UNITED STATES DISTRICT COURT WESTERN DISTRICT OF TENNESSEE MEMPHIS DIVISION NOTICE OF PENDENCY AND SETTLEMENT OF CLASS ACTION

Transcription

1 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF TENNESSEE MEMPHIS DIVISION IN RE CONCORD EFS, INC. ) SECURITIES LITIGATION ) No Ma Judge Mays NOTICE OF PENDENCY AND SETTLEMENT OF CLASS ACTION TO: ALL PERSONS OR ENTITIES WHO, DURING THE PERIOD FROM MARCH 29, 2001 THROUGH SEPTEMBER 4, 2002, INCLUSIVE, PURCHASED OR OTHERWISE ACQUIRED CONCORD EFS, INC. ( CONCORD ) COMMON STOCK. PLEASE READ THIS NOTICE CAREFULLY. THIS NOTICE RELATES TO A PROPOSED SETTLEMENT OF THIS CLASS ACTION LAWSUIT. IF YOU ARE A CLASS MEMBER, THIS NOTICE CONTAINS IMPORTANT INFORMATION AS TO YOUR RIGHTS CONCERNING THE SETTLEMENT. IF YOU ARE A MEMBER OF THE CLASS AND DO NOT SUBMIT A TIMELY REQUEST FOR EXCLUSION, YOU WILL BE BOUND BY THE RELEASE INCLUDED IN THIS NOTICE, REGARDLESS OF WHETHER YOU SUBMIT A CLAIM. YOU ARE HEREBY NOTIFIED, the above-captioned action (the "Action"), a class action lawsuit, is currently pending in the United States District Court for the Western District of Tennessee (the "Court"). The Action alleges various violations of the federal securities laws, as further described in Section II below, against Concord EFS, Inc. ( Concord ) and certain of its officers and directors. The Action seeks damages on behalf of all persons or entities who purchased Concord common stock from March 29, 2001 through September 4, 2002, inclusive (the Settlement Class Period ). This Notice is published pursuant to an Order of the Court and Federal Rule of Civil Procedure 23 to notify you that, subject to Court approval, the parties have reached a settlement of the Action. The proposed Stipulation and Agreement of Settlement of Class Action (the Settlement Agreement ) creates a Settlement Fund in the amount of $13,250, Your recovery from this fund will depend on a number of variables, including the number of shares of Concord common stock you purchased during the Settlement Class Period, and the timing of your purchases and any sales. Plaintiffs are required by law to provide in this Notice an estimate of the average per-share recovery, but the figure below does not necessarily represent the recovery any particular Member will receive. Dividing the gross amount of the Settlement Fund by the number of shares that plaintiffs estimate were purchased during and held to the end of the Settlement Class Period (approximately 275 million shares) results in an estimated average recovery per damaged share of approximately $0.05 before deduction of Court approved fees and expenses. The actual per-damage-share recovery figure will vary depending on the number of Members who elect to participate in the Settlement, and when those Members Concord common stock was purchased and/or sold. For example, the figure may be higher if less than all of the eligible claims are filed. Thus, because the actual recovery of each Authorized Claimant will be based on the volume of claims made and each Authorized Claimant s estimated out-of-pocket damages, rather than a simple per-share average, any individual Member may receive a recovery that is either higher or lower than the per-share average. Defendants emphatically deny any and all claims of wrongdoing, and any and all liability alleged in connection with such claims. Further, Lead Plaintiffs and the Defendants do not agree on the average amount of damages per share that would be recoverable if the Lead Plaintiffs prevailed on each claim alleged. The issues on which the parties disagree include, among others: (1) whether the statements allegedly made or facts allegedly omitted were material, false, misleading, or otherwise actionable under the securities laws; (2) whether the statements allegedly made or facts allegedly omitted (if there were any) were made or omitted with the state of mind required to impose liability; (3) the appropriate economic model for determining the amount by which the prices of Concord common stock were allegedly artificially inflated (if at all) during the Settlement Class Period; (4) the amount by which the prices of Concord common stock were allegedly artificially inflated (if at all) during the Settlement Class Period; (5) the extent to which external factors, such as general market and industry conditions, influenced the trading prices of Concord common stock at various times during the Settlement Class Period; (6) the extent to which the various matters that Lead Plaintiffs allege were materially false or misleading influenced (if at all) the trading prices of Concord common stock at various times during the Settlement Class Period; and (7) the extent to which the various allegedly adverse material facts that Lead Plaintiffs alleged were omitted influenced (if at all) the trading prices of Concord common stock at various times during the Settlement Class Period. Lead Plaintiffs believe that the proposed settlement is fair, reasonable, adequate and in