UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
and
IN THE CIRCUIT COURT OF THE CITY OF ST. LOUIS, STATE OF MISSOURI
NOTICE OF PENDENCY OF CLASS ACTIONS AND PROPOSED SETTLEMENT, MOTION FOR
ATTORNEYS’ FEES AND SETTLEMENT FAIRNESS HEARINGS
If you are a current or former Edward Jones customer who purchased, otherwise acquired, or held shares, units or like interests in any mutual funds offered by
American Mutual Funds, Federated Funds, Putnam Funds, Goldman Sachs Funds, Hartford Funds, Lord Abbett Funds, or Van Kampen Funds (the “Preferred
Funds”) during the period from January 1, 1999 through and including December 31, 2004 (the “Class Period”), through Edward D. Jones & Co., L.P., acting
as broker or with Edward Jones & Co., L.P., listed as broker/dealer of record, then you could receive a benefit from a class action settlement.
This is not a solicitation from a lawyer.
T The settlement provides Credit Vouchers with a face value of $72,500,000 for current Edward Jones customers and $55,000,000 in cash for former Edward
Jones customers. The settlement also provides that the Defendants will pay all reasonable costs and expenses of class notice and settlement administration.
T The settlement resolves three sets of class action lawsuits over whether Edward Jones and certain of its partners violated their fiduciary duties and/or federal
securities laws by receiving “Revenue Sharing” payments from certain mutual fund families and/or by making materially false and misleading statements and
failing to disclose material facts regarding the alleged Revenue Sharing payments during the Class Period. Revenue Sharing, as referred to herein, is the
receipt of payments by Edward Jones from the Preferred Fund’s Investment Adviser or Distributor.
T Your legal rights are affected whether you act or do not act. Read this notice carefully.
YOUR LEGAL RIGHTS AND OPTIONS IN THIS SETTLEMENT:
EXCLUDE YOURSELF BY June 11, 2007 Get no payment. This is the only option that allows you to ever be part of any other lawsuit
against Defendants’ Released Persons about the Released Plaintiffs’ Claims.
OBJECT BY June 11, 2007 Write to the courts about why you do not like the settlement.
GO TO HEARINGS ON July 20, 2007, at 10:30 a.m. CDT Ask to speak in court about the settlement.
AND ON July 20, 2007, at 2:00 p.m. CDT
DO NOTHING Automatically get payment of your per capita share from the Settlement Fund. You will give up
any Released Plaintiffs’ Claims against Defendants’ Released Persons.
T These rights and options - and the deadlines to exercise them - are explained in this notice.
T The courts in charge of these cases still have to decide whether to approve the settlement. Benefits will be given if the courts approve the settlement and
after any appeals of the settlement are resolved. Please be patient.
SUMMARY NOTICE
Statement of Plaintiff Recovery Pursuant to the settlement described receipt and retention of the Revenue Sharing payments; (d) whether
herein, Credit Vouchers with a face value of $72,500,000, and Edward Jones should pay the Revenue Sharing payments over to the
$55,000,000, plus interest, in cash will be made available. Defendants Class; and (e) the extent and amount of any damages claimed by the
will also pay for the costs of class notice and settlement administration. Class. Defendants deny that they are liable to the Plaintiffs or any other
Based on information provided by Edward Jones, Plaintiffs estimate that Class Member, and they deny that Plaintiffs or the other Class Members
the Class consists of approximately 5.1 million Class Members (3.7 mil- have suffered any damages.
