JOINT STIPULATION AND SETTLEMENT AGREEMENT

Transcription

1 JOINT STIPULATION AND SETTLEMENT AGREEMENT Subject to final approval by the Court, this Settlement Agreement is between Plaintiff Emily Hunt ( Plaintiff or Hunt or Named Plaintiff ) and Defendant VEP Healthcare, Inc. ( Defendant or VEP ) Plaintiff and Defendant collectively are referred to in this Agreement as the Parties. I. DEFINITIONS In addition to the other terms defined in this Agreement, the terms below have the following meaning: A. Action: The matter of Emily, which is currently pending in the U.S. District Court for the Northern District of California, Case No. 16-cv-04790, which was removed from the Superior Court of California, County of Contra Costa, bearing the same name and under Case No State of California. B. Administration Costs: The costs incurred by the Settlement Administrator to administer this Settlement, which shall not exceed $40,000. All Administration Costs shall be paid from the Gross Settlement Amount. C. Agreement, Settlement Agreement, Joint Stipulation, or Settlement: The settlement agreement reflected in this document, titled Joint Stipulation and Settlement Agreement of Class Action Claims. D. Attorney Fee Award: The amount, not to exceed 25 % of the Gross Settlement Amount ( GSA ), or $500,000. E. California Class Net Settlement Amount: The total amount of money available for payout to California Class Members, which is fifty percent (50%) of the GSA after subtracting the Attorney Fee Award, Cost Award, Class Representative Enhancement, and Settlement Administration Costs. F. California Class: All individuals employed by VEP Healthcare, Inc. as Physician s Assistants in the state of California who were eligible to receive productivity pay from April 6, 2011 to May 15, G. Class/Collective Counsel: The attorneys authorized to represent the California Class Members and members of the FLSA Collective: The Turley & Mara Law Firm, APLC. H. California Class Notice or Notice: The Notice of Class Action Settlement; substantially similar to the form attached hereto as Exhibit 1.

2 I. Civil Action: The above-captioned action, including but not limited to the claims asserted therein pursuant to the federal Fair Labor Standards Act and California Labor Code. J. Class/Collective Data: The data that Defendant shall provide to the Settlement Administrator, which is to consist of the following for each Class/Collective member: (1) his or her name; (2) last known mailing address and telephone number; (3) social security number; (4) whether he or she is a California Class Member; (5) whether he or she is a FLSA Collective Member; (6) the number of weeks he or she worked in the Class Period, if any; and (7) the number of weeks he or she worked in the Collective Period, if any. K. Class/Collective Representative, Plaintiff, Named Plaintiff, or Hunt: Emily Hunt. L. Class Period: The period of April 6, 2011 to May 15, M. Class Representative Enhancement: The amount the District Court awards to Emily Hunt for being the Plaintiff in this lawsuit, which will not exceed $10, This enhancement is paid as consideration for a general release by Hunt and shall be paid from the Gross Settlement Amount and will not be opposed by Defendant. This enhancement is subject to approval of the District Court. N. Complaints Filed In This Matter: The Complaint and Amended Complaint, both of which were filed in California Superior Court for the County of Contra Costa, Case No. C , and the Amended Complaint transferred to the United States District Court in the Northern District of California, Case No. 1:16-cv LB. O. Cost Award: The amount that the District Court orders Defendant to pay Class Counsel for payment of litigation costs, which shall not exceed $40, The Cost Award will be paid from the Gross Settlement Amount and will not be opposed by Defendant. The Cost Award is subject to District Court approval. P. Counsel for Defendant: Allen, Glaessner, Hazelwood, & Werth LLP Q. Court or District Court: The United States District Court for the Northern District of California. R. Defendant or VEP: VEP Healthcare, Inc. S. Disbursement Schedule: Subject to the District Court finally approving the Settlement, and provided that there are no objections or appeals to the District

3 Court s Final Approval Order and Judgment, the Settlement Administrator shall disburse the settlement monies under the following schedule: 1. Seven (7) calendar days after the funds are received by CPT from Defendant for the first payment - 45% of the Gross Settlement Amount, or $900,000, shall be disbursed. This disbursement shall include 45% of the total Net Settlement Amount, 45% of the Total Attorney Fee Award, 45% of the Cost Award, 45% of the Class Representative Enhancement, and 45% of the Settlement Administration Costs. 2. Seven (7) calendar days after the funds are received by CPT from Defendant for the second payment - 45% of the Gross Settlement Amount, or $900,000, shall be disbursed. This disbursement shall include 45% of the total Net Settlement Amount, 45% of the Total Attorney Fee Award, 45% of the Cost Award, 45% of the Class Representative Enhancement, and 45% of the Settlement Administration Costs. 3. Seven (7) calendar days after the funds are received by CPT from Defendant for the third payment - 10% of the Gross Settlement Amount, or $200,000, shall be disbursed. This disbursement shall include 10% of the total Net Settlement Amount, 10% of the Total Attorney Fee Award, 10% of the Cost Award, 10% of the Class Representative Enhancement, and 10% of the Settlement Administration Costs. T. Effective Date: The date of Final Approval of the Settlement by the District Court or, and only if there are objections filed at or before the Final Approval Hearing Date, after the period of filing a Notice of Appeal has expired, or, if an appeal is filed, after the appeal is finally adjudicated and the settlement is finally approved. U. Final Approval Hearing Date: The date the District Court sets for the Motion for Final Approval of Settlement. V. Final Approval Order: The order to be entered by the District Court (1) granting approval to the FLSA Collective settlement described in this Agreement; (2) granting final approval to the California Class settlement described in this Agreement; and (3) dismissing the Action with prejudice in accordance with the terms of this Agreement. The proposed Final Approval Order that will be submitted to the District Court with Plaintiff s motion is attached as Exhibit 4.

