, or securities of the
corporation provided for by a plan of reorganization or readjustment, in each
case the payment of which is subordinated to the payment of the Senior
Indebtedness that may at the time be outstanding. (Senior subordinated debt
indenture, Section 13.1).

The senior subordinated debt indenture defines "Senior Indebtedness" as the
principal of and premium, if any, and interest on:

. our indebtedness, whether outstanding on the date of the senior
subordinated debt indenture or thereafter created, that is:

. for money that we borrowed (including, without limitation, capitalized
lease obligations);

. for money borrowed by others and guaranteed, directly or indirectly, by
us; or

. purchase money indebtedness (whether or not secured by any lien or
other security interest), or indebtedness secured by property at the
time of our acquisition of such property, for the payment of which we
are directly or contingently liable; and

. all deferrals, renewals, extensions and refundings of, and amendments,
modifications and supplements to (whether outstanding on the date of
the senior subordinated debt indenture or thereafter created), any such
indebtedness, unless the terms of the instrument creating or evidencing
any such indebtedness expressly provide that such indebtedness is not
superior in right of payment to the senior subordinated debt securities
and/or that such indebtedness is itself subordinated to any other
indebtedness of Charles Schwab. (Senior subordinated debt indenture,
Section 1.1).

7
<PAGE>

Senior Indebtedness does not include:

. Charles Schwab's indebtedness to a subsidiary for money borrowed or
advances from that subsidiary; or

. the senior subordinated debt securities. (Senior subordinated debt
indenture, Section 1.1).

Certain Covenants

The following restrictions apply to each series of debt securities unless
the terms of such series of debt securities provide otherwise.

Negative Pledge. The senior debt indenture provides that we will not, and
will not permit any subsidiary to, create, assume, incur or guarantee any
indebtedness for borrowed money secured by a pledge, lien or other encumbrance
on the voting securities of Charles Schwab & Co., Inc., Mayer & Schweitzer,
Inc. or Schwab Holdings, Inc. (our wholly-owned subsidiary that owns all of the
common stock of Charles Schwab & Co., Inc.) without securing the senior debt
securities to the same extent as that indebtedness. (Senior debt indenture,
Section 3.6). However, the senior debt indenture permits liens on the voting
stock of Charles Schwab & Co., Inc., Mayer & Schweitzer, Inc. or Schwab
Holdings, Inc. without securing the senior debt securities if the liens arise
because of:

. claims against us for taxes or other governmental charges that we are
contesting in good faith or that are for less than $1 million;

. legal proceedings that we are contesting in good faith or that involve
claims against us for less than $1 million;

. deposits to secure (or in place of any) surety, appeals or customs bonds;
or

. any other reason if our Board of Directors determines that the lien will
not materially detract from or interfere with the present value or
control by us of the voting stock subject to the lien.

Merger, Consolidation, Sale, Lease or Conveyance. Each indenture provides
that we will not merge or consolidate with any other corporation and will not
sell, lease or convey all or substantially all our assets to any person,
unless:

. we are the continuing corporation; or

. the successor corporation in any such merger or consolidation (if other
than us) or the person that acquires or leases all or substantially all
of our assets is a corporation organized under the laws of the United
States or a State thereof or the District of Columbia and that successor
corporation expressly assumes all of our obligations under the applicable
indenture and the debt securities issued under the applicable indenture.

In either case, immediately after such merger, consolidation, sale, lease or
conveyance, we or any such successor corporation shall not be in default in the
performance or observance of the covenants and conditions of the applicable
indenture that we are required to perform or observe. (Senior and senior
subordinated debt indentures, Section 9.1).

This covenant would not apply to a recapitalization transaction, a change of
control of Charles Schwab or a highly leveraged transaction unless such
transactions or change of control are structured to include a merger or
consolidation or a sale, lease or conveyance of all or substantially all of the
assets of Charles Schwab. Except as may be described in the prospectus
supplement applicable to a particular series of debt securities, there are no
covenants or other provisions in the indentures providing for a put (the right
to require us to repurchase the debt securities) or increased interest or
otherwise that would afford holders of debt securities additional protection in
the event of a recapitalization transaction, a change of control of Charles
Schwab or a highly leveraged transaction.

8
<PAGE>

Events of Default

Unless otherwise specified in the applicable prospectus supplement, Section
5.1 of each indenture provides that an Event of Default occurs with respect to
any series of debt securities issued thereunder if:

. we fail to pay when due any principal of the debt securities of that
series;

. we fail to pay when due any interest on any debt securities of that
series for 30 days;

. we fail for 60 days after written notice to cure our default in the
observance or performance of any other covenant or agreement in the debt
securities of such series or such indenture other than a covenant
included in such indenture solely for the benefit of a series of debt
securities other than that series;

. certain events of bankruptcy, insolvency or reorganization occur;

. we fail to make any payment at maturity, including any applicable grace
period, in respect of our Indebtedness and our failure continues for more
than 30 days after we get written notice from the Trustee or from the
holders of not less than 25% in principal amount of the outstanding debt
securities (treated as one class) issued under such indenture; or

. we default with respect to any Indebtedness, which default results in the
acceleration of Indebtedness in an amount in excess of $10,000,000, and
we fail to discharge such Indebtedness or cure such acceleration (through
waiver, rescission, or annulment or other means) for more than 30 days
after we get written notice from the Trustee or from the holders of not
less than 25% in principal amount of the outstanding debt securities
(treated as one class) issued under such indenture.

