Opinion
Civil Action No. H-01-3624, (Consolidated), MDL 1446.
July 24, 2003.
CLASS ACTION
ORDER PRELIMINARILY APPROVING SETTLEMENT
WHEREAS, consolidated class actions are pending before this Court, including (i) In re Enron Corporation Securities Litigation, Civil Action No. H-01-3624, which includes, among others, cases entitled Newby, et al., v. Enron Corp., et al.; The Regents of the University of California, et al., v. Kenneth L. Lay, et al.; and Washington State Investment Board and Employer-Teamsters Local Nos. 175 and 505 Pension Trust Fund, et al., v. Kenneth L. Lay, et al.; and (ii) Pamela M. Tittle, et al., v. Enron Corp., et al., Civil Action No. H-01-3913; and
WHEREAS, the Settling Parties have applied to the Court, pursuant to Rule 23 of the Federal Rules of Civil Procedure, for an order approving the settlement of the Actions as to them in accordance with the Stipulation of Settlement among them dated as of August 29, 2002 (the "Stipulation"), which, together with the Exhibits annexed thereto, sets forth the terms and conditions for a proposed settlement of the Actions as to the Released Entities (the "Settlement") and for dismissal of the Actions with prejudice as to AWSC and the Defendant Member Firms; WHEREAS, the Stipulation provides for the conditional certification of the Settlement Class solely for purposes of the Settlement; and
WHEREAS, the Court has read and considered the Stipulation and the Exhibits annexed thereto and has read and considered all other papers filed and proceedings had herein, and is otherwise fully informed in the premises, and with good cause appearing therefore;
NOW, THEREFORE, IT IS HEREBY ORDERED:
1. This Order (the "Preliminary Approval Order") incorporates by reference the definitions in the Stipulation, and all capitalized terms used herein shall have the same meanings set forth in the Stipulation.
2. The Court preliminarily approves the Stipulation, including the releases contained therein, and the Settlement as being fair, reasonable, and adequate to the Settlement Class.
3. Solely for purposes of the Stipulation and the Settlement, the Court now finds and concludes that:
(a) With respect to all Released Claims, particularly in light of the Settlement, (1) the members of the Settlement Class are so numerous that joinder of all class members in the Actions is impracticable; (2) there are questions of law and fact common to the Settlement Class; (3) the claims of the Representative Plaintiffs are typical of the claims of the Settlement Class; and (4) in negotiating and entering into the Stipulation, the Representative Plaintiffs and their counsel have fairly and adequately represented and protected the interests of all Settlement Class Members;
(b) With respect to all Released Claims other than the Tittle ERISA Claims, (1) the questions of law and fact that are common to the Settlement Class predominate over any individual questions; and (2) a class action is superior to other available methods for the fair and efficient adjudication of this controversy, considering (i) the interests of the Settlement Class Members in individually controlling the prosecution of separate actions, (ii) the extent and nature of any litigation concerning the controversy already commenced by Settlement Class Members, (iii) the desirability or undesirability of concentrating the litigation of these claims in this particular forum, and (iv) the difficulties likely to be encountered in the management of the Actions; and
(c) With respect to the Tittle ERISA Claims, (1) the prosecution of separate actions by individual Tittle Settlement Class Members would create a risk of inconsistent or varying adjudications with respect to such individual Tittle Settlement Class Members that would establish incompatible standards of conduct for AWSC and the AWSC Entities, and (2) adjudications with respect to individual Tittle Settlement Class Members would as a practical matter dispose of the interests of other individual Tittle Settlement Class Members not parties to the Tittle Action or substantially impair or impede the ability of such other individual Tittle Settlement Class Members to protect their interests.
4. With respect to the Tittle ERISA Claims and solely for purposes of the Stipulation and the Settlement, the Settlement Class is hereby certified pursuant to Rule 23(b)(1) of the Federal Rules of Civil Procedure in accordance with the follow ing definitions as set forth in the Stipulation:
(a) "Newby Settlement Class" means all purchasers (and their beneficiaries) of any publicly traded securities of Enron Corporation from September 9, 1997 through November 27, 2001, inclusive. Excluded from the Newby Settlement Class are Defendants, the officers and directors of Enron, and members of their immediate families or their successors, heirs, and legal representatives. Also excluded from the Newby Settlement Class are those Persons who timely and validly request exclusion from the Settlement Class, to the extent that they are able to do so under Rule 23 of the Federal Rules of Civil Procedure, pursuant to the Mailed Notice (as defined in paragraph 7, below);
(b) "Tittle Settlement Class" means all participants (and their beneficiaries), including holders during the relevant period (and their beneficiaries), in the Savings Plans, the recipients of any "phantom stock" that employees (and their beneficiaries) received as compensation, and the Savings Plans themselves during the period from November 27, 1995, through November 26, 2001, inclusive. Excluded from the Title Settlement Class are Defendants, the officers and directors of Enron, and members of their immediate families or their successors, heirs, and legal representatives. Also excluded from the Tittle Settlement Class are that they are able to do so under Rule 23 of the Federal Rules of Civil Procedure, pursuant to the Mailed Notice (as defined in paragraph 7, below); and
(c) "Settlement Class" means the Newby Settlement Class and the Tittle Settlement Class, collectively. Excluded from the Settlement (lass are those Persons who timely and validly request exclusion from the Settlement Class, to the extent that they are able to do so under Rule 23 of the Federal Rules of Civil Procedure, pursuant to the Mailed Notice (as defined in paragraph 7, below). For the avoidance of doubt, the Newby Settlement Class and the Tittle Settlement Class are not mutually exclusive of each other, such that any individual Person may at once be a Member of both the Newby Settlement Class and the Tittle Settlement Class.
5. With respect to all Released Claims other than the Tittle ERISA Claims and solely for purposes of the Stipulation and the Settlement, the Settlement Class is hereby certified pursuant to Rule 23(b)(3) of the Federal Rules of Civil Procedure in accordance with the definitions set forth in paragraph 4, above.
6. Solely for purposes of the Stipulation and the Settlement, the Representative Plaintiffs are hereby certified as the class representatives pursuant to Rule 23(b)(3) of the Federal Rules of Civil Procedure. The Representative Plaintiffs in the Tittle Action are also certified as class representatives pursuant to Rule 23(b)(1) of the Federal Rules of Civil Procedure.
7. The Court approves, as to form and content, the Notice of Pendency and Partial Settlement of Class Action annexed hereto as Exhibit A-1 (the "Mailed Notice").
8. The Court approves, as to form and content, the Summary Notice for Publication annexed hereto as Exhibit A-2 (the "Summary Notice").
9. The date and time of the Settlement Hearing shall be added to the Mailed Notice and the Summary Notice before they are mailed and published, respectively, in accordance with paragraph 11, below.
10. The Court finds that the mailing, publication and distribution of the Mailed Notice and Summary Notice substantially in the manner and form set forth in paragraph 11, below, constitutes the best notice practicable under the circumstances, including individual notice to all Settlement Class Members who can be identified through reasonable effort, and constitutes valid, due and sufficient notice to all persons entitled thereto, complying fully with the requirements of Rule 23 of the Federal Rules of Civil Procedure and due process.
11. The Notice and Claims Administrator is empowered to supervise and administer the notice procedure, as set forth below:
(a) Commencing on or before August 4, 2003, the Notice and Claims Administrator shall mail or cause to be mailed, by first class mail, postage prepaid, copies of the Mailed Notice to all Settlement Class Members who can be identified by Plaintiffs' Settlement Counsel with reasonable effort at each such Settlement Class Member's last known address; and
(b) On or before August 21, 2003, the Notice and Claims Administrator shall cause the Summary Notice to be published twice in the Investor's Business Daily and twice in the Houston Chronicle.
12. At or prior to the Settlement Hearing (as defined below), Plaintiffs' Settlement Counsel shall file with the Court and serve on counsel for AWSC proof by declaration or affidavit of the mailing and publication described in paragraph 11, above.
13. Settlement Class Members who wish to exclude themselves from the Settlement Class must do so in accordance with the instructions contained in the Mailed Notice.
14. All Persons who fall within the definition of the Newby Settlement Class only and who do not timely and validly request to be excluded from the settlement Class in accordance with the instructions set forth in the Mailed Notice shall be subject to and bound by the provisions of the Stipulation, the releases contained therein, and the Judgment with respect to all Released Claims, regardless of whether such Persons seek or obtain by any means, including without limitation by submitting a Proof of Claim and Release or any similar document, any distribution from the Gross Settlement Fund or the Net Settlement Fund.