4 W. FLSA Claim Form: The form to be submitted by members of the FLSA collective who wish to be a participant in the settlement of the FLSA Collective; substantially similar to the form attached hereto as Exhibit 2. X. FLSA Collective or Collective Members: All individuals employed by VEP Healthcare, Inc. anywhere in the United States as Physician s Assistants who were eligible to receive productivity pay from April 6, 2012 through May 15, Y. FLSA Collective Net Settlement Amount or FNSA: The total amount of money available for payout to FLSA Collective Members, which is fifty percent (50%) of the GSA after subtracting the Attorney Fee Award, Cost Award, Class/Collective Representative Enhancement, and Settlement Administration Costs. Z. FLSA Collective Period: April 6, 2012 through May 15, AA. Funding of the Settlement: Subject to the District Court finally approving the Settlement, and provided that there are no objections or appeals to the Court s Final Approval Order and Judgment, the GSA shall be paid by VEP as follows: 1. Ten (10) calendar days after the Effective Date - 45% of the Gross Settlement Amount, or $900,000, shall be disbursed. This disbursement shall include 45% of the total Net Settlement Amounts, 45% of the Total Attorney Fee Award, 45% of the Cost Award, 45% of the Class/Collective Representative Enhancement, and 45% of the Settlement Administration Costs. 2. One hundred and fifty (150) calendar days after the first payment - 45% of the Gross Settlement Amount, or $900,000, shall be disbursed. This disbursement shall include 45% of the total Net Settlement Amounts, 45% of the Total Attorney Fee Award, 45% of the Cost Award, 45% of the Class/Collective Representative Enhancement, and 45% of the Settlement Administration Costs. 3. One hundred and fifty (150) calendar days after the second payment - 10% of the Gross Settlement Amount, or $200,000, shall be disbursed. This disbursement shall include 10% of the total Net Settlement Amounts, 10% of the Total Attorney Fee Award, 10% of the Cost Award, 10% of the Class/Collective Representative Enhancement, and 10% of the Settlement Administration Costs.

5 BB. CC. DD. EE. FF. GG. HH. II. JJ. KK. Gross Settlement Amount or GSA: The total value of the Settlement is a nonreversionary two million dollars and zero cents ($2,000,000.00). This is the Gross Amount Defendant can be required to pay under this Settlement Agreement, including all: (1) payments made to the California Class and FLSA Collective; (2) payments to Class/Collective Counsel for attorney fees and costs; (3) enhancement payment to the Class/Collective Representative, Emily Hunt; and (4) settlement administration expenses. No amount of the GSA will revert to Defendant for any reason. Individual Settlement Shares: Means the amount payable to each Class Member under the terms of this Settlement Agreement. Motion for Final Approval of Settlement: The motion Plaintiff will file in support of the District Court issuing the Final Approval Order. Net Settlement Amounts: Refers to both the California Class Net Settlement Amount and the FLSA Collective Net Settlement Amount. Non-Reversionary Settlement: Means no portion of the GSA shall revert to Defendant or any of the Released Parties. PA s: Physician s Assistants. Participating Settlement Members: The members of the FLSA Collective who timely return an executed and valid Claim Form. Parties: The Named Plaintiff (on behalf of herself and all California Class members and members of the FLSA Collective) and Defendant. Preliminary Approval or Preliminary Approval Order: The order to be entered by the District Court granting preliminary approval to the settlement described in this Agreement following submission to the District Court of Plaintiff s motion for an order granting preliminary approval of the Settlement to the California Class and the FLSA Collective, certifying the California Class for settlement purposes only, conditionally certifying the FLSA Collective, authorizing the FLSA Notice and California Class Notice, authorizing the FLSA Claim Form, and setting a date for the Motion for Final Approval. The proposed Preliminary Approval that will be submitted to the District Court with Plaintiff s Motion for Preliminary Approval is attached as Ex. 3. Participating California Class Members Released Claims: Plaintiff and California Class Members who do not validly and timely request to be excluded from the Settlement shall release all claims for economic, non-economic

