ÿþ<!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd"> <html xmlns="http://www.w3.org/1999/xhtml"> <head> <title>Schwab Yield Plus Settlement</title> <meta name="keywords" content=""> <link rel="stylesheet" rev="stylesheet" href="schwab.css" type="text/css" /> </head> <body> <table width="754px" align="center" cellpadding="0" cellspacing="0"> <tr> <td class="staticbody_cel"> <!-- Heading --> <table class="masthead_table"> <tr><td class="masthead_cel">Schwab Yield Plus Settlement</td></tr> </table> <!--#topmenu_table--> <table class="topmenu_table"> <tr> <td class="topmenu_cel"> <table class="topmenu_list"> <tr> <td class="topmenu_current"><a href="caschwab.html">Home</a></td> <td><a href="summary.html">Case Summary</a></td> <td><a href="casedocs.html">Case Documents</a></td> <td><a href="deadlines.html">Important Deadlines</a></td> <td><a href="faq.html">FAQs</a></td> <td><a href="http://www.schwabyieldplussettlement.com/schwab/schwab.html">Federal Settlement</a></td> </tr> </table> </td> </tr> </table> <!-- Main Body --> <table style="border-width: thin; border-style: solid;" bgcolor="#ededed"> <tr> <td> <blockquote> <div class="content_section"> </p> <br /> <h2>FAQs</h2> <b><a name="top"></a></b> <br /> &nbsp;1.&nbsp;&nbsp;<a href="#1">What is the Charles Schwab Corp Securities Litigation California Settlement?</a><br /> &nbsp;2.&nbsp;&nbsp;<a href="#2">Why did I receive multiple Notice and Claim packets? Can I participate in the Federal and California Settlements? </a><br /> &nbsp;3.&nbsp;&nbsp;<a href="#3">What does the Settlement provide?</a><br /> &nbsp;4.&nbsp;&nbsp;<a href="#4">How do I know if I am a part of the Settlement?</a><br /> &nbsp;5.&nbsp;&nbsp;<a href="#5">How do I participate in the Settlement? </a><br /> &nbsp;6.&nbsp;&nbsp;<a href="#6">I have not yet received my copy of the Notice and a Record of my Fund Transactions. </a><br /> &nbsp;7.&nbsp;&nbsp;<a href="#7">How much will my payment be? </a><br /> &nbsp;8.&nbsp;&nbsp;<a href="#8">I don't agree with what is on my record of transactions. How do I change what is provided there?</a><br /> &nbsp;9.&nbsp;&nbsp;<a href="#9">What are the exceptions to being included?</a><br /> 10. <a href="#10">How do I exclude myself from the Settlement?</a><br /> 11. <a href="#11">How do I tell the Court that I do not like the Settlement?</a><br /> 12. <a href="#12">What if I do nothing?</a><br /> 13. <a href="#13">Do I have a lawyer in this case?</a><br /> 14. <a href="#14">How do I get more information about the Settlement?</a><br /> 15. <a href="#15">My check was made out to my IRA. How can I have the check reissued directly to me??</a><br /> 16. <a href="#16">The owner of the IRA account is deceased and/or has the account is closed. How can I have the check reissued to me as the named beneficiary of the account?</a><br /> 17. <a href="#17">Does changing the payee from my IRA to me, personally, create any tax issues?</a><br /> 18. <a href="#18">My check was made out to a 401K account. Can I have the check reissued directly to me/to my trust account?</a><br /> </p> </div> <div class="content_section copy_indents faq_answer"> <div class="spacer_m"></div> <hr style="width: 650px" /> <h1>Answers</h1> <table class="copy"> <tr> <td valign="top" width="20px"><b><a name="1">&nbsp;1.</a></b></td> <td><b>What is the Charles Schwab Corporation Corporation Securities Litigation California Settlement?</b><br /> <i>On March 30, 2010, Judge William Alsup granted plaintiff's motion for summary judgment finding that the failure to hold a shareholder vote to change the limit on the percent of assets that the Fund could hold in private-label mortgage-backed securities violated the Investment Company Act. Prior to September 1, 2006, the Fund applied a 25% limit on these assets. Plaintiff alleges that defendants increased this limit in September 2006 without holding a required shareholder vote on the change and that the excess investments in private-label mortgage-backed securities caused a substantial portion of the Fund's losses. <br> <br> The Court ordered the parties to address two possible measures of restitution, which is the only remedy available. First, the Court asked what the performance of the Fund would be if the investments in mortgage-backed securities over the 25% limit had been invested in cash ("Cash Option"). Second, the Court asked how the Fund would have performed if the amount over 25% had been reallocated to other assets in the Fund ("Reallocation Option"). Plaintiff's