"Indebtedness" is defined in each indenture as obligations (other than non-
recourse obligations or the debt securities of that series issued under the
applicable indenture) of, or guaranteed or assumed by, Charles Schwab for
borrowed money (including, without limitation, capitalized lease obligations)
or evidenced by bonds, debentures, notes or other similar instruments in an
amount due and payable at maturity in excess of $10,000,000.

If an Event of Default occurs and continues, the Trustee or the holders of
25% of the aggregate principal amount of each affected series of debt
securities (voting together as a single class) may require us to repay
immediately (or "accelerate") the entire principal of the debt securities of
each affected series and any accrued interest. For example, if an Event of
Default relates to our failure to pay interest on two series of senior debt
securities, and we have issued ten series of outstanding senior debt securities
under the senior debt indenture, the holders of 25% of the two affected series
(voting together as a single class) would have the right to accelerate the
senior debt securities that are part of those two series. However, if the Event
of Default relates to our failure to pay Indebtedness in excess of $10,000,000
and the subsequent acceleration of that Indebtedness (thus affecting all ten
series of senior debt securities in the prior example), 25% of all senior debt
securities outstanding under the senior debt indenture (voting together as a
single class) would have the right to accelerate all senior debt securities
outstanding under the senior debt indenture.

The holders of a majority of the aggregate principal amount of the debt
securities of all affected series, voting as one class, can rescind any
acceleration or waive any past default or Event of Default or allow us to not
comply with any provision of the indenture. However, they cannot waive a
default in payment of principal of, premium, if any, or interest on, any of the
debt securities.

Other than its duties in case of a default, the Trustee is not obligated to
exercise any of its rights or powers under the indenture at the request, order
or direction of any holders, unless the holders offer the Trustee reasonable
indemnity. (Senior and senior subordinated debt indentures, Section 6.2). If
they provide this reasonable indemnity, the holders of a majority in principal
amount of all affected series of debt securities, voting as one class, may
direct the time, method and place of conducting any proceeding or any remedy
available to the Trustee, or exercising any power conferred upon the Trustee,
for any series of debt securities. (Senior and senior subordinated debt
indentures, Section 5.9).

9
<PAGE>

A holder of a debt security may not institute any action against us under
the indenture governing that security unless:

. the holder gives the Trustee written notice that a default has occurred
and is continuing;

. the holders of at least 25% in principal amount of each affected series
issued under the indenture and outstanding request the Trustee to
institute the action while offering the Trustee reasonable indemnity; and

. the Trustee fails to institute the action within 60 days after receiving
that request.

Even if these three conditions are met, the holder may not institute an
action if holders of a majority in principal amount of each affected series
direct the Trustee to take action inconsistent with the request of the holder
desiring to institute action against us. Holders need not meet these
conditions to institute an action for payment of overdue principal or
interest.

In each Indenture we promise to file annually with the Trustee a
certificate of no default or a certificate specifying any default that exists.
(Senior and senior subordinated debt indentures, Section 3.5).

Discharge, Defeasance and Covenant Defeasance

When we use the term defeasance, we mean discharge from some or all of our
obligations under the indenture. If we deposit with the Trustee sufficient
cash or U.S. government securities to pay the principal, interest, any premium
and any other sums due to the stated maturity date or a redemption date of the
debt securities of a particular series, then at our option:

. we will be discharged from our obligations with respect to the debt
securities of such series; or

. we will no longer be under any obligation to comply with the restrictive
covenants contained in the indenture, and the Events of Default relating
to failures to comply with covenants will no longer apply to us.

If this happens, the holders of the debt securities of the affected series
will not be entitled to the benefits of the indenture except for registration
of transfer and exchange of debt securities and replacement of lost, stolen or
mutilated debt securities. Instead the holders will only be able to rely on
the deposited funds or obligations for payment.

We must deliver to the Trustee an opinion of counsel to the effect that the
deposit and related defeasance would not cause the holders of the debt
securities to recognize income, gain or loss for federal income tax purposes.
We must also deliver a ruling to such effect received from or published by the
United States Internal Revenue Service if we are discharged from our
obligations with respect to the debt securities.

For the senior subordinated debt, we must also deliver to the Trustee an
opinion of counsel to the effect that:

. other holders of senior indebtedness will have no rights to the funds
deposited with the Trustee; and

. after the 91st day following the deposit, none of our other creditors
would have claims on the funds deposited with the Trustee under
bankruptcy or similar laws affecting creditors' rights. However, if a
court rules that the funds deposited with the Trustee remain our
property, then the Trustee and holders of the senior subordinated debt
securities would have some rights over the funds deposited with the
Trustee as secured creditors.

