Schwab Personal Choice Retirement Account (PCRA)

Transcription

1 Schwab(Retirement Plan Services Schwab Personal Choice Retirement Account (PCRA) Add access, choice and flexibility to your retirement plan.

2 Are you looking for more investment access, choice and flexibility in your retirement plan? If so, the Schwab Personal Choice Retirement Account (PCRA) may be right for you. PCRA is a self-directed brokerage account that supplements your retirement plan and enables you to contribute retirement plan savings into a greatly expanded range of investment choices. We ve Made It Easy for You Please review this enrollment guide to learn more about PCRA and discover if it fits your retirement investment strategy. You may already be familiar with PCRA and ready to sign up now, or perhaps PCRA is new to you and you want more information. Either way, we hope this PCRA enrollment guide can assist you. PCRA Basics Questionnaire: Is PCRA Right for You? PCRA Account Details Are You Ready for PCRA?

3 PCRA Basics Through PCRA, you can have access to a greatly expanded range of investment choices beyond the core investment choices offered in your retirement plan. PCRA is very similar to a typical brokerage account, but because it is part of your retirement plan, you may only fund your PCRA by transferring money from your core retirement account. Your core retirement account refers to your retirement account through your employer. PCRA is a choice, along with the other investment choices such as mutual funds and perhaps company stock. Using the terms core retirement account and PCRA allows you to make the distinction between the money held in your core retirement account and money that is invested in the PCRA. Just as core retirement account investment choices vary from one retirement plan to another, PCRA investment choices may also vary from plan to plan. Your Retirement Plan Provider will give you further plan-specific details about how PCRA works in your retirement plan. Your employer makes the decision about these details based on both the company s fiduciary responsibility and the structure of your retirement plan. For example, some employers allow only mutual fund investments in a PCRA while others decide to allow stocks but not options. The following investments are not allowed in any retirement plans: trade-away trades, collectibles, currencies, precious metals, real estate, private placements, futures, commodities, margin accounts, index and equity options (excluding covered calls and protective puts) and short sales. With PCRA, you are in charge. Self-managing your PCRA means that you are responsible for monitoring your investments. You can plan your investment strategy by researching securities, monitoring their performance and evaluating your overall progress in reaching your investment goals. Generally, as with all investments, the investments in your PCRA are part of an important long-term commitment that deserves thoughtful consideration. Self-managing your PCRA does not mean that you are on your own. If you need assistance with your investments, Schwab is here to help. Our wide variety of resources includes: Web Use schwab.com to research, trade, monitor your investments and much more. Investment Workshops Attend a workshop near you to gain a better understanding of investment basics and add to your trading and planning skills. Phone Stay in touch with the market through our Dedicated PCRA Call Center as well as our touch-tone and voice recognition services. Publications Order printed materials about various topics from managing your mutual fund portfolio to online trading. Branches Make an appointment to meet with a Schwab representative at one of more than 400 branches nationwide. For a prospectus containing more complete information, including management fees, charges and expenses, please call the Dedicated PCRA Call Center at PCRA (7272). Please read the prospectus carefully before you invest or transfer money. 1

4 Questionnaire: Is PCRA Right for You? Please take a few moments to answer the following questions to find out if PCRA is right for you. 1. Are you looking for additional investment choices for your retirement plan? YES NO 2. Do you have a good understanding of the stock market and the general principles of investing? YES NO 3. Do you invest outside of your retirement plan? YES NO 4. Do you have the time and energy to research and monitor your investments? YES NO 5. Are you comfortable taking on the additional risk associated with making investment decisions? Are you comfortable with potential volatility associated with market fluctuations? YES NO 6. Are you willing to incur additional trading and maintenance costs for expanded investment choices? YES NO Consider Your Answers If you answered YES to all of these questions, opening a PCRA may be the right choice for you. Generally, PCRA is considered a good solution for more experienced investors who take a greater role in managing their retirement portfolios, are comfortable with taking on more risk and can tolerate fluctuations in the market. Although the core retirement account investment choices may meet the investment needs of many plan participants, more experienced investors may want more flexibility and choice this is where PCRA fits in. If you want to choose from an expanded selection of investments in your retirement plan and have the opportunity to create a more personalized retirement portfolio, PCRA may be the right choice for you. If you answered NO to any of these questions, you may want to reconsider taking on the responsibility of a PCRA. Remember that your retirement savings are critical to your future. It is important to handle them with care and to protect your retirement savings by managing your investment risk appropriately. Even if you have enough investment knowledge and experience, you must also have the time to keep up with your PCRA. PCRA offers many advantages, but it does require some time and effort to research, pick and monitor your investments. As with the core retirement account investment choices, none of the investments available in PCRA are guaranteed in any way. Neither your employer, Retirement Plan Provider nor Schwab can or will advise you on how to invest. 2