the best interests of the Class. There are significant risks associated with continuing to litigate and proceeding to trial. In addition, there is a danger that the Class would not prevail on their claims against the Defendants even if those claims went to trial, in which case the Class would receive nothing. Further, had the case proceeded to trial and assuming Lead Plaintiffs established liability of the Defendants, the amount of damages recoverable by Members would have been subject to vigorous attack by the Defendants. Recoverable damages are limited to losses actually caused by conduct found actionable under applicable securities laws. Had the Action gone to trial, Defendants would have tried to prove that all or most of the losses of Members were caused by non-actionable market, industry, or other general economic factors. The proposed settlement eliminates these risks and provides an immediate recovery for Members. Plaintiffs Counsel have not received any payment for their services in prosecuting the Action on behalf of Plaintiffs and Members. If the Court approves the settlement, Plaintiffs Counsel will apply to the Court for an award of attorneys fees not to exceed 25% of the Settlement Fund. Plaintiffs Counsel also plans to seek reimbursement of out-of-pocket expenses from the settlement proceeds, not to exceed $500, exclusive of settlement administration expenses.

2 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 Action or the merits of the claims or defenses asserted. Defendants have expressly denied any and all wrongdoing and/or liability. This Notice is to advise you of the proposed settlement and of your rights in connection therewith. If you have any questions about the settlement, you may contact the following Plaintiffs Lead Counsel: Please do not contact the Court or Concord. I. DEFINITIONS WOLF HALDENSTEIN ADLER FREEMAN & HERZ LLP PETER C. HARRAR PAULETTE S. FOX 270 Madison Avenue New York, NY (212) The following terms have the meanings specified below: 1. Authorized Claimant means a Member (or the representative of such Member including, without limitation, agents, administrators, executors, heirs, successors, and assigns), who submits a Proof of Claim and Release and who is entitled to a distribution from the Net Settlement Fund pursuant to the terms and conditions set forth in the Settlement Agreement. 2. Concord or the Company means Concord EFS, Inc. 3. Defendants means Concord, Dan M. Palmer, Edward A. Labry, III, Edward T. Haslam, Marcia E. Heister, William E. Lucado, Christopher S. Reckert, E. Miles Kilburn, Ronald V. Congemi, and Richard P. Kiphart. 4. Distribution Fund means the Settlement Fund less any bank fees charged for maintenance of the Escrow Account, disbursements for establishment of the Notice and Administration Fund, and any taxes that may be payable from the Settlement Fund. 5. Final Approval Order means the Final Order Approving Class Action Settlement and Plan of Allocation, which shall be identical in all material respects to that provided in the form of Exhibit B to the Settlement Agreement. 6. Final Judgment means that judgment to be entered by the Court pursuant to the Final Approval Order, identical in all material respects to that provided in the form of Exhibit C to the Settlement Agreement, rendering the Settlement final, dismissing the Action with prejudice and without costs to any party, releasing all Released Claims, and enjoining Members from instituting, continuing, or prosecuting any action asserting one or more Released Claims. 7. Individual Defendants means Dan M. Palmer, Edward A. Labry, III, Edward T. Haslam, Marcia E. Heister, William E. Lucado, Christopher S. Reckert, E. Miles Kilburn, Ronald V. Congemi, and Richard P. Kiphart. 8. Lead Plaintiffs means J.T. Milligan, James Keith Milligan and J. Curtis Williams, Jr. 9. Member means any person or entity who is a member of the Settlement Class (including beneficial owners of Concord common stock purchased on their behalf by others during the Settlement Class Period), and including, without limitation, the Lead Plaintiffs, but excluding those persons or entities who submit valid and timely requests for exclusion from the Settlement Class in accordance with the procedures set forth in this Notice. 10. Net Settlement Fund means the Distribution Fund less all attorneys fees and attorneys and Plaintiffs expenses allowed by the Court. 11. Plaintiffs means J.T. Milligan; James Keith Milligan; J. Curtis Williams, Jr.; Marc Abrams; Kathy Schmersahl; John and Leslie Norwood; GF Partnership; AVG Limited Partnership; JYG Partnership; Sandford Sadja and Stanley Sved. 12. Plaintiffs Counsel means Wolf Haldenstein Adler Freeman & Herz LLP; Law Offices of Paul Kent Bramlett; Law Offices of Charles J. Piven, P.A.; Law Offices of Marc S. Henzel; and Vianale & Vianale LLP. 13. Plaintiffs Lead Counsel means Wolf Haldenstein Adler Freeman & Herz LLP. 14. Plan of Allocation means that plan or formula of allocation of the Distribution Fund approved by the Court, which plan or formula shall govern the distribution of the Distribution Fund. It is understood and agreed to by the parties hereto that, notwithstanding any other provision of the Settlement Agreement, any proposed Plan of Allocation that is part of the Notice is not a part of the Settlement Agreement or material thereto, being a matter solely internal to the Settlement Class and not affecting Defendants. Any revisions by the Court or on appeal or otherwise relating solely to the Plan of Allocation shall not operate to terminate or cancel the Settlement Agreement. 2