experts calculated the value of restitution to the Class under the Cash Option to be $52,203,379 and $33,014,433 under the Reallocation Option. The average of these two options, $42,608,906, represents an 82.1 percent recovery. Defendants' experts calculated values at $12 million and $5 million, respectively, under these options. It is difficult to predict how this battle of experts would have been resolved by the Court. If the Court chose to accept defendants' methodology, the settlement far exceeds the recovery under such a scenario. Settlement avoids the uncertainty of a bench trial, the costs and risks associated with continued litigation, including the danger of no recovery or a protracted delay on appeal, and provides a substantial benefit to the Class now. </i> <br /><a href="#top">Top</a><br />&nbsp; </td> </tr> <tr> <td valign="top" width="20px"> <b><a name="2">&nbsp;2.</a></b></td> <td><b>Why did I receive multiple Notice and Claim packets? Can I participate in the Federal and California Settlements?</b><br /> <i>There are two proposed settlements in In re Charles Schwab Corporation Securities Litigation, the Federal and the California settlements. If you are eligible to participate in both matters, you will receive separate Notice and Record of Fund Transactions pertaining to each of the Federal and California settlements. This means you are eligible to participate in both settlements. In addition, there are two eligible Schwab YieldPlus Funds. You will receive a Notice and Record of Fund Transactions for each account with eligible transactions invested in the Schwab YieldPlus Investor Fund and/or the Schwab YieldPlus Select Fund, for each settlement (the Federal and the California) in which you qualify. </i> <br /> <a href="#top">Top</a><br />&nbsp;</td> </tr> <tr> <td valign="top" width="20px"><b><a name="3">&nbsp;3.</a></td> <td> <b>What does the Settlement provide?</b><br /> <i>Defendants have agreed to pay $35 million in cash. The balance of this fund after payment of Court-approved attorneys' fees and expenses and the costs of settlement administration, including the costs of printing and mailing the Notice Packets (the "Net Settlement Fund"), will be divided among all eligible Class Members based on the formula set out in the Court-approved Notice. </i> <br /> <a href="#top">Top</a><br /> <br /> </td> </tr> <tr> <td valign="top" width="20px"><b><a name="4">&nbsp;4.</a></b></td> <td><b>How do I know if I am a part of the Settlement?</b><br /> <i>The Settlement Class includes: All Persons who were a California Resident and held shares of the Schwab YieldPlus Fund on September 1, 2006. </i> <br /> <a href="#top">Top</a><br /> <br /> </td> </tr> <tr> <td valign="top" width="20px"><b><a name="5">&nbsp;5.</a></b></td> <td> <b>How do I participate in the Settlement?</b><br /> <i>To qualify for payment, you must be a member of the California Class that is referred to in the Notice. You do not need to submit a claim or a request for payment. Your holdings and transactions that qualify for a share of the settlement have been obtained from Schwab's transaction records and a list of those holdings and transactions were enclosed with the Notice. If you do not agree with the Record of Transactions and you wish to submit a Transaction Dispute form, your dispute form must be postmarked on or before August 9, 2010. </i> <br /> <a href="#top">Top</a><br /> <br /> </td> </tr> <tr> <td valign="top" width="20px"><b><a name="6">&nbsp;6.</a></b></td> <td><b>I have not yet received my copy of the Notice and a Record of my Fund Transactions.</b><br /> <i>On June 25, 2010, the Settlement Administrator mailed Notice and Record of Fund Transactions to eligible Class members. If you believe that you are a member of either the Federal and/or the California Class and have not received a printed copy of the Notice and a Record of your Fund Transactions, please contact the Settlement Administrator. </i> <br /> <a href="#top">Top</a><br /> <br /> </td> </tr> <tr> <td valign="top" width="20px"><b><a name="7">&nbsp;7.</a></b></td> <td> <b>How much will my payment be?</b><br /> <i>Your share of the Net Settlement Fund will depend on the number of Class Members, how many Fund shares you held on the relevant date and when you acquired and sold Fund shares. The Record of Fund Transactions and Estimate of Settlement Payment, which were enclosed with the Notice, lists the Fund shares you held on September 1, 2006, as well as when you sold these shares (if you did), and estimates your total recovery from the settlement. If you believe the Record of Fund Transactions is incorrect or incomplete, you must submit a Transaction Dispute form no later than August 9, 2010. Your recognized losses will be calculated using the Court-approved formula, as provided on pages 3 and 4 of the Notice.