[FORM OF OPINION]
February __, 2009
Board of Trustees
Laudus Trust
101 Montgomery Street
San Francisco, CA 94104
RE: AGREEMENT AND PLAN OF REORGANIZATION, DATED FEBRUARY __, 2009 (THE "PLAN"),
ADOPTED BY THE BOARD OF TRUSTEES OF THE LAUDUS TRUST (THE "TRUST") FOR THE
REORGANIZATION OF THE TRUST'S LAUDUS ROSENBERG U.S. LARGE CAPITALIZATION
GROWTH FUND (THE "ACQUIRED FUND") INTO THE TRUST'S LAUDUS ROSENBERG U.S.
LARGE CAPITALIZATION FUND (THE "SURVIVING FUND")
Ladies and Gentlemen:
You have requested our opinions as to certain U.S. federal income tax
consequences of the reorganization of the Acquired Fund and the Surviving Fund
that will consist of: (i) the transfer of all of the assets of the Acquired Fund
to the Surviving Fund in exchange solely for Select and Investor Class shares of
the Surviving Fund ("Surviving Fund Shares"), (ii) the assumption by the
Surviving Fund of all of the liabilities of the Acquired Fund, and (iii) the
distribution of the Surviving Fund Shares to the shareholders of the Acquired
Fund(1) in complete liquidation of the Acquired Fund, all upon the terms and
conditions set forth in the Plan (the "Reorganization").
In rendering our opinions, we have reviewed and relied upon (a) the
Plan, (b) certain representations concerning the Reorganization made to us by
the Trust, on behalf of the funds, in a letter dated January __, 2009 (the
"Representation Letter"), (c) all other documents, financial and other reports
and corporate minutes that we deemed relevant or appropriate, and (d) such
statutes, regulations, rulings and decisions as we deemed material with respect
to this opinion. All terms used herein, unless otherwise defined, are used as
defined in the Plan.
For purposes of our opinions, we have assumed that the Acquired Fund
and the Surviving Fund, as of the Closing Date of the Reorganization, each
satisfy and, following the Reorganization, the Surviving Fund will continue to
satisfy, the requirements of subchapter M of the Internal Revenue Code of 1986,
as amended (the "Code"), for qualification as a regulated investment company
("RIC").
Based on the foregoing, and provided the Reorganization is carried out
in accordance with the laws of the Commonwealth of Massachusetts, the Plan and
the Representation Letter, it is our opinion that:
1. The Reorganization will constitute a tax-free reorganization within
the meaning of Section 368(a) of the Code, and the Acquired Fund and the
Surviving Fund will each be a "party to the reorganization" within the
meaning of Section 368(b) of the Code.
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(1) In the distribution, Acquired Fund shareholders who hold Acquired Fund
Select Class shares will receive Surviving Fund Select Class shares, and
Acquired Fund shareholders who hold Acquired Fund Investor Class shares
will receive Surviving Fund Investor Class shares.
Philadelphia Washington New York Los Angeles San Francisco Miami
Pittsburgh Princeton Chicago Minneapolis
Palo Alto Dallas Houston Harrisburg Irvine Boston London Paris
Brussels Frankfurt Beijing Tokyo
Board of Trustees
Laudus Trust
February __, 2009
Page 2
2. No gain or loss will be recognized by the Surviving Fund upon the
receipt of the assets of the Acquired Fund solely in exchange for Surviving
Fund Shares and the assumption by the Surviving Fund of all of the
liabilities of the Acquired Fund, pursuant to Section 1032(a) of the Code.
3. No gain or loss will be recognized by the Acquired Fund upon the
transfer of all of its assets to the Surviving Fund solely in exchange for
Surviving Fund Shares and the assumption by the Surviving Fund of all of
the liabilities of the Acquired Fund or upon the distribution of Surviving
Fund Shares to shareholders of the Acquired Fund, pursuant to Sections
361(a) and (c) and 357(a) of the Code.
4. No gain or loss will be recognized by the shareholders of the
Acquired Fund upon the exchange of their shares of the Acquired Fund for
Surviving Fund Shares (including fractional shares to which they may be
entitled), pursuant to Section 354(a) of the Code.
5. The aggregate tax basis of Surviving Fund Shares received by each
shareholder of the Acquired Fund (including fractional shares to which they
may be entitled) will be the same as the aggregate tax basis of the
Acquired Fund shares exchanged therefor, pursuant to Section 358(a)(1) of
the Code.
6. The holding period of the Surviving Fund Shares received by the
shareholders of the Acquired Fund (including fractional shares to which
they may be entitled) will include the holding period of the Acquired Fund
shares surrendered in exchange therefor, provided that the Acquired Fund
shares were held as a capital asset as of the Closing Date of the
Reorganization, pursuant to Section 1223(1) of the Code.
7. The tax basis of the assets of the Acquired Fund received by the
Surviving Fund will be the same as the tax basis of such assets to the
Acquired Fund immediately prior to the exchange, pursuant to Section 362(b)
of the Code.
8. The holding period of the assets of the Acquired Fund received by
the Surviving Fund will include the period during which such assets were
held by the Acquired Fund, pursuant to Section 1223(2) of the Code.
9. The Surviving Fund will succeed to and take into account, as of the
date of the transfer (as defined in Section 1.381(b)-1(b) of the Treasury
Regulations), the items of the Acquired Fund described in Section 381(c) of
the Code, subject to the conditions and limitations specified in Sections
381(b) and (c), 382, 383 and 384 of the Code.
Notwithstanding the foregoing opinions, no opinion is expressed as to
the effect of the Reorganization on (i) the Acquired Fund or the Surviving Fund
with respect to any asset as to which any unrealized gain or loss is required to
be recognized for U.S. federal income tax purposes at the end of a taxable year
(or on the termination or transfer thereof) under a mark-to-market system of
accounting and (ii) any shareholder of the Acquired Fund that is required to
recognize unrealized gains and losses for U.S. federal income tax purposes under
a mark-to-market system of accounting.
Board of Trustees
Laudus Trust
February __, 2009
Page 3
Our opinions are limited solely to the Reorganization. This opinion
letter expresses our views only as to U.S. federal income tax laws in effect as
of the date hereof. It represents our best legal judgment as to the matters
addressed herein, but is not binding on the Internal Revenue Service or the
courts. Accordingly, no assurance can be given that the opinions and analysis
expressed herein, if contested, would be sustained by a court. Our opinion is
based upon the Code, the applicable Treasury Regulations promulgated thereunder,
the present position of the Internal Revenue Service as set forth in published
revenue rulings and revenue procedures, present administrative positions of the
Internal Revenue Service, and existing judicial decisions, all of which are
subject to change either prospectively or retroactively. We do not undertake to
make any continuing analysis of the facts or relevant law following the date of
this letter.
Our opinions are conditioned upon the performance by the Trust, on
behalf of the Surviving Fund and the Acquired Fund, of its undertakings in the
Plan and the Representation Letter.
Our opinions are being rendered to the Trust on behalf of the
Surviving Fund and the Acquired Fund, and may be relied upon only by the Trust,
its Board of Trustees, the Acquired Fund, the Surviving Fund and the
shareholders of the Acquired Fund and the Surviving Fund.
Very truly yours,