Case 6:13-cv AA Document 55-1 Filed 10/23/15 Page 1 of 38 STIPULATED CLASS AND COLLECTIVE ACTION SETTLEMENT AGREEMENT RECITALS

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1 Case 6:13-cv AA Document 55-1 Filed 10/23/15 Page 1 of 38 STIPULATED CLASS AND COLLECTIVE ACTION SETTLEMENT AGREEMENT This Settlement Agreement ( Settlement Agreement ) is entered into between named plaintiff Rose Dusan-Speck ( Speck ) and opt-in plaintiff Cheryl Turner ( Turner ) (collectively, Class Representatives or Plaintiffs ), individually and as representatives of others similarly situated, which constitute the Settlement Class (defined below), acting by and through their undersigned counsel, Roxanne Farra, Roxanne L. Farra, P.C., and Kyle Busse of Busse & Hunt, who are designated as Class Counsel, on the one hand, and St. Charles Health System, Inc. ( St. Charles or Defendant ), on the other (collectively, the Parties ). RECITALS WHEREAS, Plaintiff Speck filed a lawsuit against Defendant that is currently pending in the U.S. District Court for the District of Oregon, Eugene Division, styled Rose Speck v. St. Charles Health System, Inc. dba St. Charles Home Health Services, Case No. 6:13-cv AA (the Lawsuit ). Plaintiff Turner joined the Lawsuit as a named Plaintiff on or about March 24, As part of the Lawsuit, Speck and Turner asserted claims, individually and on a purported collective- and class-wide basis on behalf of themselves and other allegedly similarly-situated current and former employees of Defendant, alleging violations of the Fair Labor Standards Act ( FLSA ), 29 USC 201, et seq. and Oregon wage laws, ORS Chapters 652 and 653. WHEREAS, the Parties have conducted an extensive investigation into the facts and law and have engaged in extensive negotiations relating to the Lawsuit, including numerous meetings and in-person settlement negotiations, and a mediation before the Honorable Anna Brown, and, considering the benefits of the Settlement Agreement and the risks of litigation, have concluded that it is in the best interest of the Parties to enter into the Settlement Agreement. Plaintiffs and Class Counsel agree that the Settlement Agreement is fair, reasonable, and adequate with respect to the interests of Plaintiffs and the Settlement Class, and should be approved by the Court. WHEREAS, St. Charles vigorously and expressly denies liability, but nevertheless desires to settle the Lawsuit finally on the terms and conditions set forth herein for the purposes of avoiding the burden, expense, and uncertainty of litigation, and putting to rest the controversies engendered by this Lawsuit. WHEREAS, the Parties wish to settle the Lawsuit to avoid the uncertainties and risks of trial, to avoid further expenses, inconveniences, and the distraction of burdensome and protracted litigation, and to obtain the releases, orders, and judgments contemplated by this Settlement Agreement so as to settle and put to rest totally and finally all matters that were raised, or could have been raised, in the Lawsuit. NOW THEREFORE, in consideration of the covenants and agreements set forth herein, St. Charles and Plaintiffs, on behalf of themselves and the Settlement Class and through their undersigned counsel, agree to the settlement of the Lawsuit, subject to Court approval, under the following terms and conditions:

2 Case 6:13-cv AA Document 55-1 Filed 10/23/15 Page 2 of 38 AGREEMENTS AND RELEASES 1. RECITALS The foregoing Recitals are true and correct and made part of this Settlement Agreement. 2. DEFINITIONS The following terms shall have the meanings set forth below: 2.1 Class Counsel shall mean Roxanne Farra, Roxanne L. Farra, P.C., and Kyle Busse of the law firm of Busse & Hunt. 2.2 Class Member shall mean any current or former employee of St. Charles who is a member of the Settlement Class (defined below). 2.3 Class Period shall mean the period of time commencing no earlier than March 1, 2007 and ending on the date of the Court s entry of the Preliminary Approval Order. 2.4 Class Representatives shall mean Plaintiff Speck and Plaintiff Turner. 2.5 Complaint means the Complaint filed by Plaintiff Speck in the Lawsuit on or about March 1, Court shall mean the U.S. District Court for the District of Oregon, Eugene Division. 2.7 Covered Position shall mean past and current employees of St. Charles Home Health Department who held the position of Physical Therapist, Occupational Therapist, or Physical Therapist Assistant during the Class Period. 2.8 Defendant s Counsel shall mean St. Charles attorneys Brenda Baumgart and Ryan Gibson of Stoel Rives LLP. 2.9 Effective Date shall mean the first day that the Court is open for business after entry of the General Judgment of Dismissal with Prejudice and after the last of the following dates has passed: (i) assuming no appeal or motion to intervene is filed by any objector, ten (10) days after the end of the period by which an appeal of the Court s General Judgment of Dismissal with Prejudice must be filed; (ii) in the event that the General Judgment of Dismissal with Prejudice is appealed, or a motion to intervene is filed challenging the Settlement Agreement, five (5) days after the issuance of the Appellate Mandate pursuant to Federal Rule of Appellate Procedure 41; or (iii) denial of any petition for certiorari to the U.S. Supreme Court Fairness Hearing shall mean the hearing on the Motion for Judgment and Final Approval of Settlement, which will occur no earlier than thirty (30) days after the end of the Notice Period (defined below), or a later date as set by the Court