15. All Persons who fall within the definition of the Tittle Settlement Class, or who fall within the definitions of both the Tittle Settlement Class and the Newby Settlement Class, and who do not timely and validly request to be excluded from the Settlement Class in accordance with the instructions set forth in the Mailed Notice shall be subject to and bound by the provisions of the Stipulation, the releases contained therein, and the Judgment with respect to all Released Claims, regardless of whether such Persons seek or obtain by any means, including without limitation by submitting a Proof of Claim and Release or any similar document, any distribution from the Gross Settlement Fund or the Net Settlement Fund.
16. All Persons who fall within the definition of the Tittle Settlement Class, or who fall within the definitions of both the Tittle Settlement Class and the Newby Settlement Class, and who do timely and validly request to be excluded from the Settlement Class in accordance with the instructions set forth in the Mailed Notice shall be subject to and bound by the provisions of the Stipulation, the releases contained therein, an the Judgment with respect to the Tittle ERISA Claims only, and shall be subject to and bound by such provisions regardless of whether such Persons seek or obtain by any means, including without limitation by submitting a Proof of Claim and Release or any similar document, any distribution from the Gross Settlement Fund or the Net Settlement Fund.
17. A hearing (the "Settlement Hearing") shall be held on October 23, 2003 at 10:10, a.m., before the Honorable Melinda Harmon, United States District Judge, at the United States District Court for the Southern District of Texas, Bob Casey United States Courthouse, 515 Rusk Avenue, Houston, Texas 77002, to determine (a) whether the proposed Settlement as set forth in the Stipulation is fair, reasonable and adequate and should be approved by the Court; (b) whether an Order of Final Judgment and Dismissal, substantially in the form of Exhibit B to the Stipulation, should be entered herein; (c) whether the establishment of the Expense Fund should be approved; and (d) whether the procedures agreed upon among the Representative Plaintiffs for the allocation of the Gross Settlement Fund between the Newby Action and the WSIB Action, on the one hand, and the Tittle Action, on the other, should be approved.
18. All papers in support of the Settlement shall be filed at least seven (7) days prior to the Settlement Hearing.
19. Any Settlement Class Member may appear and show cause (if he, she or it has any) why the Court should or should not (a) approve the proposed Settlement as set forth in the Stipulation as fair, reasonable and adequate; (b) enter the Order of Final Judgment and Dismissal substantially in the form annexed as Exhibit B to the Stipulation; (c) approve the establishment of the Expense Fund; or (d) approve the procedures agreed upon among the Representative Plaintiffs for the allocation of the Gross Settlement Fund between the Newby Action and the WSIB Action, on the one hand, and the Tittle Action, on the other; provided, however that no person shall be heard with respect to, or shall be entitled to contest, the foregoing matters unless on or before September 24, 2003, that person has served by hand or by first class mail notice of his, her or its intention to appear, setting forth briefly each objection and the basis therefor, together with copies of any papers and briefs in support of said objections and proof of membership in the Settlement Class, upon William S. Lerach and Keith F. Park, Milberg Weiss Bershad Hynes Lerach LLP, 401 B Street, Suite 1700, San Diego, California 92101 (on behalf of Lead Plaintiff in the Newby Action and plaintiffs in the WSIB Action), upon Steve W. Berman, Hagens Berman LLP, 1301 Fifth Avenue, Suite 2900, Seattle, Washington 98101, and Lynn Lincoln Sarko, Keller Rohrback LLP, 1201 Third Avenue, Suite 3200, Seattle, Washington 9S101-3052 (on behalf of plaintiffs in the Tittle Action); and upon William F. Lloyd, Sidley Austin Brown Wood, Bank One Plaza, 10 South Dearborn Street, Chicago, Illinois 60603, and William E. Matthews, Gardere Wynne Sewell LLP, 1000 Louisiana, Suite 3400, Houston, Texas 77002-5007 (on behalf of defendant AWSC); and has filed said objections, papers and briefs with the Court. Unless otherwise ordered by the Court, any Settlement Class Member who does not make his, her, or its objection in the manner provided for herein shall be deemed to have waived such objection and shall forever be foreclosed from making any objection to the foregoing matters.
20. The Court may adjourn the Settlement Hearing from time to time and without further notice to the Settlement Class. The Court reserves the light to approve the Settlement at or after the Settlement Hearing with such modifications as may be consented to by the Settling Parties and without further notice to the Settlement Class. The Court further reserves the right to enter the Order of Final Judgment and Dismissal, inter alia, dismissing the Actions with prejudice as to AWSC and the Settling Defendants and against Representative Plaintiffs and the Settlement Class at or after the Settlement Hearing and without further notice to the Settlement Class.
21. Upon the Effective Date, the Representative Plaintiffs and each of the Settlement Class Members, on behalf of themselves, their successors and assigns, and any other Person claiming (now or in the future) through or on behalf of them, and regardless of whether any such Representative Plaintiff or Settlement Class Member ever seeks or obtains by any means, including without limitation by submitting a Proof of Claim and Release or any similar document, any distribution from the Gross Settlement Fund, shall be deemed to have, and by operation of the Judgment shall have, fully, finally, and forever released, relinquished, and discharged all Released Claims against all Released Entities and shall have covenanted not to sue all such Released Entities with respect to all such Released Claims, and shall be permanently barred and enjoined from instituting, commencing, or prosecuting any such Released Claim against any Released Entity.
22. Except as otherwise provided in the Stipulation no person who is not a Settlement Class Member or counsel for one or more of the Representative Plaintiffs shall have any rights to any portion of the Gross Settlement Fund.
23. Banks, brokerage firms, institutions, and other persons who are nominees that purchased publicly traded securities of Enron for the beneficial interest of other persons during the Settlement Class Period shall, within ten (10) calendar days of receiving the Mailed Notice (a) send the Mailed Notice to all such beneficial owners, or (b) send a list of the names and addresses of such beneficial owners to the Notice and Claims Administrator, in which event the Notice and Claims Administrator shall promptly mail the Mailed Notice to such beneficial the Mailed Notice to such beneficial owners will be reimbursed by Plaintiffs' Settlement Counsel from the Gross Settlement Fund.
24. The Fiduciary of the Savings Plans shall, within ten (10) calendar days of receiving the Mailed Notice, (a) cause the Recordkeeper of the Savings Plans to send the Mailed Notice to all participants during the Settlement Class Period in the Savings Plans, and to the Savings Plans themselves, or (b) send a list of the names and addresses of such participants and Savings Plans to the Notice and Claims Administrator, in which event the Notice and Claims Administrator shall promptly mail the Mailed Notice to such participants and Savings Plans. The Mailed Notice will advise the Fiduciary of the Savings Plans that its reasonable costs in providing the Mailed Notice to such participants and Savings Plans will be reimbursed by Plaintiffs' Settlement Counsel from the Gross Settlement Fund.
25. Within ten (10) days after entry by the Court of this Preliminary Approval Order, Plaintiffs' Settlement Counsel in the Tittle Action shall use their best efforts to obtain the names and addresses of all recipients during the Settlement Class Period of any "phantom stock" that employees (or their beneficiaries) received as compensation, and shall cause the Mailed Notice promptly to be mailed to such employees, or shall cause the Notice and Claims Administrator promptly to mail such Notice to such employees.
26. All reasonable costs and expenses incurred in identifying and providing notice to Settlement Class Members and in administering the Gross Settlement Fund shall be paid as set forth in the Stipulation.
27. The Court retains jurisdiction over all proceedings arising out of or related to the Stipulation and/or the Settlement. Nothing in this Preliminary Approval Order, however, is or may be construed to be a finding or determination that this Court has jurisdiction over any Released Entity.
28. If for any reason the Settlement does not become effective in accordance with the terms of the Stipulation, this Preliminary Approval Order shall be rendered null and void and shall be vacated nunc pro tunc, and the provisions of paragraphs 7.5 and 7.6 of the Stipulation shall apply.
29. Without further order of the Court, the Settling Parties may agree to reasonable extensions of time to carry out any of the provisions of this Preliminary Approval Order or the Stipulation.