For the senior subordinated debt, we may not discharge our obligations in
the ways described in this section if something may prevent us from making
payments of principal, interest and premium, if any, on the securities from
the date we make the deposit establishing the trust fund to the 91st day after
that date.

10
<PAGE>

Modification of the Indentures

Without the consent of the holders of debt securities we and the Trustee may
enter into supplemental indentures to:

. secure any debt securities;

. document that a successor corporation has assumed our obligations;

. add covenants for the protection of the holders of debt securities;

. cure any ambiguity or correct any inconsistency in the indentures;

. establish the forms or terms of debt securities of any series; or

. document the appointment of a successor trustee. (Senior and senior
subordinated debt indentures, Section 8.1).

If the holders of a majority in principal amount of all affected series
consent, we and the Trustee may add to, change or eliminate any of the
provisions of an indenture or modify in any way the rights of holders of the
affected series. However, each affected holder must consent before we can:

. extend the stated maturity of the principal;

. reduce the amount of the principal;

. reduce the rate or extend the time of payment of interest;

. reduce any amount payable on redemption;

. impair the right to sue to enforce any payment on any debt security when
due; or

. reduce the percentage in principal amount required to consent to any of
the foregoing actions. (Senior and senior subordinated debt indentures,
Section 8.2).

We may not amend the senior subordinated debt indenture to alter the
subordination of any outstanding senior subordinated debt securities without
the consent of each holder of Senior Indebtedness then outstanding that would
be negatively affected. (Senior subordinated debt indenture, Section 8.6).

Governing Law

The laws of the State of California will govern the indentures and the
securities. (Senior and Senior subordinated debt indentures, Section 11.8).

Concerning the Trustee

Under the Trust Indenture Act of 1939, if a default occurs under the debt
securities issued under the senior debt indenture or the debt securities issued
under the senior subordinated debt indenture, The Chase Manhattan Bank would be
required to resign as Trustee with respect to one of the indentures within 90
days after such default unless we cure the default or the default is duly
waived or otherwise eliminated.

The Chase Manhattan Bank has loaned money to us and provided other services
to us in the past and may do so in the future as a part of its regular
business.

11
<PAGE>

PLAN OF DISTRIBUTION

We may sell our debt securities through agents, underwriters, dealers or
directly to purchasers. Agents who we designate may solicit offers to purchase
our debt securities.

. We will name any agent involved in offering or selling our debt
securities, and any commissions that we will pay to the agent, in our
prospectus supplement.

. Unless we indicate otherwise in our prospectus supplement, our agents
will act on a reasonable efforts basis for the period of their
appointment.

. Our agents may be deemed to be underwriters under the Securities Act of
any of our debt securities that they offer or sell.

We may use an underwriter or underwriters in the offer or sale of our debt
securities.

. If we use an underwriter or underwriters, we will execute an underwriting
agreement with the underwriter or underwriters at the time that we reach
an agreement for the sale of our debt securities.

. We will include the names of the specific managing underwriter or
underwriters, as well as any other underwriters, and the terms of the
transactions, including the compensation the underwriters and dealers
will receive, in our prospectus supplement.

. The underwriters will use our prospectus supplement to sell our debt
securities.

We may use a dealer to sell our debt securities.

. If we use a dealer, we, as principal, will sell our debt securities to
the dealer.

. The dealer will then sell our debt securities to the public at varying
prices that the dealer will determine at the time it sells our debt
securities.

. We will include the name of the dealer and the terms of our transactions
with the dealer in our prospectus supplement.

We may indemnify agents, underwriters and dealers against some liabilities.
Agents, underwriters and dealers may be our customers, perform services for us
or do business with us in other ways.

We may authorize our agents and underwriters to solicit offers by certain
institutions to purchase our debt securities at the public offering price under
delayed delivery contracts.

. If we use delayed delivery contracts, we will disclose that we are using
them in the prospectus supplement and will tell you when we will demand
payment and delivery of the debt securities under the delayed delivery
contracts.

. These delayed delivery contracts will be subject only to the conditions
that we set forth in the prospectus supplement.

. We will indicate in our prospectus supplement the commission that
underwriters and agents soliciting purchases of our debt securities under
delayed contracts will be entitled to receive.

In order to facilitate the offering of the debt securities, the underwriters
may engage in transactions that stabilize, maintain or otherwise affect their
price.

. They may overallot in connection with the offering, creating a short
position in the debt securities for their own accounts.

. To cover overallotments or to stabilize the price of the debt securities,
they may bid for, and purchase, the debt securities in the open market.

12
<PAGE>

. In any offering of the debt securities through a syndicate of
underwriters, the underwriting syndicate may reclaim selling concessions
allowed to an underwriter or a dealer for distributing the debt
securities in the offering if the syndicate repurchases previously
distributed debt securities in transactions to cover syndicate short
positions, in stabilization transactions or otherwise.