5 PCRA Account Details The graph below explains the life cycle of a PCRA. The first step is opening your PCRA. Once your account is open, to fund your account you will need to transfer money from your core retirement account or you may be able to make automatic deposits with money from your retirement plan into your PCRA. You will then want to research and choose your PCRA investments; you can begin placing trade orders to buy and sell investments within your PCRA. If you need to access the money in your PCRA, such as for a loan, withdrawal, distribution or simply to reallocate money back to your core retirement account investments, you will need to transfer money back to your core retirement account. Read on for a more in-depth explanation. Open Your PCRA Opening your PCRA is easy. To open your account, follow the steps listed below: 1. Complete and sign the following form(s): PCRA Limited Power of Attorney (LPOA) form, which gives you the authority to place trade orders in your PCRA. It is included with this PCRA enrollment guide. Any other form(s) required by your Retirement Plan Provider. 2. Return the form(s) to your Retirement Plan Provider. Your completed form(s) must be on file with your Retirement Plan Provider and with Schwab in order for your trade orders to be accepted. Your Retirement Plan Provider will forward your completed LPOA to Schwab, and your PCRA will be opened. You may not open your PCRA at a Schwab branch office. Please note, PCRA is a choice offered to you through your Retirement Plan Provider at your request. For this reason, your Retirement Plan Provider may charge you fees for opening and maintaining a PCRA. What happens after you return your form(s)? The time required to open your PCRA varies by Retirement Plan Provider. You will receive a PCRA Welcome Kit and account number in the mail. The PCRA Welcome Kit provides further details about: The life cycle of a PCRA. Schwab commissions and fees. Whom to contact with questions. Transfer Money In Once your PCRA is open, the first step is to transfer money from your core retirement account to your PCRA. This transaction funds your PCRA. Keep in mind, mutual funds available through PCRA generally require a $1,000 minimum investment. To transfer money in, follow the steps below: 1. Determine from which of your core account investments you want to move money. 2. Decide how much money you want to transfer from each fund. For example, $5,000 from the ABC Fund and $2,500 from the XYZ Fund. 3. Contact your Retirement Plan Provider and follow the transfer instructions provided. Please keep in mind that you may not make deposits or withdrawals directly to or from your PCRA. These transactions must be processed through your core retirement account. All transfers must be made in whole dollar increments. Total annual contribution limits are set by the Internal Revenue Service (IRS). Some transfer procedures and transfer timing vary by retirement plan. Please find more details in the cover letter accompanying this enrollment guide. 3

6 Fees and Commissions Because your PCRA is separate from your core retirement account and works differently, the fees associated with it may be different from fees associated with your core retirement account. Purchases and sales in your PCRA are subject to commissions and transaction fees. While Schwab is known for its competitive, low commissions, you can reduce those commission costs even more by using Schwab s automated and electronic services. Information about Schwab fees and commissions is available on schwab.com. Research and Choose Investments Once you have transferred money into your PCRA, the next step is to research and choose your PCRA investments. Of course, you can begin thinking about which investments best suit your needs prior to funding your PCRA. Schwab provides many investment resources through the web at schwab.com, over the phone, in print and in person at a local Schwab branch. Place Trade Orders After you have chosen your investments, it is time to place your trade orders. You cannot place trade orders at Schwab until your PCRA has been opened, your PCRA LPOA is on file at Schwab and your initial transfer has funded your PCRA. You may place trade orders in your PCRA as often as you like. To initiate a trade order, use one of the following channels: 1. Contact Schwab using the Internet through schwab.com. 2. Use the TeleBroker touch-tone service at or the Schwab by Phone voice recognition service at Call a Schwab representative through the Dedicated PCRA Call Center at PCRA (7272). PCRA investments may have initial and subsequent investment minimums, depending on the investments you choose. You will receive a current fund prospectus from Schwab when you make your first purchase in a mutual fund. Also keep in mind that after you place a trade order, the settlement times may vary for different investments. Many of the mutual funds offered through PCRA are available with no load or transaction fees. These funds are part of the Schwab Mutual Fund OneSource service. 1 However, other available mutual funds will impose transaction fees and/or loads for going into and/or out of the fund. Please refer to each fund s prospectus for more information before investing or transferring money. Statements and Confirmations To help you with monitoring the investment performance in your PCRA, Schwab s statements and confirmations are easy to understand. You may also receive additional information from your Retirement Plan Provider. From Schwab, you will receive: Quarterly brokerage statements detailing your PCRA activity and performance. Monthly statements, if there are transactions made in that month. Trade confirmations that are mailed whenever you place a trade order in your PCRA. Online access to the last two years of activity in your PCRA at schwab.com. Telephone access for detailed information on your PCRA investments or to speak to a Schwab representative. Transfer Money Out As your financial needs change over time, it may become necessary to transfer money out of your PCRA and back to your core retirement account. Money is transferred out of PCRA typically for a loan, withdrawal, distribution or simply to reallocate money back into the core retirement account investments. Keep the following in mind when considering a transfer from PCRA: Money in your PCRA cannot be accessed directly because it is part of your retirement plan savings. Investments in your PCRA generally must be liquidated to transfer money out. You may be able to make an in-kind transfer if you are doing an IRA rollover. 2 4

