IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION
________________________________________________________________________
IN
RE:
PRIME
SUCCESSION, INC.
FLSA
CLASS ACTION LITIGATION Case
No. 99-2278 D/Bre
________________________________________________________________________
STIPULATION OF SETTLEMENT
________________________________________________________________________
This Stipulation of Settlement (the
"Stipulation"), dated as of October 20, 1999, is made and entered
into by and among (i) The Representative Plaintiffs (on behalf of themselves
and each of the Settlement Class Members), by and through their counsel of
record in the Litigation; (ii) Prime Succession, Inc., a Delaware Corporation, Prime Business Solutions, Inc., Prime
Succession Inc. of Tennessee and all of the related subsidiaries and separate
corporate entities listed on the attached Exhibit A (the "Settling
Defendants"), by and through their counsel of record in the Litigation. The Stipulation is intended by these
Settling Parties to fully, finally and forever resolve, discharge and settle
the Released Claims (as defined herein), upon and subject to the terms and
conditions hereof.
I. THE LITIGATION
This
lawsuit for violation of the Fair Labor Standards Act (hereinafter “the
Litigation”) was brought representatively on behalf of a class consisting of
all persons who are presently, or who have been at any time in the past from
March 26, 1996, to the present, employed by Settling Defendants, in the
position of Family Service Counselor.
For the purposes of the Litigation, a Family Service Counselor is anyone
who was or is employed for the purpose of making sales and performing in-office
duties, including servicing at-need clients, and who is or was eligible to be
paid an hourly wage for in-office work and whose hourly wage could be
supplanted by commissions from sales in any workweek if and when those
commissions were greater than the earned hourly wage.
The
Litigation was filed on March 26, 1999, in the United States District Court for
the Western District of Tennessee, Western Division. It was brought pursuant to the Fair Labor Standards Act
(hereinafter “FLSA”), 29 U.S.C. § 201, et
seq. The Representative Plaintiffs
sought to recover from the Settling Defendants all unpaid wages for those weeks
when Settlement Class Members were paid less than the statutorily required
minimum wage and all unpaid overtime wages, if any. The Representative Plaintiffs also sought an injunction
prohibiting Settling Defendants’ alleged employment practices which caused
Representative Plaintiffs to be paid less than minimum wage and to not be paid
proper overtime wages.
Representative
Plaintiffs allege the following practices which violate the FLSA, some or all
of which were practiced on other members of the class: Family Service Counselors were required to
work in-office duties at the funeral home and/or cemetery at which they were
employed, which included helping clients of the funeral home and/or cemetery,
as well as a variety of other duties.
Family Service Counselors also were required to develop sales during
both duty and non-duty hours and had their hourly wage for in-office work
reduced or eliminated by the commission from these sales. Family Service Counselors were instructed
not to record any hours worked over eight in a day, no matter how many hours
they actually worked. In addition,
certain deductions were made from their salaries, including deductions for
selling materials, deductions for administrative and advertising expenses,
deductions from commissions to be placed in a reserve account, and deductions
associated with the production and delivery of their paychecks. As a result of these practices, the
plaintiffs allege that they and the
class often were paid salaries which were below minimum wage and were often not
paid time-and-a-half for overtime.
II. PRETRIAL PROCEEDINGS AND DISCOVERY IN THE
LITIGATION
The Settling Parties have engaged in
substantial discovery practice in the Litigation, including the depositions of
in-house counsel, the former Vice-President in charge of sales and a sales
manager for Settling Defendants, as well as each of the Representative
Plaintiffs. Counsel for the
Representative Plaintiffs has also conducted discovery and investigation during
the prosecution of the Litigation, of voluminous documents including Settling
Defendants payroll records and records of hours of work for the employees in
Settling Defendants’ sales force for the period from January 1, 1997 through
the present. Counsel for Representative
Plaintiffs has also conducted extensive research and invested significant
amounts of time into establishing the enterprise nature of Settling Defendants,
as well as establishing proof negating the FLSA exemptions claimed by the
Settling Defendants.
III. SETTLING
DEFENDANTS' STATEMENT
Settling
Defendants deny liability or that any illegal conduct occurred. Settling Defendants allege that their
actions did not violate the FLSA. They
allege that the payment of commissions equal to or in excess of minimum wage
satisfied their obligations under the FLSA as to the Settlement Class
Members. Settling Defendants also
allege that Settlement Class Members were exempt from the FLSA’s minimum wage
and overtime compensation provisions because they were outside salespeople, or
were paid on a commission basis exceeding one and a half times the minimum wage
for each hour worked. The Settling
Defendants assert that they did not instruct any Family Services Counselor, or
any other employee, not to record compensable hours, whether they exceeded
eight in a day or not. The Settling
Defendants assert that deductions made from the Settlement Class Members’ pay,
if any, were appropriate and allowed by law.