lion current Edward Jones customers and 1.4 million former Edward Jones
customers). Plaintiffs estimate that the recovery per Class Member under Statement of Attorneys’ Fees and Costs Sought Plaintiffs’ Lead Counsel
the settlement is approximately $19.86 per current customer in Credit are moving the Spahn Court for a fee award from the cash portion of the
Vouchers and $17.99 per former customer in cash. The actual recovery settlement in an amount not to exceed 30% of the total face value of the
per Class Member may vary depending on the actual number of current cash and non-cash portions of the settlement, and accrued interest, and
and former customers who participate in the settlement. See the Plan of for reimbursement of expenses incurred in connection with the prosecution
Allocation beginning on page 5 for more information on the allocation of of the Class Actions in the approximate amount of $712,000. The
the Settlement Fund. requested fees and expenses would amount to an average of $7.62
per Class Member in total for fees and expenses. However, payment
Statement of Potential Outcome of Case The parties disagree on both of attorneys’ fees and expenses from the Cash Component will be subor-
liability and the relief sought by the Class. The primary issues on which dinated to payments from the Cash Component to former customers. See
the parties disagree include: (a) whether the Class may assert claims for question 16 under “Basic Information” for further information concerning
breach of fiduciary duty against Edward Jones under Missouri law and attorneys’ fees and expenses. In this type of litigation, it is customary for
whether such claims are preempted or precluded by federal law; (b) counsel to be awarded a percentage of the common fund recovery as
whether Edward Jones breached its fiduciary duties by receiving and their attorneys’ fees, and to be reimbursed out of the common fund for
retaining Revenue Sharing payments from the Preferred Funds; (c) their expenses.
whether Edward Jones violated securities laws by failing to disclose its
1
Further Information included in this settlement are: (a) Enriquez v. Edward D. Jones & Co.,
Further information regarding the Class Actions and this Notice may be et al., Civ. No. 042-00126 Cir. Ct., St. Louis, Missouri (the “Enriquez”
obtained by calling 1 (866) 735-2324 or by contacting any of Plaintiffs’ action); (b) Bressler v. Edward D. Jones & Co., et al., Civ. No. BC309500,
Lead Counsel: Kirk B. Hulett, Esq., Hulett Harper Stewart LLP, 550 West C Superior Court of California (the “Bressler” action) and Potter v. Edward
Street, Suite 1600, San Diego, CA 92101; Matthew J. Zevin, Esq., D. Jones & Co., Case No. BC310059 (the “Potter” action) (the Enriquez,
Stanley, Mandel & Iola, P.C., 550 West C Street, Suite 1600, San Diego, Bressler and Potter actions are collectively referred to as the “State
CA 92101; Robert D. Blitz, Esq., Blitz, Bardgett & Deutsch, LC, 120 Class Actions”); and (c) Spahn v. Edward D. Jones & Co., et al., Civ. No.
South Central Avenue, Suite 750, St. Louis, MO 63105; and Wayne T. 4:04cv00086, United States District Court, Missouri District Court (the
Lamprey, Esq., Goodin, MacBride, Squeri, Ritchie & Day, LLP, 505 “Spahn Action” or “Federal Class Action”).
Sansome Street, Suite 900, San Francisco, CA 94111 for the State
Class Actions and Jerome Congress, Esq., Milberg Weiss & Bershad LLP, The State Class Actions generally claim that Defendants received
One Pennsylvania Plaza, New York, NY 10119-0165; Richard A. Acocelli, continuing periodic Revenue Sharing payments from the Preferred Fund
Esq., Weiss & Lurie, 551 Fifth Avenue, Suite 1600, New York, NY 10176; families in exchange for holding their clients’ investments in the mutual
and Jules Brody, Esq., Stull, Stull & Brody, 6 East 45th Street, New York, funds offered by those fund families, and that this constituted breaches
NY 10017 for the Federal Class Action. of fiduciary duty.
Reasons for the Settlement For Plaintiffs, the principal reason for the The Federal Class Action generally alleges that Defendants violated
settlement is the benefit to be provided to the Class now. This benefit federal securities laws by receiving secret Revenue Sharing payments in
must be compared to the risk that no recovery or a substantially smaller exchange for selling the Preferred Funds to their clients and misleading
recovery might be achieved if the Actions were adjudicated. the Class about the Revenue Sharing payments when Class Members
purchased shares in the Preferred Funds.
For Defendants, who deny all allegations of wrongdoing or liability
whatsoever, the principal reason for the settlement is to eliminate the The Defendants deny the allegations in the Actions and deny
expense, risks, and uncertain outcome of the litigation. any wrongdoing.