6 equitable, liquidated, nominal, restitutionary, injunctive, or other relief that are based on the facts stated in the Complaints Filed in this Matter or could have been stated based on the facts stated in the Complaints Filed in this Matter. The Participating California Class Members Released Claims include all claims for wages and related penalties actually alleged in the Action, by Plaintiff Emily Hunt, on behalf of herself and the California Class Members, based on the facts stated in the complaint, including, but not limited to, that: (1) Defendant failed to compensate all time worked by Putative Class Members; (2) Defendant failed to pay overtime compensation; (3) Defendant failed to provide meal periods, or compensation in lieu thereof, including but not limited to any violation of California Labor Code sections and 512 and the applicable Industrial Welfare Commission Wage Order; (4) Defendant failed to authorize and permit rest periods, or compensation in lieu thereof, including but not limited to any violation of California Labor Code section and the applicable Industrial Welfare Commission Wage Order; (5) Defendant failed to provide itemized employee wage statements, including but not limited to any violation of California Labor Code sections 226, 1174, and 1175 and the applicable Industrial Welfare Commission Wage Order; (6) Defendant failed to timely pay wages due at termination, including but not limited to any violation of California Labor Code sections and 205; (6) Defendant engaged in unlawful business practices in violation of California Business and Professions Code section 17200, et seq; (7) Putative Class Members are entitled to declaratory relief to determine whether the practices alleged in the complaint are unlawful; (8) Putative Class Members are entitled to injunctive relief to halt any practices alleged in the complaint that are unlawful; (9) Putative Class Members are entitled to restitutionary damages under California Business & Professions Code sections 17200, et seq.; (10) Defendant is liable for attorneys fees and/or costs incurred to prosecute this action on behalf of Putative Class Members, including fees incurred for the services of Class Counsel; and (11) Defendant is liable for any other remedies, penalties, and interest, including but not limited to, under California Labor Code sections 201, 202, 203, 205, 226, 226.7, 510, 512, 1174, 1194, , 1197, , 2699, and the applicable Industrial Welfare Commission Wage Order. LL. Participating FLSA Collective Members Released Claims. Plaintiff and members of the FLSA Collective who submit valid and timely Claim Forms shall release all claims for economic, non-economic equitable, liquidated, nominal, restitutionary, injunctive, or other relief that are based on the facts stated in the Complaints Filed in this Matter or could have been stated based on the facts stated in the Complaints Filed in this Matter. The Participating FLSA Collective Members Released Claims shall include all claims for wages under the FLSA, including but not limited to 29 U.S.C. 201 et seq.

7 MM. Released Parties: VEP Healthcare, Inc. and its subsidiaries, affiliates, parents, members, attorneys, successors, assigns, joint venturers, partners, predecessors in interest, all of their respective officers, directors, shareholders, contractors, employees, administrators, fiduciaries, trustees and agents, and each of their past, present, and future officers, directors, members, shareholders, employees, contractors, agents, principals, heirs, assigns, joint venturers, partners, representatives, accountants, auditors, consultants, insurers, and reinsurers. NN. OO. Settlement Administration: The Settlement Administrator will conduct a skip trace for the address of all former employee California Class Members and members of the FLSA Collective. The Settlement Administrator will mail the California Class Notice and FLSA Notice by first class U.S. mail to all currently employed California Class Members and FLSA Collective members at the address Defendant has on file for those individuals and, for all formerly employed California Class Members and FLSA Collective members, at the address resulting from the skip trace. Settlement Administrator: The third-party administrator agreed upon by Parties to administer this Settlement: CPT Group, Inc. II. RECITALS A. The Action was filed by Named Plaintiff Emily Hunt v. Valley Emergency Physicians Medical Group, Inc. on April 6, 2015, in Contra Costa County Superior Court on behalf of herself and all other similarly situated non-exempt Physician s Assistants employed in the state of California during the relevant statute of limitations. The complaint alleged causes of action for wage theft, failure to timely pay wages due at termination, knowing and intentional failure to provide itemized wage statements and violations of California s Unfair Competition Law. B. The underlying nature of Plaintiff s initial complaint was a claim that Defendant had failed to compensate the class of non-exempt Physician s Assistants all Productivity Bonuses they were entitled to during a limited time period. C. On August 18, 2015, Defendant Answered the Complaint as VEP Healthcare, Inc. for what it stated was the successor to Valley Emergency Physicians Medical Group, Inc. In its Answer, Defendant denied all allegations in the Complaint. D. Defendant also filed a Demurrer and Motion to Strike on January 26, E. Plaintiff served two sets of interrogatories, one set of demands for production of documents, and deposition notices on Defendant on September 21, 2015.

8 Shortly thereafter, the Parties agreed to an informal production of information and documents responsive to Plaintiff s discovery requests and agreed to schedule and attend a mediation. With the agreement to mediate, Defendant agreed to continue its hearing on the Demurrer and Motion to Strike to a time after the mediation took place. F. The mediation was initially scheduled to take place on April 6, 2016, with respected wage and hour class action mediator, Mark Rudy. The April 6, 2016, mediation had to be rescheduled to June 22, Prior to mediation, Defendant produced thousands of pages of documents. G. In addition to the production of documents, Plaintiff also conducted a deposition of a person most qualified witness with VEP to testify regarding issues of meal and rest periods, payment of wages, and payment of bonuses. H. A day before the mediation was scheduled to take place, Plaintiff took the deposition of VEP s Vice President of Clinical Services. Based on the deposition testimony, documents produced, and interviews of class members, Plaintiff believed the complaint needed to be amended to add claims for failure to provide meal and rest periods, as well as failure to pay straight and overtime wages under California and Federal Law. Defendant, denied that there was any basis for those claims. Based on the recent discovery of what Plaintiff believed to be new causes of action, the matter was unable to resolve at the June 22, 2016, mediation. I. On July 21, 2016, Plaintiff filed her First Amended Complaint for Damages. This amended complaint added new causes of action and expanded the scope of the class to include VEP s Physician s Assistants who worked for the company during the time period of the relevant statute of limitations. J. As for the unpaid overtime claims, Plaintiff claimed in the First Amended Complaint that Defendant violated California and Federal Law in failing to adjust the regular rate for purposes of overtime compensation with the monthly productivity bonuses Physician s Assistants received. The First Amended Complaint was also based on Plaintiff s belief from the documents produced and Physician s Assistants interviewed that Defendant did not provide its California Physician s Assistants with meal and/or rest periods in compliance with California law. As it did with Plaintiff s originally filed complaint, Defendant denied each of these allegations. K. Due to the addition of claims under the federal Fair Labor Standards Act, Defendant removed the matter on August 19, 2016, to the United States District Court for the Northern District of California. The Parties continued to meet and confer over the issues informally and scheduled a second mediation to take