3 Case 6:13-cv AA Document 55-1 Filed 10/23/15 Page 3 of General Judgment of Dismissal with Prejudice means the General Judgment of Dismissal with Prejudice to be submitted by the Parties and rendered by the Court consistent with this Settlement Agreement Notice shall mean the Notice of Proposed Class Action Settlement, substantially in the form attached as Exhibit 1, and as ultimately approved by the Court Notice Period shall mean the deadline by which Class Members must submit the Settlement Response Form (defined below) to request that they participate in ( opt in ) or be excluded from ( opt out ) the Settlement Class, or to file objections to the Settlement. To be effective, the Settlement Response Form must be validly completed and postmarked by the date specified in the Notice, which will be seventy-five (75) calendar days after the initial mailing of the Notice. To be effective, any objections must be made pursuant to the terms and within the time periods in this Settlement Agreement Parties shall mean Speck and Turner, on behalf of themselves and Class Members, and St. Charles Preliminary Approval Order shall mean the Court s order preliminarily approving this Settlement Agreement without any modification, in the form attached as Exhibit Released Parties shall mean St. Charles and all of its current and former parents, subsidiaries, affiliates, successors, predecessors, assigns, directors, officers, agents, legal representatives, employees, insurers and transferees Settlement Administrator shall mean the entity approved by the Court to serve the role of disseminating class Notice, processing claims, and fulfilling other requirements as set forth herein and in any orders of the Court. Subject to Court approval, the Parties have agreed to request that Epiq Systems, Inc. in Beaverton, Oregon serve in the capacity of Settlement Administrator at St. Charles expense Settlement Agreement means this Stipulated Class and Collective Action Settlement Agreement, including any permitted and executed amendments and exhibits hereto Settlement Class shall mean a class to be certified by the Court pursuant to this Settlement Agreement solely for purposes of effectuating this Settlement Agreement, as provided for and defined in section 3. The Settlement Class consists of sixty (60) specifically named individuals the Parties have identified during settlement negotiations, who are all the past and current employees who worked in Covered Positions at any time during the Class Period. A list of the Class Members, together with the Settlement Formula (see below), and the dollar amount of each Class Member s personal settlement share, will be submitted to the Court for in camera review under LR 3-9, and filed under seal, to effectuate sections and of this Settlement Agreement. Pursuant to the negotiations of the Parties, Settlement Class shall exclude: (a) those persons who opted out of this Settlement Agreement as identified in the Opt Out List submitted by Class Counsel or their designee pursuant to section 4; (b) Defendant s Counsel and Defendant s Counsel s employees; (c) Class Counsel and Class Counsel s

4 Case 6:13-cv AA Document 55-1 Filed 10/23/15 Page 4 of 38 employees; and (d) any judge hearing or deciding any matter related to the Lawsuit, including that judge s staff Settlement Formula shall mean a calculation of how settlement proceeds shall be paid to each individual Class Member who opts in to the Settlement, based on a formula using each Class Member s dates of employment, full time equivalent ( FTE ) position, and last hourly pay rate. The Parties have cooperated in identifying and confirming the correct employment information for each Class Member including the identity of Class Members, each Class Member s dates of employment, FTE, and last hourly pay rate Settlement Fund means funds the Defendant will distribute under the terms of this Settlement Agreement in accordance with section Settlement Payment means the amount of money from the Settlement Fund to be paid to each opt-in Class Member pursuant to the Settlement Formula Settlement Response Form shall mean the document that must be submitted by Class Members in order to obtain the benefits of this Settlement Agreement ( opt in ) or be excluded from the Settlement Class ( opt out ). A copy of the proposed Settlement Response Form approved by the Parties is attached as Exhibit St. Charles shall mean St. Charles Health System, Inc., including each and every one of its respective past or present owners, affiliates, parents, subsidiaries, predecessors, successors, related entities, assigns, insurers, underwriters, agents, officers, directors, partners, shareholders, employees, and/or attorneys of St. Charles or of any entity related to St. Charles. 3. CERTIFICATION OF THE SETTLEMENT CLASS AND COLLECTIVE ACTION St. Charles agrees that, solely for the purposes of resolving the Lawsuit and for purposes of this Settlement Agreement and its implementation, the Lawsuit shall proceed as a class action pursuant to FRCP 23 and a collective action pursuant to the FLSA, 29 USC 201, et seq., as more particularly described in this Settlement Agreement. The Parties have agreed that the Settlement Class shall be defined as set forth in section The Class Representatives and Class Counsel agree to recommend approval of this Settlement Agreement by the Court and to recommend participation in the Settlement Agreement by members of the Settlement Class. The Parties agree to undertake their best efforts, including any and all steps and efforts that may become necessary by order of the Court or otherwise, to effectuate the terms and purposes of the Settlement Agreement, to secure the Court s approval. At no time shall any of the Parties or their counsel seek to solicit or otherwise encourage Class Members to submit written objections to the Settlement, requests for exclusion from the Settlement, or appeal from the Court s judgment. 4. APPROVAL AND CLASS NOTICE 4.1 Preliminary Approval by the Court. On October 23, 2015, the Class Representatives through Class Counsel shall move the Court for certification of the Settlement