BASIC INFORMATION 3. Why is this a class action? In a class action, one or more people
1. Why did I get this notice package? You may be a Class Member called class representatives sue on behalf of people who have similar
because you are a current or former Edward Jones customer who claims. All these people are a Class or Class Members. One court
purchased or held shares through Edward Jones in any of the Preferred resolves the issues for all Class Members, except for those who exclude
Funds during the Class Period. themselves from the Class.
The courts directed that this notice be sent to Class Members because 4. Why is there a settlement? The courts did not decide in favor of
they have a right to know about a proposed settlement in the Class Plaintiffs or Defendants. Instead, both sides agreed to a settlement after
Actions, and about all of their options, before the courts decide whether multiple discussions among the parties and after several mediation
to approve the settlement. If the courts approve the settlement, and after sessions. This notice does not imply that there has been or would be any
any objections and appeals are resolved, Edward Jones will provide the finding of violation of the law or that recovery could be had if the Class
benefits that the settlement allows. Actions were not settled.
This package explains the lawsuits, the settlement, Class Members’ legal WHO IS IN THE SETTLEMENT
rights, what benefits are available, who is eligible for them, and how to 5. How do I know if I am part of the settlement? Everyone who fits
get them. this description is a Purchaser Settlement Class Member in the Spahn
Action: any person or entity, who purchased or otherwise acquired
The court in charge of the Federal Class Action is the United States shares, units or like interests or who held shares, units or like interests
District Court for the Eastern District of Missouri. United States District in any Preferred Fund, between January 1, 1999, and December 31,
Judge Henry E. Autry is presiding over the Federal Class Action and the 2004, inclusive, through Edward D. Jones & Co., L.P., acting as broker or
claims of the Purchaser Settlement Class. with Edward Jones & Co., L.P., listed as broker/dealer of record.
The court in charge of the Enriquez Action is the Circuit Court of the City Everyone who fits this description is a Holder Settlement Class Member
of St. Louis, Missouri. Circuit Court Judge Margaret M. Neill is presiding in the Enriquez Action: any person or entity, who held shares, units or
over the Enriquez Action and the claims of the Holder Settlement Class. like interests or who held shares, units or like interests in any Preferred
The people who sued are called Plaintiffs, and the companies and the Fund, between January 1, 1999, and December 31, 2004, inclusive,
persons they sued, Edward D. Jones & Co., L.P., The Jones Financial through Edward D. Jones & Co., L.P., acting as broker or with Edward
Companies, L.L.L.P., EDJ Holding Company, Inc., John W. Bachmann, Jones & Co., L.P., listed as broker/dealer of record.
Douglas E. Hill, Michael R. Holmes, Richie L. Malone, Steven Novik,
Darryl L. Pope, and Robert Virgil, Jr., are called the Defendants. 6. Are there exceptions to being included? Excluded from the Class
are Defendants in the Actions, members of the immediate families
2. What are these lawsuits about? The lawsuits (the “Class Actions”) (parents, spouses, siblings, and children) of each of the individual
2
defendants, all directors, officers, limited and general partners, matured or not matured, Class-wide or individual in nature, including
subsidiaries and affiliates of the corporate defendants, any person, firm, claims (a) that have been asserted in the Federal and State Class
trust, corporation or entity in which any Defendant during the Class Actions by the Class Members or any of them against any of the
Period had a controlling interest or which is related to or affiliated with Defendants’ Released Persons, or (b) that could have been asserted
any of the Defendants, and the legal representatives, heirs, successors in the Federal and State Class Actions or any other forum by the Class
in interest or assigns of any such excluded party. Members or any of them against any of the Defendants’ Released
Persons, that arise out of, are based upon, or relate in any way to the
7. What if I am still not sure if I am included? If you are still not sure allegations, transactions, facts, matters or occurrences, representations
whether you are included, you can call 1 (866) 735-2324, visit or omissions involved, set forth, or referred to in the Federal and State
www.edwardjones.com or write to Lead Plaintiffs’ Counsel for additional Class Actions or otherwise are based upon or relate in any way to
information or clarification. Revenue Sharing payments received by Defendants, fees and commissions
received by Defendants from the Preferred Funds for mutual fund trades,
THE SETTLEMENT BENEFITS — WHAT YOU GET shelf-space arrangements, directed brokerage transactions, shareholder
8. What does the settlement provide? Defendants have paid into escrow accounting fees and mutual fund trades from the Preferred Funds which
$55,000,000 in cash, which has been earning interest for the benefit of were purchased through or held at Edward Jones or held directly at the
the Class since November 20, 2006, and will provide $72,500,000 in fund company with Edward Jones listed as broker/dealer of record.