9 place on December 6, 2016, with respected wage and hour class mediator, Michael Dickstein. Prior to this mediation, thousands of lines of data were produced, along with hundreds more documents relating to Defendant s provision of bonuses to Physician s Assistants in California and nationwide. L. The Parties negotiated at arm s length throughout the day on December 6, 2016, and into the early evening. At the mediation, Defendant s financial status was discussed and evaluated in depth as it related to Defendant s ability to satisfy a large seven figure settlement and especially as it related to a single lump sum. In this regard, Defendant agreed to provide Plaintiff with private financial documents pursuant to a protective order. M. The Parties adjourned mediation on December 6, 2016, and continued to negotiate and disclose necessary financial documents. Plaintiff retained the services of an accounting expert to review the documents Defendant provided, which consisted of profit and loss statements, bank statements for the year 2016, and IRS forms. Having vigorously evaluated the facts, law, and financial status of Defendant, the Parties were able to reach the instant settlement on February 22, N. Benefits of Settlement to Class/Collective Members. Hunt and Class/Collective Counsel recognize the expense and length of continued proceedings necessary to continue the litigation against Defendant through trial and through any possible appeals. Hunt and Class/Collective Counsel also have considered the uncertainty and risk of further litigation, the potential outcome, and the difficulties and delays inherent in such litigation. Hunt and Class/Collective Counsel have conducted extensive settlement negotiations, including formal conversations and written correspondence before and after the December 6, 2016, mediation. Based on the foregoing, Hunt and Class/Collective Counsel believe the Settlement set forth in this Agreement is a fair, adequate, and reasonable settlement, and is in the best interests of the Putative Class/Collective Members. O. Defendant s Reasons for Settlement. Defendant recognizes that the defense of this litigation will be protracted and expensive. Substantial amounts of time, energy, and resources of Defendant has been and, unless this Settlement is made, will continue to be devoted to the defense of the claims asserted by Plaintiff in this Action. Defendant also understands the impact protracted litigation and an adverse outcome could have on its financial status. Defendant, therefore, has agreed to settle in the manner and upon the terms set forth in this Agreement to put to rest the Released Claims. P. Defendant s Denial of Wrongdoing. Defendant denies the claims and allegations by Plaintiff in this Action and asserts that it complied with

10 California and federal law at all times. Defendant asserts a number of defenses to the claims, and has denied any wrongdoing or liability arising out of any of the alleged facts or conduct in the Action. Defendant specifically denies the allegations that: it failed to pay for all hours worked; failed to pay overtime compensation under state and federal law; failed to provide meal or rest breaks; failed to provide itemized employee wage statements;. failed to timely pay wages due at termination; engaged in any unlawful, unfair, or fraudulent business practices; engaged in any wrongful conduct as alleged in the Action; or that the California Class Members and members of the FLSA Collective were harmed by the conduct alleged in the Action. Neither this Agreement, nor any document referred to or contemplated herein, nor any action taken to carry out this Agreement, is or may be construed as, or may be used as an admission, concession, or indication by or against Defendant or any of the Released Parties of any fault, wrongdoing, or liability whatsoever. Q. Named Plaintiff s Claims. Named Plaintiff, Emily Hunt, asserts that Defendant s defenses are without merit. Neither this Agreement nor any documents referred to or contemplated herein, nor any action taken to carry out this Agreement is, may be construed as, or may be used as an admission, concession or indication by or against Hunt, Class/Collective Members, or Class/Collective Counsel as to the merits of any claims or defenses asserted, or lack thereof, in the Action. However, if this Settlement is finally approved by the Court, Hunt, Class/Collective Members, and Class/Collective Counsel will not oppose Defendant s efforts to use this Agreement to prove that Hunt and Class/Collective Members have resolved and are forever barred from relitigating the Released Claims. R. Based on the Recitals, the Parties agree, as follows: III. SETTLEMENT TERMS AND CONDITIONS A. Gross Settlement Amount. Subject to the terms and conditions of this Agreement, the maximum Gross Settlement Amount that Defendant is obligated to pay under this Settlement Agreement is Two Million Dollars ($2,000,000.00). B. Class Certification of the California Class Members Claims. Solely for the purposes of this Settlement, the Parties stipulate and agree to certification of the claims asserted on behalf of the California Class Members. As such, the Parties stipulate and agree that in order for this Settlement to occur, the Court must certify the class: All individuals employed by VEP Healthcare, Inc. as Physician s Assistants in the state of California who were eligible to receive productivity pay from April 6, 2011, through the date the Court grants