The Settling Defendants allege that the Settlement Class Members were
not paid below minimum wage nor denied the equivalent of time and a half for
overtime. The Settling Defendants have
concluded, however, that the further conduct of the Litigation would be
protracted and expensive, and they also have taken into account the uncertainty
and risks inherent in any litigation, especially in complex cases like this
Litigation. Therefore, the Settling
Defendants have determined that it is desirable and beneficial to them that the
Litigation be fully and finally settled as to them in the manner and upon the
terms and conditions set forth in this Stipulation.
IV. CLAIMS OF THE REPRESENTATIVE PLAINTIFFS
AND BENEFITS OF SETTLEMENT
The Representative Plaintiffs believe
that the claims asserted in the Litigation have merit and that the evidence
developed to date in the Litigation supports the claims asserted. However, Counsel for the Representative
Plaintiffs recognizes and acknowledges the expense and length of continued
proceedings necessary to prosecute the Litigation against the Settling
Defendants through trial and through appeals.
Counsel for the Representative Plaintiffs also has taken into account
the uncertainty and risks inherent in any litigation, especially in complex
cases like this Litigation, and they believe that the settlement set forth in
the Stipulation confers substantial benefits upon the Settlement Class and each
of the Settlement Class Members. Based
on their evaluation, Counsel for the Representative Plaintiffs has determined
that the settlement set forth in the Stipulation is in the best interests of
the Representative Plaintiffs and the Settlement Class and each of the
Settlement Class Members.
V. TERMS OF STIPULATION AND AGREEMENT OF
SETTLEMENT
NOW, THEREFORE, IT IS HEREBY STIPULATED
AND AGREED by and among the Representative Plaintiffs (for themselves and the
Settlement Class Members), and the Settling Defendants, by and through their
attorney of record, that, subject to the approval of the Court and the
satisfaction of the conditions set forth herein, the Litigation and the
Released Claims (defined below) shall be finally and fully compromised and
settled, as to the Released Persons (defined below), upon and subject to the
terms and conditions of the Stipulation, as follows:
1.
Definitions
As used in the Stipulation the following
terms have the meanings specified below:
1.1 "Authorized Claimant" means any
Settlement Class Member whose claim has been allowed pursuant to the terms of
the Stipulation.
1.2 "Prime" or the
"Company" means Prime Succession, Inc. or any one or more of the
entities listed on attached Exhibit A.
1.3 "Claimant" means any Settlement
Class Member who files a Proof of Claim in such form and manner, and within
such time, as the Court shall prescribe.
1.4 "Claims Agent" means ___________________________________ or its
successors.
1.5 "Effective Date" means the first
date by which all of the events and conditions specified in ¶9 of the Stipulation
have been met and have occurred.
1.6 "Final" means: (i) The date of final affirmance on an
appeal from the Judgment, the expiration of the time for a petition for a writ
of certiorari to review the Judgment and, if certiorari be granted, the date of
final affirmance of the Judgment following review pursuant to that grant; or
(ii) the date of final dismissal of any appeal from the Judgment or the final
dismissal of any proceeding on certiorari to review the Judgment; or (iii) if
no appeal is filed, the expiration date of the time for the filing or noticing
of any appeal from the Court's judgment approving the Stipulation substantially
in the form of Exhibit "B" hereto, i.e., thirty (30) days after entry
of the Judgment or such longer time as allowed by extension. An appeal or petition for a writ of
certiorari pertaining solely to any plan of allocation and/or application for
attorneys' fees, costs or expenses, shall not in any way delay or preclude the
Judgment from becoming Final.
1.7 "Judgment" means the judgment to
be rendered by the Court, substantially in the form attached hereto as Exhibit
"B."
1.8 "Person" means an individual,
corporation, partnership, limited partnership, association, joint stock
company, estate, legal representative, trust, unincorporated association,
government or any political subdivision or agency thereof, and any business or
legal entity and their spouses, heirs, predecessors, successors,
representatives, or assignees.
1.9 "Plaintiff's Settlement Counsel"
means Crone & Mason, PLC, Alan G. Crone, James R. Becker, Jr. and James J.
Webb, Jr., 8 So. Third Street, Fifth Floor, Memphis, Tennessee, 38103,
Telephone: 901/527-5522.
1.10 "Plan of Allocation" means a plan
or formula of allocation of the Settlement Fund which shall be described in the
"Notice of Pendency and Settlement of Class Action" to be sent to
Settlement Class Members in connection with the Settlement whereby payments
shall be distributed to Authorized Claimants by the Settling Defendants and/or
their representatives.