5 Case 6:13-cv AA Document 55-1 Filed 10/23/15 Page 5 of 38 Class and for preliminary approval of the Settlement Agreement and all proposed forms, orders and judgments, including but not limited to this Settlement Agreement and all attached exhibits. St. Charles shall join in that motion. 4.2 Administration of Settlement Agreement by the Settlement Administrator The Parties agree that the Settlement Administrator and Class Counsel shall be solely and exclusively responsible for having all contact with Class Members during the settlement administration process, including but not limited to responding to potential inquiries from Class Members. The Settlement Administrator shall be solely and exclusively responsible for disseminating the Notice and Settlement Response Forms, collecting and processing the Settlement Response Forms, and making all Settlement Payments as set forth in section St. Charles and Defendant s Counsel agree to refrain from directly contacting any Class Member about this action during the Notice Period or claims administration process. If St. Charles or Defendant s Counsel are contacted by any Class Member regarding the Lawsuit or the Settlement Agreement or its terms, they will not provide any information to the Class Member and will instead refer him or her to the Settlement Administrator and Class Counsel The Parties agree and understand that the Settlement Administrator is solely and exclusively responsible for administering any Settlement Payments from the Settlement Fund pursuant to this Settlement Agreement, including that the Settlement Administrator is responsible for making all necessary payroll withholdings and deductions required by law for any portions of Settlement Payment allocated as wages, and sending all necessary IRS tax forms to Class Members as required by law The Parties agree that Defendant s Counsel will not inform any employees of St. Charles Human Resources or Home Health Departments about the identity of any Class Member who opts in or out of the settlement, about the amount of any Settlement Payments to any Class Member pursuant to the Settlement Formula, or about which Class Members have opted in, opted out, or objected to the settlement. Defendant s Counsel will not provide the Opt In List, Opt Out List, or No Response List described in section to any employees of St. Charles Human Resources or Home Health Departments. It is the understanding of the Parties that the Settlement Administrator will handle all aspects of administering the settlement and issuing any Settlement Payments, including but not limited to doing proper payroll withholdings and issuing necessary tax documents required by law, and without involving St. Charles Human Resources or payroll staff. To the extent the Settlement Administrator requires information from St. Charles in order to carry out the administration of the Settlement Agreement or its terms, including tax or payroll information for specific Class Members, St. Charles agrees to involve only one or two employees in its Payroll Department and limit that involvement to the greatest extent practicable consistent with implementing this Settlement. Should St. Charles require the involvement of any other payroll department employees in order to carry out the administration of this Settlement Agreement, St. Charles agrees to provide Class Counsel with prior notice of the need to do so

6 Case 6:13-cv AA Document 55-1 Filed 10/23/15 Page 6 of St. Charles agrees that it will not retaliate or take any adverse employment action against any Class Member who is a current or former employee because that Class Member has participated in the Lawsuit or this Settlement Agreement in any way. 4.3 Notice Within thirty (30) days of entry of the Preliminary Approval Order by the Court, or a later date approved by the Court, at St. Charles sole expense, the Settlement Administrator shall disseminate the documents listed in sections and to all Class Members by First Class U.S. mail, postage prepaid to the Class Member s most current mailing address The Notice, defined in section 2.12 of this Settlement Agreement, which will inform the Class Member about the Lawsuit and the Settlement Agreement. A copy of the proposed Notice agreed to by the Parties is attached as Exhibit The Settlement Response Form, defined in section 2.23 of this Settlement Agreement, which will explain what Class Members must do to join, opt out of, or object to the settlement. A copy of the proposed Settlement Response Form agreed to by the Parties is attached as Exhibit Prior to mailing the Notice, the Settlement Administrator shall see that an updated address for each Class Member is obtained from the National Change of Address database maintained by the U.S. Postal Service. It shall be presumed that if an envelope is not returned as undelivered or undeliverable, the Class Member received the Notice. If a Notice is returned undeliverable, within five (5) business days, the Settlement Administrator will do one of the following: (1) if the Notice was returned with a forwarding address provided by the U.S. Postal Service, the Settlement Administrator will resend the Notice to that forwarding address; or (2) if a Notice is returned as undeliverable and without a forwarding address, the Settlement Administrator will perform a single skip trace search through LexisNexis AllFind or a comparable address database, using the social security number of the Class Member involved, and, if the Settlement Administrator obtains a different address from the skip trace, it will resend the Notice to that address. If after these steps are taken the Notice is still returned undelivered or undeliverable, the Settlement Administrator will notify Defendant s Counsel and Class Counsel within five (5) business days. Class Counsel may engage in reasonable efforts to determine the current location and address of the Class Member, and, if updated address information is found, provide that information to the Settlement Administrator. Within five (5) business days thereafter, the Settlement Administrator will send the Notice and Settlement Response Form to the address provided by Class Counsel. The fact that the Settlement Administrator or Class Counsel may need to undertake additional measures to locate current address information for some Class Members as set forth in this paragraph does not extend the Notice Period. Any Class Member whose actual receipt of a Notice and Settlement Response Form is delayed because of difficulties in locating current address information must still comply with all the deadlines and requirements in the Notice for the Settlement Response Form or objections to be effective and timely