7 Are You Ready for PCRA? You ve come full-circle in the life cycle of a PCRA. If you are ready to maximize your investment choices, follow the steps for opening your PCRA and you ll be on your way to more investment access, choice and flexibility in your retirement plan. Questions? As you consider opening a PCRA, you have three resources at your fingertips. Your main information resource is your Retirement Plan Provider, who should be able to answer questions on how a PCRA works with your retirement plan, as well as general PCRA questions. You may also be able to research your own answers about services and resources available through Schwab via schwab.com. You may also call to speak with a Schwab representative at PCRA (7272) for general information about PCRA and Schwab. Sign Up! We hope this PCRA enrollment guide has given you an overview of PCRA and how it works. To sign up for a PCRA, please complete, sign and return the following form(s): PCRA Limited Power of Attorney (LPOA) form. Other form(s) required by your Retirement Plan Provider. Enroll today to add access, choice and flexibility to your retirement plan. 1 Schwab s short-term redemption fee will be charged on each redemption of funds bought through Schwab s Mutual Fund OneSource service (and certain other funds) with no transaction fee and held for 90 days or less (except SchwabFunds ). If you pay a transaction fee to purchase a fund, you will pay a transaction fee to sell it as well. Schwab reserves the right to change the funds we make available without transaction fees and to reinstate fees on any funds. Charles Schwab & Co., Inc. receives remuneration from fund companies for recordkeeping, shareholder services and other administrative services for shares purchased through its Mutual Fund OneSource service. For a prospectus containing more complete information, including management fees, charges and expenses, please call the Dedicated PCRA Call Center at PCRA (7272). Please read the prospectus carefully before you invest or transfer money. 2 Contact your Retirement Plan Provider to determine eligibility for in-kind transfers. The Schwab Personal Choice Retirement Account (PCRA) is offered through Charles Schwab & Co., Inc. 5

8 2001 Charles Schwab & Co., Inc. All rights reserved. Member SIPC/NYSE. CRS ( ) MKT21095(06/01)

9 Schwab Personal Choice Retirement Account (PCRA) Participant Limited Power of Attorney (LPOA) Terms Open a PCRA Today All sections of this form (Sections 1 4) and your signature must be completed in ink. Questions? Call PCRA (7272) Forms completed in pencil, photocopies or faxes will not be processed. Page 1 of 3 1. Establish Your PCRA. Please complete all sections below. We respect your privacy. Schwab will use the information you provide to open and service your accounts, communicate with you and provide information about products and services. Read about Schwab s privacy policy at Tell Us About Yourself. Retirement Plan Name/Employer* Social Security/Tax ID No. Mr. Mrs. Ms. Miss Dr. Name (First) (Middle) (Last) Date of Birth (mm/dd/yyyy) Driver s License Number, State Mother s Maiden Name Are you known by another name? Specify: Home Street Address (no P.O. boxes) City, State, Zip Code Mailing Address (if different from above; P.O. boxes may be used) Securities industry regulations require that we collect the following information: Check only one: Employed Self-employed Retired Student Not employed Employer Industry Occupation/Position Home Telephone Number (required) Business Telephone Number ( ) ( ) Address (See Section 3, Enrollment for Electronic Trade Confirmations.) * If you are unsure about your retirement plan name, please confirm with your human resources or benefits department. By providing your address, you consent to receiving from Schwab. Information about opting out of certain communications is provided at Business Street Address City, State, Zip Code List any security firm(s) you are employed by or in which you are a director or owner. Specify: List all publicly traded companies in which you are a director, 10% shareholder or policy-making officer. Specify: Marital Status Number of Dependents Single Married Divorced Attach a Rule 407 letter from your employer s compliance department if employed by a securities firm. Rule 407 of the New York Stock Exchange (NYSE) governs the opening of brokerage accounts by employees of any NYSE member firm or employees of the NYSE. The National Association of Securities Dealers, Inc. (NASD) Conduct Rule 3050 imposes similar obligations on employees of the NASD member firms. Compliance with NYSE Rule 407 satisfies the requirements of the NASD obligations. If you are unsure about whether the Rule 407 letter applies to you, please confirm with your employer s compliance department before submitting this application. 2. Create Your Investment Profile. Securities industry regulations require that we collect this information. Overall Investment Objective of Account : Capital Preservation Income Growth Speculation Investment Knowledge: None Limited Good Extensive Investment Experience: None Limited Good Extensive Federal Income Tax Bracket: 10% 15% 27% 30% 35% 38.6% Other: Annual Income: Under $15,000 $15,000 $24,999 $25,000 $49,999 $50,000 $99,999 $100,000 or More Liquid Net Worth: Under $25,000 $25,000 $49,999 $50,000 $99,999 $100,000 $249,999 $250,000 or More Specify: Investment Objective Definitions: Capital Preservation: The objective of capital preservation is to protect your initial investment by choosing investments that minimize the potential of any loss of principal. The long-term risk of capital preservation is that the returns may not be adequate to offset inflation. Income: The primary objective of an income strategy is to provide current income rather than long-term growth of principal. Growth: The objective of a growth strategy is to increase the value of your investment over time while recognizing a high likelihood of volatility. Speculation: A speculator s objective is to assume a higher risk of loss in anticipation of potentially higher-than-average gain by taking advantage of expected price changes. (Continued on page 2.) 2003 Charles Schwab & Co., Inc. All rights reserved. Member: SIPC/New York Stock Exchange. CRS ( ) APP (11/03)

