Pricing Supplement Dated May 21, 1998
(To Prospectus dated November 1, 1996, and Prospectus Supplement dated November
7, 1996)
The Charles Schwab Corporation
Medium-Term Notes, Series A (Fixed Rate)
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Trade Date: May 21, 1998 Original Issue Date: May 27, 1998
Principal Amount: $5,000,000 Net Proceeds to Issuer: $4,970,000
Issue Price: 100% Interest Payable: March 1, September 1,
Agent's Discount or Commission: .600% and at maturity
Interest Rate: 6.42% Agent's Capacity: X Principal
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Maturity Date May 27, 2005 Agent
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Form: X Book-Entry
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Certificated
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Redemption: X The Notes cannot be redeemed prior to maturity
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The Notes may be redeemed prior to maturity
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Initial Redemption Date:
Initial Redemption Price:
Annual Redemption Price Reduction:
Repayment: X The Notes cannot be repaid prior to maturity
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The Notes can be repaid prior to maturity at the option of
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the holder of the note
Repayment Date:
Repayment Price:
Discount Note: Yes X No
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Total Amount of OID:
Yield to Maturity:
Initial Accrual Period:
Ranking: X Senior Senior Subordinated
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The second paragraph under the caption "Certain United States Federal Income Tax
Consequences" in the Company's Prospectus Supplement dated November 7, 1996 is
hereby amended in its entirety to read as follows:
As used herein, the term "Holder" means the beneficial holder of a Note (a)
that is for United States federal income tax purposes (i) a citizen or
resident of the United States, (ii) a corporation, partnership or other
entity created or organized in or under the laws of the United States or of
any political subdivision thereof, (iii) an estate the income of which is
subject to United States federal income taxation regardless of its source,
or (iv) any trust if (A) a United States court is able to exercise primary
supervision over the administration of the trust and (B) one or more United
States fiduciaries have the authority to control all substantial decisions
of the trust; or (b) whose income from such Note is treated as effectively
connected with such owner's conduct of the United States trade or business.
The term Holder also includes certain former citizens and certain former
long-term residents of the United States whose interest and gain on the
Notes will be subject to United States federal income taxation.
The second paragraph under the caption "Sale, Exchange or Retirement of the
Notes" in the Company's Prospectus Supplement dated November 7, 1996 is hereby
amended in its entirety to read as follows:
Subject to the discussion relating to Short-Term Notes above, gain or loss
realized on the sale, exchange or retirement of a Note will be capital gain
or loss. For this purpose, Holders of Amortizing Notes acquired at a cost
less than par will recognize some amount of capital gain upon the receipt
of each principal payment, the same as though they had sold a proportionate
amount of the related Amortizing Note. As a general rule, gains realized by
certain noncorporate Holders from the sale, exchange or redemption of a
Note, or upon the receipt of a principal payment on an Amortizing Note
acquired at a cost less than par, may be taxable at lower maximum rates
than ordinary income if such Holder has held the Note for more than one
year, and may be taxable at even lower maximum rates if such Holder has
held the Note for more than 18 months. The distinction between capital gain
or loss and ordinary income or loss is also relevant for purposes of, among
other things, limitations on the deductibility of capital losses.
Morgan Stanley & Co.