30. Pending final determination as to whether the Settlement as set forth in the Stipulation should be approved, no Settlement Class Member shall commence, prosecute, pursue or litigate any Released Claim against any Released Entity, whether directly, representatively or in any other capacity, and regardless of whether or not any such Settlement Class Member has appeared in the Actions.
IT IS SO ORDERED.
EXHIBIT A-1 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION
______________________________ In re ENRON CORPORATION § Civil Action No. H-01-3624 SECURITIES LITIGATION § (Consolidated) ______________________________ § This Document Relates To: § CLASS ACTION § MARK NEWBY, et al., § NOTICE OF PENDENCY AND PARTIAL § SETTLEMENT OF CLASS ACTION Plaintiffs, § § vs. § § ENRON CORP., et al., § § Defendants. § ______________________________ § THE REGENTS OF THE UNIVERSITY § OF CALIFORNIA, et al., § § Plaintiffs, § § vs. § § KENNETH L. LAY, et al., § § Defendants. § ______________________________ § WASHINGTON STATE INVESTMENT § BOARD and EMPLOYER-TEAMSTERS § LOCAL NOS. 175 and 505 PENSION § TRUST FUND, et al., § § Plaintiffs, § § vs. § § KENNETH L. LAY, et al., § § Defendants. § ______________________________ § PAMELA M. TITTLE, et al., § § Plaintiffs, § § vs. § § ENRON CORP., an Oregon § corporation, et al., § § Defendants. § ______________________________ §
TO: (1) ALL PERSONS WHO PURCHASED PUBLICLY TRADED SECURITIES OF ENRON CORPORATION DURING THE PERIOD FROM SEPTEMBER 9, 1997, THROUGH AND INCLUDING NOVEMBER 27, 2001, AND (2) ALL PARTICIPANTS IN THE ENRON CORPORATION SAVINGS PLAN, THE ENRON ESOP PLAN, THE ENRON CASH BALANCE PLAN, AND SUCH PLANS THEMSELVES, AND ALL RECIPIENTS OF ANY "PHANTOM STOCK" THAT EMPLOYEES OF ENRON RECEIVED AS COMPENSATION, DURING THE PERIOD FROM NOVEMBER 27, 1995, THROUGH AND INCLUDING NOVEMBER 26, 2001.
This Notice of Pendency and Partial Settlement of Class Action (the "Notice") is given pursuant to Rule 23 of the Federal Rules of Civil Procedure to inform you of the proposed partial settlement of these Actions (the "Settlement") and the hearing (the "Settlement Hearing") to be held by the United States District Court for the Southern District of Texas (the "Court") to consider the fairness, reasonableness and adequacy of the Settlement as set forth in the Stipulation of Settlement among the Representative Plaintiffs and Andersen Worldwide Societe Cooperative ("AWSC," as further defined below), dated as of August 29, 2002 (the "Stipulation"), on file with the Court. THIS SETTLEMENT DOES NOT RELEASE OR OTHERWISE COMPROMISE ANY CLAIMS BY ANY PERSONS AGAINST ARTHUR ANDERSEN LLP, WHICH WAS THE AWSC MEMBER FIRM THAT PROVIDED AUDITING AND OTHER PROFESSIONAL SERVICES IN THE UNITED STATES, OR ANY OF ARTHUR ANDERSEN LLP'S PARTNERS. All capitalized terms not defined prior to their use in this Notice have the meanings set forth in Part IX, below.
I. STATEMENT OF PLAINTIFF RECOVERY
The Settlement will result in the creation of a cash settlement fund in the aggregate principal amount of Forty Million ($40,000,000) Dollars (the "Gross Settlement Fund"), which, subject to deduction for costs of notice and administration and for attorneys' fees, costs and expenses as approved by the Court, will be available for distribution to Settlement Class Members (as defined below). As described more fully below, the amount of any distribution to Settlement Class Members on a per share basis will depend on future Court proceedings and it is therefore not possible to estimate the amount of any such distribution at the present time. See Part XII.
II. STATEMENT OF POTENTIAL OUTCOME
Representative Plaintiffs and AWSC do not agree on the average amount of damages per share that would have been recoverable from AWSC or the Defendant Member Firms (as defined below) if Representative Plaintiffs were to have prevailed on each claim asserted. The issues on which the parties disagree include (1) whether the Court has jurisdiction over AWSC and the Defendant Member Firms; (2) whether AWSC and the Defendant Member Firms engaged in conduct that would give rise to any liability to the Settlement Class under the federal securities laws, the Employee Retirement Income Security Act ("ERISA"), the Racketeer Influenced and Corrupt Organizations Act ("RICO"), Texas common law, or any other laws; (3) the appropriate economic model for determining the amount by which the publicly traded securities of Enron ("Enron Securities") were allegedly artificially inflated (if at all) during the Settlement Class Period; (4) the amount by which the Enron Securities were allegedly artificially inflated (if at all) during the Settlement Class Period; (5) the effect of various market forces influencing the trading price of Enron Securities at various times during the Settlement Class Period; (6) the extent to which external factors, such as general market conditions, influenced the trading price of Enron Securities at various times during the Settlement Class Period; (7) the extent to which the various matters that Representative Plaintiffs alleged were materially false or misleading influenced (if at all) the trading price of Enron Securities at various times during the Settlement Class Period; (8) the extent to which the various allegedly adverse material facts that Representative Plaintiffs alleged were omitted influenced (if at all) the trading price of the Enron Securities at various times during the Settlement Class Period; (9) the extent, if any, to which the actions of AWSC and the Defendant Member Firms caused damages under ERISA, RICO, or Texas common law; (10) the appropriate measure of damages, if any, for violations of ERISA, RICO, and Texas common law, and (11) whether the statements made or facts allegedly omitted were false, material or otherwise actionable under the federal securities or other laws.
III. ALLOCATION OF GROSS SETTLEMENT FUND AMONG THE ACTIONS
The Representative Plaintiffs have agreed that the Gross Settlement Fund, less any amounts approved by the Court for allocation to the Expense Fund, will be allocated between the Newby Action and the WSIB Action, on the one hand, and the Tittle Action, on the other, by confidential, binding, non-appealable arbitration. Promptly after the arbitrator has ruled and upon further notice to the Settlement Class and an opportunity to be heard, the Representative Plaintiffs will present the arbitration decision to the Court for approval. Settlement Class Members, other than the Representative Plaintiffs, will have the right to challenge the decision of the arbitrator in those proceedings.
The arbitration proceedings described in the preceding paragraph are not part of the settlement among the Representative Plaintiffs and AWSC, and will not affect or delay the finality of the settlement among the Representative Plaintiffs and AWSC.
IV. STATEMENT OF ATTORNEYS' FEES AND EXPENSES SOUGHT
At a future date, upon further notice to the Settlement Class, counsel for the Representative Plaintiffs will apply to the Court for an award of attorneys' fees from the Gross Settlement Fund. No attorneys' fees are being sought at this time. However, the Stipulation provides for the allocation of Fifteen Million ($15,000,000) Dollars of the Gross Settlement Fund for reimbursement of expenses expected to be incurred by Plaintiffs' Settlement Counsel in prosecuting the Actions against the remaining Defendants. The Court will be asked to approve that allocation at the Settlement Hearing, and to divide the total amount allocated for such expenses between the Newby and WSIB Actions, on the one hand, and the Tittle Action, on the other, with the Newby and WSIB Actions receiving 80.5 percent of such total amount and the Tittle Action receiving the remaining 19.5 percent of such total amount.
V. REASONS FOR SETTLEMENT
The parties to this Settlement believe that it is fair, reasonable, and adequate to the Members of the Settlement Class. The parties have reached this conclusion after investigating and considering, among other things, the strengths and weaknesses of the Representative Plaintiffs' claims against AWSC and the Defendant Member Firms, the uncertainties of this complex litigation, and the benefit provided by the Settlement to the Members of the Settlement Class. See Part VIII.