3 15. Released Claims means any and all claims, liabilities, demands, causes of action, or lawsuits, known or unknown (including Unknown Claims), whether legal, statutory, equitable or of any other type or form, whether under federal or state law, and whether brought in an individual, representative or any other capacity, that in any way relate to or arise out of or are connected with the purchase, retention, or sale of Concord common stock (ticker symbol: CEFT) during the Settlement Class Period, including, but not limited to, any event, act, statement or omission occurring during the Settlement Class Period that has been alleged or asserted in, or which could have been alleged or asserted in, the Action, any of the cases consolidated into the Action, or the Complaint. 16. Released Parties means Defendants, their predecessors, successors, parents, subsidiaries, and each and all of their respective current and former officers, directors, employees, agents, accountants, auditors, attorneys, consultants, insurers, investment bankers, representatives, heirs, and assigns. The Released Parties who are not Settling Parties are intended as third party beneficiaries of the Settlement Agreement with respect to the release of Released Claims. 17. Settlement Administrator means The Garden City Group, Inc. 18. Settlement Class means all persons or entities who purchased or had purchased on their behalf Concord common stock between March 29, 2001 and September 4, 2002, inclusive of those dates. Excluded from the Settlement Class are Defendants, members of the immediate family of each of the Individual Defendants, any entity in which any Defendant has a controlling interest or had a controlling interest during the Settlement Class Period, and the legal representatives, officers and directors, heirs, successors or assigns of any such excluded party. Also excluded from the Settlement Class are those Members who validly and timely request exclusion from the Settlement Class in accordance with the procedures set forth in this Notice. 19. Settlement Class Period means the period commencing on March 29, 2001 and ending on September 4, 2002, inclusive. 20. Settlement Effective Date means the date upon which the Final Approval Order and Final Judgment becomes both final and no longer subject to appeal or review (or further appeal or review), whether by unsuccessful conclusion of any possible appeal, lapse of time, or otherwise. 21. Settlement Fund means the amounts deposited in the Escrow Account pursuant to Section 3 of the Settlement Agreement, including any interest earned thereon, as provided for therein. 22. Settlement Hearing means the hearing to be held by the Court to consider final approval of the Settlement pursuant to Rule 23(e) of the Federal Rules of Civil Procedure. 23. Settling Parties means the Lead Plaintiffs, the Members, and the Defendants. 24. Unknown Claims means any Released Claims which any Lead Plaintiff and/or Member does not know or suspect to exist in his, her or its favor at the time of the release of the Released Parties which, if known by him, her or it, might have affected his, her or its settlement with and release of the Released Parties, or might have affected his, her or its decision not to object to this settlement. Without admitting that California law is in any way applicable to this agreement, in whole or in part, with respect to any and all Released Claims, the Settling Parties stipulate and agree that, upon the Effective Date, each Lead Plaintiff and each of the Members shall be deemed to have, and by operation of the Final Judgment shall have, expressly 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. Each Lead Plaintiff and each of the Members shall be deemed to have, and by operation of the Final Judgment shall have, expressly 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, which is similar, comparable or equivalent to California Civil Code The Lead Plaintiffs or Members may hereafter discover facts in addition to or different from those which he, she or it now knows or believes to be true with respect to the subject matter of the Released Claims, but the Lead Plaintiffs and each Member, upon the Settlement Effective Date, shall be deemed to have, and by operation of the Final 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, which 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 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. The Lead Plaintiffs and Members shall be deemed by operation of the Final Judgment to have acknowledged that the foregoing waiver was separately bargained for and a key element of the settlement of which this release is a part. II. THE LITIGATION AND RELATED PROCEEDINGS 1. On and after September 6, 2002, the following actions were filed in the United States District Court for the Western District of Tennessee (the Court ) as a proposed class action on behalf of persons who purchased the common stock of Concord between March 29, 2001 and September 4, 2002: 3