</i> <br /> <a href="#top">Top</a><br /> <br /></td> </tr> <tr> <td valign="top" width="20px"><b><a name="8">&nbsp;8.</a></b></td> <td> <b>I don't agree with what is on my Record of Fund Transactions. How do I change what is provided there?</b><br /> <i> If you believe the Record of Fund Transactions mailed to you is incorrect or incomplete, please submit the Transaction Dispute Form along with supporting documentation to the Claims Administrator for review. </i> <br /> <a href="#top">Top</a><br /><br /> </td> </tr> <tr> <td valign="top" width="20px"><b><a name="9">&nbsp;9.</a></b></td> <td> <b>What are the exceptions to being included?</b><br /> <i> You are not a Member of the California Class if you are a Defendant, a member of the immediate family of one of the Individual Defendants, a current or former director or officer of Defendants, or a legal representative, heir, successor, or assign of any excluded party. You are also excluded from the California Class if you timely and validly requested exclusion, have arbitrated to final judgment any of the Released Claims, have previously settled any of the Released Claims, or the Settling Parties have agreed to allow you to be excluded from the Class. <br> <br> If you held Schwab YieldPlus Fund shares at any time other than September 1, 2006, that alone does not make you a Class Member. You are a Class Member only if you were a California resident on September 1, 2006 and held Schwab YieldPlus Fund shares on September 1, 2006. </i> <br /> <a href="#top">Top</a><br /><br /> </td> </tr> <tr> <td valign="top" width="20px"><b><a name="10">10.</a></b></td> <td> <b>How do I exclude myself from the Settlement?</b><br /> <i>The deadline to exclude yourself, December 28, 2009, has already passed. </i> <br /><a href="#top">Top</a><br /><br /> </td> </tr> <tr> <td valign="top" width="20px"><b><a name="11">11.</a></b></td> <td> <b>How do I tell the Court that I do not like the Settlement?</b><br /> <i>If you are a Class Member, you can object to the settlement if you do not like any part of it, including the request for attorneys' fees. You can state the reasons why you think the Court should not approve it. The Court will consider your views. To object, you must send a letter saying that you object to the California Class settlement in In re Charles Schwab Corporation Securities Litigation, Case No. C 08-01510 WHA. Be sure to include your name, address, telephone number, your signature, the number and type of Schwab YieldPlus Fund shares you held on September 1, 2006, and the reasons you object. Any objection must be mailed or delivered such that it is received by each of the following no later than August 24, 2010: <br> <br> <div align="center">Clerk of the Court<br> UNITED STATES DISTRICT COURT <br> NORTHERN DISTRICT OF CALIFORNIA<br> United States Courthouse 450 Golden Gate Avenue<br> San Francisco, CA 94102</div> <br> <br> <table cellspacing="2" cellpadding="2" border="0"> <tr> <td>Counsel for Lead Plaintiff: </td> <td>&nbsp;&nbsp;&nbsp;&nbsp;</td> <td>&nbsp;&nbsp;&nbsp;&nbsp;</td> <td>Counsel for Defendants: </td> </tr> <tr> <td>Steve W. Berman </td> <td>&nbsp;&nbsp;&nbsp;&nbsp;</td> <td>&nbsp;&nbsp;&nbsp;&nbsp;</td> <td>Darryl P. Rains </td> </tr> <tr> <td>HAGENS BERMAN SOBOL & SHAPIRO LLP </td> <td>&nbsp;&nbsp;&nbsp;&nbsp;</td> <td>&nbsp;&nbsp;&nbsp;&nbsp;</td> <td>Morrison & Foerster LLP </td> </tr> <tr> <td>1918 Eighth Avenue, Suite 3300</td> <td>&nbsp;&nbsp;&nbsp;&nbsp;</td> <td>&nbsp;&nbsp;&nbsp;&nbsp;</td> <td>755 Page Mill Road </td> </tr> <tr> <td>Seattle, WA 98101 </td> <td>&nbsp;&nbsp;&nbsp;&nbsp;</td> <td>&nbsp;&nbsp;&nbsp;&nbsp;</td> <td>Palo Alto, CA 94304 </td> </tr> </table> </i> <br /><a href="#top">Top</a><br /><br /> </td> </tr> <tr> <td valign="top" width="20px"><b><a name="12">12.</a></b></td> <td> <b>What if I do nothing?</b><br /> <i>If you do nothing, and if certain conditions that are listed in a publicly-filed Stipulation of Settlement between the Lead Plaintiff and the Defendants are met, the Settlement Administrator will calculate your share of the settlement and send you a check for that amount, and you won't be able to start a lawsuit of any kind, including an arbitration, continue with a lawsuit of any kind, including an arbitration, or be part of any other lawsuit or arbitration against the Defendants about the Released Claims, which are described in the Stipulation of Settlement. <br> <br> <strong>PLEASE DO NOT TELEPHONE THE COURT REGARDING THIS NOTICE.