Credit Vouchers. Defendants will also pay the costs necessary for providing
this notice to Class Members and for administering the settlement. “Defendants’ Released Persons” means each and all of the Defendants
and their respective past or present directors, officers, employees,
In return for the $127,500,000 face value of cash and Credit Vouchers, attorneys, general partners, limited partners, subordinated partners,
Class Members give up legal claims against Defendants and Defendants’ subordinated limited partners, principals, affiliates, agents, shareholders,
Released Persons. See question 11 below. personal or legal representatives, predecessors, successors, parents, sub-
sidiaries, divisions, joint ventures, assigns or any entity in which any
9. How much will my benefit be? Your share of the fund will depend on Defendant has a controlling interest.
the number of Class Members who participate in the Settlement. See the
Plan of Allocation beginning on page 5 for more information. The “Effective Date” will occur when orders entered by the courts
approving the Settlement become final and not subject to appeal.
10. When would I get my benefit? To decide whether to approve the
settlement, the Spahn Court will hold a hearing on July 20, 2007, at If you remain a member of the Class, all of the courts’ orders will apply
10:30 a.m. CDT and the Enriquez Court will hold a hearing on July 20, to you and legally bind you. The settlement does not affect your rights to
2007, at 2:00 p.m. CDT. If the courts approve the settlement, there may participate in the $75 million Fair Fund established by Edward Jones as
be appeals after that. Resolving any appeals could take time, perhaps part of an agreement with the SEC, the NASD and other regulators to
more than a year. Please be patient. resolve related investigations concerning Revenue Sharing payments.
11. What am I giving up to get a benefit or stay in the Class? Unless EXCLUDING YOURSELF FROM THE SETTLEMENT
you exclude yourself, you are staying in the Class, and that means that, If you do not want any benefits from this settlement, but you want to
upon the “Effective Date,” you will release all “Released Plaintiffs’ Claims” keep any right you may have to sue or continue to sue Defendants and
(as defined below) against the “Defendants’ Released Persons” (as the other Defendants’ Released Persons on your own about the Released
defined below). Plaintiffs’ Claims, then you must take certain steps to get out. This is
called excluding yourself — or is sometimes referred to as “opting out” of
“Released Plaintiffs’ Claims” shall collectively mean any and all claims, the class. Defendants may withdraw from and terminate the Settlement
debts, demands, rights, or causes of action or liabilities (including, but if more than a certain number of Class Members exclude themselves
not limited to, any claims for damages, interest, attorneys’ fees, expert or from the Class.
consulting fees, and any other costs, expenses or liability), whether
based on federal, state, local, statutory or common law or any other law, 12. How do I get out of the proposed settlement? To exclude yourself
rule or regulation (including, but not limited to, claims for violation of from the Class, you must send a signed letter by mail stating that you
the federal securities laws, state securities laws, negligence, gross “request exclusion from the Class in the Edward Jones Revenue Sharing
negligence, indemnification, breach of duty of care and/or breach Litigation Settlement.” Your letter must include your name, address,
of duty of loyalty, fraud, misrepresentation, breach of fiduciary duty, telephone number, and your signature. You must mail your exclusion
negligent misrepresentation, unfair competition, insider trading, request postmarked no later than June 11, 2007 to:
professional negligence, malpractice, mismanagement, corporate waste,
or breach of contract), related to Revenue Sharing payments received by Edward Jones Revenue Sharing Litigation EXCLUSIONS
Defendants from the Preferred Funds, fees and commissions received by P.O. Box 66995
Defendants from the Preferred Funds for shelf-space arrangements, St. Louis, MO 63166-6995
directed brokerage transactions, shareholder accounting fees and mutual
fund trades generally, whether fixed or contingent, accrued or unaccrued, You cannot exclude yourself by telephone or by e-mail. If you ask to be
known or unknown, liquidated or not liquidated, at law or in equity, excluded, you will not get any settlement benefits, and you cannot object
3
to the settlement. You will not be legally bound by anything that happens OBJECTING TO THE SETTLEMENT
in this lawsuit, and you may be able to sue (or continue to sue) You can tell the courts that you do not agree with the settlement or some
Defendants and the other Defendants’ Released Persons in the future. part of it.
