Carter’s PwC Settlement FAQ's
  1. What is the Carter’s PwC Settlement about?
  2. How do I know if I am part of the Settlement?
  3. Are there exceptions to being included in the Settlement Class?
  4. What does the Settlement provide?
  5. How much will my payment be?
  6. How can I get a payment?
  7. When would I get my payment?
  8. How do I get out of the proposed Settlement?
  9. If I do not exclude myself, can I sue PwC and the other Released Defendant Parties for the same thing later?
  10. If I exclude myself, can I get money from the proposed Settlement?
  1. Do I have a lawyer in this case?
  2. How will the lawyers be paid?
  3. How do I tell the Court that I do not like the proposed Settlement?
  4. When and where will the Court decide whether to approve the proposed Settlement?
  5. Do I have to come to the Settlement Hearing?
  6. May I speak at the Settlement Hearing?
  7. Are there more details about the proposed settlement?
  8. I received a letter with a login. Do I need to file a claim again?
  9. Am I a class member in both settlements?

BASIC INFORMATION

  1. What is the Carter’s PwC Settlement about?

    The main complaint in the Consolidated Action is the Second Amended and Consolidated Class Action Complaint for Violations of Federal Securities Laws (the “Second Amended Complaint”). Following the Carter’s Settlement, the only remaining defendant in this class action lawsuit is PwC. The Second Amended Complaint generally alleges, among other things, that PwC violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by making alleged misstatements and omissions during the Class Period in its audit opinions on Carter’s publicly-filed consolidated year-end financial statements. The alleged misstatements concern the timing of when Carter’s recognized accommodations made to certain customers, which PwC allegedly failed to detect during its audits of Carter’s consolidated year-end financial statements. The Second Amended Complaint alleges that PwC issued false and misleading unqualified audit opinions in connection with its audits of Carter’s consolidated year-end financial statements during the Class Period, which were purportedly conducted in accordance with U.S. Generally Accepted Auditing Standards (“GAAS”). The Second Amended Complaint further alleges that Lead Plaintiff and other Settlement Class Members purchased Carter’s publicly traded securities during the Class Period at artificially inflated prices and were damaged thereby.

    The Consolidated Action seeks money damages against PwC for violations of the federal securities laws. PwC denies all allegations of misconduct contained in the Second Amended Complaint, and denies having engaged in any wrongdoing whatsoever. The Settlement should not be construed or seen as evidence of or an admission or concession on the part of PwC with respect to any claim or of any fault or liability or wrongdoing or damage whatsoever, or any infirmity in the defenses that PwC has asserted.

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  2. How do I know if I am part of the Settlement?

    The Court directed, for the purpose of the proposed Settlement, that everyone who fits this description is a Settlement Class Member, unless they are an excluded person or they take steps to exclude themselves (see below): all Persons who purchased the publicly traded securities of Carter’s during the period from March 16, 2005 through November 10, 2009, inclusive and were allegedly damaged thereby.

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  3. Are there exceptions to being included in the Settlement Class?

    Excluded from the Settlement Class are: the current or former defendants in the Consolidated Action; the officers and directors of Carter’s; the partners and principals of PwC; the members of the immediate families of the former individual defendants in the Consolidated Action; the legal representatives, heirs, successors or assigns of any excluded Person; and any entity in which any current or former defendant has or had a controlling interest. Also excluded from the Settlement Class will be any Person who timely and validly seeks exclusion from the Settlement Class in accordance with the requirements explained below.

    If one of your mutual funds purchased or owned shares of Carter’s securities during the Class Period, that alone does not make you a Settlement Class Member. You are only eligible to be a Settlement Class Member if you directly purchased or otherwise acquired Carter’s securities during the Class Period.

    Check your investment records or contact your broker to see if you purchased or otherwise acquired Carter’s securities during the Class Period.

    If you sold Carter’s securities during the Class Period, your sale alone does not make you a Settlement Class Member. You are eligible to be a Settlement Class Member only if you purchased or otherwise acquired your securities during the Class Period.