11 preliminary approval or 60 days after this Settlement Agreement is executed, whichever occurs first. C. Conditional Nature of Stipulation for Certification. The Parties stipulate and agree to the certification of the claims asserted on behalf of the California Class Members for purposes of this Settlement only. If the Settlement does not become effective, the fact that the Parties were willing to stipulate to certification as part of the Settlement shall not be admissible or used in any way in connection with, the question of whether the Court should certify any claims in a non-settlement context in this Action or in any other lawsuit. If the Settlement does not become effective, Defendant reserves the right to contest any issues relating to class certification and liability if the settlement is not approved. D. Conditional Nature of Stipulation to Conditional Certification of FLSA Collective Action. The Parties stipulate and agree to the conditional certification of the claims asserted on behalf of the FLSA Collective for purposes of this Settlement only. If the Settlement does not become effective, the fact that the Parties were willing to stipulate to certification as part of the Settlement shall not be admissible or used in any way in connection with the question of whether the Court should conditionally certify the FLSA Collective in a non-settlement context in this Action or in any other lawsuit. If the Settlement does not become effective, Defendant reserves the right to contest any issues relating to conditional certification of the FLSA Collective and liability if the settlement is not approved. E. Appointment of Class/Collective Representative. Solely for the purposes of this Settlement, the Parties stipulate and agree Emily Hunt shall be appointed as representative for the Class. F. Appointment of Class/Collective Counsel. Solely for the purpose of this Settlement, the Parties stipulate and agree that The Turley & Mara Law Firm, APLC shall be appointed as Class/Collective Counsel for the Class/Collective. G. Individual Settlement Share. Subject to the terms and conditions of this Agreement, the Settlement Administrator will pay an Individual Settlement Share from the Net Settlement Amount to each Class Member who does not submit a valid and timely request for exclusion and to each Collective Member who does submit a valid and time Claim Form. 1. Calculation. a. Individual California Class Settlement Share. Each Participating Class Member will receive a proportionate share of

12 the California Class Net Settlement Amount that is equal to (i) the number of workweeks he or she worked based on the Class/Collective Data provided by Defendant, divided by (ii) the total number of workweeks worked by all Participating Class Members based on the same Class/Collective Data, which is then multiplied by the California Class Net Settlement Amount. Therefore, the results of the Class Member s settlement value ties directly to the amount of workweeks worked. b. Individual FLSA Collective Settlement Share. Each Participating FLSA Collective Member will receive a proportionate share of the FLSA Collective Net Settlement Amount that is equal to (i) the number of workweeks he or she worked based on the Class/Collective Data provided by Defendant, divided by (ii) the total number of workweeks worked by all Participating FLSA Collective Members based on the same Class/Collective Data, which is then multiplied by the FLSA Collective Net Settlement Amount. Therefore, the results of the Collective Member s settlement value ties directly to the amount of workweeks worked. 2. Tax Withholdings. a. California Class Settlement Shares: 1. Thirty-Three and One-Third percent (33 1/3%) of each Individual California Class Member Settlement Share in Section III.G.1.a. is intended to settle each California Class Member s claims for unpaid wages (the Wage Portion ). The Wage Portion will be reduced by applicable payroll tax withholdings and deductions; the employer s share of legally required payroll taxes for the Wage Portion will be paid by Defendant through the Settlement Administrator; the Settlement Administrator will issue an IRS Form W-2 with respect to the Wage Portion withheld from each California Class Member who does not submit a valid request for exclusion under this Agreement. All taxes shall come out of the GSA. 2. Sixty-Six and Two-Third percent (66 2/3%) of the Individual California Class Member Settlement Share specified in Section III.G.1.b. is intended to settle each Class Member s claims for interest and penalties. This portion will not be reduced by payroll tax withholding and deductions. The

13 Settlement Administrator will issue each Class Member who does not submit a request for exclusion an IRS Form 1099 with respect to this portion of his/her Individual Settlement Share. The settlement share for interest & penalties is allocated 33 1/3% penalties & 33 1/3% interest. b. FLSA Collective Settlement Shares: 1. One Hundred Percent (100%) of the Individual FLSA Collective member Settlement Share specified in Section IV.B.1.a. is intended to settle each Collective Member s claims for unpaid wages. The settlement share will be reduced by applicable payroll tax withholdings and deductions; the employer s share of the legally required payroll taxes for the Settlement Share will be paid by Defendant through the Settlement Administrator; the Settlement Administrator will issue an IRS Form W-2 to the Participating FLSA Collective Member who submits a valid and timely Claim Form. All taxes shall come out of the GSA. H. Settlement Disbursement. Subject to the terms and conditions of this Agreement, the Settlement Administrator will make the following payments out of the Gross Settlement Amount: 1. To The Named Plaintiff, Emily Hunt: In addition to her Individual Settlement Share, and subject to the Court s approval, Plaintiff Emily Hunt will receive up to $10,000 as a Class/Collective Representative Enhancement. The Settlement Administrator will pay the Class/Collective Representative Enhancement out of the Gross Settlement Amount. Payroll tax withholdings and deductions will not be taken from the Class/Collective Representative Enhancement. An IRS Form 1099 will be issued to Emily Hunt with respect to her Class/Collective Representative Enhancement. In the event the Court does not approve the entirety of the application for the Class/Collective Representative Enhancement, the Administrator shall pay whatever amount the District Court awards, and neither Defendant nor the Administrator shall be responsible for paying the difference between the amount requested and the amount awarded. If the amount awarded is less than the amount requested by Plaintiff, the difference shall become part of the California Class Net Settlement Amount and FLSA Collective Net Settlement Amount, equally, and be available for distribution to Class/Collective Members. 2. To Class/Collective Counsel. Class/Collective Counsel will apply to the Court for, and Defendant agrees not to oppose, a total Attorney Fee Award