4 a. Brody v. Concord EFS, Inc., et al., No ; b. Colbert Birnet, L.P. v. Concord EFS, Inc., et al., No ; c. Abrams v. Concord EFS, Inc., et al., No ; d. Counts v. Concord EFS, Inc., et al., No ; e. Schmersahl v. Concord EFS, Inc., et al., No ; f. Norwood v. Concord EFS, Inc., et al., No ; and g. GF Partnership v. Concord EFS, Inc., et al., No On or about November 18, 2002, Colbert Birnet, L.P. v. Concord EFS, Inc., et al., No , was voluntarily dismissed. 3. On November 29, 2002, the Court entered an Order consolidating the above actions. Thus, the litigation, in its entirety, exists as consolidated Case No. 02-CV-2697 ( the Action ). Furthermore, on this same date, the Court confirmed the appointment of J.T. Milligan, James Keith Milligan, and J. Curtis Williams, Jr. as Lead Plaintiffs for the Action. By the same Order, the Court approved the selection of Plaintiffs Lead Counsel: Wolf Haldenstein Adler Freeman & Herz LLP. 4. Lead Plaintiffs filed their Consolidated Amended Class Action Complaint (the Complaint ) on February 17, The Complaint generally alleges that Defendants violated Section 10(b) and, in the case of the Individual Defendants, Section 20(a) of the Securities Exchange Act of 1934, by issuing materially false and misleading statements during the Settlement Class Period concerning Concord s financial condition and operating results, including concerning Concord s transactions with H & F Services, Inc., an entity that served as a sales organization for certain of Concord s products. 5. Defendants filed a Motion to Dismiss on May 2, 2003, and then Plaintiffs filed their Response to the Motion to Dismiss on May 30, Defendants then filed a Reply to Plaintiffs Response on June 25, On January 7, 2004, this Court entered an order denying the Motion to Dismiss filed by Defendants, and, thereafter, Defendants filed an Answer and Separate or Affirmative Defenses on February 27, Discovery occurred thereafter. 7. Beginning in January 2005, Lead Plaintiffs and Defendants submitted to mediation with an independent mediator. Following mediation, the parties entered into the Settlement Agreement to settle the Action, subject to the approval of the Court. III. DEFENDANTS DENIALS OF WRONGDOING AND LIABILITY Defendants have expressly and emphatically denied and continue to deny each and all of the claims and contentions alleged by the Lead Plaintiffs. Defendants expressly have denied and continue to deny all charges of wrongdoing or liability against them arising out of any of the conduct, statements, acts or omissions alleged, or that could have been alleged, in the Action. Defendants also have denied and continue to deny, inter alia, the allegations that the Lead Plaintiffs or the Members (as defined above) have suffered damage, that the Lead Plaintiffs or the Members were harmed by the alleged conduct, or that the price of Concord common stock was artificially inflated by reason of any alleged misrepresentations, non-disclosures or otherwise. Nonetheless, the Defendants have concluded that further conduct of the Action would be protracted, expensive, and distracting to Defendants and that it is desirable that the Action be fully and finally settled in the manner and upon the terms and conditions set forth in the Settlement Agreement. The Defendants have also taken into account the uncertainty and risks inherent in any litigation, especially in complex cases like the Action. The Defendants have therefore determined that the Action should be settled in the manner and upon the terms and conditions set forth in the Settlement Agreement. Neither the Settlement Agreement nor the settlement shall be construed, whether in whole or in part, as evidence, or an admission or concession on the part of Defendants, of any fault or liability, nor shall the Settlement Agreement or the settlement be considered an admission by Defendants that Lead Plaintiffs have satisfied the requirements for class certification under Federal Rule of Civil Procedure 23 for any purposes other than the settlement. Without conceding any infirmity in any defenses they have asserted or intend to assert in the Action, Defendants consider it desirable and in their best interest that the Action be dismissed on the terms set forth herein in order to avoid further expense and protracted litigation. IV. CLAIMS OF THE LEAD PLAINTIFFS AND BENEFITS OF