7 Case 6:13-cv AA Document 55-1 Filed 10/23/15 Page 7 of Class Counsel may post the Settlement Agreement, Notice, and Settlement Response Form and any official notices or relevant forms on Class Counsel s website Except for Class Counsel s posting of settlement documents on its website as set forth in section 4.3.3, the Parties, Class Counsel, and Defendant s Counsel agree they will not make any public statements regarding the Lawsuit or the Settlement Agreement, including but not limited to statements to the media, to any regulatory agency or authority, or in any blog or social media. If asked, the Parties, Class Counsel, and Defendant s Counsel may only acknowledge the existence of the Lawsuit, acknowledge the existence of the Settlement Agreement, and state that the Parties are happy with, satisfied with, or pleased by the Settlement Agreement or similar words to that effect, but agree to provide no further details or opinion about the Settlement. Class Counsel and Defendant s Counsel agree to immediately notify each other if they receive any inquiries from any regulatory or governmental agency or authority or the general media, and Class Counsel and Defendant s Counsel agree that they will not respond to any such inquiries. 4.4 Class Member Settlement Response Form The Settlement Response Form will explain the options that Class Members will have with respect to choosing whether to join the Settlement Class ( opt in ) or to be excluded from the Settlement Class ( opt out ). A copy of the Settlement Response Form, which explains in detail the options available to each Class Member and has been approved by the Parties, is attached as Exhibit Regardless of what option Class Members elect as set forth in the Settlement Response Form, to be effective the Settlement Response Form must be postmarked by no later than 5:00 pm Pacific Standard Time (PST) on the date specified in the Notice, which will be the end of the Notice Period, as defined in section Any Settlement Response Form postmarked after the end of the Notice Period shall be null and void, and will be treated for purposes of this Settlement Agreement as if the Class Member had not responded to the Notice and Settlement Response Form at all. St. Charles or Defendant s Counsel may at their sole discretion choose to accept in specific instances a Settlement Response Form that is postmarked after the Notice Period, and issue a Settlement Payment to that Class Member despite the fact that the Settlement Response Form was untimely. Any such acceptance by St. Charles or its Defendant s Counsel will not act as a general waiver of Defendant s right to treat any and all untimely Settlement Response Forms as null and void If a Class Member returns a Settlement Response Form that the Settlement Administrator deems to not be valid or completed incorrectly or incompletely, the Settlement Administrator will notify Defendant s Counsel and Class Counsel within five (5) business days of receiving the defective or invalid Notice. Class Counsel may then engage in reasonable efforts to ensure that any Class Member who submitted an allegedly deficient Settlement Response Form has an opportunity to remedy any deficiency in the completion of the Settlement Response Form and send in another Settlement Response Form. The Notice Period will not be extended for any Class Members who may submit an invalid or incomplete Settlement Response Form. If a Class Member sends in a corrected Settlement Response Form, he or she must still do so within the Notice Period for it to be timely and valid

8 Case 6:13-cv AA Document 55-1 Filed 10/23/15 Page 8 of At the end of the Notice Period, the Settlement Administrator will record a list of persons who have properly and timely opted to join the Settlement Class ( Opt In List ); a list of persons who have chosen to exclude themselves from the Settlement Agreement (the Opt Out List ); and a list of persons who have done neither ( No Response List ). The Settlement Administrator will provide the list to Defendant s Counsel and Class Counsel within ten (10) days following the close of the Notice Period. Class Counsel will thereafter file the Opt In List, the Opt Out List, and No Response List with the Court under seal, no later than ten (10) days before the Fairness Hearing Any Class Member who timely and properly returns a Settlement Response Form and opts in to the Settlement Class agrees to receive the Settlement Payment allocated for that Class Member pursuant to the Settlement Formula, consents to join and opt in to the class action settlement under the Fair Labor Standards Act, and agrees to be bound by this Settlement Agreement including but not limited to the Release of Claims in section Any Class Member who timely and properly returns a Settlement Response Form and opts out of the Settlement Class agrees to not receive a Settlement Payment pursuant to the Settlement Formula, does not consent to join or opt in to the class action settlement under the Fair Labor Standards Act, and will not be bound by the Settlement Agreement, including but not limited to the Release of Claims in section Any Class Member who does not timely and properly return a Settlement Response Form within the Notice Period will not receive a Settlement Payment pursuant to the Settlement Formula, but will be bound by the Settlement Agreement, including but not limited to the Release of Claims in section Objections to Settlement Agreement Class Members who wish to present objections to the Settlement Agreement at the Fairness Hearing must first do so in writing. The written objection must set forth the factual and legal bases for the objection. To be considered, such objection must be filed with the Court and sent to Class Counsel and Defendant s Counsel via First Class U.S. mail, postage prepaid, and be postmarked by the deadline ( Objection Deadline ) specified in the Notice, which shall be not less than forty-five (45) days after the Notice and Settlement Response Form are mailed to the Class Member. objections Class Members who opt out of the Settlement Class are not entitled to file An objector has the right to appear at the Fairness Hearing either in person or through counsel. An objector who wishes to appear at the Fairness Hearing must state his or her intention to do so at the time he or she submits his or her written objections. The Parties will not object to an objector seeking Court approval to withdraw his or her objections. No Class Member may appear to object at the Fairness Hearing unless he or she has filed a timely objection that complies with the procedures provided for in section A Class Member who opts in to the Settlement Agreement and submits an objection nevertheless remains bound by the Settlement Agreement