13. If I do not exclude myself, can I sue Defendants and the other 17. How do I tell the courts that I do not like the proposed settlement?
Defendants’ Released Persons for the same thing later? No. Unless If you are a Class Member you can object to the Settlement or any of
you exclude yourself, you give up any rights to sue Defendants and the its terms, the proposed Plan of Allocation and/or the application by
other Defendants’ Released Persons for any and all Released Plaintiffs’ Plaintiffs’ Lead Counsel for an award of fees and expenses.
Claims. If you have a pending lawsuit, speak to your lawyer in that case
immediately. You must exclude yourself from this Class to continue your To object, you must send a signed letter stating that you object to the
own lawsuit. The exclusion deadline is June 11, 2007. proposed settlement in the Edward Jones Revenue Sharing Litigation.
Be sure to include your name, address, telephone number, and your
14. If I exclude myself, can I get any benefits from the proposed signature and state the reasons why you object to the Settlement. Your
settlement? No. If you exclude yourself, you will not receive any objection must be filed with the courts and served on all the following
proceeds from this settlement. But, you may exercise any right you may counsel on or before June 11, 2007:
have to sue, continue to sue, or be part of a different lawsuit against
Defendants and the other Defendants’ Released Persons. FEDERAL COURT
Clerk of the Court
THE LAWYERS REPRESENTING YOU United States District Court for the Eastern District of Missouri
15. Do I have a lawyer in this case? The courts ordered that the law Thomas F. Eagleton United States Courthouse
111 South Tenth Street
firms of Hulett Harper Stewart LLP, Stanley, Mandel & Iola, L.L.P., Blitz St. Louis, MO 63102-1116
Bardgett & Deutsch LC, and Goodin, MacBride, Squeri, Ritchie & Day,
LLP will represent the Holder Settlement Class in the State Class Actions
and the law firms of Milberg Weiss & Bershad LLP, Weiss & Lurie, and STATE COURT
Clerk of the Court
Stull, Stull & Brody will represent the Purchaser Settlement Class in the St. Louis City Circuit Court
Federal Class Action. These lawyers are called Plaintiffs’ Lead Counsel. Civil Courts Building
You will not be separately charged for these lawyers. 10 North Tucker Boulevard
St. Louis, MO 63101-2044
16. How will the lawyers be paid? Plaintiffs’ Lead Counsel are moving
the Spahn Court for a fee award from the cash portion of the settlement PLAINTIFFS’ COUNSEL IN THE STATE CLASS ACTIONS
in an amount not to exceed 30% of the total face value of the cash Matthew J. Zevin, Esq.
and Credit Voucher portions of the settlement, and accrued interest, and Stanley, Mandel & Iola, L.L.P.
550 West C Street, Suite 1600
for reimbursement of expenses incurred in connection with the prosecu-
San Diego, CA 92101
tion of the Class Actions in the approximate amount of $712,000, plus
interest at the same rate as earned by the Settlement Fund.
PLAINTIFFS’ COUNSEL IN THE FEDERAL CLASS ACTION
Plaintiffs’ Lead Counsel, without further notice to the Class, may Richard A. Acocelli, Esq.
Weiss & Lurie
subsequently apply to the Spahn Court for fees and expenses incurred in 551 Fifth Avenue, Suite 1600
connection with administering and distributing the settlement proceeds New York, NY 10176
to the members of the Class and any proceedings subsequent to the
Settlement Fairness Hearings. Defendants have agreed to pay all reasonable
DEFENDANTS’ COUNSEL
costs and expenses of class notice and settlement administration (but
David M. Harris, Esq.
not attorneys’ fees) incurred in connection with the administration and Greensfelder, Hemker & Gale, P.C.
distribution of the Settlement Fund proceeds to Class Members. 10 S. Broadway, Suite 2000
St. Louis, MO 63102
Payment of attorneys’ fees and expenses from the Cash Component
will be subordinated to payments from the Cash Component to former
customers. It is anticipated that the initial distribution to the former You do not need to go to the Settlement Fairness Hearings to have your
customers will use approximately $26.3 million, leaving approximately written objection considered by the Courts. At the Settlement Fairness
$28.7 million plus interest available for payment of attorneys’ fees and Hearings, any Class Member who has not previously submitted a request
expenses (or about 22.5% of the total face value of the cash and Credit for exclusion from the Class and who has complied with the procedures
Voucher benefits achieved). If payments to former customers are set out in response to this question (17) for filing with the Court and
returned or go uncashed, then the unclaimed cash will be used first to providing to the counsel for Plaintiffs and Defendants a statement of an
pay any unpaid balance of the attorneys’ fees and expense awards, and intention to appear at the Settlement Fairness Hearings may also appear
if there is still unclaimed cash, it will be distributed to charity. See Plan and be heard, to the extent allowed by the Courts. Any such objector may
of Allocation beginning on page 5 for more information. appear in person or arrange, at that objector’s expense, for a lawyer to
represent the objector at the Hearings.
4
Class Members who intend to object to the Settlement, the Plan of your per capita allocation from the Settlement Fund. You will be precluded
Allocation, and/or Plaintiffs’ Lead Counsel’s application for an award from starting a lawsuit, continuing with a lawsuit, or being part of any
of attorneys’ fees and expenses and desire to present evidence at the other lawsuit against Defendants and the other Defendants’ Released
Settlement Fairness Hearings must include in their written objections the Persons about the Released Plaintiffs’ Claims in this case, ever again.
identity of any witnesses they may call to testify and exhibits they intend
to introduce into evidence at the Settlement Fairness Hearings. You GETTING MORE INFORMATION
cannot speak at the hearings if you excluded yourself from the Class or 21. Are there more details about the proposed settlement? This notice
if you have not provided written notice of your intention to speak at summarizes the proposed settlement. More details are in a Stipulation of
the Settlement Fairness Hearings by the deadline identified, and in Settlement dated December 11, 2006 (the “Stipulation”). You can get a
accordance with the procedures described herein. copy of the Stipulation by writing to Edward Jones Revenue Sharing
Litigation Settlement, P.O. Box 66995, St. Louis, MO 63166-6995,
18. What is the difference between objecting and excluding? visiting the website at www.edwardjones.com or writing to any of
Objecting is simply telling the courts that you do not like something Plaintiffs’ Lead Counsel at their addresses listed on page 4.
about the proposed settlement. You can object only if you stay in the
Class. Excluding yourself is telling the courts that you do not want to be 22. How do I get more information? The pleadings, the Stipulation, the
part of the Class. If you exclude yourself, you have no basis to object orders entered by the Courts, and other papers filed in the Class Actions
because the case no longer affects you. may be inspected at the Office of the Clerk of the United States District
Court for the Eastern District of Missouri, Thomas F. Eagleton United
THE COURTS’ SETTLEMENT FAIRNESS HEARINGS States Courthouse, 111 South Tenth Street, St. Louis, MO 63102-1116
The Spahn Court will hold a hearing to decide whether to approve the for the Federal Class Action and at the Office of the Clerk of the Court,
proposed settlement in the Federal Class Action. The Enriquez Court will St. Louis City Circuit Court, Civil Courts Building, 10 North Tucker Boule-
hold a hearing to decide whether to approve the proposed settlement in vard, St. Louis, MO 63101-2044 for the State Class Actions, during regu-
the Enriquez Action. You may attend and you may ask to speak, but you lar business hours. You may also contact any of Plaintiffs’ Lead Counsel.
do not have to.