VI. IDENTIFICATION OF ATTORNEYS' REPRESENTATIVES
Any questions regarding the Settlement should be directed to Plaintiffs' Settlement Counsel or their staff:
Rick Nelson Milberg Weiss Bershad Hynes Lerach LLP 401 B Street Suite 1700 San Diego, CA 92101-4297 Telephone: (800) 449-4900 Counsel for Enron Securities Litigation (Newby Action)
Steve W. Berman Hagens Berman LLP 1301 Fifth Avenue Suite 2900 Seattle, WA 98101 Telephone: (877) 694-0660 Co-Counsel for Enron ERISA Litigation (Tittle Action)
Lynn Lincoln Sarko Keller Rohrback LLP 1201 Third Avenue Suite 3200 Seattle, WA 98101-3052 Telephone: (866) 560-4043 Co-Counsel for Enron ERISA Litigation (Tittle Action)
PLEASE READ THIS NOTICE CAREFULLY. THIS NOTICE RELATES TO A PROPOSED PARTIAL SETTLEMENT OF THESE ACTIONS AND, IF YOU ARE A SETTLEMENT CLASS MEMBER, CONTAINS IMPORTANT INFORMATION AS TO YOUR RIGHTS CONCERNING THE SETTLEMENT AS FURTHER DESCRIBED BELOW.
EXCLUSION DEADLINE: REQUESTS FOR EXCLUSION MUST BE FILED SO AS TO BE RECEIVED NO LATER THAN September 24, 2003.
SECURITIES BROKERS AND OTHER NOMINEES: PLEASE SEE THE INSTRUCTIONS ON PAGE ___ BELOW.
VII. BACKGROUND OF THE LITIGATION
AWSC and the Defendant Member Firms have been named as defendants in the Actions (defined below). AWSC and the Defendant Member Firms moved to dismiss the Actions on the following grounds:
1. The Court lacks personal jurisdiction over AWSC and the Defendant Member Firms.
2. The complaints fail to state a claim upon which relief can be granted because plaintiffs failed to allege facts that would sustain a claim that AWSC and the Defendant Member Firms engaged in any actionable conduct or that they should be held liable for the actions of any of the other defendants named in the Actions.
VIII. BACKGROUND OF THE SETTLEMENT
Counsel for the Representative Plaintiffs have conducted an investigation relating to the claims and underlying events alleged in the Complaint. Counsel for the Representative Plaintiffs also have conducted considerable informal discovery in the Actions and in related litigation and have analyzed the evidence obtained therein, and have researched the applicable law with respect to the claims alleged in the complaints and the potential defenses thereto.
The Representative Plaintiffs, by their counsel, have conducted arms'-length negotiations with counsel for AWSC with a view toward settling the issues in dispute and achieving the best result possible consistent with the interests of the Settlement Class.
Based upon their investigation, counsel for the Representative Plaintiffs have concluded that the terms of the Settlement as set forth in the Stipulation are fair, reasonable, and adequate to the Representative Plaintiffs and the Settlement Class, and in the best interest of the Representative Plaintiffs and the Settlement Class, and have agreed to settle the Actions as to the Released Entities pursuant to the terms and provisions of the Stipulation, after considering (i) the benefits that the Representative Plaintiffs and the Settlement Class will receive from the Settlement; (ii) the attendant risks of litigation; and (iii) the desirability of permitting the Settlement to be consummated as provided by the terms of the Stipulation.
AWSC denies any and all wrongdoing whatsoever and the Stipulation shall in no event be construed or deemed to be evidence of or an admission or concession on the part of any party thereto with respect to any claim or of any fault or liability or wrongdoing or damage whatsoever, or any infirmity in the defenses that any party thereto has asserted, or any admission that they are subject to the jurisdiction of the Court. AWSC has asserted, and continues to assert, that all claims and contentions raised in the Actions are without merit, and continues to deny all charges of wrongdoing or liability with respect to each and all of the claims and contentions that were alleged or that could have been alleged in the Actions, including without limitation all contentions concerning the conduct of AWSC and the Defendant Member Firms, as well as the contentions that such conduct constitutes wrongdoing or gives rise to legal liability or has caused damage to the Representative Plaintiffs or the Settlement Class. In addition, AWSC has repeatedly asserted and continues to assert alleged defenses to the claims and contentions of the Representative Plaintiffs and the Settlement Class, and notwithstanding the Stipulation, AWSC expressly asserts that it believes that these defenses have merit and that AWSC has no liability to the Representative Plaintiffs or the Settlement Class. Nonetheless, AWSC has concluded that further conduct of the Actions as to these issues would be expensive, and that it is desirable and in the best interests of AWSC fully and finally to settle and terminate the Representative Plaintiffs' and the Settlement Class' claims against the Released Entities so as to limit the inconvenience and distraction of the Released Entities and their present and former personnel, to put to rest any and all claims that were or could have been asserted in this action or that arise out of the matters set forth in the complaints, and to avoid the further expense and burdens of continued litigation, without in any way acknowledging any fault or liability. AWSC also has taken into account the uncertainty and risks inherent in any litigation, especially in complex cases like this one. AWSC has, therefore, determined that it is desirable and in its best interests that the Actions be settled upon the terms and conditions set forth in the Stipulation. Neither the Stipulation, nor any document referred to therein, nor any action taken to carry out the Stipulation, is or may be construed or used as an admission by or against any party thereto of any fault, wrongdoing or liability whatsoever. There has been no determination by any court, administrative agency, or other tribunal as to the factual allegations made against AWSC and the Defendant Member Firms.
THE COURT HAS NOT FINALLY DETERMINED THE MERITS OF THE REPRESENTATIVE PLAINTIFFS' CLAIMS IN THE NEWBY AND TITTLE CONSOLIDATED ACTIONS OR THE DEFENSES THERETO. THIS NOTICE IS NOT INTENDED TO BE, AND SHOULD NOT BE CONSTRUED AS, AN EXPRESSION OF ANY OPINION BY THE COURT WITH RESPECT TO THE TRUTH OF THE ALLEGATIONS IN THE ACTIONS OR THE MERITS OF THE CLAIMS OR DEFENSES ASSERTED. THIS NOTICE IS SOLELY TO ADVISE YOU OF THE PENDENCY OF THE ACTION AND THE PROPOSED PARTIAL SETTLEMENT THEREOF AND OF YOUR RIGHTS IN CONNECTION THEREWITH.
IX. DEFINITIONS
As used in this Notice, the following terms have the meanings specified below. Any capitalized terms not specifically defined in this Notice shall have the meanings set forth for such terms in the Stipulation. In the event of any inconsistency between any definition set forth below or elsewhere in this Notice and any definition set forth in the Stipulation, the definition set forth in the Stipulation shall control.
1. "Actions" means (i) the Newby Action, (ii) the WSIB Action, and (iii) the Tittle Action.
2. "Arthur Andersen LLP" is an Illinois limited liability partnership that provided auditing and other professional services in the United States.
3. "Authorized Claimant" means any Settlement Class Member who is entitled to a distribution from the Gross Settlement Fund pursuant to the terms of the Stipulation, any Plan of Allocation, or any order of the Court.
4. "AWSC" means Andersen Worldwide Societe Cooperative, a cooperative organization formed under the Swiss Code of Obligations and domiciled in Geneva, Switzerland. AWSC is a limited liability entity under Swiss law. AWSC served as the coordinating entity of the Andersen Worldwide Organization, which had Member Firms (as defined in paragraph 5, below) in countries throughout the world. Each Member Firm was formed under the laws of the country in which it was located. The relationship between each Member Firm and AWSC was a contractual one, governed by a separate Member Firm Interfirm Agreement between each Member Firm and AWSC. AWSC does not provide professional services to any client and does not earn a profit.