Any of these activities may stabilize or maintain the market price of the debt
securities above independent market levels. The underwriters are not required
to engage in these activities, and may end any of these activities at any
time.

One or more firms may offer and sell debt securities in connection with a
remarketing upon their purchase.

. The firms may include Morgan Stanley & Co., Incorporated, Goldman, Sachs
& Co., Credit Suisse First Boston Corporation and Charles Schwab & Co.,
Inc., acting as principals for their own accounts or as our agents.

. We will include the name of any remarketing firm, the terms of its
agreement with us and its compensation in the prospectus supplement.

. We may indemnify remarketing firms against some liabilities. Remarketing
firms may be our customers, perform services for us or do business with
us in other ways.

Any underwriter, agent or dealer we use in the initial offering of debt
securities will not confirm sales to accounts over which it exercises
discretionary authority without the prior specific written approval of its
customer.

Charles Schwab & Co., Inc. is a wholly owned subsidiary of The Charles
Schwab Corporation. If Charles Schwab & Co., Inc. participates in the
distribution of our securities, we will conduct the offering in accordance
with Section 2720 of the NASD Conduct Rules.

LEGAL OPINIONS

The legality of the debt securities will be passed upon for us by Howard,
Rice, Nemerovski, Canady, Falk & Rabkin, A Professional Corporation. Certain
directors of that firm beneficially own an aggregate of less than 1% of our
common stock.

Certain legal matters relating to the debt securities will be passed upon
on behalf of dealers, underwriters or agents by Davis Polk & Wardwell.

EXPERTS

The consolidated financial statements and the related consolidated
financial statement schedules incorporated by reference in this prospectus
from our annual report on Form 10-K for the year ended December 31, 1998, have
been audited by Deloitte & Touche llp, independent auditors, as stated in
their reports, which are incorporated herein by reference, and have been so
incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.

13
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14. Other Expenses of Issuance and Distribution.

The following table sets forth the various expenses in connection with the
issuance and distribution of the securities being registered hereby, other than
underwriting discounts and commissions. All amounts are estimated except the
Securities and Exchange Commission registration fee and National Association of
Securities Dealers, Inc. filing fee.

<TABLE>
<S> <C>
SEC registration fee............................................... $ 69,500
NASD fee........................................................... 25,500
Printing and engraving expenses.................................... 25,000
Accountants' fees and expenses..................................... 10,000
Legal fees and expenses............................................ 120,000
Fees and expenses for qualification under state securities laws.... 5,000
Trustee's fees and expenses........................................ 1,000
Rating agency fees................................................. 100,000
Miscellaneous...................................................... 4,000
--------
Total............................................................ $360,000
========
</TABLE>

Item 15. Indemnification of Directors and Officers.

Our Third Restated Certificate of Incorporation provides that, pursuant to
Delaware law, our directors will not be personally liable to us or our
stockholders for monetary damages for breach of fiduciary duty as a director,
with specific exceptions. The exceptions relate to (i) any breach of a
director's duty of loyalty to us or our stockholders, (ii) acts or omissions
that are not in good faith or that involve intentional misconduct or a knowing
violation of law, (iii) approval by a director of certain unlawful dividend
payments, distributions or stock redemptions or repurchases or (iv) engaging in
a transaction from which a director derives an improper personal benefit. Among
the types of breaches for which directors will not be liable are those
resulting from negligent or grossly negligent behavior.

Our Second Restated Bylaws also provide for the indemnification of both our
directors and officers within the limitations permitted by Delaware law.
Section 145 of the Delaware General Corporation Law authorizes indemnification
of directors and officers for actions taken in good faith and in a manner such
person reasonably believed to be in, or not opposed to, our best interests.
This provision is sufficiently broad to permit indemnification under certain
circumstances for liabilities (and for reimbursement of expenses incurred)
arising under the Securities Act of 1933, as amended. We have entered into
indemnity agreements with our directors that contain provisions that are in
some respects broader than the specified indemnification provisions contained
in Delaware law.

We have obtained directors' and officers' liability and corporate
reimbursement insurance covering all of our officers and directors and the
officers and directors of our subsidiaries and providing for the reimbursement
of amounts paid by us or our subsidiaries to directors and officers pursuant to
indemnification arrangements, subject to certain deductibles and coinsurance
provisions.

II-1
<PAGE>

Item 16. Exhibits and Financial Statement Schedule.

<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
1.1 Form of Underwriting Agreement*

1.2 Form of Distribution Agreement*

4.1 Form of Senior Debt Indenture filed on July 1, 1993 as Exhibit 4.1 to
the Company's Registration Statement on Form S-3 (registration number
33-65342) and incorporated herein by reference.

4.2 Form of Senior Subordinated Debt Indenture filed on July 1, 1993 as
Exhibit 4.2 to the Company's Registration Statement on Form S-3
(registration number 33-65342) and incorporated herein by reference.