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  4. What does the Settlement provide?

    In exchange for the Settlement and the release of the Released Claims (defined below) against the Released Defendant Parties (defined below), PwC has agreed to create a $3.3 million fund to be divided, after deduction of Court-awarded attorneys’ fees and expenses, settlement administration costs, and any applicable taxes, among all Settlement Class Members who submit valid and timely claims. This will be in addition to any distribution from the Carter’s Settlement.

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  5. How much will my payment be?

    Your share of the fund will depend on several things, including: (1) the total amount of Recognized Claims sent in by other Settlement Class Members; (2) how many Carter’s securities you bought; (3) how much you paid for them; (4) when you bought them; (5) whether or when you sold them (and, if so, for how much you sold them).

    Your Recognized Claim will be calculated according to the formula in the Plan of Allocation. It is unlikely that you will get a payment for your entire Recognized Claim, given the number of potential Settlement Class Members. After all Settlement Class Members have submitted claims, the payment you get will be a portion of the Net Settlement Fund based on your Recognized Claim divided by the total of everyone’s Recognized Claims, in each category of security. See the Plan of Allocation in the Notice for more information on your Recognized Claim.

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  6. How can I get a payment?

    To be eligible for a payment from the Settlement, you must EITHER:

    1. have submitted a claim in connection with the prior Carter’s Settlement by May 21, 2013; OR
    2. if you did not submit a claim in connection with the Carter’s Settlement by May 21, 2013, you must timely submit a validly completed Proof of Claim with supporting documents (DO NOT SEND ORIGINALS of your supporting documents) in this Settlement.

    DO NOT SUBMIT A CLAIM FORM IF YOU ALREADY SUBMITTED A TIMELY ONE IN CONNECTION WITH THE CARTER’S SETTLEMENT

    If you submitted a claim in the Carter’s Settlement by May 21, 2013, that claim and the transactional information you already provided will be used to determine your eligibility for a payment from this Settlement. If you previously received a letter from the Claims Administrator about your Carter’s Settlement claim being incomplete, you must contact the Claims Administrator to rectify your claim to the Carter’s Settlement. You can check the status of your claim in the Carter’s Settlement or the transactions you previously submitted by logging in here.

    If the Claims Administrator did not receive a claim from you in connection with the Carter’s Settlement or you submitted a claim after May 21, 2013, a Proof of Claim was mailed to you with the Carter’s PwC Notice. You may also download a Proof of Claim here. Please read the instructions carefully, fill out the Proof of Claim, include all the documents the form asks for, sign it, and mail it to the Claims Administrator by First-Class Mail, postmarked on or before October 3, 2013. The Claims Administrator needs all of the information requested in the Proof of Claim in order to determine what you may be entitled to.

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  7. When would I get my payment?

    The Court will hold a Settlement Hearing on October 8, 2013, to decide whether to approve the Settlement. Even if the Court approves the Settlement, there may still be appeals, which can take time to resolve, perhaps more than a year. It also takes time for all claims to be processed. All Proofs of Claim need to be submitted by October 3, 2013.

    Once all the claims are processed and calculated, Lead Counsel, without further notice to the Settlement Class, will apply to the Court for an order distributing the Net Settlement Fund to the members of the Settlement Class. Lead Counsel will also ask the Court to approve payment of the Claims Administrator’s outstanding fees and expenses incurred in connection with giving notice and administering the Settlement. Please be patient.

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  8. How do I get out of the proposed Settlement?

    To exclude yourself from the Settlement Class, you must send a signed letter by mail stating that you “request exclusion from the PwC Settlement Class in In re Carter’s, Inc. Securities Litigation, No. 1:08-CV-2940-AT (N.D.Ga.).”