5. "AWSC Entity" means:
(a) all current and former firms worldwide that have each entered into a "Member Firm Interfirm Agreement" with AWSC (each a "Member Firm"), including without limitation the Defendant Member Firms; Andersen Legal, CV; Accenture LLP (formerly known as Andersen Consulting LLP); Accenture Partners, SC (formerly known as Andersen Consulting Partners, SC); all other firms formerly known as Andersen Consulting; and Accenture Ltd; in each instance, with the exception of Arthur Andersen LLP;
(b) the respective past, present, and future subsidiaries, parents, predecessors, Member Firms, affiliates of all types, including without limitation cooperating, representative, affiliate, and related firms, and divisions of AWSC and/or of any entity covered by subparagraph (a) above (in each case, with the exception of Arthur Andersen LLP);
(c) all past, present, and future partners, members, officers, directors, principals, shareholders, advisors, agents and employees of AWSC and/or of any entity covered by subparagraphs (a) or (b) above (in each case, with the exception of Arthur Andersen LLP and its partners);
(d) all heirs, executors, administrators, spouses, assigns, and bankruptcy estates of any person or entity covered by subparagraph (c) above; and
(e) all successors to, acquirers of, merger partners of, or entities that have otherwise entered into a contractual arrangement with respect to association, cooperation, coordination, combination or integration of their businesses (now or in the future) with, AWSC or any entity covered by subparagraphs (a), (b), (c), or (d) above (including without limitation successors to, acquirers or merger partners of, or contractual counterparties with respect to any portions or assets (including personnel and clients) of AWSC or of any entity covered by subparagraphs (a), (b), (c), or (d) above) and all affiliates of any type of any such successor, acquirer, merger partner, or contractual counterparty (including without limitation any worldwide organization with which any such entity may be associated) (in each case, with the exception of Arthur Andersen LLP); provided, however, that such successors, acquirers, merger partners, contractual counterparties, or affiliates of any of them are deemed to be AWSC Entities only with respect to claims against them based on, arising out of, or related to acts or omissions of AWSC, any entity covered by subparagraphs (a), (b), (c), or (d) above, or Arthur Andersen LLP.
6. "Defendant Member Firms" means the current and former Member Firms of AWSC presently named as defendants in the Actions (with the exception of Arthur Andersen LLP).
7. "Effective Date" means the first date by which all of the events and conditions specified in paragraph 7.1 of the Stipulation have occurred and have been met, respectively.
8. "Enron" means Enron Corporation and all of its past and present parents, subsidiaries, divisions, joint ventures, predecessors, successors, assigns, related or affiliated entities, and any entity in which any of them has a controlling interest.
9. "Expense Fund Decision Order" means a future order of the Court approving the allocation of the Expense Fund between the Newby and WSIB Actions, on the one hand, and the Tittle Action, on the other. The Representative Plaintiffs have agreed that, subject to approval by the Court, the Expense Fund shall be allocated in the amounts of Twelve Million and Seventy Five Thousand ($12,075,000) Dollars, or 80.5 percent of the Expense Fund, to the Newby and WSIB Actions, on the one hand, and Two Million Nine Hundred and Twenty Five Thousand ($2,925,000) Dollars, or 19.5 percent of the Expense Fund, to the Tittle Action, on the other. That portion of the Expense Fund allocated to the Newby and WSIB Actions shall be deemed the "Newby Expense Fund." That portion of the Expense Fund allocated to the Tittle Actions shall be deemed the "Tittle Expense Fund."
10. "Judgment" means a judgment to be rendered by the Court, substantially in the form attached to the Stipulation as Exhibit B.
11. "Lead Securities Plaintiff" means the Regents of the University of California.
12. "Newby Action" means the actions brought on behalf of all purchasers (and their beneficiaries) of any publicly traded securities of Enron Corporation from October 19, 1998, through November 27, 2001, inclusive (excluding Defendants, the officers and directors of Enron, and members of their immediate families or their successors, heirs, and legal representatives), proceeding as a consolidated action captioned Newby, et al. v. Enron Corp., et al., No. H 01-CV-3624 (S.D. Tex.).
13. "Newby Settlement Class" means all purchasers (and their beneficiaries) of any publicly traded securities of Enron Corporation from September 9, 1997 through November 27, 2001, inclusive. Excluded from the Newby Settlement Class are Defendants, the officers and directors of Enron, and members of their immediate families or their successors, heirs, and legal representatives. Also excluded from the Newby Settlement Class are those Persons who timely and validly request exclusion from the Settlement Class, to the extent that they are able to do so under Rule 23 of the Federal Rules of Civil Procedure, in accordance with the instructions set forth in Part XI, below.
14. "Newby Settlement Class Member" or "Member of the Newby Settlement Class" means a Person who falls within the definition of the Newby Settlement Class.
15. "Notice and Claims Administrator" means Gilardi Co. LLC or its successors.
16. "Person" means an individual, corporation, limited liability corporation, professional corporation, limited liability partnership, 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 any spouses, heirs, predecessors, successors, representatives, or assignees of any of the foregoing.
17. "Plaintiffs' Settlement Counsel" means, collectively, (a) Milberg Weiss Bershad Hynes Lerach LLP, William S. Lerach, Keith F. Park, 401 B Street, Suite 1700, San Diego, California 92101; (b) Hagens Berman LLP, Steve W. Berman, 1301 Fifth Avenue, Suite 2900, Seattle, Washington 98101; and (c) Keller Rohrback LLP, Lynn Lincoln Sarko, 1201 Third Avenue, Suite 3200, Seattle, Washington 98101-3052.
18. "Plan of Allocation" means any plan or formula of allocation of the Gross Settlement Fund, to be approved by the Court upon further notice to the Class, whereby the Net Settlement Fund shall in the future, upon or after entry of the Settlement Fund Decision Order, be distributed to Authorized Claimants. Any Plan of Allocation is not part of the Stipulation and the Released Entities shall have no responsibility or liability with respect thereto.
19. "Proof of Claim and Release" means the form to be sent to Newby Settlement Class Members, upon further order(s) of the Court, by which Newby Settlement Class Members (or Persons who are Members of both the Newby Settlement Class and the Tittle Settlement Class) may make claims against the Newby Settlement Fund for damages incurred by reason of their investment(s) in Enron publicly traded securities. At this point it has not been determined whether any such form will be sent to Persons who are Members of the Tittle Settlement Class only.
20. "Released Claims" shall mean any and all claims (including "Unknown Claims" as defined in paragraph 35, below) of any nature whatsoever that any Settlement Class Member has, had, or may have against AWSC and each AWSC Entity (but not against Arthur Andersen LLP or its partners) based on, arising out of, or related to, directly or indirectly, (i) purchases of Enron's publicly traded securities, (ii) the Savings Plans or any "phantom stock" that employees (and their beneficiaries) received as compensation, or (iii) any services (audit, consulting, or otherwise) provided to Enron by Arthur Andersen LLP, AWSC, or any AWSC Entity. For the avoidance of doubt, "Released Claims" includes, but is not limited to, both the Tittle ERISA Claims and the Tittle Non-ERISA Claims.
21. "Released Entities" means AWSC and each AWSC Entity (but not Arthur Andersen LLP or its partners).
22. "Representative Plaintiffs" means the Lead Securities Plaintiff and each of the named plaintiffs in the WSIB Action and the Tittle Action.
23. "Savings Plans" means the Enron Corporation Savings Plan, the Enron ESOP Plan, and the Enron Cash Balance Plan.
24. "Settlement Amount" means the principal amount of Forty Million ($40,000,000) Dollars.
25. "Settlement Class" means the Newby Settlement Class and the Tittle Settlement Class, collectively. Excluded from the Settlement Class are those Persons who timely and validly request exclusion from the Settlement Class, to the extent that they are able to do so under Rule 23 of the Federal Rules of Civil Procedure, in accordance with the instructions set forth in Part XI, below. For the avoidance of doubt, the Newby Settlement Class and the Tittle Settlement Class are not mutually exclusive of each other, such that any individual Person may at once be a Member of both the Newby Settlement Class and the Tittle Settlement Class.
26. "Settlement Class Member" or "Member of the Settlement Class" mean a Person who falls within the definition of the Settlement Class.
27. "Settlement Class Period" means, collectively, the period commencing on September 9, 1997 through October 18, 1998, inclusive, in the WSIB Action; October 19, 1998 through November 27, 2001, inclusive, in the Newby Action; and November 27, 1995 through November 26, 2001, inclusive, in the Tittle Action.
28. "Settlement Fund Decision Order" means a future of the Court allocating the Gross Settlement Fund between the Newby Action and the WSIB Action, on the one hand, and the Tittle Action, on the other. That portion of the Gross Settlement Fund allocated by the Court to the Newby and WSIB Actions shall be deemed the "Newby Settlement Fund." That portion of the Gross Settlement Fund allocated to the Tittle Action shall be deemed the "Tittle Settlement Fund." For the avoidance of doubt, the term "Newby Settlement Fund" shall always include the Newby Expense Fund (as defined in paragraph 9, above) and the term "Tittle Settlement Fund" shall always include the Tittle Expense Fund (as defined in paragraph 9, above).
29. "Settling Parties" means, collectively, AWSC and the Representative Plaintiffs (on behalf of themselves and each of their respective Settlement Class Members).