10 3. Select the Account Features You Want. Web Access to Your PCRA Select below if you would like to view your account information and place trade orders online. To access your account through the web, your address is required. Yes, I want web access.* No, I do not want web access. Call PCRA (7272) to add web access at a later date. Enrollment for Electronic Trade Confirmations By providing your address, you also consent to receiving Schwab econfirms (trade confirmations sent to your address detailing any purchase or sale of a security). Mutual fund prospectuses for initial fund purchases and trade terms and conditions will be available on the web by link from the econfirm. Unless you check the box below, we will soon send you an to the above address with more information about econfirms and your consent, and to verify your address. Later, if you decide you do not want econfirms, you may change your election and receive paper trade confirmations through the U.S. mail. If we can t verify your address or are unable to deliver to you at that address, we will send you paper trade confirmations through the U.S. mail. No, at this time I do not want econfirms. *Expect an shortly asking you to log in and change your temporary password. Page 2 of 3 4. Agree to Terms. By signing this form, you ( Participant ) and Charles Schwab & Co., Inc. ( Schwab ) agree that the authority conferred on the Participant by the Plan Sponsor, Plan Trustees ( Trustees ) or by the Custodial Institution for the Plan (the Institution ), as the case may be, in accordance with the LPOA Authorization to the Participant in the Schwab Personal Choice Retirement Account Plan Application, shall be exercised according to the following terms and conditions. If you are the beneficiary of a deceased Participant, you will be considered the Participant for purposes of this form. PCRA Fees. The Retirement Plan Provider, Trustee or Institution may charge additional fees for opening and maintaining Participant s PCRA. Understanding Our Agreement. Participant agrees to: Read the Schwab One Account Agreement; Read other agreements relating to Participant s PCRA; Read amendments to the agreements; Contact a Schwab representative if Participant does not receive or understand the agreements or amendments; and Be bound by the terms of these agreements and all amendments. If Participant adds features to Participant s PCRA after it is opened, Participant agrees to be bound by the terms in the agreements relating to these features. Responsibility for Investment Decisions. Participant acknowledges that: Participant is responsible for determining the nature, potential value and suitability of any particular security, transaction or investment strategy; Except as provided in this section, Schwab is not responsible for determining the nature, potential value and suitability of any particular security, transaction or investment strategy; Schwab will not give legal or tax advice; Schwab is in no way responsible for supervising or monitoring trading in Participant s PCRA; Participant understands that no investments will be made with respect to Participant s PCRA except as the Participant specifically instructs Schwab; and FOR CHARLES SCHWAB USE ONLY: Branch Office and Account Number Purchases and sales of securities in Participant s PCRA are subject to commissions and transaction fees. Schwab agrees that it is responsible for determining the nature, potential value and suitability of any particular security, transaction or investment strategy for Participant only (1) if required by applicable law, or (2) if: A Schwab representative gives advice directly to Participant; and The advice is clearly identified as a Schwab recommendation for Participant to enter into a particular transaction or to buy or sell a particular security. Credit Verification. Participant authorizes Schwab to inquire from any source, including a consumer reporting agency, as to Participant s creditworthiness and ongoing eligibility for the account at any time throughout the life of the account, and thereafter for debt collection or investigative purposes. Authorization to Trade for PCRA. Participant may place trading orders for Participant s PCRA pursuant to the LPOA. The Plan Sponsor, Trustees or Institution may revoke the LPOA at any time by giving written notice to Schwab. Participant agrees not to take any actions that exceed Participant s authority under the LPOA or any other agreement between Participant and the Trustees or Institution or Plan Sponsor with respect to which the PCRA is opened. Appointment of Limited Power of Attorney for Third Party. By execution of a Schwab Personal Choice Retirement Account Limited Power of Attorney (LPOA) for Third Party, including a Schwab Personal Choice Account Limited Power of Attorney (LPOA) for an Investment Manager, Participant may grant authority to an Attorney-In-Fact to trade in Participant s PCRA but not to make withdrawals. The ability to work with a third party, including a professional money manager, varies by retirement plan. Mutual Fund Minimum Investments. Participant acknowledges that mutual funds require a specified minimum investment, and that until sufficient amounts have been deposited into Participant s PCRA, it will not be possible to invest in such mutual funds. Uninvested Funds. All uninvested funds held within Participant s PCRA will be automatically invested (swept) into the Schwab Money Market Fund. It is the responsibility of the Participant to allocate funds into other investments, if so desired, once funds have been invested (swept) into the Schwab Money Market Fund. Trading Restrictions. PCRA may not include trading on trade-away trades, collectibles, currencies, precious metals, real estate, private placements, futures, commodities, margin accounts, index and equity options, short sales or Schwab corporate debentures/collateralized debt obligations. If specifically allowed by Participant s retirement plan, Participant may write covered calls and buy protective puts. Participant must complete a Schwab Personal Choice Retirement Account Options Application Participant to be approved to trade options. Participant s retirement plan may have other trading restrictions that limit Participant s investment options. Compliance with Applicable Law. Participant will comply with all applicable state and federal securities laws. Information. Participant will provide promptly any information reasonably requested by Schwab concerning the management of Participant s PCRA or compliance with this Agreement. If questions arise concerning compliance with any law, Participant will take any action believed by Schwab to be necessary and proper to ensure compliance with applicable law. Schwab has no duty to supervise or monitor Participant s management of Participant s PCRA or compliance with applicable laws. Schwab may disclose Participant s name, address and share position upon request to companies whose securities are held in Participant s PCRA, unless Participant notifies Schwab in writing not to disclose this information. Indemnification. Participant will indemnify and hold harmless Schwab, its affiliates and their directors, officers and employees from and against all claims, actions, costs and liabilities, including attorneys fees, arising out of or relating to: Any breach by Participant of any provision of this Agreement; Any dispute between the Participant and Plan Sponsor; and (Continued on page 3.) 2003 Charles Schwab & Co., Inc. All rights reserved. Member: SIPC/New York Stock Exchange. CRS ( ) APP (11/03)