4.3 Form of Supplemental Indenture to Senior Debt Indenture.

4.4 Form of Supplemental Indenture to Senior Subordinated Debt Indenture.

5.1 Opinion of Howard, Rice, Nemerovski, Canady, Falk & Rabkin, A
Professional Corporation.

12.1 Computation of Consolidated Ratio of Earnings to Fixed Charges.

23.1 Independent Auditors' Consent.

23.2 Consent of Howard, Rice, Nemerovski, Canady, Falk & Rabkin, A
Professional Corporation (included in Exhibit 5.1).

25.1 Form T-1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of The Chase Manhattan Bank.*
</TABLE>
- --------

* Previously filed.

Item 17. Undertakings. The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:

(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;

(ii) to reflect in the prospectus any facts or events arising after the
effective date of this Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
Registration Statement; notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement; and

(iii) to include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in the Registration Statement;

provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this Registration
Statement.

II-2
<PAGE>

(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.

(4) That, for purposes of determining any liability under the Securities Act
of 1933, each filing of the Registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of any employee benefit plan's annual report pursuant
to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated
by reference in the Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

(5) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

II-3
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of San Francisco, State of California on the 23rd
day of June, 1999.

THE CHARLES SCHWAB CORPORATION

By: /s/ STEVEN L. SCHEID
-----------------------------------
Steven L. Scheid
Executive Vice President
and Chief Financial Officer

Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to Registration Statement has been signed below by the following persons
on behalf of the Company in the capacities indicated on June 23, 1999.

<TABLE>
<CAPTION>
Signature Title
--------- -----

<C> <S>
Chairman, Co-Chief Executive
Officer and Director (principal
* executive officer)
- ------------------------------------------
Charles R. Schwab

Co-Chief Executive Officer,
President, Chief Operating
Officer and Director (principal
* executive officer)
- ------------------------------------------
David S. Pottruck

Executive Vice President and
Chief Financial Officer
(principal financial and
/s/ STEVEN L. SCHEID accounting officer)
- ------------------------------------------
Steven L. Scheid

* Director
- ------------------------------------------
Nancy H. Bechtle

* Director
- ------------------------------------------
C. Preston Butcher

* Director
- ------------------------------------------
Donald G. Fisher
</TABLE>

II-4
<PAGE>

<TABLE>
<CAPTION>
Signature Title
--------- -----

<C> <S>
Director
- ------------------------------------------
Anthony M. Frank

* Director
- ------------------------------------------
Frank C. Herringer

* Director
- ------------------------------------------
Stephen T. McLin

* Director
- ------------------------------------------
Mark A. Pulido

* Director
- ------------------------------------------
Arun Sarin

* Director
- ------------------------------------------
George P. Shultz

* Director
- ------------------------------------------
Roger O. Walther
</TABLE>

*By: /s/ STEVEN L. SCHEID
----------------------------------

Steven L. Scheid

Attorney-in-fact

II-5
<PAGE>

Index to Exhibits

<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
1.1 Form of Underwriting Agreement*

1.2 Form of Distribution Agreement*

4.1 Form of Senior Debt Indenture filed on July 1, 1993 as Exhibit 4.1 to
the Company's Registration Statement on Form S-3 (registration number
33-65342) and incorporated herein by reference.

4.4 Form of Supplemental Indenture to Senior Subordinated Debt Indenture.

5.1 Opinion of Howard, Rice, Nemerovski, Canady, Falk & Rabkin, A
Professional Corporation.

12.1 Computation of Consolidated Ratio of Earnings to Fixed Charges.

23.1 Independent Auditors' Consent.

23.2 Consent of Howard, Rice, Nemerovski, Canady, Falk & Rabkin, A
Professional Corporation (included in Exhibit 5.1).

25.1 Form T-1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of The Chase Manhattan Bank.*
</TABLE>
- --------

* Previously filed.

<PAGE>

EXHIBIT 4.3

THE CHARLES SCHWAB CORPORATION, ISSUER

AND

THE CHASE MANHATTAN BANK, TRUSTEE

--------------------------

FIRST SUPPLEMENTAL INDENTURE

DATED AS OF JUNE __, 1999

--------------------------

FIRST SUPPLEMENT TO THE SENIOR INDENTURE

DATED AS OF JULY 15, 1993
<PAGE>

FIRST SUPPLEMENTAL INDENTURE, dated as of June __, 1999, between THE
CHARLES SCHWAB CORPORATION, a Delaware corporation (the "Issuer"), and THE CHASE
MANHATTAN BANK (formerly known as Chemical Bank), as Trustee (the "Trustee").