30. "Tittle Action" means the action brought on behalf of all participants (and their beneficiaries), including holders during the relevant period (and their beneficiaries), in the Savings Plans, the recipients of any "phantom stock" that employees (and their beneficiaries) received as compensation, and the Savings Plans themselves during the period from November 27, 1995, through November 26, 2001, inclusive (excluding Defendants, the officers and directors of Enron, and members of their immediate families or their successors, heirs, and legal representatives), proceeding as a consolidated class action captioned Tittle, et al. v. Enron Corp., et al., No. H 01-CV-3913 (S.D. Tex.).
31. "Tittle ERISA Claims" means any claim for relief alleged in Count I, II, III, IV, or V in the First Consolidated and Amended Complaint in the Tittle Action that any Tittle Settlement Class Member has, had, or may have against AWSC and each AWSC Entity (but not against Arthur Andersen LLP or its partners).
32. "Tittle Non-ERISA Claims" means any and all Released Claims that any Tittle Settlement Class Member has, had, or may have other than the Tittle ERISA Claims.
33. "Tittle Settlement Class" means all participants (and their beneficiaries), including holders during the relevant period (and their beneficiaries), in the Savings Plans, the recipients of any "phantom stock" that employees (and their beneficiaries) received as compensation, and the Savings Plans themselves during the period from November 27, 1995, through November 26, 2001, inclusive (excluding Defendants, the officers and directors of Enron, and members of their immediate families or their successors, heirs, and legal representatives). Excluded from the Tittle Settlement Class are those Persons who timely and validly request exclusion from the Settlement Class, to the extent that they are able to do so under Rule 23 of the Federal Rules of Civil Procedure, in accordance with the instructions set forth in Part XI, below.
34. "Tittle Settlement Class Member" or "Member of the Tittle Settlement Class" means a Person who falls within the definition of the Tittle Settlement Class.
35. "Unknown Claims" means any Released Claim that any Representative Plaintiff or Settlement Class Member does not know or suspect to exist in his, her or its favor at the time of the release of the Released Entities that if known by him, her or it, might have affected his, her or its settlement with and release of the Released Entities, or might have affected his, her or its decision not to object to this settlement or not to exclude himself, herself or itself from the Settlement Class. With respect to any and all Released Claims, the Settling Parties stipulate and agree that, upon the Effective Date, the Representative Plaintiffs shall expressly waive, and each of the Settlement Class Members shall be deemed to have waived and by operation of the Judgment shall have waived, the provisions, rights and benefits of California Civil Code § 1542, which provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.
The Representative Plaintiffs shall expressly waive, and each of the Settlement Class Members shall be deemed to have waived and by operation of the Judgment shall waived, 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, that is similar, comparable or equivalent to California Civil Code § 1542. The Representative Plaintiffs and Settlement Class Members may hereafter discover facts in addition to or different from those that any of them now knows or believes to be true with respect to the subject matter of the Released Claims, but each Representative Plaintiff shall expressly have, and each Settlement Class Member shall be deemed to have and by operation of the Judgment shall have, fully, finally, and forever settled and released any and all Released Claims, known or unknown, suspected or unsuspected, contingent or non-contingent, whether or not concealed or hidden, that now exist, or heretofore have existed upon any theory of law or equity now existing or coming into existence in the future, including, but not limited to, conduct that is negligent, reckless, 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. The Representative Plaintiffs acknowledge, and the Settlement Class Members shall be deemed to have acknowledged and by operation of the Judgment shall have acknowledged, that the foregoing waiver was separately bargained for and a key element of the settlement of which this release is a part.
36. "WSIB Action" means the action brought on behalf of all purchasers of the publicly traded equity and debt securities of Enron from September 9, 1997 through October 18, 1998, inclusive (excluding Defendants, the officers and directors of Enron, and members of their immediate families or their successors, heirs, and legal representatives), captioned Washington State Investment Board, et al. v. Kenneth L. Lay, et al., Civil Action No. H-02-3401 (S.D. Tex.).
X. THE SETTLEMENT CLASS
By Order dated July 24, 2003, the Court certified the Settlement Class pursuant to Rules 23(b)(1) and 23(b)(3) of the Federal Rules of Civil Procedure, for the purpose of the Settlement only, and directed that this Notice be given to Members of the Settlement Class. If you are: (1) a purchaser or beneficiary of a purchaser of publicly traded securities of Enron during the period from September 9, 1997 through and including November 27, 2001; or (2) a participant (or beneficiary of a participant) in the Enron Corporation Savings Plan, the Enron ESOP Plan, or the Enron Cash Balance Plan during the period from November 27, 1995, through and including November 26, 2001; or (3) one of those plans yourself; or (4) the recipient of any "phantom stock" that employees (and their beneficiaries) received as compensation during the period from November 27, 1995, through and including November 26, 2001 (in each of the foregoing four instances excluding Defendants, the officers and directors of Enron, and members of their immediate families or their successors, heirs, and legal representatives); then you are a Settlement Class Member.
XI. THE RIGHTS OF SETTLEMENT CLASS MEMBERS
If you are a Settlement Class Member, you may receive the benefit of, and you will be bound by, the terms of the proposed Settlement described in Part XII of this Notice, upon approval of the proposed Settlement by the Court.
If you are a Member of the Newby Settlement Class only and if you do not wish to be included in the Settlement Class and do not wish to participate in the proposed Settlement described in this Notice, you may request to be excluded with respect to all Released Claims. If you are a Member of both the Newby Settlement Class and the Tittle Settlement Class, or if you are a Member of the Tittle Settlement Class only, you may request to be excluded with respect to all Released Claims except for the Tittle ERISA Claims. Tittle Settlement Class Members cannot request to be excluded with respect to the Tittle ERISA Claims.
To request to be excluded in accordance with the preceding paragraph, you must send a signed, written request to be excluded, postmarked no later than A 2003, and addressed as follows:
In re Enron Corporation Securities and ERISA Litigations c/o Gilardi Co. LLC P.O. Box 5100 Larkspur, CA 94977-5100
You must set forth the name of this Action ( In re Enron Corporation Securities and ERISA Litigations, Civil Action No. H-01-3624 (Consolidated)), your name, address and telephone number, and state that you "request exclusion from the Settlement Class in In re Enron Corporation Securities and ERISA Litigation, Civil Action No. H-01-3624 (Consolidated)." You must also set forth (i) your telephone number, (ii) whether you believe that you are a member of the Newby Settlement Class or the Tittle Settlement Class, or both, (iii) the number of shares of publicly traded securities of Enron that you purchased and sold during the Settlement Class Period and the prices at which the shares were purchased and sold, along with the name and address of the record owner of such shares if different from your own, and/or (iv) the amounts of any investment losses that you incurred in connection with your participation during the Settlement Class Period in the Enron Corporation Savings Plan, the Enron ESOP Plan, or the Enron Cash Balance Plan, and/or the number of shares of any "phantom stock" that you (or your beneficiaries) received as compensation during the Settlement Class Period and the dates when you received such shares of "phantom stock." NO PERSON OR ENTITY MAY EXCLUDE HIMSELF, HERSELF, OR ITSELF FROM THE SETTLEMENT CLASS AFTER September 24, 2003.
If you validly request exclusion from the Newby Settlement Class or from the Tittle Settlement Class (except with respect to the Tittle ERISA Claims), (a) you will be excluded from the Newby Settlement Class or from the Tittle Settlement Class (except with respect to the Tittle ERISA Claims), (b) you will not share in the proceeds of the Settlement described herein as allocated to the Newby Action or to the Tittle Action (except with respect to the Tittle ERISA Claims), as appropriate, (c) you will not be bound by any judgment entered in the Actions insofar as such judgment relates to the Newby Action or to the Tittle Action (except with respect to the Tittle ERISA Claims), and (d) you will not be precluded, by reason of your decision to request exclusion from the Settlement Class, from otherwise prosecuting an individual claim, if timely and otherwise valid, against any of the Released Entities based on the matters complained of in the Actions, except that in any event you will be precluded from prosecuting against the Released Entities, on an individual basis, any of the Tittle ERISA Claims. If you are a Settlement Class Member, you may, but are not required to, enter an appearance through counsel of your own choosing at your own expense, provided that such counsel must file an appearance on your behalf on or before September 24, 2003, and must serve copies of such appearance on the attorneys listed in Part XV below. If you do not enter an appearance through counsel of your own choosing, you will be represented by Plaintiffs' Settlement Counsel.