11 4. Agree to Terms. Continued Any dispute between the Participant and the Trustees (or the Institution [if applicable]) except when The Charles Schwab Trust Company, or any of its affiliates, acts as the Trustee (or the Institution [if applicable]) for the Participant s plan assets. Trade Confirmations and Account Statements. Unless the Plan Sponsor, Trustees or Institution direct otherwise, Schwab will send trade confirmations and account statements to the Participant and, if requested by the Plan Sponsor, Trustees or Institution, to the Plan Sponsor, Trustees or Institution and other parties as directed. Transfers to and from PCRA and Distributions. Participant is solely responsible for contacting Participant s Retirement Plan Services Provider to direct transfers between Participant s PCRA and the core investment options, if applicable, available through Participant s retirement plan. Transfers into Participant s PCRA will be automatically invested (swept) into the Schwab Money Market Fund until Participant instructs Schwab to allocate funds into other investments. Transfers out of Participant s PCRA to the core investment options will be made from the Schwab Money Market Fund. Participant is solely responsible for instructing Schwab to liquidate sufficient PCRA assets for a cash distribution from the plan, including a lump-sum distribution, and for ensuring that sufficient funds are held in the Schwab Money Market Fund prior to requesting any cash transfer from PCRA. Participant may be able to make an in-kind transfer or distribution, such as one in the form of a direct rollover to an Individual Retirement Account (IRA). Contact your Retirement Plan Services Provider to determine eligibility for an in-kind transfer or distribution. Liquidation. If for any reason Participant s PCRA has insufficient funds to cover the purchase price of any trade or a fee, Schwab may take appropriate steps in its discretion to complete, cancel or liquidate one or more transactions or investments. Additionally, Schwab may, on direction from an authorized party, which may include the Plan Sponsor, Trustees or Institution, liquidate one or more transactions or investments in order to address corrections which may be required pursuant to the provisions of the plan document, the Employee Retirement Income Security Act of 1974, as amended (ERISA), or the Internal Revenue Code of 1986, as amended (IRC), including but not limited to, the correction of excess annual additions pursuant to IRC 415, of excess contributions pursuant to IRC 401(k), of excess aggregate contributions pursuant to IRC 401(m) and of excess deferrals pursuant to IRC 402(g), to the extent that Schwab has either been informed by the authorized party that such correction is required or has the responsibility for the determination of the need for such correction pursuant to the terms of the Schwab One Account Agreement and any other applicable agreements between Schwab and the authorized party. Entire Agreement. This Agreement contains all of the agreements, representations and understandings made between Participant and Schwab. All modifications and amendments hereto must be in writing and signed by both parties. Waivers. The failure of either party at any time to require performance by the other party of any provision of this Agreement will not affect in any way the right to require such performance at any time thereafter. The waiver by either party of a breach of any provisions hereof will not be taken or held to be a waiver of the provision itself. Governing Law. This Agreement, and all future agreements you shall enter into with Schwab, unless otherwise indicated on such other agreement, shall be governed by the law (but not the choice or law doctrines) of the state of California. This is the case regardless of whether you reside or transact business with Schwab in California or elsewhere, except that the section entitled Arbitration shall be governed by the Federal Arbitration Act. Page 3 of 3 Arbitration Agreement. On behalf of Participant, Participant s Agents, and any other persons having or claiming to have a legal or beneficial interest in the account, Participant agrees to settle by arbitration any controversy between or among the Participant and/or Schwab, Schwab s affiliates, Schwab s officers, directors and employees or agents relating to the Schwab One Account Agreement, Participant s PCRA or account transactions, the LPOA or in any way arising out of Participant s relationship to the Plan Sponsor, Trustees or Institution or to Schwab, as provided in Section 23 of the Schwab One Account Agreement on pages The following disclosures are made pur - suant to applicable self-regulatory organization rules: (1) arbitration is final and binding on all parties; (2) the parties are waiving their right to seek remedies in court, including the right to a jury trial; (3) pre-arbitration discovery is generally more limited than and different from court proceedings; (4) the arbitrators award is not required to include factual findings or legal reasoning, and any party s right to appeal or to seek modification of rulings by the arbitrators is strictly limited; (5) the panel of arbitrators will typically include a minority of arbitrators who were or are affiliated with the securities industry. No person shall bring a putative or certified class action to arbitration, nor seek to enforce any pre-dispute arbitration agreement against any person who has initiated in court a putative class action, or who is a member of a putative class who has not opted out of the class with respect to any claims encompassed by the putative class action until: (1) the class certification is denied; (2) the class is decertified; or (3) the customer is excluded from the class by the court. Such forbearance to enforce an agreement to arbitrate shall not constitute a waiver of any rights under this Agreement except to the extent stated herein. BY SIGNING THIS AGREEMENT, I ACKNOWLEDGE THAT I HAVE RECEIVED A COPY OF THE ACCOUNT TERMS TO RETAIN FOR MY RECORDS. Note that the Account Agreement contains a pre-dispute arbitration agreement, which is set forth in Section 23, pages 32 34, of the Schwab One Account Agreement. Ink Signature Required X Your Signature Date FOR CHARLES SCHWAB USE ONLY NYSE SEC 144 NRA AKA CRS EMPL Approved by Print Name of Approver Date Approved Branch Office Plan ID Number Registration Code Index as Document Number Account Number Affiliate Number PT Charles Schwab & Co., Inc. All rights reserved. Member: SIPC/New York Stock Exchange. CRS ( ) APP (11/03)