W I T N E S S E T H

WHEREAS, the Company has heretofore executed and delivered to the
Trustee that certain Senior Indenture dated as of July 15, 1993 (the "Original
Indenture"); and

WHEREAS, the Company desires to amend the Original Indenture (the
"Proposed amendment") in a way that does not adversely affect the legal rights
under the Original Indenture of any Holder of the Notes (the "Holders"); and

WHEREAS, Section 8.1 of the Original Indenture provides that the Company
and the Trustee may amend the Original Indenture without the consent of any
Holder to, among other things, make any change that does not adversely affect
the rights of any Holder under the Original indenture; and

WHEREAS, the Company desires and has requested the Trustee to join with
it in the execution and delivery of this Supplemental Indenture for the purpose
of amending the original Indenture to affect the Proposed Amendment; and

WHEREAS, the execution and delivery of this Supplemental Indenture have
been duly authorized and approved by a resolution of the Issuer's Board of
Directors.

NOW, THEREFORE, in consideration of the foregoing premises, and for the
equal and proportionate benefit of all Holders of the Notes, the Original
Indenture is hereby amended, effective upon execution hereof by the Trustee as
follows:

ARTICLE ONE

SECTION 1.01. AMENDMENTS
----------

(a) Section 1.1 of the Original Indenture is hereby amended by replacing
the definition of "Issuer Order" with the following:

"Issuer Order" means a written statement, request or order of the
------------
Issuer signed in its name by the chairman or vice chairman of the Board of
Directors, the

-1-
<PAGE>

chief executive officer ("CEO") (or any co-CEO if the CEO title is allocated to
more than one person), the president, the chief financial officer, the executive
vice president-finance or the treasurer of the Issuer."

(b) Section 1.1 of the Original Indenture is hereby amended by replacing
the definition of "Officer's Certificate" with the following:

"Officer's Certificate" means a certificate signed by the chairman or
---------------------
vice chairman of the Board of Directors, the CEO (or any co-CEO if the CEO title
is allocated to more than one person), the president, the chief financial
officer, the executive vice president-finance or the treasurer of the Issuer and
delivered to the Trustee. Each such certificate shall comply with Section 314 of
the Trust Indenture Act of 1939 and include the statements provided for in
Section 11.5."

"Person" means any individual, corporation, partnership, joint venture,
------
association, limited liability company, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof."

(d) Section 2.5 of the Original Indenture is hereby amended by replacing
the first sentence thereof with the following:

"The Securities shall be signed on behalf of the Issuer by the chairman
or vice chairman of its Board of Directors or its CEO (or any co-CEO if the CEO
title is allocated to more than one person), president, chief financial officer,
executive vice president-finance or treasurer, under its corporate seal which
may, but need not, be attested."

ARTICLE TWO

MISCELLANEOUS PROVISIONS
------------------------

SECTION 2.01. Definitions.
-----------

For all purposes of this Supplemental Indenture, except as otherwise
defined or unless the context otherwise requires, capitalized terms used in this
Supplemental Indenture and defined in the Original Indenture have the meaning
specified in the Original Indenture.

SECTION 2.02. Enforceability.
--------------

Except specifically amended and supplemented by this Supplemental
Indenture, the Original Indenture shall remain in full force and effect and is
hereby ratified and confirmed.

-2-
<PAGE>

SECTION 2.03. Governing Law.
-------------

This Supplemental Indenture shall be governed by, and construed in
accordance with, the laws of the State of California but without giving effect
to applicable principles of conflicts of law to the extent that the application
of the law of another jurisdiction would be required thereby.

SECTION 2.04. No Adverse Interpretation of Other Agreements.
---------------------------------------------

This Supplemental Indenture may not be used to interpret another
indenture, loan or debt agreement of the Issuer or any of its Subsidiaries. Any
such indenture, loan or debt agreement may not be used to interpret this
Supplemental Indenture.

SECTION 2.05. Successors.
----------

All agreements of the Issuer in this Supplemental Indenture shall bind
its successors. All agreements of the Trustee in this Supplemental Indenture
shall bind its successors.

SECTION 2.06. Duplicate Originals.
-------------------

All parties may sign any number of copies of this Supplemental
Indenture. Each signed copy shall be an original, but all of them together
shall represent the same agreement.

SECTION 2.07. Severability.
------------

In case any one or more of the provisions in this Supplemental Indenture
shall be held invalid, illegal or unenforceable, in any respect for any reason,
the validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions shall not in any way be affected or
impaired thereby, it being intended that all of the provisions hereof shall be
enforceable to the full extent permitted by law.

SECTION 2.08. Execution of Supplemental Indenture.
-----------------------------------

This Supplemental Indenture is executed and shall be construed as an
indenture supplement to the Original Indenture and, as provided in the Original
Indenture, this Supplemental Indenture forms a part thereof.

-3-
<PAGE>

SECTION 2.09. Trustee.
-------

The Trustee shall not be responsible in any manner whatsoever for or in
respect of the validity or sufficiency of this Supplemental Indenture or for or
in respect of the recitals contained herein, all of which are made solely by the
Issuer.

IN WITNESS WHEREOF, the parties hereof have caused this Supplemental
Indenture to be duly executed, all as of the date first written above.