9 Case 6:13-cv AA Document 55-1 Filed 10/23/15 Page 9 of Motion for Entry of General Judgment of Dismissal with Prejudice and Final Approval of Settlement. Not later than fourteen (14) days after the end of the Notice Period, Class Counsel shall file a motion requesting that the Court grant final approval of the Settlement Agreement and enter final judgment and an order of dismissal with prejudice, and that the Court set a hearing with the Parties to decide the final approval of the Settlement Agreement ( Fairness Hearing ). Not later than ten (10) calendar days before the Fairness Hearing (or such other time as the Court may require), Class Counsel shall submit a Motion for Entry of the General Judgment of Dismissal with Prejudice and for Final Approval of the Settlement Agreement. St. Charles shall file a joinder to that motion. 4.7 Entry of General Judgment of Dismissal with Prejudice. At the Fairness Hearing, the Parties will request that the Court, among other things: (i) approve the Settlement Agreement as final, fair, reasonable, adequate and binding on all Class Members who have not timely opted out pursuant to section 4.4; (ii) determine that adequate Notice was provided to the Class Members; (iii) approve payment to Class Counsel of Class Counsel s Attorney Fee and Cost Award; (iv) enter an order permanently enjoining all Class Members who do not opt out from pursuing and/or seeking to reopen claims that have been released by this Settlement Agreement; (v) dismiss the Complaint and the Lawsuit with prejudice and without further fees or costs to any Party; and (vi) enter the General Judgment of Dismissal with Prejudice. 4.8 Effect of Failure to Grant Preliminary or Final Approval. In the event this Settlement Agreement is not approved by the Court, is reversed on any appeal, or is terminated by any Party as allowed herein, the Settlement Agreement and the Settlement Class, including, without limitation, certification of the Settlement Class, shall become null and void and have no further force and effect whatsoever, and the Parties shall be restored without prejudice to their respective positions as if the Settlement Agreement and application for its approval had not been made. If the Court refuses to approve the Settlement Agreement, or if the Court s order approving the Settlement Agreement is reversed on appeal, the Settlement Agreement and any negotiations, statements, communications or proceedings relating thereto, and the fact that the Parties agreed to the Settlement Agreement, shall be without prejudice to the rights of the Settlement Class or St. Charles, shall not be used for any purpose whatsoever in any subsequent proceeding in this action or any other action in any court or tribunal, and shall not be construed as an admission or concession by any Party of any fact, matter or allegation. The Parties further agree to jointly move the Court to vacate all orders issued pursuant to the Settlement Agreement in the event the Settlement Agreement is not approved by the Court, is reversed on any appeal, or is terminated by any Party as allowed herein. 4.9 Right to Withdraw from Settlement Agreement. If any legal proceeding or regulatory investigation, including, but not limited to, any class action lawsuit, or regulatory action or governmental investigation of any kind, is commenced by

10 Case 6:13-cv AA Document 55-1 Filed 10/23/15 Page 10 of 38 or on behalf of any Class Member concerning any allegations in the Lawsuit, St. Charles shall have the right, in its sole discretion, to withdraw from this Settlement Agreement by filing with the Court a Notice of Withdrawal of Settlement not later than ten (10) days before the Fairness Hearing, in which case the Settlement Agreement shall become null and void as if the Court failed to grant final approval as set forth in section 4.8. In the event that the Court or any appellate court enters an order altering this Settlement Agreement in a way that either Party believes, in its sole discretion, materially and adversely affects its interests, that affected Party may, within ten (10) days of entry of such order, withdraw from this Settlement Agreement by filing with the Court a Notice of Withdrawal of Settlement, in which case the Settlement Agreement shall become null and void as if the Court failed to grant final approval as set forth in section SETTLEMENT PROCEEDS The Parties agree on the following consideration to be provided to Class Members as set forth in this section. 5.1 Settlement Fund. St. Charles agrees to pay a maximum amount of Nine Hundred and Fifty Thousand and No Dollars ($950,000.00) to be made available to fully resolve all claims or potential claims by or on behalf of Plaintiffs and Class Members and pursuant to the terms of this Settlement Agreement, and inclusive of all incentive payments to Class Representatives, all attorney fees and costs to Class Counsel, and all pre- and post-judgment interest. The Settlement Fund amount in this paragraph is the maximum that St. Charles will be required to pay pursuant to this Settlement Agreement. The Settlement Fund does not include the costs of the Settlement Administrator, which St. Charles agrees to pay. 5.2 Settlement Formula. Class Counsel has determined each eligible Class Member s maximum share of the Settlement Fund ( Settlement Payment ) based on the Settlement Formula. A copy of the Settlement Formula, which identifies each Class Member s maximum Settlement Payment, will be submitted to the Court for in camera review under LR 3-9, and filed under seal, to effectuate sections and of this Settlement Agreement. The Settlement Payment to each eligible Class Member pursuant to the Settlement Formula is the maximum amount that Class Member may be paid pursuant to this Settlement Agreement. 5.3 Incentive Awards to Class Representatives. It is acknowledged that, subject to Court approval, each Class Representative will receive an incentive award in the amount of Ten Thousand and No Dollars ($10,000.00) as part of their Settlement Payment. 5.4 Taxation of Settlement Payments Fifty percent (50%) of the Settlement Payment for each Class Member shall be deemed payment in settlement of claims for unpaid wages, and will be subject to all