1.11 "Related Parties" means each of
the Settling Defendant's successors, assigns, heirs, spouses, insurers, agents,
attorneys, accountants, advisors, representatives, partners and associates, and
Prime's past or present subsidiaries, directors, officers, employees, insurers,
agents, underwriters, controlling shareholders, attorneys, accountants,
auditors, advisors, representatives, partners, independent contractors,
affiliates, successors and assigns.
1.12 "Released Claims" shall mean and
include any and all claims, causes of action, demands, rights, or liabilities,
including but not limited to claims for violations of the Fair Labor Standards
Act, and any Unknown Claims as defined in ¶1.21 hereof ("Claims"),
that have been or that could have been asserted in this or any other forum by
or on behalf of the Representative Plaintiffs, the Settlement Class, or any
Member of the Settlement Class based on or related to their employment with
Prime.
1.13 "Released Persons" means each and
all of the Settling Defendants, and their Related Parties.
1.14 "Representative Plaintiffs” mean Class
Plaintiffs Michael Beauregard, Gloria Jones, Bertha Williams and Melinda
Campbell.
1.15 "Settlement Class" means all
persons (except Settling Defendants, members of the immediate family of
Settling Defendants, any entity in which any Settling Defendant has a
controlling interest, and the legal representatives, heirs, successors or
assigns of any such excluded party) who were employed by Prime as a Family Services
Counselor at any time during the period from March 26, 1997 through the present
and validly execute an Inclusion
Request in the form attached hereto as Exhibit “C”.
1.16 "Settlement Class Member" or
"Member of the Settlement Class" means a Person who falls within the
definition of the Settlement Class as set forth in ¶1.15 of the Stipulation.
1.17 "Settlement Class Period" means
the period from March 26, 1997 through and including August 27, 1999,
inclusive.
1.18 "Settling Defendants" means Prime
and any and all entities listed on attached Exhibit “A”.
1.19 "Settling Parties" means,
collectively, each of the Settling Defendants and the Representative Plaintiff
on behalf of himself and the members of the Settlement Class.
1.20 "Unknown Claims" means any
Released Claims which the Representative Plaintiff or any Settlement Class
Member does not know or suspect to exist in his, her or its favor against the
Released Persons at the time of the release of the Released Persons which, if
known by him, her, or it, might have affected his, her, or its settlement with
and release of the Released Persons, or might have affected his, her, or its
decision not to object to this settlement or not to request exclusion from the
Settlement Class.
Solely with
respect to any and all Released Claims, the Settling Parties stipulate and
agree that, upon the Effective Date, the Representative Plaintiff shall
expressly and the Settlement Class Members shall be deemed to, and by operation
of the Judgment shall, waive and relinquish, to the fullest extent permitted by
law, the provisions, rights, and benefits of any and all state or federal laws
providing that general releases do not extend to claims which the creditor did
not know or suspect exist in his or her favor at the time of executing the
release and which, if known by him, would have materially affected his
settlement with the debtor.
The Representative Plaintiffs shall expressly and
the Settlement Class Members shall be deemed to, and upon the Effective Date
and by operation of the Judgment shall, also waive any and all provisions,
rights and benefits conferred by any law of any state or territory of the
United States, or principle of common law, which is similar, comparable or
equivalent to §1542 of the California Civil Code. The Representative Plaintiff and the Settlement Class Members may
hereafter discover facts in addition to or different from those which he or she
now knows or believes to be true with respect to the subject matter of the
Released Claims, but hereby stipulate and agree that the Representative
Plaintiff does and the Settlement Class Members shall be deemed to, upon the
Effective Date, fully, finally, and forever settle and release any and all
Released Claims, as against the Released Persons, known or unknown, suspected
or unsuspected, contingent or non-contingent, whether or not concealed or
hidden, which now exist, or heretofore have existed upon any theory of law or
equity, including, but not limited to, conduct which is negligent, intentional,
with or without malice, or a breach of any duty, law or rule, without regard to
the subsequent discovery or existence of such different or additional
facts. Releasers acknowledge that the
foregoing waiver was separately bargained for and a key element of the
Settlement of which this release is a part.
2.
The Class Settlement
2.1
Each Settling Defendant warrants as to himself or itself that, as of the date
of this Stipulation, he or it is not insolvent within the meaning of and/or for
the purposes of the U.S. Bankruptcy Code §§101 and/or 547.
2.2 The Claims Agent shall be responsible for
determining the veracity of the Proofs of Claim submitted by any Claimant
pursuant to this Stipulation of Settlement, Notice of Settlement and/or any
subsequent Order of the Court.
2.3 Subject to further order and direction by
the Court, the Claims Agent is authorized to execute such transactions on
behalf of the Settlement Class Members and Settling Defendants as are
consistent with the terms of the Stipulation.