14 not to exceed $500,000 (or 25 % of the GSA) and a Cost Award not to exceed $40,000. The Settlement Administrator will pay the Court-approved amounts for the Attorney Fee Award and Cost Award out of the Gross Settlement Amount. Payroll tax withholding and deductions will not be taken from the Attorney Fee Award or the Cost Award. IRS Forms 1099 will be issued to Class/Collective Counsel with respect to these payments. In the event the Court does not approve the entirety of the application for the Attorney Fee Award and/or Cost Award, the Administrator shall pay whatever amount the Court awards and neither Defendant nor the Administrator shall be responsible for paying the difference between the amount requested and the amount awarded. If the amount awarded is less than the amount requested by Class Counsel for the Attorney Fee Award and/or Cost Award, the difference shall become part of the California Class Net Settlement Amount and FLSA Collective Net Settlement Amount, equally, and be available for distribution to Class/Collective Members. 3. To the responsible tax authorities. The Administrator will pay the amount of the employees portion of normal payroll withholding taxes out of the Net Settlement Amount. Out of the GSA, the Administrator shall pay the employer portion of payroll taxes (including the employer s payment of applicable FICA, FUTA, and SUI contributions, etc.) to the appropriate local, state, and federal taxing authorities. Administrator will calculate amount of employees and employer s portion of payroll withholding taxes out of each individual settlement payment & forward to taxing authorities. Employer s portion of payroll taxes shall be entirely paid out of the GSA. 4. To the Settlement Administrator. The Settlement Administrator will pay to itself Administration Costs (reasonable fees and expenses) approved by the Court. The Administration Costs are estimated not to exceed $40,000. This will be paid out of the Gross Settlement Amount. If the amount awarded or the actual settlement administration fees are less than the amount requested, the difference shall become part of the California Class Net Settlement Amount and the FLSA Collective Net Settlement Amount, equally, and be available for distribution to Class/Collective Members. 5. To Class Members. The Settlement Administrator will pay Class/Collective Members according to the Individual Settlement Share calculations, set forth above. All payments to Class/Collective Members shall be made from the Net Settlement Amounts. I. Appointment of Settlement Administrator. Solely for the purposes of this Settlement, the Parties stipulate and agree that CPT Group, Inc. shall be retained to serve as Settlement Administrator. The Settlement Administrator shall be responsible for preparing, printing, and mailing the Notice to the Putative Class

15 Members; keeping track of any requests for exclusion from the Settlement; determining eligibility for payment of any Individual Settlement Share and the amount of such payments; calculating any and all payroll tax deductions as required by law; calculating each Class/Collective Member s Individual Settlement Share; providing weekly status reports to Defendant s Counsel and Class/Collective Counsel, which is to include updates on any requests for exclusion that have been received; providing a due diligence declaration for submission to the Court prior to the Final Approval Hearing; mailing Individual Settlement Shares to Class/Collective Members, printing and providing Class/Collective Members and Hunt with W-2s and 1099 forms as required under this Agreement and applicable law; providing a due diligence declaration for submission to the Court upon the completion of the Settlement; and for such other tasks as the Parties mutually agree. The Parties each represent that they do not have any financial interest in CPT Group, Inc. or otherwise have a relationship with CPT Group, Inc. that could create a conflict of interest. Settlement Administrator will also provide certified translation of all notice documents in Spanish to be provided to Class/Collective members. J. Procedure for Approving Settlement. 1. Motion for Preliminary Approval and Conditional Certification. a. Plaintiff will move for an order conditionally certifying the Class and Collective for settlement purposes only, Preliminarily Approving the Settlement, setting a date for the Final Approval Hearing, and approving the Class/Collective Notice, and Collective Claim Form. b. At the Preliminary Approval Hearing, Class/Collective Counsel will appear, support the granting of the motion, and submit a proposed order granting conditional certification of the Class/Collective and preliminary approval of the Settlement; appointing Class/Collective Representative, Class/Collective Counsel, and Settlement Administrator; approving the forms of the Class/Collective Notice and Collective Claim Form; and setting the Final Approval Hearing. c. Should the Court decline to conditionally certify the Class/Collective or to preliminarily approve all material aspects of the Settlement, the Parties agree to negotiate settlement terms which address the Court s concerns and set a re-hearing for Preliminary Approval. Should the Court decline to conditionally certify the Class or Collective, or to preliminarily approve all material aspects of the Settlement upon a re-hearing for