</strong> </i> <br /><a href="#top">Top</a><br /><br /> </td> </tr> <tr> <td valign="top" width="20px"><b><a name="13">13.</a></b></td> <td> <b>Do I have Lawyers in this case?</b><br /> <i>The Court appointed Hagens Berman to represent you and other Class Members. These lawyers are called Lead Counsel. You will not be charged for these lawyers. If you want to be represented by your own lawyer, you may hire one at your own expense. <br> <br> <strong>PLEASE DO NOT TELEPHONE THE COURT REGARDING THIS NOTICE.</strong> </i> <br /><a href="#top">Top</a><br /><br /> </td> </tr> <tr> <td valign="top" width="20px"><b><a name="14">14.</a></b></td> <td> <b>How do I get more Information about the Settlement?</b><br /> <i>You can contact the Settlement Administrator by phone at 1-888-955-2703, by email at <a href="mailto:classact@gilardi.com">classact@gilardi.com</a>, or visit the website at <a href="http://www.gilardi.com">www.gilardi.com</a>. <br> <br> <strong>Please do not call the Court or the Clerk of the Court for additional information about the settlement. </strong> </i> <br /><a href="#top">Top</a><br /><br /> </td> </tr> <!-- New Line --> <tr> <td valign="top" width="20px"><b><a name="15">15.</a></b></td> <td> <b>My check was made out to my IRA. How can I have the check reissued directly to me?</b><br /> <i> If the check you received was made out to your IRA and is over $200, you must fill out the <br /><a href="pdf/v1_CASCHWAB_IRACheckReissue_Web_081111.pdf">IRA Check Reissue Request Election Form</a> mail it to: <br /> <br /> <center> <i>In re Charles Schwab Corp. Securities Litigation</i><br /> c/o Gilardi & Co. LLC Settlement Administrator<br /> P.O. Box 8040<br /> San Rafael, CA 94912-8040<br /> </center> <br /> Please note that changing the payee from your IRA to you, personally, may create tax consequences (see question 17, below). </i> <br /> <a href="#top">Top</a><br /><br /> </td> </tr> <!-- New Line --> <tr> <td valign="top" width="20px"><b><a name="16">16.</a></b></td> <td> <b>The owner of the IRA account is deceased and/or has the account is closed. How can I have the check reissued to me as the named beneficiary of the account?</b><br /> <i> If you are the surviving beneficiary of the IRA account and are requesting a reissue of the distribution you must provide appropriate documentation (i.e. death certificate, Letters Testamentary, Power of Attorney, etc.) to demonstrate your status as beneficial owner of the distribution. Please fill out the IRA Check Reissue Request Election Form and mail it to the address listed above in Question 15. </i> <br /> <a href="#top">Top</a><br /><br /> </td> </tr> <!-- New Line --> <tr> <td valign="top" width="20px"><b><a name="17">17.</a></b></td> <td> <b>Does changing the payee from my IRA to me, personally, create any tax issues?</b><br /> <i> Although we are not tax advisors, you should know that changing the payee from an IRA to yourself triggers a 10% Federal income tax withholding requirement on checks over $200. You can instruct us not to withhold 10%, however, that information may be provided to the IRS if required. Please fill out the IRA Check Reissue Request Election Form and mail it to the address listed above in Question 15. You should check with your own tax advisor to determine the tax consequences of your distribution and/or withholding election. </i> <br /> <a href="#top">Top</a><br /><br /> </td> </tr> <!-- New Line --> <tr> <td valign="top" width="20px"><b><a name="18">18.</a></b></td> <td> <b>My check was made out to a 401K account. Can I have the check reissued directly to me/to my trust account?</b><br /> <i> Checks originally made out to employee plan accounts or 401K accounts can only be reissued to another eligible retirement account such as an IRA, Roth IRA, new employee plan or 401K, etc. We cannot reissue your check to you directly or to any non-retirement account. </i> <br /> <a href="#top">Top</a><br /><br /> </td> </tr> </table> <br /> <hr style="width: 650px" /> <br /> <br /> </div> </blockquote> </td> </tr> </table> <!-- Footer --> <div class="footer">Copyright &copy; 2010&nbsp; Gilardi & Co. LLC.</div> </td> </tr> </table> </body> </html>