Neither the Representative Plaintiffs, Plaintiff’s Settlement Counsel
nor the Settling Defendants shall not be responsible for nor liable for any act
of the Claims Agent, who shall indemnify and hold the Representative
Plaintiffs, Plaintiff’s Settlement Counsel and Settling Defendants harmless
from any liability to any Settlement Class Member that arises out of the Claims
Agent's transactions involving the Settlement Fund.
3.
Compromise Agreement
This Stipulation of Settlement is a
compromise disposition of controverted claims.
No consideration for this Stipulation, and nothing contained in this
Stipulation shall be construed as an admission of any liability or any lack of
merit to the claims asserted by or on behalf of any of the Settling Parties or
their attorneys.
4. Notice And Administration
4.1 Within ten (10) days after the payment of
the Settlement Fund or any portion thereof to the Claims Agent, the Claims
Agent may establish a "Notice and Administration Fund," and $100,000
may be transferred from the Settlement Fund to it. The Notice and Administration Fund may be used by Plaintiff's
Settlement Counsel to pay costs and expenses reasonably and actually incurred
in connection with providing notice to the Settlement Class, locating Class
members, soliciting Class claims, assisting with the filing of claims,
administering and distributing the Settlement Fund to the Members of the
Settlement Class, processing Proofs of Claim and Release and paying escrow fees
and costs, if any. The Notice and
Administration Fund may also be invested and earn interest as provided for in
¶2.4 of this Stipulation.
4.2 On the Effective Date, any balance
(including interest) then remaining in the Notice and Administration Fund, less
expenses incurred but not yet paid, may be transferred by the Escrow Agent to,
and deposited and credited as part of, the Settlement Fund to be applied as set
forth in ¶7.2 below. Thereafter,
Plaintiff's Settlement Counsel shall have the right to use such portions of the
Settlement Fund as are, in their exercise of reasonable judgment, necessary to
carry out the purposes set forth in ¶4.1.
5.
Notice Order and Settlement Hearing
5.1 Promptly after execution of the
Stipulation, but in no event later than ten days after the Stipulation is
signed (unless such time is extended by the written agreement of Plaintiff's
Settlement Counsel and counsel for the Settling Defendants), the Settling
Parties shall submit the Stipulation together with its Exhibits to the Court
and shall jointly apply for entry of an order (the "Notice Order"),
substantially in the form and content of Exhibit "C" hereto,
requesting the preliminary approval of the settlement set forth in the
Stipulation, and approval for the mailing and publication of a Class Pendency
and Settlement Notice which shall include the general terms of the settlement
set forth in the Stipulation, the proposed Plan of Allocation, the general
terms of the Fee and Expense Application and the date of the Settlement
Hearing.
5.2 The Settling Parties shall request that,
after notice is given, the Court hold the Settlement Hearing and finally
approve this settlement as set forth herein.
At or after the Settlement Hearing,
the Representative Plaintiffs’ counsel also will request that the Court
approve the proposed Plan of Allocation and the Fee and Expense
Application. Settling Defendants and
Representative Plaintiffs agree that the claims of Representative Plaintiffs’
counsel for attorney’s fees in the Litigation are reasonable and necessary to
the amount of Two Hundred Sixty-Five Thousand and no/100 Dollars ($265,000.00).
5.3 The Class Notice Order shall specifically
include provisions that, among other things, will:
(a)
Certify the Class solely for purposes of this Settlement;
(b)
Preliminarily approve the Stipulation and the settlement set forth
herein as being fair, just, reasonable and adequate;
(c) Approve the form of Notice of Pendency and
Settlement of Class Action ("Notice") (substantially in the form of
Exhibit "C-1" hereto) for mailing to members of the Class and the
form of summary notice ("Summary Notice") (substantially in the form
of Exhibit "C-2" hereto) for publication;
(d)
Approve the form of Proof of Claim and Release ("Proof of Claim and
Release") (substantially in the form of Exhibit "C-3" hereto)
for mailing to members of the Class;
(e)
Direct Plaintiff's Settlement Counsel to mail or cause to be mailed by
first class mail the Notice and, the Proof of Claim and Release to those
Persons in the Class who are identified as Family Service Counselors on Exhibit
“D” on or before the date to be specified in the Notice Order;
(f)
Direct that individuals identified as Family Service Counselors on
Exhibit “D” send the Notice and Proof of Claim and Release form to the Claims
Agent within thirty (30) days after receipt of the Notice;
(g)
Provide that any Settlement Class Member who wishes to be included in
the Settlement Class must provide written notice of such request to the claims
administrator identified in the Notice, referring to the Litigation and setting
forth his or her name, address, and social security number and beginning and
ending dates of employment, within thirty-five (35) days of mailing of the
Notice. All Settlement Class Members
not exercising the option to be included in the Settlement Class within the
specified time period shall not be bound by this Stipulation, the settlement
and releases contained herein, and the Final Judgment entered hereon and shall