16 Preliminary Approval, the Settlement will be null and void and the Parties will have no further obligations under it. Provided, however, that the amounts of the Attorney Fee Award, Cost Award, Administration Costs, and Class/Collective Representative Enhancement shall be determined by the Court, and the Court s determination on these amounts shall be final and binding, and that the Court s approval or denial of any amount requested for these items are not conditions of this Settlement Agreement, and are to be considered separate and apart from the fairness, reasonableness, and adequacy of the Settlement. Any order or proceeding relating to an application for the Attorney Fee Award, Cost Award, Administration Costs, and Class/Collective Representative Enhancement shall not operate to terminate or cancel this Settlement Agreement. But nothing in this Agreement shall limit Plaintiff s or Class/Collective Counsel s ability to appeal any decision by the Court to award less than the requested Attorney Fee Award, Cost Award, Administration Costs, and Class/Collective Representative Enhancement. 2. Notice to Class/Collective Members. After the District Court enters its Preliminary Approval Order, every Class/Collective Member will be provided with the Class/Collective Notice, in accordance with the following procedure: a. Within seven (7) days after entry of the Preliminary Approval Order, Defendant shall deliver to the Settlement Administrator a Class/Collective List for all Class/Collective Members. Defendant will provide the Settlement Administrator with the following information for each Class Member: (1) his or her name; (2) last known mailing address and telephone number; (3) social security number; (4) whether he or she is a California Class Member; (5) whether he or she is a FLSA Collective Member; (6) the number of weeks he or she worked in the Class Period, if any; (7) the number of weeks he or she worked in the Collective Period, if any; and (8) his or her address, if known. If any or all of this information is unavailable to Defendant, Defendant will so inform Class Counsel and the Parties will make their best efforts to reconstruct or otherwise agree upon how to deal with the unavailable information. The Settlement Administrator will conduct a skip trace for the address of all former Defendant employee Class/Collective Members. b. Within fourteen (14) days after entry of the Preliminary Approval Order, the Settlement Administrator will mail the Class/Collective

17 Notice and Collective Claim Form to all identified Class/Collective Members via first-class regular U.S. Mail, using the mailing address information provided by Defendant and the results of the skip trace performed on all former Defendant employee Class/Collective Members. The outside of the envelope the Notice is mailed in will read: IMPORTANT DOCUMENTS REGARDING A CLASS ACTION SETTLEMENT ARE ENCLOSED. Within fourteen (14) days after entry of the Preliminary Approval Order, the Settlement Administrator will also the Class/Collective Notice and the Collective Claim Form to all identified Class/Collective Members to the addresses provided by Defendant. Should Defendant not have address(es) for all Class/Collective Members, members without a known address will receive the Class/Collective Notice and Collective Claim Form by U.S. Mail only. c. If a Class/Collective Notice and Collective Claim Form is returned because of an incorrect address, within ten (10) days from receipt of the returned Notice, the Settlement Administrator will conduct a search for a more current address for the Class/Collective Member and r the Class/Collective Notice and Collective Claim Form to the Class/Collective Member. The Settlement Administrator will use the National Change of Address Database and skip traces to attempt to find the current address. The Settlement Administrator will be responsible for taking reasonable steps to trace the mailing address of any Class/Collective Member for whom a Class Notice is returned by U.S. Postal Service as undeliverable. These reasonable steps shall include, at a minimum, the tracking of all undelivered mail; performing address searches for all mail returned without a forwarding address; and promptly r ing to Class/Collective Members for whom new addresses are found. If the Class/Collective Notice is r ed, the Settlement Administrator will note for its own records the date and address of each r ing. d. The Settlement Administrator shall provide a weekly status report to the Parties. As part of its weekly status report, the Settlement Administrator will inform Class/Collective Counsel and Defendant s Counsel of the number of Notices mailed, the number of Notices returned as undeliverable, the number of Notices r ed, and the number of requests for exclusion received, the number of Collective Claim Forms received, and the number of objections received.

18 e. No later than fourteen (14) days before the Final Approval Hearing, the Settlement Administrator will serve on the Parties a declaration of due diligence setting forth its compliance with its obligations under this Agreement. The declaration from the Settlement Administrator shall also be filed with the Court by Class/Collective Counsel no later than ten (10) days before the Final Approval Hearing. Before the Final Approval Hearing, the Settlement Administrator will supplement its declaration of due diligence if any material changes occur from the date of the filing of its prior declaration. 3. Objections to Settlement. The Class/Collective Notice will provide that the Class/Collective Members who wish to object to the Settlement must do so in writing, signed, dated, and mailed to the Class Action Clerk, United States District Court for the Northern District of California, 450 Golden Gate Avenue, San Francisco, California and postmarked no later than forty-five (45) days after the Settlement Administrator first mails the Class/Collective Notice. The timeframe to submit an objection will not be increased for returned mailings. All objections will be scanned into the electronic case docket by the Court and the Parties will receive electronic notices of filing. a. Format. Any Objections shall state: (a) the objecting person s full name, address, and telephone number; (b) the words Notice of Objection or Formal Objection; (c) describe, in clear and concise terms, the legal and factual arguments supporting the objection; (d) list identifying witness(es) the objector may call to testify at the Final Approval Hearing; and (e) provide true and correct copies of any exhibit(s) the objector intends to offer at the Final Approval Hearing. The objection will not be valid if it objects only to the appropriateness of the Action or its merits. The objection and supporting papers must also clearly identify the case name and number (, Case Number 16-cv-04790). b. Notice of Intent to Appear. Class/Collective Members who timely file valid objections to the Settlement may appear at the Final Approval Hearing, either in person or through the objector s own counsel, provided the objector has first notified the Court by sending his/her written objections to the Court, postmarked no later than forty-five (45) days after the Settlement Administrator first mails the Notice to the Class/Collective. The Court may excuse this requirement upon a showing of good cause. The Court