XII. TERMS OF THE PROPOSED SETTLEMENT
A settlement has been reached in the Actions between the Representative Plaintiffs and AWSC, the terms and conditions of which are set forth in the Stipulation and the Exhibits thereto. THIS SETTLEMENT DOES NOT RELEASE OR OTHERWISE COMPROMISE ANY CLAIMS BY ANY PERSONS AGAINST ARTHUR ANDERSEN LLP, WHICH WAS THE AWSC MEMBER FIRM THAT PROVIDED AUDITING AND OTHER PROFESSIONAL SERVICES IN THE UNITED STATES, OR ANY OF ARTHUR ANDERSEN LLP'S PARTNERS. The following description of the proposed Settlement is only a summary, and reference is made to the text of the Stipulation, on file with the Court, for a full statement of its provisions.
A. The Settlement Fund
1. The entire settlement fund (the "Gross Settlement Fund") consists of the aggregate principal amount of Forty Million ($40,000,000) Dollars in cash, plus interest thereon, that has been placed into an interest-bearing account pursuant to the terms of the Stipulation. The Stipulation of Settlement provides for the establishment of an Expense Fund in the amount of Fifteen Million ($15,000,000) Dollars, which shall be paid from, and not in addition to, the Gross Settlement Fund. At the Settlement Hearing, the Court will be asked to approve the establishment of the Expense Fund. The Expense Fund will be used, subject to the Court's future approvals, to reimburse Plaintiffs' Settlement Counsel for the expenses that they have incurred and expect to incur in the prosecution of the Actions against the remaining Defendants. A portion of the Gross Settlement Fund will also be used to pay for this notice as well as taxes and tax return preparation expenses regarding the interest earned on the Gross Settlement Fund.
After further notice to the Settlement Class and an opportunity to be heard, the Gross Settlement Fund will be allocated by an order of the Court (the "Settlement Fund Decision Order") to the Newby and WSIB Actions on the one hand and the Tittle Action on the other. Also after further notice to the Settlement Class and an opportunity to be heard, Plaintiffs' Settlement Counsel will seek approval by the Court of a Plan of Allocation that will govern the calculation of Settlement Class Members' claims against the Gross Settlement Fund. Finally, in the future Newby Settlement Class Members (which include members of the class alleged in the WSIB Action) will be sent a Proof of Claim and Release form to establish their claims against the portion of the Gross Settlement Fund that is allocated to the Newby and WSIB Actions. At this point it has not been determined if Persons who are only Members of the Tittle Settlement Class, or certain subgroups of the Tittle Settlement Class, will be required to submit an individual Proof of Claim and Release form in order to receive their respective shares of the portion of the Gross Settlement Fund that is allocated to the Tittle Action.
Because of the aggregate amount of damages that Plaintiffs' Settlement Counsel assert were suffered by Settlement Class Members, it is not economically feasible to distribute the Gross Settlement Fund to Settlement Class Members at this time. Plaintiffs' Settlement Counsel anticipate that such distributions will occur in connection with additional recoveries against the remaining Defendants in the Actions.
B. Additional Consideration For The Settlement
In addition to the establishment of the Gross Settlement Fund, AWSC and the Defendant Member Firms have agreed voluntarily to provide documents and other information to Plaintiffs' Settlement Counsel that Plaintiffs' Settlement Counsel believe are related to the allegations of the complaints in the Actions. Plaintiffs' Settlement Counsel believe that this information may significantly assist them in the continued prosecution of the Actions against the remaining Defendants.
C. Releases
If the proposed Settlement is approved by the Court, the Court will enter an order (the "Order of Final Judgment and Dismissal") that will dismiss the Action with prejudice as to AWSC and the Defendant Member Firms. In addition, upon the Effective Date, all Settlement Class Members, on behalf of themselves, their successors and assigns, and any other Person claiming (now or in the future) through or on behalf of them, and regardless of whether any such Representative Plaintiff or Settlement Class Member ever seeks or obtains by any means, including without limitation by submitting a Proof of Claim and Release, any distribution from the Gross Settlement Fund, shall be deemed to have, and by operation of the Judgment shall have, fully, finally, and forever released, relinquished, and discharged all Released Claims against all Released Entities and shall have covenanted not to sue all such Released Entities with respect to all such Released Claims, and shall be permanently barred and enjoined from instituting, commencing, or prosecuting any such Released Claim against any Released Entity. In addition, subject to certain limitations set forth in the Stipulation, AWSC and the Defendant Member Firms will release the Representative Plaintiffs, the Settlement Class Members and Plaintiffs' Settlement Counsel from any claims relating to the prosecution of the Action. THIS SETTLEMENT DOES NOT RELEASE OR OTHERWISE COMPROMISE ANY CLAIMS BY ANY PERSONS AGAINST ARTHUR ANDERSEN LLP, WHICH WAS THE AWSC MEMBER FIRM THAT PROVIDED AUDITING AND OTHER PROFESSIONAL SERVICES IN THE UNITED STATES, OR ANY OF ARTHUR ANDERSEN LLP'S PARTNERS. The Court shall retain jurisdiction over this action, including without limitation all matters with respect to implementation and enforcement of the terms of the Stipulation.
XIII. NOTICE TO BANKS, BROKERS AND OTHER NOMINEES
Banks, brokerage firms, institutions, and other persons who are nominees that purchased publicly traded securities of Enron for the beneficial interest of other persons as of any date from September 9, 1997 through and including November 27, 2001 are requested to, within ten (10) calendar days of receipt of this Notice, (1) provide the Notice and Claims Administrator with the names and addresses of such beneficial purchasers, or (2) forward a copy of this Notice to each such beneficial purchaser and provide Plaintiffs' Settlement Counsel with written confirmation that the Notice has been so forwarded. Upon submission of appropriate documentation, Plaintiffs' Settlement Counsel will reimburse your reasonable costs and expenses of complying with this provision. Additional copies of this Notice may be obtained from the Notice and Claims Administrator by writing to:
In re Enron Corporation Securities Litigation c/o GILARDI CO. LLC P.O. Box 5100 Larkspur, CA 94977-5100
Correspondence to Plaintiffs' Settlement Counsel should be addressed as follows:
William S. Lerach Keith F. Park MILBERG WEISS BERSHAD HYNES LERACH LLP 401 B Street Suite 1700 San Diego, CA 92101-4297
Steve W. Berman HAGENS BERMAN LLP 1301 Fifth Avenue Suite 2900 Seattle, WA 98101
Lynn Lincoln Sarko KELLER ROHRBACK LLP 1201 Third Avenue Suite 3200 Seattle, WA 98101-3052
XIV. APPLICATION FOR ATTORNEYS' FEES, COSTS AND EXPENSES
Plaintiffs' Settlement Counsel do not intend to apply for an award of attorneys' fees at this time. As noted above, Plaintiffs' Settlement Counsel will ask the Court at the Settlement Hearing to approve the establishment of the Expense Fund. Any application for attorneys' fees and reimbursement of expenses not otherwise recovered from the Expense Fund will only occur after notice of that application to the Settlement Class and an opportunity to be heard. Any such sums as awarded by the Court will be paid from the Gross Settlement Fund.
XV. THE SETTLEMENT HEARING
A hearing (the "Settlement Hearing") will be held on October 23,2003 at 10:00, a.m., before the Honorable Melinda Harmon, United States District Judge, at the United States District Court for the Southern District of Texas, Bob Casey United States Courthouse, 515 Rusk Avenue, Houston, Texas 77002, for the purpose of determining (a) whether the proposed Settlement as set forth in the Stipulation is fair, reasonable and adequate and should be approved by the Court; (b) whether an Order of Final Judgment and Dismissal, substantially in the form of Exhibit B to the Stipulation, should be entered herein; (c) whether the establishment of the Expense Fund should be approved; and (d) whether the procedures agreed upon among the Representative Plaintiffs for the allocation of the Gross Settlement Fund between the Newby Action and the WSIB Action, on the one hand, and the Tittle Action, on the other, should be approved. The Court may adjourn the Settlement Hearing from time to time and without further notice to the Settlement Class.