SETTLEMENT The Lead Plaintiffs believe that the claims asserted in the Action have merit. However, Plaintiffs Lead Counsel recognize and acknowledge Defendants denial of wrongdoing and liability, as well as the expense and length of continued proceedings necessary to prosecute the Action through trial and through appeals. Plaintiffs Lead Counsel also have taken into account the uncertain outcome and risk of continued litigation, especially in complex actions such as the Action, as well as the difficulties and delays inherent in such litigation. Plaintiffs Lead Counsel considered the inherent problems of proving, and possible defenses to, the allegations asserted in the Action, including potential difficulties in establishing proximately caused damages. Based on their evaluation, Plaintiffs Lead Counsel believe that the settlement set forth in the Settlement Agreement confers substantial benefits upon the Class and protects the best interests of the Lead Plaintiffs and the Class. V. THE RIGHTS OF SETTLEMENT CLASS MEMBERS If you are a Member of the Settlement Class, you may receive the benefit of and you will be bound by the terms of the proposed settlement described in this Notice, upon the Court s approval of such terms. If you are a Member, you have the following options: 4

5 1. Filing a Proof of Claim. You may complete and file the attached Proof of Claim and Release ( Proof of Claim ) as described below. If you choose this option, you will remain a Member, you will share in the proceeds of the proposed settlement if your claim is timely and valid and if the proposed settlement is finally approved by the Court, and you will be bound by the Final Judgment and Release described below. 2. Requesting Exclusion. If you do not wish to be included in the Class and you do not wish to participate in the proposed settlement described in this Notice, you may request to be excluded. To do so, you must so state in writing no later than October 4, 2005, to the following address: Your exclusion request must set forth: Concord EFS, Inc. Securities Litigation Exclusions c/o The Garden City Group, Inc. Settlement Administrator P.O. Box 9000 #6344 Merrick, New York (a) the name of the Action (In re Concord EFS, Inc. Securities Litigation, Civil Action No. 02-CV-2697); (b) your name, address, and telephone number, and the name and address of the record owner of your Concord common stock if different from your own; (c) the number of shares of Concord common stock you purchased (or options in Concord common stock you transacted) during the Settlement Class Period, and the dates of each such transaction; and (d) that you wish to be excluded from the Class. NO REQUEST FOR EXCLUSION WILL BE CONSIDERED VALID UNLESS ALL OF THE INFORMATION DESCRIBED ABOVE IS INCLUDED IN ANY SUCH REQUEST. 3. If you validly request exclusion from the Class: (a) you will be excluded from the Class; (b) you will not share in the proceeds of the settlement described herein; (c) you will not be bound by any judgment entered in the Action; and (d) you will not be precluded from otherwise prosecuting an individual claim, if timely, against Defendants based on the matters complained of in the Action. 4. If you do not request in writing to be excluded from the Class, you will be bound by any and all determinations or judgments in the Action in connection with the proposed settlement, whether favorable or unfavorable to the Class, including, without limitation, the Final Judgment described below, and you shall be deemed to have, and by operation of the Final Judgment shall have, fully and finally released all of the Released Claims (as defined herein), regardless of whether you submit a valid Proof of Claim. Even if you have a pending litigation, arbitration or other proceeding against any of the Released Parties relating to any of the Released Claims, or want to start such a proceeding later, you must exclude yourself from the Class if you want to continue or bring the proceeding. If you have a pending lawsuit, speak to your lawyer in that case immediately. 5. Objecting to the Settlement. If you do not request exclusion from the Class, you may object to any aspect of the proposed settlement, and/or the application of Plaintiffs Counsel for an award of attorneys fees and reimbursement of expenses. Your objection must (1) be in writing, (2) include your name, address and telephone number; (3) demonstrate your membership in the Settlement Class, including the number of shares you purchased; (4) state the reasons for your objection and include any factual and/or legal materials that you believe support your objection. To be considered, any objection and supporting materials must be filed with the Court no later than October 4, 2005: Clerk of the Court United States District Court Western District of Tennessee, Memphis Division Room 242, Clifford Davis Federal Building 167 North Main Street Memphis, Tennessee You must also serve copies of your objection and any supporting materials on Plaintiffs Lead Counsel and Defendants Counsel, at the following addresses no later than October 4, 2005: Counsel for the Class: Counsel for the Defendants WOLF HALDENSTEIN ADLER FREEMAN SIDLEY AUSTIN BROWN & WOOD LLP & HERZ LLP GERARD D. KELLY PETER C. HARRAR -and- Bank One Plaza PAULETTE S. FOX 10 South Dearborn Street 270 Madison Avenue Chicago, Illinois New York, NY

6 6. Unless otherwise ordered by the Court, any Member who does not submit an objection in the manner set forth above shall be deemed to have waived all objections and opposition to the fairness, reasonableness, and adequacy of the proposed settlement, the Plan of Allocation, or to the request of Plaintiffs Counsel for attorneys fees, costs and expenses. 7. The filing of a Proof of Claim by a Member does not preclude a Member from objecting to the settlement. However, if your objection is rejected, you will be bound by the settlement and the Final Judgment described below just as if you had not objected. 8. Doing Nothing. You may do nothing at all. If you choose this option, you will not share in the proceeds of the settlement, but you will be bound by any judgment entered by the Court, and you shall be deemed to have, and by operation of the Final Judgment shall have, fully released all of the Released Claims against the Released Parties (as defined herein). 9. Your Lawyers in the Action. If you are a Member, you may, but are not required to, enter an appearance through counsel of your own choosing at your own expense. If you wish to do so, your attorney must file a notice of appearance with the Court, and serve copies on Plaintiffs Lead Counsel and Defendants Counsel at the addresses listed above, no later than October 4, If you do not hire your own attorney, your interests will be represented by Plaintiffs Lead Counsel. VI. THE PROPOSED SETTLEMENT Plaintiffs Lead Counsel, on the basis of, among other things, a thorough investigation of the facts and the law relating to the acts, events, and conduct complained of and the subject matter of the Action, have concluded that the proposed settlement is fair to and in the best interests of the Class. The following description of the proposed settlement of the Action is only a summary, and reference is made to the text of the Settlement Agreement on file with the Court for a full statement of its provisions: 1. The Settlement Fund consists of $13,250, in cash, plus any interest that may accrue thereon. 2. Upon Court approval of the Settlement Agreement and entry of a Final Judgment that becomes final, and upon satisfaction of the other conditions to the settlement, described below, the Settlement Fund will be distributed as follows: (a) to pay costs and expenses in connection with providing notice to the members of the Class and administering the settlement on behalf of the Class; (b) to pay Escrow Account fees as provided for in Section 4 of the Settlement Agreement; (c) to pay the reasonable costs incurred in the preparation of any tax returns required to be filed on behalf of the Settlement Fund, as well as the taxes (and any interest and penalties determined to be due thereon) owed by reason of the earnings of the Settlement Fund, including all Tax Expenses as defined in the Settlement Agreement; (d) allowed by the Court; and to pay Plaintiffs Counsel attorneys fees, expenses, and costs, with interest thereon, if and to the extent Class. (e) to reimburse Plaintiffs for their reasonable costs and expenses directly relating to their representation of the 3. Subject to Court approval of the Plan of Allocation described below, the balance of the Net Settlement Fund shall be distributed to Authorized Claimants, as follows: (a) Each Member claiming to be an Authorized Claimant shall submit a separate Proof of Claim and Release. The Proof of Claim, which is included with this Notice, must be signed under penalty of perjury and supported by such documents as specified in the Proof of Claim. (b) All Proof of Claim forms must be postmarked or received by December 16, Unless otherwise ordered by the Court, any Member who fails to submit a Proof of Claim within such period, or such other period as the Court may order, shall be forever barred from receiving any payments pursuant to the Settlement Agreement, but will in all other respects be subject to the provisions of the Settlement Agreement and the Final Judgment described below. 4. To the extent sufficient funds exist in the Net Settlement Fund, each Authorized Claimant will receive an amount equal to the Authorized Claimant s claim, as defined below. If, however, the amount in the Net Settlement Fund is not sufficient to permit payment of the total claim of each Authorized Claimant, then each Authorized Claimant shall be paid that percentage of the Net Settlement Fund that each Authorized Claimant s claim is of the total of the claims of all Authorized Claimants. A claim will be computed pursuant to the Plan of Allocation as follows: An Authorized Claimant s Recognized Loss, for which the claimant will receive a pro rata recovery, will be computed as follows: 6