PLAN OF ALLOCATION FOR SETTLEMENT PROCEEDS AMONG
19. When and where will the courts decide whether to approve the CLASS MEMBERS
proposed settlement? The Spahn Court will hold a Settlement Fairness The parties submit this Plan of Allocation to distribute the settlement
Hearing at 10:30 a.m. CDT on the 20th day of July 2007, at the proceeds to Class Members who are Authorized Customers. If both
United States District Court for the Eastern District of Missouri, Thomas courts approve the proposed settlement, Authorized Customers will be
F. Eagleton United States Courthouse, 111 South Tenth Street, St. Louis, eligible to receive a settlement benefit on the terms described herein.
MO 63102-1116.
The cut-off date for determining whether a Class Member is
The Enriquez Court will hold a Settlement Fairness Hearing at 2:00 p.m. considered an Authorized Current Customer or an Authorized Former
CDT on the 20th day of July 2007, at the St. Louis City Circuit Court, Civil Customer is August 27, 2006.
Courts Building, 10 North Tucker Boulevard, St. Louis, MO 63101-2044.
A. Credit Voucher Program
At these hearings, the courts will consider whether the settlement is fair, 1. The Individual Credit Voucher Total
reasonable and adequate and whether the proposed Plan of Allocation Edward Jones will make available to the Authorized Current Customers,
for the proceeds of the Settlement is fair and reasonable. In addition, $72,500,000 worth of Credit Vouchers toward reducing future fees and
the Spahn Court will consider the application of Plaintiffs’ Lead Counsel commissions as more fully described below in Section A.3. The total
for attorneys’ fees and reimbursement of expenses. Both courts will take amount of the Credit Voucher distributed to each Authorized Current
into consideration any written objections filed in accordance with the Customer (the “Individual Credit Voucher Total”) shall be determined by
instructions in question 17. Both courts also may listen to people dividing $72,500,000 by the total number of Authorized Current
who have properly indicated, within the deadline identified above, an Customers. $72,500,000 represents the maximum redemption value
intention to speak at the hearing; but decisions regarding the conduct of the Credit Vouchers that will be made available to Class Members.
of the hearings will be made by the courts. See question 17 for more
information about speaking at the hearings. After the hearings, the 2. Term and Expiration
courts will decide whether to approve the settlement. We do not know (a) Authorized Current Customers shall be entitled to use their Credit
how long these decisions will take. Voucher in accordance with the following schedule:
You should be aware that the courts may change the dates and times T one-third (1/3) of the Individual Credit Voucher Total may be used
of the hearings. Thus, if you want to come to the hearings, you should during the first 12 months after the Credit Vouchers are distributed
check with Plaintiffs’ Lead Counsel before coming to be sure that the (“Redemption Period One”);
dates and/or times have not changed. T one-third (1/3) of the Individual Credit Voucher Total may be
used during the 12 months after Redemption Period One
IF YOU DO NOTHING (“Redemption Period Two”);
20. What happens if I do nothing at all? If you do nothing, you will get
T one-third (1/3) of the Individual Credit Voucher Total may be used during
5
the 12 months after Redemption Period Two (“Redemption Period Three”). of the cash payment that each Authorized Former Customer will receive,
the per capita amount of the Individual Credit Voucher Total will be dis-
(b) An Authorized Current Customer may not apply or use more than
counted in order to arrive at an approximately equivalent cash distribu-
one-third (1/3) of his/her Individual Credit Voucher Total during any one
tion amount.
Redemption Period. Each Authorized Current Customer’s rights with
respect to the portion of the Credit Voucher allocated and assigned to
3. Distribution
each Redemption Period shall lapse and expire at the conclusion of
(a) Authorized Former Customers
each such Redemption Period.
Within ninety (90) days of the Effective Date of the Settlement, distributions
shall be mailed to the last known address of the Former Authorized Customers.