12 This page left blank intentionally Charles Schwab & Co., Inc. All rights reserved. Member: SIPC/New York Stock Exchange. CRS ( ) APP (11/03)

13 Schwab Personal Choice Retirement Account (PCRA) Participant Limited Power of Attorney (LPOA) Terms These terms relate to your account and are part of the Account Agreement between each account holder and Schwab. Please retain for your files. By signing this form, you ( Participant ) and Charles Schwab & Co., Inc. ( Schwab ) agree that the authority conferred on the Participant by the Plan Sponsor, Plan Trustees ( Trustees ) or by the Custodial Institution for the Plan (the Institution ), as the case may be, in accordance with the LPOA Authorization to the Participant in the Schwab Personal Choice Retirement Account Plan Application, shall be exercised according to the following terms and conditions. If you are the beneficiary of a deceased Participant, you will be considered the Participant for purposes of this form. PCRA Fees. The Retirement Plan Provider, Trustee or Institution may charge additional fees for opening and maintaining Participant s PCRA. Understanding Our Agreement. Participant agrees to: Read the Schwab One Account Agreement; Read other agreements relating to Participant s PCRA; Read amendments to the agreements; Contact a Schwab representative if Participant does not receive or understand the agreements or amendments; and Be bound by the terms of these agreements and all amendments. If Participant adds features to Participant s PCRA after it is opened, Participant agrees to be bound by the terms in the agreements relating to these features. Responsibility for Investment Decisions. Participant acknowledges that: Participant is responsible for determining the nature, potential value and suitability of any particular security, transaction or investment strategy; Except as provided in this section, Schwab is not responsible for determining the nature, potential value and suitability of any particular security, transaction or investment strategy; Schwab will not give legal or tax advice; Schwab is in no way responsible for supervising or monitoring trading in Participant s PCRA; Participant understands that no investments will be made with respect to Participant s PCRA except as the Participant specifically instructs Schwab; and Purchases and sales of securities in Participant s PCRA are subject to commissions and transaction fees. Schwab agrees that it is responsible for determining the nature, potential value and suitability of any particular security, transaction or investment strategy for Participant only (1) if required by applicable law, or (2) if: A Schwab representative gives advice directly to Participant; and The advice is clearly identified as a Schwab recommendation for Participant to enter into a particular transaction or to buy or sell a particular security. Credit Verification. Participant authorizes Schwab to inquire from any source, including a consumer reporting agency, as to Participant s creditworthiness and ongoing eligibility for the account at any time throughout the life of the account, and thereafter for debt collection or investigative purposes. Authorization to Trade for PCRA. Participant may place trading orders for Participant s PCRA pursuant to the LPOA. The Plan Sponsor, Trustees or Institution may revoke the LPOA at any time by giving written notice to Schwab. Participant agrees not to take any actions that exceed Participant s authority under the LPOA or any other agreement between Participant and the Trustees or Institution or Plan Sponsor with respect to which the PCRA is opened. Appointment of Limited Power of Attorney for Third Party. By execution of a Schwab Personal Choice Retirement Account Limited Power of Attorney (LPOA) for Third Party, including a Schwab Personal Choice Account Limited Power of Attorney (LPOA) for an Investment Manager, Participant may grant authority to an Attorney-In-Fact to trade in Participant s PCRA but not to make withdrawals. The ability to work with a third party, including a professional money manager, varies by retirement plan. Mutual Fund Minimum Investments. Participant acknowledges that mutual funds require a specified minimum investment, and that until sufficient amounts have been deposited into Participant s PCRA, it will not be possible to invest in such mutual funds. Uninvested Funds. All uninvested funds held within Participant s PCRA will be automatically invested (swept) into the Schwab Money Market