THE CHARLES SCHWAB
CORPORATION, as Issuer

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

Its:
---------------------------

THE CHASE MANHATTAN BANK, as
Trustee

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

Its:
---------------------------

-4-

<PAGE>

EXHIBIT 4.4

THE CHARLES SCHWAB CORPORATION, ISSUER

AND

THE CHASE MANHATTAN BANK, TRUSTEE

__________________________

FIRST SUPPLEMENTAL INDENTURE

DATED AS OF JUNE __, 1999

____________________________

FIRST SUPPLEMENT TO THE SENIOR SUBORDINATED INDENTURE

DATED AS OF JULY 15, 1993
<PAGE>

W I T N E S S E T H

WHEREAS, the Company has heretofore executed and delivered to the
Trustee that certain Senior Subordinated Indenture dated as of July 15, 1993
(the "Original Indenture"); and

WHEREAS, the execution and delivery of this Supplemental Indenture have
been duly authorized and approved by a resolution of the Issuer's Board of
Directors.

ARTICLE ONE

SECTION 1.01. AMENDMENTS
----------

(a) Section 1.1 of the Original Indenture is hereby amended by replacing
the definition of "Issuer Order" with the following:

"Issuer Order" means a written statement, request or order of the
------------
Issuer signed in its name by the chairman or vice chairman of the Board of
Directors, the

-1-
<PAGE>

(b) Section 1.1 of the Original Indenture is hereby amended by replacing
the definition of "Officer's Certificate" with the following:

(d) Section 2.5 of the Original Indenture is hereby amended by replacing
the first sentence thereof with the following:

ARTICLE TWO

MISCELLANEOUS PROVISIONS
------------------------

SECTION 2.01. Definitions.
-----------

SECTION 2.02. Enforceability.
--------------

Except specifically amended and supplemented by this Supplemental
Indenture, the Original Indenture shall remain in full force and effect and is
hereby ratified and confirmed.

-2-
<PAGE>

SECTION 2.03. Governing Law.
-------------

SECTION 2.04. No Adverse Interpretation of Other Agreements.
---------------------------------------------

SECTION 2.05. Successors.
----------

All agreements of the Issuer in this Supplemental Indenture shall bind
its successors. All agreements of the Trustee in this Supplemental Indenture
shall bind its successors.

SECTION 2.06. Duplicate Originals.
-------------------

All parties may sign any number of copies of this Supplemental
Indenture. Each signed copy shall be an original, but all of them together
shall represent the same agreement.

SECTION 2.07. Severability.
------------

SECTION 2.08. Execution of Supplemental Indenture.
-----------------------------------

-3-
<PAGE>

SECTION 2.09. Trustee.
-------

IN WITNESS WHEREOF, the parties hereof have caused this Supplemental
Indenture to be duly executed, all as of the date first written above.

THE CHARLES SCHWAB
CORPORATION, as Issuer

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

Its:
---------------------------

THE CHASE MANHATTAN BANK, as
Trustee

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

Its:
---------------------------

-4-

<PAGE>

EXHIBIT 5.1

Opinion of Howard, Rice, Nemerovski, Canady, Falk & Rabkin,
A Professional Corporation, as to the legality of securities being registered.

June 23, 1999

The Charles Schwab Corporation
120 Kearny Street
San Francisco, CA 94104

Ladies and Gentlemen:

You have requested our opinion as counsel for The Charles Schwab
Corporation, a Delaware corporation (the "Company"), in connection with the
registration under the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder, and the public offering by the Company, of
up to $395,000,000 of debt securities (the "Debt Securities").

We have examined the Company's Registration Statement on Form S-3 in the
form to be filed with the Securities and Exchange Commission on the date of this
opinion (the "Registration Statement"). We further have examined the Certificate
of Incorporation of the Company as certified by the Secretary of State of the
State of Delaware, the Bylaws and the minute books of the Company and the Senior
Indenture and Senior Subordinated Indenture entered into as of July 15, 1993 by
and between the Company and The Chase Manhattan Bank (formerly Chemical Bank) as
trustee (each, an "Indenture"). In addition, we have examined such corporate
records, certificates and other documents (of which we are aware) and such
questions of law as we have considered necessary or appropriate for the purposes
of this opinion.

Based on the foregoing examination, we are of the opinion that the
issuance of the Debt Securities has been duly authorized by appropriate
corporate action of the Company and when the Debt Securities have been duly
established, completed, executed, authenticated and delivered in accordance with
the relevant Indenture and sold as described in the Registration Statement, any
amendment thereto, the prospectus and any supplement thereto, the Debt
Securities will be legal, valid and binding obligations of the Company entitled
to the benefits of such Indenture.

In connection with this opinion we have assumed the following: (a) the
authenticity of original documents and the genuineness of all signatures; (b)
the conformity to the originals of all documents submitted to us as copies; (c)
the truth, accuracy and completeness of the information, representations and
warranties contained in the instruments, documents, records and certificates we
have reviewed; (d) the due authorization, execution and delivery on behalf of
the respective parties thereto of the documents referred to herein and, except
for the Debt Securities, the legal, valid and binding nature thereof with
respect to such parties; and (e) the absence of any evidence extrinsic to the
provisions of the written agreements between the parties that the parties
intended a meaning contrary to that expressed by those provisions. We have not
independently verified such assumptions.
<PAGE>

We express no opinion as to laws other than the substantive laws of the
State of California (without regard to conflicts-of-laws or choice-of-law
principles), the General Corporation Law of the State of Delaware and the
federal laws of the United States of America, in each case to the extent
applicable and not excepted from the scope of the opinions expressed above.

Our opinion that any document is legal, valid and binding is qualified
as to the effects of:

(a) bankruptcy, reorganization, fraudulent transfer or conveyance,
moratorium, insolvency or other similar laws or court decisions relating to or
affecting the rights of creditors generally;

(b) equitable principles of general applicability (including,
without limitation, concepts of materiality, reasonableness, good faith and fair
dealing, equitable subordination and the possible unavailability of specific
performance or injunctive relief), regardless of whether codified by statute
and regardless of whether enforcement is considered in a proceeding in equity or
at law;

(c) the unenforceability of any indemnity obligation imposed or
undertaken by the Company, to the extent that such obligation does not satisfy
the requirements of Section 2772 et seq. of the California Civil Code and
-- ---
judicial decisions thereunder or otherwise violate public policy;

(d) the unenforceability of provisions purporting to require the
award of attorneys' fees, expenses or costs, where such provisions do not
satisfy the requirements of Section 1717 et seq. of the California Civil Code
-- ---
and judicial decisions thereunder or otherwise violate public policy;

(e) the unenforceability, under certain circumstances, of provisions
that contain a waiver of (i) broadly or vaguely stated rights, (ii) the benefits
of statutory, regulatory or constitutional rights, unless and to the extent the
statute, regulation or constitution explicitly allows waiver, (iii) unknown
future defenses and (iv) rights to damages; and

(f) the unenforceability, under certain circumstances, of provisions
of agreements to the effect that rights or remedies are not exclusive, that
every right or remedy is cumulative and may be exercised in addition to or with
any other right or remedy, or that the election of some particular remedy or
remedies does not preclude recourse to one or another remedy.

We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name wherever it appears in the
Registration Statement, any amendment thereto, the prospectus and any supplement
thereto.

Very truly yours,

HOWARD, RICE, NEMEROVSKI, CANADY,
FALK & RABKIN
A Professional Corporation

By /s/ John E. Stoner
---------------------------------
John E. Stoner

<PAGE>

EXHIBIT 12.1

THE CHARLES SCHWAB CORPORATION

Computation of Ratio of Earnings to Fixed Charges

(Dollar amounts in thousands, unaudited)

<TABLE>
<CAPTION>
Three Months Ended
March 31, Year Ended December 31,
------------------ ---------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings before taxes on income $236,092 $112,234 $ 576,544 $ 447,247 $394,063 $277,104 $224,343
- ------------------------------------------------------------------------------------------------------------------------------------

Fixed charges
Interest expense -- customer 155,000 137,672 579,930 480,988 368,462 321,225 178,067
Interest expense -- other 18,545 17,923 71,951 65,495 57,410 35,998 20,169
Interest portion of rental expense 9,255 7,399 32,326 26,045 23,051 20,810 17,102
- ------------------------------------------------------------------------------------------------------------------------------------
Total fixed charges (A) 182,800 162,994 684,207 572,528 448,923 378,033 215,338
- ------------------------------------------------------------------------------------------------------------------------------------

Earnings before taxes on income and fixed charges (B) $418,892 $275,328 $1,260,751 $1,019,775 $842,986 $655,137 $439,681
====================================================================================================================================

Ratio of earnings to fixed charges (B) (divided by) (A)* 2.3 1.7 1.8 1.8 1.9 1.7 2.0
====================================================================================================================================

Ratio of earnings to fixed charges excluding
customer interest expense** 9.5 5.4 6.5 5.9 5.9 5.9 7.0
====================================================================================================================================
</TABLE>

* The ratio of earnings to fixed charges is calculated in a manner consistent
with SEC requirements. For such purposes, "earnings" consist of earnings
before taxes on income and fixed charges. "Fixed charges" consist of interest
expense incurred on payable to customers, borrowings and one-third of rental
expense, which is estimated to be representative of the interest factor.

** Because interest expense incurred in connection with payable to customers is
completely offset by interest revenue on related investments and margin
loans, the Company considers such interest to be an operating expense.
Accordingly, the ratio of earnings to fixed charges excluding customer
interest expense reflects the elimination of such interest expense as a fixed
charge.

<PAGE>

EXHIBIT 23.1

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in this Registration Statement of
The Charles Schwab Corporation on Form S-3 of our reports dated February 22,
1999, appearing in and incorporated by reference in the Annual Report on Form
10-K of The Charles Schwab Corporation for the year ended December 31, 1998, and
to the reference to us under the heading "Experts" in the Prospectus, which is
part of this Registration Statement.

San Francisco, California
April 29, 1999