11 Case 6:13-cv AA Document 55-1 Filed 10/23/15 Page 11 of 38 applicable payroll deductions and withholdings required by law. The Settlement Administrator will be responsible for calculating and paying all such payroll deductions and withholdings, and for issuing required tax forms, including but not limited to an IRS Form W-2 or 1099, to each Class Member for the portion of each Settlement Payment allocated as wages pursuant to this section The other fifty percent (50%) of the Settlement Payment for each Class Member shall be deemed payment of statutory penalties and other non-wages damages, and will not be subject to applicable payroll withholdings and deductions. An IRS Form 1099 will be issued by the Settlement Administrator for this amount to each Class Member. The Settlement Administrator will also issue an IRS Form 1099 to Class Representatives for any incentive award payments pursuant to this Settlement Agreement under section Each Class Member will be solely responsible for his or her obligation to pay appropriate taxes related to the Settlement Payments, other than the payroll withholdings and deductions described in section The Notice shall make clear that each Class Member is responsible for any tax obligations resulting from that Class Member s acceptance of a Settlement Payment, and that each Class Member agrees to indemnify and hold St. Charles harmless with respect to any taxes, interest, or penalties that may arise from or be related to each Class Member s tax obligations with respect to their Settlement Payment. St. Charles, or any of its representatives or attorneys, has made no promise, representation or warranty, express or implied, regarding the tax consequences of any consideration paid to Plaintiffs or Class Members pursuant to this Settlement Agreement. Plaintiffs and Class Members also agree and acknowledge that St. Charles has no obligation to indemnify or defend them in any tax proceedings or from any tax consequences that could result from payments made in accordance with this Settlement Agreement. 5.5 Class Counsel s Attorney Fees and Costs Pursuant to the Settlement Formula, Class Counsel agrees to request approval from the Court of attorney fees and costs in an amount not to exceed Two Hundred Forty-Five Thousand Nine Hundred Ninety Nine Dollars and Ninety Nine Cents ($245,999.99) ( Class Counsel s Attorney Fee and Cost Award ). This amount consists of Two Hundred Thirty-Seven Thousand Five Hundred and No Dollars ($237,500.00) for attorney fees (twentyfive percent (25%) of the Settlement Fund), and Eight Thousand Four Hundred Ninety Nine Dollars and Ninety Nine Cents ($8,499.99) for costs. St. Charles agrees not to oppose such a request. St. Charles shall have no additional liability for attorney fees and costs in connection with the Lawsuit, including, without limitation, expert fees and costs, and administration costs (except those administrative costs identified in section 8 related to costs of the Settlement Administrator). St. Charles agrees to pay Class Counsel s Attorney Fee and Cost Award in the amount set forth in the Settlement Formula and this paragraph no later than thirty (30) days after the Effective Date of this Settlement Agreement as defined in section 2.9, by delivering payment via certified mail, return receipt to Roxanne L. Farra, P.C., P.O. Box 5217, Bend, Oregon or in person or via overnight mail to Roxanne L. Farra, P.C., Ropp Lane, Bend, Oregon Class Counsel agrees that they are responsible for allocating attorney fees and costs among themselves and other counsel for the Class Representatives and Class Members. In the event an attorneys lien is asserted related to this Settlement Agreement, St. Charles shall

12 Case 6:13-cv AA Document 55-1 Filed 10/23/15 Page 12 of 38 tender the uncontested amounts of attorney fees and costs awarded by the Court to Class Counsel per the provided instructions and shall tender the contested amounts to the Court, and shall thereafter be released from any attorneys lien claim Class Counsel s Attorney Fee and Cost Award paid to Class Counsel as provided for in section and as set forth in the Settlement Formula shall be the full amount that will be paid by St. Charles for attorney fees and costs in connection with the Lawsuit and this Settlement Agreement, regardless of the actual amount of attorney fees and costs expended by Class Counsel or any other counsel who represented or purports to represent the Class Representatives, the Settlement Class or any individual Class Member The outcome of any proceeding relating to Class Counsel s application for attorney fees and costs shall not terminate this Settlement Agreement or otherwise affect the Court s ruling on the entry of the General Judgment of Dismissal with Prejudice or final approval of Settlement If Class Counsel s application for attorney fees and costs is denied, in whole or in part, Class Counsel has the right to appeal such denial. 5.6 Eligibility. To be eligible for a Settlement Payment, each Class Member must submit a signed and correctly completed Settlement Response Form, defined in section 2.23 and attached as Exhibit 3, indicating that they wish to participate in ( opt in ) the Settlement Agreement. Class Members who do not timely submit a Settlement Response Form as set forth in this paragraph will not be eligible to receive a Settlement Payment under this section. Class Members who opt out under section are not entitled to any of the settlement benefits provided for in this section. Each Class Member who opts in is eligible for only one Settlement Payment as specifically calculated for that Class Member in the Settlement Formula. Any Class Member who does not timely and properly return a Settlement Response Form within the Notice Period will not receive a Settlement Payment pursuant to the Settlement Formula, but will be bound by the Settlement Agreement, including but not limited to the Release of Claims in section Reversion. The Parties agree that each Class Member s Settlement Payment calculated pursuant to the Settlement Formula represents a fair, reasonable and adequate settlement of each Class Member s claim if the Lawsuit were to proceed to trial. The Settlement Payment takes into account each Class Member s length of employment within the relevant limitations periods, last hourly pay rate, and Full Time Equivalent ( FTE position. The Settlement also takes into account the present procedural posture of the Lawsuit, the Parties claims and defenses, the risks and difficulties of continuing to litigate, and the risk that the Class Members may not prevail at trial at all or could recover significantly less than what Plaintiffs or particular Class Members may claim or allege. The Parties agree that, with the exception of the incentive awards for the two Class Representatives, each Class Member should receive no more than his or her specific Settlement Payment calculated for that Class Member pursuant to the Settlement Formula. The Parties further agree that any proceeds of the Settlement Fund that are not claimed by Class

13 Case 6:13-cv AA Document 55-1 Filed 10/23/15 Page 13 of 38 Members for any reason, including but not limited to because a Class Member opts out of the Settlement Agreement or fails to timely and properly return the Settlement Response Form as set out in section 4.4, shall revert solely to St. Charles. 5.8 Funding of Settlement Fund and Payment of Settlement Payments. The Parties agree that St. Charles will fund the Settlement Fund within thirty (30) days of the Effective Date of this Settlement Agreement as defined in section 2.9. St. Charles will fund the Settlement Fund in the amount needed to cover the Settlement Payments pursuant to the Settlement Formula for those Class Members who have timely submitted a valid Settlement Response Form and indicated they wish to join ( opt in ) the settlement. The Settlement Administrator will issue the Settlement Payment to each Class Member pursuant to the Settlement Formula by sending checks certified mail, return receipt requested, within ten (10) business days after St. Charles has funded the Settlement Fund as set forth in this paragraph. 6. RELEASE OF CLAIMS 6.1 Release of Claims. Except as set forth in section 6.2, the Class Representatives and Class Members who have not opted out of the Settlement Agreement in accordance with section of this Settlement Agreement, and each of their respective past and present executors, administrators, representatives, agents, heirs, successors, assigns, trustees, and guardians, and all those who claim through them or who assert claims on their behalf (including the federal government or any state government in its capacity as parens patriae), will be deemed to have unconditionally, irrevocably, and completely released and forever discharged St. Charles, including all Released Parties and entities defined in section 2.16, from any and all matters, claims, charges, demands, damages, causes of action, debts, liabilities, and controversies, foreseen or unforeseen, known or unknown, for unpaid regular or overtime wages, liquidated damages, penalties, attorney fees, and other damages, which could arise between Class Members and St. Charles, including but not limited to claims arising under the Fair Labor Standards Act, 29 USC 201, et seq. ( FLSA ) or Oregon wage laws in ORS Chapters 652 and 653, up to the Effective Date of this Settlement Agreement (collectively hereinafter Claims ). Notwithstanding this general Release of Claims, nothing in this Settlement Agreement is intended to operate as, nor shall be construed as, a release or waiver of any rights and/or claims that cannot be released or waived as a matter of law. 6.2 Carve-Out to Release of Claims for Claims Covered by Giles Litigation. St. Charles is currently a defendant in another purported class and collective action lawsuit brought by Class Counsel in the U.S. District Court for the District of Oregon, Eugene Division, styled Giles, et al. v. St. Charles, Case No. 6:13-cv AA ( Giles Litigation ). To the extent Plaintiffs or any Class Members are parties or potential class members in the Giles Litigation, the Release of Claims in this section will not release claims for unpaid wages or penalties that those individuals may recover in the Giles Litigation. However, the Parties agree that Class Members shall not receive a double recovery both pursuant to this Settlement

14 Case 6:13-cv AA Document 55-1 Filed 10/23/15 Page 14 of 38 Agreement and in the Giles Litigation, and that any recovery for penalties in this Settlement shall offset any recovery for penalties in the Giles Litigation. 6.3 Notice to Include Language Regarding This Release of Claims. So that Class Members are fairly and reasonably informed about the existence, nature and binding effect of the Release of Claims in this section, the full text of the Release shall be included in the body of the Notice defined in section 2.12 and attached as Exhibit Covenant Not to Sue. The Class Representatives and Class Members who do not opt out in accordance with this Settlement Agreement shall be enjoined from prosecuting any legal proceeding against St. Charles with respect to the claims encompassed by the Lawsuit and released pursuant to this Settlement Agreement. The Court shall retain jurisdiction to enforce the judgment, releases, and bar to suits contemplated by this Settlement Agreement. The Settlement Agreement may be pleaded as a complete defense to any action or claim commenced that is released by this section. 6.5 No Prior Assignments or Undisclosed Liens The Class Representatives, Class Members and Class Counsel represent and warrant that they have not assigned, transferred, conveyed, or otherwise disposed of, or purported to assign, transfer, convey, or otherwise dispose of, any Released Claims. Class Counsel further represent and warrant that they are not aware of any liens or claims against any of the amounts being paid by St. Charles as provided in this Settlement Agreement The Class Representatives, Class Members and Class Counsel warrant and represent that they have asserted no claim in the Lawsuit except those that they own, that they can provide complete resolution of the Released Claims, and that no part of the Released Claims will remain viable after entry of the General Judgment of Dismissal with Prejudice and dismissal of the Lawsuit Class Counsel and the Class Representatives agree to defend, indemnify, and hold St. Charles harmless from any and all liens or claims against any of the amounts being paid to Class Counsel and the Class Representatives and from any liability, losses, claims, damages, costs, or expenses, including reasonable attorney fees, arising out of a breach of the representations and warranties contained in section NON-ADMISSION OF LIABILITY The Parties agree that this Settlement Agreement is entered into solely to resolve disputed claims, and that nothing herein is to be construed or interpreted as an admission by any Party of any wrongdoing, either in violation of an applicable law or otherwise. St. Charles specifically and expressly denies that it has engaged in any violation of law, including but not limited to any of the violations alleged in the Lawsuit