7 (a) (b) (c) With respect to each Member who purchased Concord common stock during the Settlement Class Period and who held on to those through the end of the Settlement Class Period, the Recognized Loss shall mean the difference (excluding brokerage commissions and transaction charges), if any, between the price paid for the shares and $14.78 per share, which is the weighted average trading price of Concord common stock during the ninety days following the end of the Settlement Class Period. With respect to each Class Member who purchased Concord common stock during the Settlement Class Period and who sold those shares before the end of the Settlement Class Period, the recognized loss shall be zero. In determining the Recognized Loss of Authorized Claimants and their pro rata recoveries, the following rules will apply: (i) (ii) FIFO: Where an Authorized Claimant engaged in multiple purchases and/or sales of Concord common stock, the first-in first-out method ( FIFO ) will be applied to determine the relevant purchases and sales. De minimis: No payment will be made on any claims where the payable loss is $10.00 or less, but the Authorized Claimant will nevertheless be bound by the final judgment entered by the Court. 5. The above Plan of Allocation may be modified by a ruling by the Court, an objection filed by a Member or a settlement with a person or entity requesting exclusion from the Settlement Class. 6. Payment pursuant to the Plan of Allocation set forth above shall be conclusive against all Authorized Claimants. No Member shall have any claim whatsoever against Defendants, Defendants counsel, Defendants insurers or any of their agents or representatives with respect to any act, omission or determination of the Escrow Agent, Settlement Administrator, Plaintiffs Lead Counsel or any agent or designee of the Escrow Agent, Settlement Administrator or Plaintiffs Lead Counsel in connection with the administration of the Settlement or Plan of Allocation. No Member shall have any claim against Plaintiffs Lead Counsel, the Settlement Administrator, or any of their agents or representatives based on distributions made substantially in accordance with the Settlement Agreement, the Plan of Allocation, or further Court orders. All Members who fail to complete and file a valid and timely Proof of Claim and Release shall be barred from participating in distributions from the Net Settlement Fund (unless otherwise ordered by the Court), but otherwise shall be bound by all of the terms of the Settlement Agreement, including the terms of the Release and Final Judgment described below. 7. To share in the Net Settlement Fund, you must submit a valid Proof of Claim and Release on the form enclosed with this Notice, to the address set forth on the enclosed Proof of Claim form, so that it is postmarked or received no later than December 16, VII. CONDITIONS FOR SETTLEMENT The settlement is conditioned upon the occurrence of certain events described in the Settlement Agreement on file with the Court. Those events include, among other things: (a) entry of the Final Judgment by the Court, as provided for in the Settlement Agreement; and (b) expiration of the time to appeal from or alter or amend the Final Judgment. If, for any reason, any one of the conditions described in the Settlement Agreement is not met, the Settlement Agreement might be terminated. If the Settlement Agreement is terminated, it will become null and void, and the parties to the Settlement Agreement will be restored to their respective positions in the Action as of April 25, VIII. DISMISSAL AND RELEASES 1. If the Court approves the proposed settlement, the Court will enter a Final Judgment that will dismiss the Action against Defendants with prejudice, and bar and enjoin the Plaintiffs and each Member, regardless of whether such Member has submitted a Proof of Claim, from prosecuting the Released Claims against the Released Parties (as defined herein). The Court shall retain jurisdiction over implementation of the settlement, disposition of the Settlement Fund, hearing and determining Plaintiffs Counsel s application for attorneys fees, costs, interest, and expenses (including fees and costs of experts), and enforcing and administering the Settlement Agreement, including any releases executed in connection therewith. 2. Upon the Settlement Effective Date, Lead Plaintiffs and Class Members of the Settlement Class, on behalf of themselves, their heirs, executors, administrators, successors and assigns, and any person they represent, shall be deemed to have, and by operation of the Final Judgment shall have, fully, finally and forever released, relinquished and discharged, and shall forever be enjoined from prosecution of, each and every Released Claim against any and all of the Released Parties, whether or not such Settlement Class Member executes and delivers a Proof of Claim, provided, however, that nothing herein is meant to bar any claim relating to performance or enforcement of the Settlement Agreement or the Settlement. 7