Fund. It is the responsibility of the Participant to allocate funds into other investments, if so desired, once funds have been invested (swept) into the Schwab Money Market Fund. Trading Restrictions. PCRA may not include trading on trade-away trades, collectibles, currencies, precious metals, real estate, private placements, futures, commodities, margin accounts, index and equity options, short sales or Schwab corporate debentures/collateralized debt obligations. If specifically allowed by Participant s retirement plan, Participant may write covered calls and buy protective puts. Participant must complete a Schwab Personal Choice Retirement Account Options Application Participant to be approved to trade options. Participant s retirement plan may have other trading restrictions that limit Participant s investment options. Compliance with Applicable Law. Participant will comply with all applicable state and federal securities laws. Information. Participant will provide promptly any information reasonably requested by Schwab concerning the management of Participant s PCRA or compliance with this Agreement. If questions arise concerning compliance with any law, Participant will take any action believed by Schwab to be necessary and proper to ensure compliance with applicable law. Schwab has no duty to supervise or monitor Participant s management of Participant s PCRA or compliance with applicable laws. Schwab may disclose Participant s name, address and share position upon request to companies whose securities are held in Participant s PCRA, unless Participant notifies Schwab in writing not to disclose this information. Indemnification. Participant will indemnify and hold harmless Schwab, its affiliates and their directors, officers and employees from and against all claims, actions, costs and liabilities, including attorneys fees, arising out of or relating to: Any breach by Participant of any provision of this Agreement; Any dispute between the Participant and Plan Sponsor; and Any dispute between the Participant and the Trustees (or the Institution [if applicable]) except when The Charles Schwab Trust Company, or any of its affiliates, acts as the Trustee (or the Institution [if applicable]) for the Participant s plan assets. Trade Confirmations and Account Statements. Unless the Plan Sponsor, Trustees or Institution direct otherwise, Schwab will send trade confirmations and account statements to the Participant and, if requested by the Plan Sponsor, Trustees or Institution, to the Plan Sponsor, Trustees or Institution and other parties as directed. Transfers to and from PCRA and Distributions. Participant is solely responsible for contacting Participant s Retirement Plan Services Provider to direct transfers between Participant s PCRA and the core investment options, if applicable, available through Participant s retirement plan. Transfers into Participant s PCRA will be automatically invested (swept) into the Schwab Money Market Fund until Participant instructs Schwab to allocate funds into other investments. Transfers out of Participant s PCRA to the core investment options will be made from the Schwab Money Market Fund. Participant is solely responsible for instructing Schwab to liquidate sufficient PCRA assets for a cash distribution from the plan, including a lump-sum distribution, and for ensuring that sufficient funds are held in the Schwab Money Market Fund prior to requesting any cash transfer from PCRA. Participant may be able to make an in-kind transfer or distribution, such as one in the form of a direct rollover to an Individual Retirement Account (IRA). Contact your Retirement Plan Services Provider to determine eligibility for an in-kind transfer or distribution. Liquidation. If for any reason Participant s PCRA has insufficient funds to cover the purchase price of any trade or a fee, Schwab may take appropriate steps in its discretion to complete, cancel or liquidate one or more transactions or investments. Additionally, Schwab may, on direction from an authorized party, which may include the Plan Sponsor, Trustees or Institution, liquidate one or more transactions or investments in order to address corrections which may be required pursuant to the provisions of the plan document, the Employee Retirement Income Security Act of 1974, as amended (ERISA), or the Internal Revenue (Continued on back.) CLIENT COPY 2003 Charles Schwab & Co., Inc. All rights reserved. Member: SIPC/New York Stock Exchange. CRS ( ) APP12215A-08(11/03)

14 Page 2 of 2 Code of 1986, as amended (IRC), including but not limited to, the correction of excess annual additions pursuant to IRC 415, of excess contributions pursuant to IRC 401(k), of excess aggregate contributions pursuant to IRC 401(m) and of excess deferrals pursuant to IRC 402(g), to the extent that Schwab has either been informed by the authorized party that such correction is required or has the responsibility for the determination of the need for such correction pursuant to the terms of the Schwab One Account Agreement and any other applicable agreements between Schwab and the authorized party. Entire Agreement. This Agreement contains all of the agreements, representations and understandings made between Participant and Schwab. All modifications and amendments hereto must be in writing and signed by both parties. Waivers. The failure of either party at any time to require performance by the other party of any provision of this Agreement will not affect in any way the right to require such performance at any time thereafter. The waiver by either party of a breach of any provisions hereof will not be taken or held to be a waiver of the provision itself. Governing Law. This Agreement, and all future agreements you shall enter into with Schwab, unless otherwise indicated on such other agreement, shall be governed by the law (but not the choice or law doctrines) of the state of California. This is the case regardless of whether you reside or transact business with Schwab in California or elsewhere, except that the section entitled Arbitration shall be governed by the Federal Arbitration Act. Arbitration Agreement. On behalf of Participant, Participant s Agents, and any other persons having or claiming to have a legal or beneficial interest in the account, Participant agrees to settle by arbitration any controversy between or among the Participant and/or Schwab, Schwab s affiliates, Schwab s officers, directors and employees or agents relating to the Schwab One Account Agreement, Participant s PCRA or account transactions, the LPOA or in any way arising out of Participant s relationship to the Plan Sponsor, Trustees or Institution or to Schwab, as provided in Section 23 of the Schwab One Account Agreement on pages The following disclosures are made pur - suant to applicable self-regulatory organization rules: (1) arbitration is final and binding on all parties; (2) the parties are waiving their right to seek remedies in court, including the right to a jury trial; (3) pre-arbitration discovery is generally more limited than and different from court proceedings; (4) the arbitrators award is not required to include factual findings or legal reasoning, and any party s right to appeal or to seek modification of rulings by the arbitrators is strictly limited; (5) the panel of arbitrators will typically include a minority of arbitrators who were or are affiliated with the securities industry. No person shall bring a putative or certified class action to arbitration, nor seek to enforce any pre-dispute arbitration agreement against any person who has initiated in court a putative class action, or who is a member of a putative class who has not opted out of the class with respect to any claims encompassed by the putative class action until: (1) the class certification is denied; (2) the class is decertified; or (3) the customer is excluded from the class by the court. Such forbearance to enforce an agreement to arbitrate shall not constitute a waiver of any rights under this Agreement except to the extent stated herein. CLIENT COPY 2003 Charles Schwab & Co., Inc. All rights reserved. Member: SIPC/New York Stock Exchange. CRS ( ) APP12215A-08(11/03)

15 Day-Trading Risk Disclosure Statement Please retain for your files. You should consider the following points before engaging in a day-trading strategy. For purposes of this notice, a day-trading strategy means an overall trading strategy characterized by the regular transmission by a customer of intraday orders to effect both purchase and sale transactions in the same security or securities. 1. Day trading can be extremely risky. Day trading generally is not appropriate for someone of limited resources and limited investment or trading experience and low risk tolerance. You should be prepared to lose all of the funds that you use for day trading. In particular, you should not fund day-trading activities with retirement savings, student loans, second mortgages, emergency funds, funds set aside for purposes such as education or home ownership, or funds required to meet your living expenses. Further, certain evidence indicates that an investment of less than $50,000 will significantly impair the ability of a day trader to make a profit. Of course, an investment of $50,000 or more will in no way guarantee success. 2. Be cautious of claims of large profits from day trading. You should be wary of advertisements or other statements that emphasize the potential for large profits in day trading. Day trading can also lead to large and immediate financial losses. 3. Day trading requires knowledge of securities markets. Day trading requires in-depth knowledge of the securities markets and trading techniques and strategies. In attempting to profit through day trading, you must compete with professional, licensed traders employed by securities firms. You should have appropriate experience before engaging in day trading. 4. Day trading requires knowledge of a firm s operations. You should be familiar with a securities firm s business practices, including the operation of the firm s order-execution systems and procedures. Under certain market conditions, you may find it difficult or impossible to liquidate a position quickly at a reasonable price. This can occur, for example, when the market for a stock suddenly drops, or if trading is halted due to recent news events or unusual trading activity. The more volatile a stock is, the greater the likelihood that problems may be encountered in executing a transaction. In addition to normal market risks, you may experience losses due to system failures. 5. Day trading will generate substantial commissions, even if the per-trade cost is low. Day trading involves aggressive trading, and generally you will pay commissions on each trade. The total daily commissions that you pay on your trades will add to your losses or significantly reduce your earnings. For instance, assuming that a trade costs $16 and an average of 29 transactions are conducted per day, an investor would need to generate an annual profit of $111,360 just to cover commission expenses. CLIENT COPY 6. Day trading on margin or short selling may result in losses beyond your initial investment. When you day trade with funds borrowed from a firm or someone else, you can lose more than the funds you originally placed at risk. A decline in the value of the securities that are purchased may require you to provide additional funds to the firm to avoid the forced sale of those securities or other securities in your account. Short selling as part of your day-trading strategy also may lead to extraordinary losses, because you may have to purchase a stock at a very high price in order to cover a short position. 7. Potential registration requirements Persons providing investment advice for others or managing securities accounts for others may need to register as either an Investment Advisor under the Investment Advisers Act of 1940 or as a Broker or Dealer under the Securities Exchange Act of Such activities may also trigger state registration requirements Charles Schwab & Co., Inc. All rights reserved. Member: SIPC/New York Stock Exchange. CRS ( ) REG (10/03)

16 2003 Charles Schwab & Co., Inc. All rights reserved. Member: SIPC/New York Stock Exchange. CRS ( ) APP (11/03)