not have any further opportunity to opt into of the Settlement Class. Any Settlement Class Member who shall timely
and properly elect to be included in the Settlement Class shall be permitted to
revoke such election by mailing a request for revocation to the claims
administrator at any time prior to the expiration of thirty-five (35) days of
the mailing of the Notice, and in such event shall no longer be a Settlement
Class Member for any purposes. Any
Person who, pursuant to the provisions of this Paragraph and the Notice Order,
elects to be included in the Settlement Class and does not revoke such election
as provided above, shall have a full right to his or her full portion of the
Settlement Fund in such amount as deemed established by the Claims Agent. Any Settlement Class Member who shall fail
and/or refuse to opt into the Settlement Class shall be left, as to the
Released Persons, only to his or her individual remedies;
(h)
Provide that Settlement Class Members who wish to participate in the
settlement provided for in this Stipulation shall complete and file a Proof of
Claim and Release form pursuant to the instructions contained therein if they
have not already done so;
(i)
Find that the notice given pursuant to subparagraphs (d) through (i),
above, constitutes the best notice practicable under the circumstances,
including individual notice to all Persons in the Class who can be identified
upon reasonable effort, and constitutes valid, due and sufficient notice to all
Persons in the Class, complying fully with the requirements of the Constitution
of the United States, and any other applicable law;
(j)
Schedule a hearing or hearings (the "Settlement Hearing") to
be held by the Court to consider and determine whether (i) the proposed
settlement of the Litigation against the Settling Defendants as contained in
the Stipulation should be approved as fair, reasonable and adequate; and (ii)
the Judgment approving the settlement should be entered;
(k)
Provide that at or after the Settlement Hearing, the Court shall
determine whether the proposed Plan of Allocation should be approved;
(l)
Provide that at or after the Settlement Hearing, the Court shall
determine and enter an order regarding whether and in what amount attorneys'
fees and reimbursement of expenses should be awarded to the Representative
Plaintiff's counsel;
(m)
Provide that pending final determination of whether the settlement
contained in the Stipulation should be approved, neither the Representative
Plaintiff, nor any Settlement Class Member, either directly, representatively,
or in any other capacity shall commence or prosecute any action or proceeding
in any court or tribunal asserting any of the Released Claims against the
Released Persons;
(n)
Provide that any objections to (i) the proposed settlement contained in
the Stipulation; (ii) entry of the Judgment approving the settlement; (iii) the
proposed Plan of Allocation; (iv) the Representative Plaintiff's Counsel's Fee
and Expense Application, shall be heard and any papers submitted in support of
said objections shall be received and considered by the Court at the Settlement
Hearing only if, on or before a date to be specified in the Notice Order,
Persons making objections shall file and serve on all parties notice of their
intention to appear (which shall set forth each objection and the basis
therefor) and copies of any papers in support of their position as set forth in
the Notice Order;
(o)
Provide that, unless the Court otherwise orders, upon the occurrence of
the Effective Date, all Settlement Class Members who did not timely and validly
request exclusion from the Settlement Class or who timely and validly revoked
any such request, whether or not they file a Proof of Claim and Release within
the time provided for, shall be enjoined and barred from asserting any Released
Claims against any of the Released Persons and any such Settlement Class Member
shall conclusively be deemed to have released any and all such Released Claims
as against all of the Released Persons; and
(p)
Provide that the Settlement Hearing may, from time to time and without
further notice to the Class, be continued or adjourned by Order of the Court.
(q)
Provide that the Scheduling Order, previously entered by this Court,
shall be suspended pending entry of the final order approving settlement. In the event the Court does not, for
whatever reason, approve this settlement, the parties shall jointly petition
the Court for a new Scheduling Conference and new Scheduling Order.
6. Releases
6.1 Upon the Effective Date, as defined in
¶1.4, the Representative Plaintiffs shall and each of the Settlement Class
Members shall hereby be deemed to have, and by operation of the Judgment shall
have, fully, finally, and forever released, relinquished and discharged all
Released Claims against each and all of the Released Persons, whether or not
such Settlement Class Member executes and delivers the Proof of Claim and
Release.
6.2 Upon the Effective Date, each of the
Settling Defendants shall be deemed to have, and by operation of the Judgment
shall have, fully, finally, and forever released, relinquished and discharged
each and all of the Representative Plaintiff, the Settlement Class Members and
counsel to the Representative Plaintiff from all claims (including "Unknown
Claims"), arising out of, relating to, or in connection with the
institution, prosecution, assertion or resolution of the Litigation or the
Released Claims except claims to enforce the releases contained in this
Stipulation.