Any Settlement Class Member who has not requested exclusion may appear at the Settlement Hearing and be heard on any of the foregoing matters (except that Tittle Settlement Class Members who requested to be excluded from the Settlement Class may be heard only with respect to the Tittle ERISA Claims); provided, however, that no such person shall be heard unless his, her or its objection is made in writing and is filed, together with proof of membership in the Settlement Class and copies of all other papers and briefs to be submitted by him, her or it to the Court at the Settlement Hearing, with the Court no later than. September 24, 2003, and showing due proof of service on each of Plaintiffs' Settlement Counsel:
William S. Lerach Keith F. Park MILBERG WEISS BERSHAD HYNES LERACH LLP 401 B Street Suite 1700 San Diego, CA 92101-4297
Steve W. Berman Clyde A. Platt HAGENS BERMAN LLP 1301 Fifth Avenue Suite 2900 Seattle, WA 98101
Lynn Lincoln Sarko Britt L. Tinglum KELLER ROHRBACK LLP 1201 Third Avenue Suite 3200 Seattle, WA 98101-3052
and upon the following counsel for AWSC:
William F. Lloyd SIDLEY AUSTIN BROWN WOOD Bank One Plaza 10 South Dearborn Street Chicago, IL 60603
William E. Matthews GARDERE WYNNE SEWELL LLP 1000 Louisiana Suite 3400 Houston, TX 77002-5007
Unless otherwise ordered by the Court, any Settlement Class Member who does not make his, her or its objection in the manner provided shall be deemed to have waived all objections to the foregoing matters.
XVI. EXAMINATION OF PAPERS AND INQUIRIES
This Notice contains only a summary of the terms of the proposed Settlement. For a more detailed statement of the matters involved in the Actions, reference is made to the pleadings, to the Stipulation of Settlement and to other papers filed in this action, which may be inspected at the Office of the Clerk of the United States District Court, 515 Rusk Avenue, Houston, Texas 77002, during business hours of any business day.
Inquiries regarding the Actions should be addressed to Plaintiffs' Settlement Counsel at the address set forth above.
DO NOT CONTACT THE COURT REGARDING THIS NOTICE.
DATED: July 24, 2003
BY ORDER OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS
EXHIBIT A-2 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION
______________________________ In re ENRON CORPORATION § Civil Action No. H-01-3624 SECURITIES LITIGATION § (Consolidated) ______________________________ § This Document Relates To: § CLASS ACTION § MARK NEWBY, et al., § SUMMARY NOTICE FOR PUBLICATION § Plaintiffs, § § vs. § § ENRON CORP., et al., § § Defendants. § § ______________________________ § THE REGENTS OF THE UNIVERSITY § OF CALIFORNIA, et al., § § Plaintiffs, § § vs. § § KENNETH L. LAY, et al., § § Defendants. § § ______________________________ § WASHINGTON STATE INVESTMENT § BOARD and EMPLOYER-TEAMSTERS § LOCAL NOS. 175 and 505 PENSION § TRUST FUND, et al., § § Plaintiffs, § § vs. § § KENNETH L. LAY, et al., § § Defendants. § ______________________________ § PAMELA M. TITTLE, et al., § § Plaintiffs, § § vs. § § ENRON CORP., an Oregon § corporation, et al., § § Defendants. § ______________________________ §
TO: (1) ALL PERSONS WHO PURCHASED PUBLICLY TRADED SECURITIES OF ENRON CORPORATION DURING THE PERIOD FROM SEPTEMBER 9, 1997, THROUGH AND INCLUDING NOVEMBER 27, 2001, AND (2) ALL PARTICIPANTS IN THE ENRON CORPORATION SAVINGS PLAN, THE ENRON ESOP PLAN, THE ENRON CASH BALANCE PLAN, AND SUCH PLANS THEMSELVES, AND ALL RECIPIENTS OF ANY "PHANTOM STOCK" THAT EMPLOYEES OF ENRON RECEIVED AS COMPENSATION, DURING THE PERIOD FROM NOVEMBER 27,1995, THROUGH AND INCLUDING NOVEMBER 26, 2001.
YOU ARE HEREBY NOTIFIED that the Representative Plaintiffs in the above litigation (the "Actions") have entered into a Stipulation of Settlement (the "Stipulation") with Defendant Andersen Worldwide Societe Cooperative to resolve the issues raised in the Actions as to AWSC and its former member firms named as defendants in the Actions (the "Defendant Member Firms"). THIS SETTLEMENT DOES NOT RELEASE OR OTHERWISE COMPROMISE ANY CLAIMS BY ANY PERSONS AGAINST ARTHUR ANDERSEN LLP, WHICH WAS THE AWSC MEMBER FIRM THAT PROVIDED AUDITING AND OTHER PROFESSIONAL SERVICES IN THE UNITED STATES, OR ANY OF ARTHUR ANDERSEN LLP'S PARTNERS.
PLEASE BE FURTHER ADVISED that pursuant to an Order of the United States District Court, date July 24, 2003, a hearing will be held on October 23, 2003 at 10:00, a.m., before the Honorable Melinda Harmon, United States District Judge, at the United States District Court for the Southern District of Texas, Bob Casey United States Courthouse, 515 Rusk Avenue, Houston, Texas 77002, for the purpose of determining whether, among other things: (1) the proposed settlement of the Actions as to AWSC and the Defendant Member Firms for Forty Million ($40,000,000) Dollars and certain other consideration should be approved by the Court as fair, reasonable and adequate; (2) the Actions should be dismissed with prejudice as to AWSC and the Defendant Member Firms pursuant to the terms of the Stipulation; (3) a portion of the Gross Settlement Fund should be allocated for the payment of expenses, excluding attorneys' fees, associated with the prosecution of the Actions; and (4) the procedures agreed upon among the Representative Plaintiffs for the allocation of the Gross Settlement Fund among the respective Actions should be approved. If you are either (1) a purchaser or beneficiary of a purchaser of publicly traded securities of Enron during the period from September 9, 1997, through and including November 27, 2001; or (2) a participant (or beneficiary of a participant) in the Enron Corporation Savings Plan, the Enron ESOP Plan, or the Enron Cash Balance Plan during the period from November 27, 1995, through and including November 26, 2001; or (3) one of those plans yourself; or (4) the recipient of any "phantom stock" that employees (and their beneficiaries) received as compensation during the period from November 27, 1995, through and including November 26, 2001 (excluding defendants, the officers and directors of Enron, and members of their immediate families or their successors, heirs, and legal representatives); your rights may be affected by the settlement of the Actions. If you have not received a Notice of Pendency and Partial Settlement of Class Action (the "Mailed Notice") you may obtain a copy by contacting: In re Enron Corporation Securities and ERISA Litigation, c/o Gilardi Co. LLC, P.O. Box 5100, Larkspur, CA 94977-5100.
You will be bound by any judgment rendered in the Actions with respect to AWSC and the Defendant Member Firms with respect to certain claims asserted in the action captioned above as Tittle, et al. v. Enron Corp., et al., No. H 01-CV-3913 (S.D. Tex.) (the "Tittle Action"), under the Employee Retirement Income Security Act of 1975. You will also be bound by any such judgment with respect to other claims asserted in the Tittle Action, as well as with respect to claims asserted in the other actions identified above, and with respect to other claims that you had, have, or may have against AWSC (and certain persons and entities related to AWSC) based on matters related to Enron Corp., unless you request to be excluded from the Class, in writing, in accordance with the instructions set forth in the Mailed Notice, postmarked by September 24, 2003. Any objection to the Settlement must be filed with the Court by September 24, 2003, and must show due proof of service on each of the counsel listed below:
MILBERG WEISS BERSHAD HYNES LERACH LLP KEITH F. PARK 401 B Street Suite 1700 San Diego, CA 92101-4297
KELLER ROHRBACK LLP LYNN LINCOLN SARKO 1201 Third Avenue Suite 3200 Seattle, WA 9S101-3052
HAGENS BERMAN LLP STEVE W. BERMAN 1301 Fifth Avenue Suite 2900 Seattle, WA 98101
SIDLEY AUSTIN BROWN WOOD WILLIAM F. LLOYD Bank One Plaza 10 South Dearborn Street Chicago, IL 60603
GARDERE WYNNE SEWELL LLP WILLIAM E. MATTHEWS 1000 Louisiana Suite 3400 Houston, TX 77002-5007PLEASE DO NOT CONTACT THE COURT REGARDING THIS NOTICE.
DATED: July 24, 2003
BY ORDER OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS