1. Schwab and the investment adviser have agreed to maintain the “net operating expenses” of each of the Funds at 0.00% for so long as the investment adviser serves as adviser to the Funds. This agreement is limited to each Fund’s direct operating expenses and, therefore, does not apply to acquired fund fees and expenses, which are indirect expenses incurred by the Fund through its investments in the underlying funds. This net operating expense agreement may only be amended or terminated with the approval of a Fund's Board of Trustees.
2. Morningstar Category Average as of 09/30/2009.

Investors should carefully consider information contained in the prospectus, including investment objectives, risks, charges and expenses. You can view, download and print a prospectus by going to Prospectus & Reports or call 800-435-4000.  Please read the prospectus carefully before investing. Investment value and return will fluctuate, such that shares when redeemed may be worth more or less than original cost.

The values of the funds will fluctuate up to and after the target dates. There is no guarantee the funds will provide adequate income at or through retirement.

The Funds are subject to market volatility and risks associated with the underlying investments. Risks include exposure to international and emerging markets, small company and sector equity securities, and fixed income securities subject to changes in inflation, market valuations, liquidity, prepayments, and early redemption.

Schwab’s short-term redemption fee of $49.95 will be charged on redemption of funds purchased through Schwab’s Mutual Fund OneSource® service (and certain other funds with no transaction fee) and held for 90 days or less. Schwab reserves the right to exempt certain funds from this fee, including Schwab Funds®, which may charge a separate redemption fee, and funds that accommodate short-term trading. For trade orders placed through a broker, a $25 service charge applies. Funds are also subject to management fees and expenses.

The Laudus Group® of Funds includes the Laudus Rosenberg, Laudus Mondrian, and Laudus Growth Investors Funds, which are part of the Laudus Trust and Laudus Institutional Trust and distributed by ALPS Distributors, Inc.; and the Laudus MarketMasters Funds®, which are part of the Schwab Capital Trust and distributed by Charles Schwab & Co., Inc. Charles Schwab & Co., Inc. and ALPS Distributors, Inc. are unaffiliated entities.

Schwab Affiliate Funds include Schwab Funds and Laudus Funds. Schwab Funds and Laudus Funds are advised by Charles Schwab Investment Management, Inc., an affiliate of Charles Schwab & Co., Inc.