6.3 Upon the Effective Date, the Representative
Plaintiff and each of the Settlement Class Members shall be deemed to have, and
by operation of the Judgment shall have, fully, finally, and forever released,
relinquished and discharged each and all of the Settling Defendants and counsel
to the Settling Defendants from all claims (including "Unknown
Claims"), arising out of, relating to, or in connection with the defense
or resolution of the Litigation or the Released Claims except claims to enforce
the releases contained in this Stipulation.
6.4 Upon the Effective Date, as defined in ¶
1.4, each of the Settling Defendants shall be deemed to have, and by operation
of the Judgment shall have, fully, finally and forever released, relinquished
and discharged each other Settling Defendant from any and all claims (including
Unknown Claims) arising out of any of the facts, circumstances, allegations,
claims, causes of action, representations, statements, reports, disclosures,
transactions, events, occurrences, acts, omissions or failures to act which are
the subject of the Released Claims.
6.5 Only those Settlement Class Members filing
valid and timely Proofs of Claim and Release shall be entitled to participate
in the settlement and receive any distributions from the Settlement Fund. The releases to be executed by the
Settlement Class Members shall release all Released Claims against the Released
Persons, and shall be substantially in the form contained in Exhibit
"C-3" hereto.
7.
Administration
And Calculation Of Claims, Final Awards And Supervision And Distribution Of The
Settlement Fund
7.1 The Claims Agent, or their authorized
agents, subject to the supervision, direction and approval of the Court, shall
administer and calculate the claims submitted by Settlement Class Members and
shall oversee distribution of that portion of the Settlement Fund that is
finally awarded by the Court to the Settlement Class Members.
7.2 Settlement Class Counsel, or their
authorized agents, subject to the supervision, direction and approval of the
Court shall oversee the administration and calculation of the claims submitted
by Settlement Class Members and the distribution of that portion of the
Settlement Fund that is finally awarded by the Court to the Settlement Class
Members.
7.3 The Settlement Fund shall be applied as
follows:
(a)
To pay counsel to Representative Plaintiff attorneys' fees, expenses and
costs, with interest thereon (the "Fee and Expense Award"), if and to
the extent allowed by the Court;
(b)
To pay all unpaid costs and expenses reasonably and actually incurred in
connection with providing Class Notice including, locating Class members,
soliciting Class claims, assisting with the filing of claims, administering and
distributing the Settlement Fund to the Settlement Class, processing Proofs of
Claim and Release and paying escrow fees and costs, if any;
(c)
To pay Taxes and Tax Expenses; and
(d)
To distribute the balance of the Settlement Fund (the "Net
Settlement Fund") to Authorized Claimants as allowed by the Stipulation,
the Plan of Allocation or the Court.
7.4 After the Effective Date and subject to
such further approval and further order(s) of the Court as may be required, the
Net Settlement Fund shall be distributed to Settlement Class Members who submit
valid, timely filed Proofs of Claim and Release ("Authorized
Claimants"), subject to and in accordance with the following:
(a)
Within ninety (90) days after the mailing of the Notice or such other
time as may be set by the Court, each Person claiming to be an Authorized Claimant
shall be required to submit to the Claims Agent a separate completed Proof of
Claim and Release as attached to the Notice and substantially in the form of
Exhibit "C-3" hereto, signed under penalty of perjury and supported
by such documents as specified in the Proof of Claim and Release and as are
reasonably available to the Authorized Claimant.
(b)
Except as otherwise ordered by the Court, all Settlement Class Members
who fail to timely submit a Proof of Claim and Release within such period, or such
other period as may be ordered by the Court, or who have not already done so,
shall be forever barred from receiving any payments pursuant to the Stipulation
and the settlement set forth herein, but will in all other respects be subject
to and bound by the provisions of the Stipulation, the settlement and releases
contained herein, and the Judgment.
(c)
The Settlement Fund shall be distributed to the Authorized Claimants at
the rate of 100% of their verified claims.
7.5 The Released Persons shall have no
responsibility for, interest in, or liability whatsoever with respect to the
investment or distribution of the Settlement Fund, the determination,
administration, calculation or payment of claims, or any losses incurred in
connection therewith. Released Persons
are released from any and all liability and claims arising from or with respect
to the investment or distribution of the Settlement Fund.
7.6 No Person shall have any claim against
Representative Plaintiff's counsel or any claims administrator, or other agent
designated by Plaintiff's Settlement Counsel, or Released Persons or their
counsel based on the distributions made substantially in accordance with the
Stipulation and the settlement contained herein or further orders of the Court.
8.