    Your letter must state the date(s), price(s), and number(s) of shares of all your purchases, acquisitions, and sales of Carter’s securities during the Class Period. In addition, be sure to include your name, address, telephone number and your signature. You must mail your exclusion request postmarked no later than September 17, 2013, to:

    In re Carter’s, Inc. Securities Litigation - EXCLUSIONS
    Claims Administrator
    P.O. Box 5110
    Portland, OR 97208-5110

    You cannot exclude yourself by telephone or by email. Your exclusion request must comply with these requirements in order to be valid. If you write to request to be excluded, you will not get any settlement payment, and you cannot object to the Settlement. You will not be legally bound by anything that happens in this lawsuit, and you may be able to sue (or continue to sue) PwC and the other Released Defendant Parties in the future.

    The time to seek exclusion from the Carter’s Settlement has passed. A request for exclusion from the proposed Settlement will not exclude you from the Carter’s Settlement.

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  9. If I do not exclude myself, can I sue PwC and the other Released Defendant Parties for the same thing later?

    No. Unless you exclude yourself, you give up any rights to sue PwC and the other Released Defendant Parties for any and all Released Claims. If you have a pending lawsuit, speak to your lawyer in that case immediately. You must exclude yourself from this Settlement Class to continue your own lawsuit. Remember, the exclusion deadline is September 17, 2013.

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  10. If I exclude myself, can I get money from the proposed Settlement?

    No. If you exclude yourself, do not send in a Proof of Claim to ask for any money. But, you may exercise any right you may have to sue, continue to sue, or be part of a different lawsuit against PwC and the other Released Defendant Parties.

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  11. Do I have a lawyer in this case?

    The Court appointed the law firm of Labaton Sucharow LLP to represent all Settlement Class Members. These lawyers are called Lead Counsel. You will not be separately charged for these lawyers. The Court will determine the amount of Lead Counsel’s fees and expenses, which will be paid from the Settlement Fund. If you want to be represented by your own lawyer, you may hire one at your own expense.

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  12. How will the lawyers be paid?

    Lead Counsel has not received any payment for its services in pursuing the claims against PwC on behalf of the Settlement Class, nor has it been reimbursed for its litigation expenses. At the Settlement Hearing, or at such other time as the Court may order, Lead Counsel will ask the Court to award it, from the Settlement Fund, attorneys’ fees of no more than 30% of the Settlement Fund, plus any interest on such amount at the same rate and for the same periods as earned by the Settlement Fund, and to reimburse its litigation expenses (such as the cost of experts) that have been incurred in pursuing the Consolidated Action. The request for reimbursement of expenses will not exceed $200,000, plus interest on the expenses at the same rate as may be earned by the Settlement Fund.

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  13. How do I tell the Court that I do not like the proposed Settlement?

    If you are a Settlement Class Member you can object to the Settlement or any of its terms, the certification of the class, the proposed Plan of Allocation and/or the application by Lead Counsel for an award of fees and expenses. You may write to the Court setting out your objection. You may give reasons why you think the Court should not approve any part or all of the Settlement terms or arrangements. The Court will consider your views if you file a proper objection within the deadline and according to the following procedures.

    To object, you must send a signed letter stating that you object to the proposed settlement with PwC in “In re Carter’s, Inc. Securities Litigation, No. 1:08-CV-2940-AT (N.D.Ga.).” Be sure to include your name, address, telephone number, and your signature, identify the date(s), price(s) and number(s) of shares of all purchases, acquisitions and sales of Carter’s securities you made during the Class Period, and state the reasons why you object to the Settlement. Your objection must be filed with the Court and postmarked or delivered to all the following on or before September 17, 2013:

    COURT: LEAD COUNSEL: PwC’S COUNSEL:
    Clerk of the Court
    United States District Court
    for the Northern District of Georgia
    Richard B. Russell Federal Building
    and United States Courthouse
    75 Spring Street, SW
    Atlanta, GA 30303-3309
    Jonathan Gardner
    Labaton Sucharow LLP
    140 Broadway
    New York, NY 10005
    Elizabeth V. Tanis
    Juanita P. Kuhner
    King & Spalding LLP
    1180 Peachtree St., N.E.
    Atlanta, Georgia 30309

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  14. When and where will the Court decide whether to approve the proposed Settlement?