8 IX. NOTICE TO BANKS, BROKERS, AND OTHER NOMINEES Banks, brokerage firms, institutions, and other Members who are nominees, and who purchased or otherwise acquired Concord common stock between March 29, 2001 and September 4, 2002, inclusive, for the beneficial interest of another Member are requested within ten (10) days of receipt of this Notice to: (1) provide the Settlement Administrator with the names and addresses of such Class Member, or (2) forward a copy of this Notice to each such Member and provide the Settlement Administrator with written confirmation of doing so. The Settlement Administrator will reimburse your reasonable costs and expenses of complying with this provision upon submission of appropriate documentation. Additional postage pre-paid copies of the Notice may be obtained from the Settlement Administrator for forwarding to such beneficial owners. All such correspondence to the Settlement Administrator should be addressed as follows: Concord EFS, Inc. Securities Litigation c/o The Garden City Group, Inc. Settlement Administrator P.O. Box 9000 #6344 Merrick, New York X. FEES, COSTS, AND EXPENSES OF PLAINTIFFS COUNSEL 1. To date, Plaintiffs Counsel have not received any payment for their services in conducting the Action on behalf of the Plaintiffs and the Members, nor have counsel been reimbursed for their out-of-pocket expenses. At the conclusion of the Court s approval hearing described below, Plaintiffs Counsel will apply to the Court for an award of attorneys fees of up to 25% of the Settlement Fund, plus reimbursement of expenses, not to exceed $500, exclusive of settlement administration expenses. Such sums as the Court may grant will be paid from the Distribution Fund. Members are not personally liable for any fees or expenses awarded by the Court. 2. The fee requested will compensate Plaintiffs Counsel for their efforts in achieving the Settlement Fund for the benefit of the Settlement Class, and for their risk in undertaking this case on a contingent basis. If approved by the Court, the fee requested would fall within the range of fees awarded to plaintiffs counsel under similar circumstances in litigation of this type. XI. THE HEARING ON PROPOSED SETTLEMENT 1. A hearing (the Settlement Hearing ) will take place before the Honorable Samuel H. Mays, Jr., at the United States District Court for the Western District of Tennessee, Memphis Division, Room 1111, Clifford Davis Federal Building, 167 North Main Street, Memphis, Tennessee 38103, at 1:30 p.m., on October 21, 2005, for the purpose of determining whether: (a) the proposed settlement and Settlement Agreement should be approved as fair, reasonable and adequate; (b) the proposed Plan of Allocation is fair, reasonable, and adequate and should be approved; (c) the Court should approve applications of Plaintiffs Counsel for an award of attorneys fees, costs and expenses; and (d) the Court should enter the Final Judgment dismissing the Action with prejudice as against Defendants and releasing the Released Parties. The Court may reschedule the Settlement Hearing or modify any dates set forth herein without further notice to Members. 2. Any Member who has not requested exclusion may appear at the Settlement Hearing to show cause why the proposed settlement should not be approved, or the Action should not be dismissed with prejudice as against the Defendants, and to present any opposition to the Plan of Allocation or the application of Plaintiffs Counsel for attorneys fees, costs and expenses. However, any Member wishing to be heard at the Settlement Hearing must first file and serve a timely written objection, as described above. XII. OBTAINING ADDITIONAL INFORMATION This Notice contains only a summary of the terms of the proposed settlement. For a more detailed statement of the matters involved in the Action, reference is made to the pleadings, to the Settlement Agreement, and to other papers filed in the Action, which may be inspected at the office of the Clerk of the Court, United States District Court for the Western District of Tennessee, Room 242, Clifford Davis Federal Building, 167 North Main Street, Memphis, Tennessee 38103, during business hours of each business day. In addition, the Complaint, Settlement Agreement, Notice, Proof of Claim, and other pleadings, documents, or orders of the Court as the Settling Parties may agree or the Court may order are available at the following website: DO NOT CONTACT THE COURT OR CONCORD REGARDING THIS NOTICE. If you have any questions about the proposed settlement, you may contact the following Plaintiffs Lead Counsel: WOLF HALDENSTEIN ADLER FREEMAN & HERZ LLP PETER C. HARRAR PAULETTE S. FOX 270 Madison Avenue New York, NY (212) DATED: August 10, 2005 BY ORDER OF THE COURT UNITED STATES DISTRICT COURT WESTERN DISTRICT OF TENNESSEE 8