Representative
Plaintiff's Counsel's Attorneys' Fees And Reimbursement Of Expenses
8.1 The Representative Plaintiff or their
counsel may submit an application or applications (the "Fee and Expense
Application") for distributions to them from the Settlement Fund for: (i)
an award of attorneys' fees in an amount equal to up to Three Hundred Thousand
and no/100 Dollars ($300,000.00); plus (ii) reimbursement of all expenses and
costs, including the fees of any experts or consultants incurred in connection
with prosecuting the Litigation, plus interest on such attorneys' fees, costs
and expenses at the same rate and for the same periods as earned by the
Settlement Fund, as may be awarded by the Court. Representative Plaintiff's counsel reserve the right to make
additional applications for fees and expenses incurred.
8.2 The attorneys' fees, expenses and costs,
including the fees of experts and consultants, as awarded by the Court (the
"Fee and Expense Award"), shall be transferred to Plaintiff's
Settlement Counsel from the Settling Defendants at a date not later than
December 15, 1999. Plaintiff's
Settlement Counsel shall thereafter allocate the Fee and Expense Award amongst
Representative Plaintiff's Counsel in a manner in which they in good faith
believe reflects the contributions of such counsel to the prosecution and
settlement of the Litigation; provided, however, that in the event that the
Stipulation and the settlement set forth herein does not become Effective for
any reason, or the Judgment or the Order making the Fee and Expense Award is
reversed or modified on appeal, and in the event that the Fee and Expense Award
have been paid to any extent, then Representative Plaintiff's Counsel shall
refund to the Settlement Fund the fees, expenses, costs and interest previously
paid to them in an amount consistent with such reversal or modification. Settling Defendants further agree that they
will pay Plaintiff’s Settlement Counsel the amount of $2,000.00 for every 30 day
period which passes beyond the December 15, 1999 payment date without Settling
Defendants having paid the Fee and Expense Award.
Settling
Defendants shall also pay to Representative Plaintiffs’ Counsel their full
hourly rate for time expended in administering the Settlement Class up to a maximum
of $25,000.00. This will include any
and all time expended by Representative Plaintiffs’ Counsel after the Effective
Date, including, but not limited to time expended in noticing the claimants,
evaluating the Proofs of Claim and calculating the amount of payment to be made
by Settling Defendants to the Claimants.
8.3 The procedure for and the allowance or
disallowance by the Court of any applications by any of the counsel to the
Representative Plaintiff for attorneys' fees, costs and expenses, including the
fees of experts and consultants are not part of the settlement set forth in the
Stipulation, and are to be considered by the Court separately from the Court's
consideration of the fairness, reasonableness and adequacy of the settlement
set forth in the Stipulation, and any order or proceedings relating to the Fee
and Expense Application, or any appeal from any order relating thereto, shall
not operate to terminate or cancel the Stipulation, or affect or delay the
finality of the Judgment approving the Stipulation and the settlement of the
Litigation set forth herein.
9.
Conditions
Of Settlement, Effect Of Disapproval, Cancellation Or Termination
9.1 The Effective Date of the Stipulation shall
be conditioned on the occurrence of all of the following events:
(a)
The Court has entered the Notice Order, as required by ¶5.3, above;
(b)
The Court has entered the Judgment, or a judgment substantially in the
form and content of Exhibit "C"; and
(c)
The Judgment has become Final, as defined in ¶1.6, above.
9.2 Neither a modification nor reversal on
appeal of any plan of allocation or of any amount of attorneys' fees, costs,
expenses and interest awarded by the Court to any of the Representative
Plaintiff's counsel shall constitute grounds for cancellation and termination
of the Stipulation.
9.3 If the Court in the case of Beauregard,
et al. v. Prime Business Solutions, Inc., et al. (U.S. District Court,
Western District of Tennessee Case No.99-22785-D/Bre) does not find that the
settlement set forth in the Stipulation for settlement of that case is fair,
just, reasonable and adequate or otherwise declines to enter the Judgment
substantially in the form and content of Exhibit "C" to that
Stipulation, then any Settling Defendant may terminate the settlement set forth
in this Stipulation upon filing Notice of such termination with the Court and
serving a copy of that Notice on all parties to this Stipulation no later than
three business days following entry of any written Order of the Court in Beauregard,
et al. v. Prime Business Solutions, Inc., et al. that declines to make such
finding or enter such Judgment.
9.4 If all of the conditions specified in ¶9.1
are not met, then the Stipulation shall be canceled and terminated unless
Plaintiff's Settlement Counsel and counsel for Settling Defendants mutually
agree in writing to proceed with the Stipulation.
9.5 In the event that the Stipulation is not
approved by the Court or the settlement set forth in the Stipulation is
terminated or fails to become effective in accordance with its terms, the
Settling Parties shall be restored to their respective positions in the
Litigation as of November ___, 1999. In
such event, the terms and provisions of the Stipulation shall have no further
force and effect with respect to the Settling Parties and shall not be used in
this Litigation or in any other proceeding for any purpose, and any Judgment
entered by the Court in accordance with the terms of the Stipulation shall be
treated as vacated, nunc pro tunc. No
order of the Court or modification or reversal on appeal of any order of the
Court concerning the Plan of Allocation or the amount of any attorneys' fees,
costs, expenses and interest awarded by the Court to the Representative
Plaintiff or any of their counsel shall constitute grounds for cancellation or
termination of the Stipulation.
9.6 If the Effective Date does not occur, or if
the Stipulation is terminated pursuant to its terms, neither the Representative
Plaintiff nor any of their counsel shall have any obligation to repay any
amounts actually and properly expended in the notice and administration of this
settlement. In addition, any expenses
already incurred and properly chargeable pursuant to ¶4.1 at the time of such
termination or cancellation but which have not been paid, shall be paid by the
Claims Agent in accordance with the terms of the Stipulation.
10. Miscellaneous Provisions
10.1 The Settling Parties (a) acknowledge that
it is their intent to consummate this agreement; and (b) agree to cooperate to
the extent necessary to effectuate and implement all terms and conditions of
the Stipulation and to exercise their best efforts to accomplish the foregoing
terms and conditions of the Stipulation.
10.2 Settling Defendants agree to pay 100% of
all Approved Claims within thirty (30) days of their submission by the Claims
Agent and that this process has been reached voluntarily by Representative
Plaintiffs and Settling Defendants after consultation with experienced legal
counsel. The Stipulation and Settlement may be used in such proceedings as may
be necessary to consummate or enforce the Stipulation, the settlement or the
Judgment, and Settling Defendants may file the Stipulation and/or the Judgment
in any action that may be brought against them in order to support a defense or
counterclaim based on principles of res judicata, collateral estoppel, release,
good faith settlement, judgment bar or reduction or any other theory of claim
preclusion or issue preclusion or similar defense or counterclaim.
10.3 All of the Exhibits to the Stipulation are
material and integral parts hereof and are fully incorporated herein by this
reference.
10.4 The Stipulation may be amended or modified
only by a written instrument signed by or on behalf of all Settling Parties or
their successors-in-interest.
10.5 The Stipulation and the Exhibits attached
hereto constitute the entire agreement among the parties hereto and no
representations, warranties or inducements have been made to any party
concerning the Stipulation or its Exhibits other than the representations,
warranties and covenants contained and memorialized in such documents. Except as otherwise provided herein, each
party shall bear its own costs.
10.6 Plaintiff's Settlement Counsel, on behalf
of the Settlement Class are expressly authorized by the Representative
Plaintiff to take all appropriate action required or permitted to be taken by
the Settlement Class pursuant to the Stipulation to effectuate its terms and
also are expressly authorized to enter into any modifications or amendments to
the Stipulation on behalf of the Settlement Class which they deem appropriate.
10.7 Each counsel or other Person executing the
Stipulation or any of its Exhibits on behalf of any party hereto hereby
warrants that such person has the full authority to do so.
10.8 The Stipulation may be executed in one or
more counterparts. All executed
counterparts and each of them shall be deemed to be one and the same
instrument. Counsel for the parties to
the Stipulation shall exchange among themselves original signed counterparts
and a complete set of original executed counterparts shall be filed with the
Court.
10.9 The Stipulation shall be binding upon, and
inure to the benefit of, the successors and assigns of the parties hereto.
10.10 The Court shall retain jurisdiction with
respect to implementation and enforcement of the terms of the Stipulation, and
all parties hereto submit to the jurisdiction of the Court for purposes of
implementing and enforcing the settlement embodied in the Stipulation.
10.11 The Stipulation and the Exhibits hereto
shall be considered to have been negotiated, executed and delivered, and to be
wholly performed, in the State of California, and the rights and obligations of
the parties to the Stipulation shall be construed and enforced in accordance
with, and governed by, the internal, substantive laws of the State of
California without giving effect to that State's choice of law principles.
IN WITNESS WHEREOF, the parties hereto
have caused the Stipulation to be executed, by their duly authorized attorneys,
as of the _____ day of __________________, 1999.
Alan G. Crone
James R. Becker, Jr.
James J. Webb
Crone & Mason, PLC
8
South Third, 5th Floor
Memphis,
Tennessee, 38103
(901)
527-5522
Counsel for Representative Plaintiffs
William G.
Trumpeter
Kelly Weston
Miller &
Martin LLP
1275 Peachtree Street N.E., 7th Floor
Atlanta, Georgia 30309-3576
Counsel
for Settling Defendants