15 Case 6:13-cv AA Document 55-1 Filed 10/23/15 Page 15 of COSTS OF SETTLEMENT ADMINISTRATION Settlement administration costs borne by the Settlement Administrator in administering this Settlement Agreement, including but not limited to the costs of mailing the Notice and Settlement Response Form and administering the Settlement Payments, are to be paid by St. Charles. The Parties and Class Counsel agree that, other than as set forth in section 5.5 (Class Counsel s Attorney Fees and Costs), St. Charles is not responsible for and shall not reimburse Class Counsel or the Class Representatives for any fees or costs incurred by Class Counsel or the Class Representatives in connection with the Lawsuit and/or the negotiation or administration of the Settlement Agreement. 9. MISCELLANEOUS 9.1 Cooperation Between the Parties; Further Acts. The Parties shall cooperate fully with each other and shall use their best efforts to obtain the Court s approval of this Settlement Agreement and all of its terms. Each of the Parties, upon the request of any other Party, agrees to perform such further acts and to execute and deliver such other documents as are reasonably necessary to carry out the provisions of this Settlement Agreement. 9.2 Papers to Be Filed with the Court. All papers to be filed with the Court by Defendant s Counsel or Class Counsel in connection with this Settlement Agreement shall be submitted to the other Party at least one (1) day prior to filing. The other Party shall have no right to object to the papers unless they do not conform to the terms and conditions of this Settlement Agreement. 9.3 Documents and Discovery. Within one hundred and twenty (120) days after the Effective Date or January 1, 2016, whichever occurs last, Class Counsel shall return to Defendant s Counsel all documents and data produced by St. Charles in connection with the Lawsuit, or destroy said documents and data. Class Counsel shall certify to St. Charles their good-faith efforts to comply with this provision. Class Counsel shall be entitled to keep a copy of all pleadings, depositions, and any other materials required to be maintained by any insurance carrier and/or that may be appropriate to retain in the event that any subsequent litigation or claims arise out of or in connection with the prosecution of the Lawsuit for a period of ten (10) years after the General Judgment of Dismissal with Prejudice is entered herein, after which such documents and data will be destroyed. 9.4 Entire Agreement. This Settlement Agreement constitutes the entire agreement between the Parties with regard to the subject matter contained herein, and all prior and contemporaneous negotiations and understandings between the Parties shall be deemed merged into this Settlement Agreement

16 Case 6:13-cv AA Document 55-1 Filed 10/23/15 Page 16 of Binding Effect. This Settlement Agreement shall be binding upon the Parties and, with respect to the Class Representatives and Class Members, their spouses, children, representatives, agents, heirs, administrators, executors, beneficiaries, conservators, trustees, attorneys and assigns. 9.6 Arm s-length Transaction; Materiality of Terms. The Parties have negotiated all the terms and conditions of this Settlement Agreement at arm s length. All terms and conditions of this Settlement Agreement in the exact form set forth in this Settlement Agreement are material to this Settlement Agreement and have been relied upon by the Parties entering into this Settlement Agreement. 9.7 Captions. The captions or headings of the sections and paragraphs of this Settlement Agreement have been inserted for convenience of reference only and shall have no effect upon the construction or interpretation of any part of this Settlement Agreement. 9.8 Construction. The determination of the terms and conditions of this Settlement Agreement has been by mutual agreement of the Parties. Each Party participated jointly in the drafting of this Settlement Agreement, and therefore the terms and conditions of this Settlement Agreement are not intended to be, and shall not be, construed against any Party by virtue of draftsmanship. 9.9 Continuing Jurisdiction. The Court shall retain jurisdiction over the implementation of this Settlement Agreement as well as any and all matters arising out of, or related to, the implementation of this Settlement Agreement and of the settlement contemplated thereby. The Court shall not have jurisdiction to modify the terms of the Settlement Agreement Waivers, Modifications and Amendments. No waiver, modification or amendment of the terms of this Settlement Agreement, whether purportedly made before or after the Court s approval of this Settlement Agreement, shall be valid or binding unless in writing, signed by or on behalf of all Parties, and then only to the extent set forth in such written waiver, modification or amendment, subject to any required Court approval. Any failure by any Party to insist upon the strict performance by the other Party of any of the provisions of this Settlement Agreement shall not be deemed a waiver of future performance of the same provisions or of any of the other provisions of this Settlement Agreement, and such Party, notwithstanding such failure, shall have the right thereafter to insist upon the specific performance of any and all of the provisions of this Settlement Agreement