The Charles Schwab Corporation and Subsidiaries - Page 9

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          Petitioner maintained offices in all but one of the markets where           
          Rose’s customers were located.  Petitioner, to some extent,                 
          provided more services to its customers than did Rose.                      
          Corresponding to the level of services, the fees charged to                 
          Rose’s customers were 8-13 percent less than those charged to               
          petitioner’s customers.  Generally, Rose’s customers were more              
          active traders than petitioner’s customers.  There were some                
          additional, but less significant, differences in the customer               
          bases, and petitioner believed that it generally offered more to            
          its customers than Rose offered to its customers.  Petitioner’s             
          analysis focused on the value of Rose’s customer accounts and the           
          income that could be derived from them.  On the basis of the                
          analysis performed by Mr. Dodds and others, petitioner concluded            
          that customers acquired from Rose would likely assimilate and be            
          retained as customers of petitioner.                                        
               During June 1990, Deloitte & Touche (Deloitte) submitted an            
          appraisal of the fair market values of the Rose assets to                   
          petitioner.  Petitioner used the Deloitte appraisal to allocate             
          its MADSP to the Rose assets.  On the basis of the Deloitte                 






               6(...continued)                                                        
          appears that each party has merged the Rose’s institutional                 
          customers into another category.  Essentially, the parties’                 
          positions are based on three major categories of customer                   
          accounts for petitioner and four major categories for respondent.           




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