3. Application of Credit Vouchers
(a) Each Authorized Current Customer will be entitled to use the Credit
(b) Attorneys’ Fees and Expenses
Voucher to offset the following fees, charges and commissions otherwise
Any court-awarded attorneys’ fees and expenses awarded will be
charged to customers by Edward Jones: (i) equity, bond and fixed income
paid to Class counsel from the cash remaining after the amount to be
trades (specifically excluding mutual funds and insurance products) with a
distributed to Authorized Former Customers has been determined and
gross commission equal to or greater than twenty dollars ($20.00); (ii)
deposited in a separate account.
annual (or other periodic) fees charged in connection with opening or
maintaining any Traditional, SEP or Roth Individual Retirement Account (c) Cy Pres and Cash Balance in Settlement Fund
(“IRA”); (iii) annual (or other periodic) fees charged in connection with If there are any remaining funds after payment of all distributions, costs,
opening or maintaining CFO accounts; and (iv) transfer-out fees. and expenses and after the expiration period for all outstanding checks,
then the remaining cash will be donated to the Edward D. Jones &
(b) The available portion of the Individual Credit Voucher Total for a
Company Foundation, which will distribute the remaining cash in
particular Redemption Period may only be applied against a single fee,
accordance with its regular charitable operations.
charge or commission. To the extent the portion of the Individual Credit
Voucher Total for a particular Redemption Period is not exhausted, it
SPECIAL NOTICE TO SECURITIES BROKERS AND OTHER NOMINEES
shall be forfeited.
If you purchased or otherwise acquired shares, units or like interests
4. Issuance and Redemption of Credit Vouchers or held shares, units or like interests in any Preferred Fund (American
Prior to each Redemption Period, Edward Jones will mail Authorized Mutual Funds, Federated Funds, Putnam Funds, Goldman Sachs Funds,
Current Customers a distinct redemption number and the amount Hartford Funds, Lord Abbett Funds, or Van Kampen Funds) between January
of the Individual Credit Voucher Total available in the upcoming 1, 1999 and December 31, 2004, inclusive, through Edward D. Jones &
Redemption Period. ., .,
Co., L.P acting as broker or with Edward Jones & Co., L.P listed as bro-
ker/dealer of record, for the beneficial interest of a person or organization
If the Credit Voucher is being used to offset fees and/or commissions other than yourself, within seven (7) days of your receipt of this Notice,
charged in connection with an equity, bond or fixed income trade as please either (a) provide to the Settlement Administrator the name and last
described in Section A.3(a)(i) above, the Authorized Current Customer known address of each person or organization for whom or which you pur-
must advise his or her financial advisor and provide the redemption chased or otherwise acquired Preferred Funds during such time period or
number prior to or at the time the purchase or sale order is placed. (b) request additional copies of this Notice, which will be provided to you
To apply the Credit Voucher against the fees or charges described in free of charge, and within seven (7) days mail the Notice directly to the
Section A.3(a)(ii-iv) above, the Authorized Current Customer must advise beneficial owners of those Preferred Funds. If you choose to follow alterna-
his or her financial advisor and provide the redemption number within tive procedure (b), please send a statement to the Settlement Administrator
thirty (30) days before or after such fee or charge is or has been confirming that the mailing was made as directed. You are entitled to
assessed, so long as the applicable Credit Voucher has not expired. reimbursement from Edward Jones of your reasonable expenses actually
incurred in connection with the foregoing, including reimbursement of
5. Non-Transferable postage expense and the cost of ascertaining the names and addresses of
The Credit Vouchers are non-transferable and may only be used by the beneficial owners. Those expenses will be paid upon request and submission
Authorized Current Customer to whom they are issued. of appropriate supporting documentation. All communications concerning
the foregoing should be addressed to the Settlement Administrator:
B. Distribution of the Cash Component
1. The cash component of the Settlement ($55,000,000, plus interest) Edward Jones Revenue Sharing Litigation Settlement
will be used first to pay Authorized Former Customers. The remaining Settlement Administrator
cash component will be used to pay court-awarded attorneys’ fees and P.O. Box 66995
expenses. Authorized Current Customers are not eligible to receive cash St. Louis, MO 63166-6995
in the Settlement.
Dated: St. Louis, Missouri
2. Initial Allocation to Authorized Former Customers
December 27, 2006
Each Authorized Former Customer shall receive a payment from the Cash
Component of the Settlement which will be correlated to the present
By Orders of the Courts
value of the per capita amount to be distributed to each Authorized
CLERKS OF THE COURTS
Current Customer in Credit Vouchers. In order to determine the amount
6