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="schwab.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/caschwab/caschwab.html">California 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 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 Corp. Securities Litigation Settlement?</b><br /> <i>This case was brought as a class action alleging that Defendants made false and misleading statements and omissions in the registration statements and prospectus issued by the YieldPlus Fund during the period between May 31, 2006, and March 17, 2008, about the investment profile and objectives of the YieldPlus Fund. The Lead Plaintiffs allege that Defendants violated federal and state law in registering, marketing and selling the Fund as a stable bond fund which had "minimal" risk of a fluctuating share price. Lead Plaintiffs allege that the Fund was not "stable" and "safe," because it was comprised of mortgage-backed securities and corporate finance bonds making the Fund riskier than represented, and eventually the true risks presented by the assets held by the Fund were revealed, resulting in losses to Fund investors. Defendants deny that they did anything wrong and that the Lead Plaintiffs or anyone else may recover alleged damages from any Defendant. </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 $200,000,000 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 this Notice (the "Net Settlement Fund",) will be divided among all eligible Class Members. <br> <br> You are encouraged to read the detailed Notice to determine if you are eligible for a recovery in this case. </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 Federal Classes include those who acquired Schwab YieldPlus Fund shares between May 31, 2006, (November 15, 2006, for the Section 11 Class) and March 17, 2008. <br /> <br /> A very small number of Schwab YieldPlus Fund investors Schwab originally identified as possible members of the Classes in this litigation could not be located for purposes of sending the Court-approved Notice and have, consequently, been excluded from the Classes by the Court. The 701 investors who fall into this category will not receive any benefits under the settlements, are not bound by the settlements and, if they wish, may pursue an action against Schwab in their own names. If you believe you fall into this category, you may contact the Settlement Administrator at 1-888-955-2703. <br /></i> <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>If you are a member of the Class, you do not need to submit a claim or a request for payment. Your transactions that qualify for a share of the settlement have been obtained from Schwab's transaction records and a list of those transactions and your estimated recovery was mailed with your Notice packet. If the Court approves the Settlement, your check will be mailed to you. </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 and how many Fund shares Class Members acquired during the relevant period and when you acquired and sold Fund shares. The Record of Fund Transactions during the relevant time period and Estimate of Settlement Payment lists the Fund shares you acquired and sold, and estimates your total recovery from the settlement. If you believe the Record of Fund Transactions is incorrect or incomplete, please contact the Settlement Administrator. <br> <br> Your share will be calculated as follows: <br> <br> Pursuant to Section 11 of the Securities Act, for shares purchased November 15, 2006, through March 17, 2008, the alleged damages are the difference between the Net Asset Value ("NAV") on the date of purchase and the NAV on the date of sale, if the shares were disposed of in the market prior to March 17, 2008. If shares were held until March 17, 2008, the amount per share is the difference between the NAV on the date of purchase and the $7.96, which is the NAV for both the Investor Fund and the Select Fund as of that date. If the shares were sold after the close of trading on March 17, 2008, the amounts are the lesser of (a) the difference between the purchase NAV and the sale NAV; or (b) the difference between the purchase NAV and $7.96. <br> <br> Pursuant to Section 12 of the Securities Act, recovery is calculated as follows: For shares purchased May 31, 2006, through March 17, 2008, and still held as of June 1, 2008, amounts are the NAV on date of purchase, plus interest earned at the Federal Treasury bill rate through June 1, 2008, less any income received through June 1, 2008, less the NAV on June 2, 2008 which was $6.32 for the Investor and $6.31 for the Select Fund. If shares were sold prior to June 1, 2008, amounts are calculated as the difference between the NAV on date of purchase and the NAV on date of sale, plus interest earned at the Federal Treasury bill rate through the date of sale, minus any income received from the date of purchase through the date of sale. For any shares disposed of after June 1, 2008, the amounts are calculated the same way as for those shares retained as of that date. <br> <br> The amount received will be the greater of A or B above. In the event that Recognized Losses exceed the Net Settlement Fund, settlement distributions from the Net Settlement Fund will be awarded on a pro-rata basis. <br> <br> The date of purchase or sale is the "contract" or "trade" date as distinguished from the "settlement" date. <br> <br> For Class Members who held Schwab YieldPlus shares at the beginning of the Class Period or made multiple purchases or sales during the Class Period, the first-in, first-out ("FIFO") method will be applied to such holdings, purchases and sales for purposes of calculating a settlement payment from the Net Settlement Fund. Under the FIFO method, sales of shares during the Class Period will be matched, in chronological order, first against shares held at the beginning of the Class Period. The remaining sales of shares during the Class Period will then be matched, in chronological order, against shares acquired during the Class Period. <br> <br> A Class Member will be eligible to receive a distribution from the Net Settlement Fund only if a Class Member had a net loss, after all profits from transactions in Schwab YieldPlus shares during the Class Period are subtracted from all losses. </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 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 a Federal 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, or if you timely met the requirements for opting out of a Federal Class. You are also excluded from the Federal Classes 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 Federal Classes. <br> <br> If you sold Schwab YieldPlus Fund shares between May 31, 2006, and March 17, 2008, that alone does not make you a Class Member. You are a Class Member only if you acquired Schwab YieldPlus Fund shares between May 31, 2006, and March 17, 2008 (including acquisitions through dividend reinvestments). </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 Plan of Allocation and 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 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 acquired between May 31, 2006, and March 17, 2008, 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: Court: <br> <br> <div align="center">Clerk of the Court<br> UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA<br> United States Courthouse<br> 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">&nbsp;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 Plaintiffs and the Defendants are met, the Settlement Administrator will calculate your share of the settlement and send you a check of 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. </i> <br /> <a href="#top">Top</a><br /><br /> </td> </tr> <tr> <td valign="top" width="20px"><b><a name="13">&nbsp;13.</a></b></td> <td> <b>Do I have a lawyer in this case?</b><br /> <i> The Court appointed Hagens Berman Sobol & Shapiro LLP 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. </i> <br /> <a href="#top">Top</a><br /><br /> </td> </tr> <tr> <td valign="top" width="20px"><b><a name="14">&nbsp;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> PLEASE DO NOT TELEPHONE THE COURT REGARDING THIS NOTICE. </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/v5_SCHWAB_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>