    The Court will hold a Settlement Hearing at 11:00 a.m. on October 8, 2013, at the United States District Court for the Northern District of Georgia in the Richard B. Russell Federal Building and United States Courthouse, 75 Spring Street, SW, Atlanta, GA 30303-3309.

    At this hearing the Court will consider whether the Settlement is fair, reasonable and adequate. The Court also will consider the proposed Plan of Allocation for the Net Settlement Fund and the application of Lead Counsel for attorneys’ fees and reimbursement of expenses. The Court will take into consideration any written objections filed in accordance with the instructions set out in question 18 above. The Court also may listen to people who have properly indicated, within the deadline identified above, an intention to speak at the Settlement Hearing, but decisions regarding the conduct of the Settlement Hearing will be made by the Court. See question 22 for more information about speaking at the Settlement Hearing. After the Settlement Hearing, the Court will decide whether to approve the Settlement, and, if the Settlement is approved, how much attorneys’ fees and expenses should be awarded to Lead Counsel. We do not know how long these decisions will take.

    You should be aware that the Court may change the date and time of the Settlement Hearing without another notice being sent. If you want to come to the hearing, you should check with Lead Counsel before coming to be sure that the date and/or time has not changed.

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  15. Do I have to come to the Settlement Hearing?

    No. Lead Counsel will answer questions the Court may have. But, you are welcome to come at your own expense. Settlement Class Members do not need to appear at the Settlement Hearing or take any other action to indicate their approval. If you submit an objection, you do not have to come to Court to talk about it. As long as you filed and sent your written objection on time, the Court will consider it. You may also pay your own lawyer to attend, but it is not necessary.

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  16. May I speak at the Settlement Hearing?

    If you object to the Settlement, you may ask the Court for permission to speak at the Settlement Hearing. To do so, you must include with your objection (see question 18 above) a statement stating that it is your “Notice of Intention to Appear in In re Carter’s, Inc. Securities Litigation, No. 1:08-CV-2940-AT (N.D.Ga.).” Persons who intend to object to the Settlement, the Plan of Allocation, and/or Lead Counsel’s application for an award of attorneys’ fees and expenses and desire to present evidence at the Settlement Hearing must also include in their written objections the identity of any witness they may call to testify and exhibits they intend to introduce into evidence at the Settlement Hearing. You cannot speak at the Settlement Hearing if you excluded yourself from the Settlement Class or if you have not provided written notice of your intention to speak at the Settlement Hearing in accordance with the procedures described in the Notice.

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  17. What happens if I do nothing at all?

    If you do nothing, and you did not submit a claim in connection with the earlier Carter’s Settlement by May 21, 2013, you will get no money from this Settlement and you will be precluded from starting a lawsuit, continuing with a lawsuit, or being part of any other lawsuit against PwC and the other Released Defendant Parties about the Released Claims in this case, ever again. To share in the Net Settlement Fund you must submit a Proof of Claim (see question 10) or have submitted one previously in connection with the Carter’s Settlement. To start, continue or be a part of any other lawsuit against PwC and the other Released Defendant Parties about the Released Claims in this case you must exclude yourself from this Settlement Class.

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  18. Are there more details about the proposed settlement?

    The Notice summarizes the proposed Settlement. More details are in the Stipulation, dated April 24, 2013. You may review the Stipulation filed with the Court or documents filed during the case during business hours at the Office of the Clerk of the United States District Court for the Northern District of Georgia, Richard B. Russell Federal Building and United States Courthouse, 75 Spring Street, SW, Atlanta, GA 30303-3309.

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  19. I received a letter with a login. Do I need to file a claim again?

    No. If you filed a claim already for the Carter’s Settlement, then that claim is automatically processed as a claim in the Carter’s PwC Settlement, so you don’t need to do anything.

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  20. Am I a class member in both settlements?

    The class period for both settlements is the same. If you purchased the publicly traded securities of Carter’s, Inc (“Carter’s”) during the period from March 16, 2005 through November 10, 2009, inclusive (the “Class Period”), and were allegedly damaged thereby, then you are a class member in both settlements.

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