19 will only require substantial compliance with the requirements for submitting an objection. 4. California Class Members Request for Exclusion from the Settlement ( Opt-Out ). The California Class Notice will provide that Class Members who wish to exclude themselves from the Settlement must mail to the Settlement Administrator a written request for exclusion. The written request for exclusion must: (a) state the Class Member s name, address, telephone number, and social security number; (b) state the Class Member s intention to exclude themselves from or opt-out of the Settlement; (c) be addressed to the Settlement Administrator; (d) be signed by the Class Member or their lawful representative; and (e) be postmarked no later than forty-five (45) days after the Settlement Administrator first mails the Notice to the Class. The timeframe to Opt-Out will not be increased for returned mailings. a. Confirmation of Authenticity. If there is a question about the authenticity of a signed request for exclusion, the Settlement Administrator may demand additional proof of the Class Member s identity. Any Class Member who returns a timely, valid, and executed request for exclusion will not participate in or be bound by the Settlement and subsequent judgment and will not receive an Individual California Class Member Settlement Share. A Class Member who does not complete and mail a timely request for exclusion will automatically be included in the Settlement, will receive an Individual California Class Member Settlement Share, and be bound by all terms and conditions of the Settlement, if the Settlement is approved by the Court, and by the subsequent judgment, regardless of whether he or she has objected to the Settlement. b. Report. No later than seven (7) days after the deadline for submission of requests for exclusion, the Settlement Administrator will provide the Parties with a complete and accurate accounting of the number of Notices mailed to Class Members, the number of Notices returned as undeliverable, the number of Notices r ed to Class Members, the number of r ed Notices returned as undeliverable, the number of Class Members who returned valid requests for exclusion, and the number of Class Members who returned invalid requests for exclusion. 5. FLSA Collective Claims Process ( Opt-In ): The Collective Notice will provide that Collective Members who wish to Participate in the Settlement

20 will be required to submit the Claim Form, which will accompany the Collective Notice, to the Settlement Administrator within forty-five (45) days of the Collective Notice and Claim Form being mailed out. To be a valid claim submission, the Claim form must be post-marked no later than 45-days after the Collective Notice and Claim form were mailed out by the Administrator. a. Confirmation of Authenticity. If there is a question about the authenticity of a signed Claim Form, the Settlement Administrator may demand additional proof of the Collective Member s identity. Any Collective Member who does not return a timely, valid, and executed Claim Form will not participate in or be bound by the Settlement as it relates to the FLSA Release of Claims and subsequent judgment and will not receive an Individual FLSA Settlement Share. A Collective Member who does complete and mail a timely request for exclusion will automatically be included in the FLSA Collective Settlement and will receive an Individual Settlement Share, and be bound by all terms and conditions of the Settlement, if the Settlement is approved by the Court, and by the subsequent judgment, regardless of whether he or she has objected to the Settlement. b. Report. No later than seven (7) days after the deadline for submission of signed Claim Forms, the Settlement Administrator will provide the Parties with a complete and accurate accounting of the number of Notices mailed to Collective Members, the number of Notices returned as undeliverable, the number of Notices and Claim Forms r ed to Collective Members, the number of r ed Notices and Claim Forms returned as undeliverable, and the number of Collective Members who returned valid Claim Forms. 6. No Solicitation of Objection or Requests for Exclusion. Neither the Parties nor their respective counsel will solicit or otherwise encourage directly or indirectly any Class/Collective Member to object to the Settlement, request exclusion from the Settlement, not make a claim under the settlement, or appeal from the Judgment. 7. Motion for Final Approval. a. Class/Collective Counsel will file unopposed motions and memorandums in support thereof for final approval of the Settlement and the following payments in accord with the terms of the Settlement: (1) the Attorney Fee Award; (2) the Cost

21 Award; (3) Administrative Costs; and (4) the Class Representative Enhancement. b. If the District Court does not grant Final Approval of the Settlement, or if the District Court s Final Approval of the Settlement is reversed or materially modified on appellate review, then this Settlement will become null and void; if that occurs, the Parties will have no further obligations under the Settlement, including any obligation by Defendant to pay the Gross Settlement Amount or any amounts that otherwise would have been owed under this Agreement. Further, should this occur, the Parties agree they shall be equally responsible for the Settlement Administrator s Administration Costs through that date. An award by the Court of a lesser amount than sought by Plaintiff and Class/Collective Counsel for the Class/Collective Representative Enhancement, Attorney Fee Award, Cost Award, will not constitute a material modification to the Settlement within the meaning of this paragraph. c. Upon Final Approval of the Settlement, the Parties shall present to the District Court a proposed Final Approval Order, approving of the Settlement and entering Judgment in accordance therewith. After entry of Judgment, the District Court shall have continuing jurisdiction over the Action for purposes of: (1) enforcing this Settlement Agreement; (2) addressing settlement administration matters, and (3) addressing such post-judgment matters as may be appropriate under Court rules and applicable law. 8. Waiver of Right to Appeal. Provided that the Judgment is consistent with the terms and conditions of this Agreement, if Class/Collective Members do not timely object to the Settlement, then the Parties and their respective counsel waive any and all rights to appeal from the Judgment, including, but not limited to, all rights to any post-judgment proceeding and appellate proceeding, such as a motion to vacate or set aside judgment, and any extraordinary writ, and the Judgment will become non-appealable at the time it is entered. The waiver of appeal does not include any waiver of the right to oppose any appeal, appellate proceeding, or post-judgment proceeding. This paragraph does not preclude Plaintiff or Class/Collective Counsel from appealing from a refusal by the District Court to award the full Class/Collective Representative Enhancement, the Attorney Fee Award, or the Cost Award sought by them. 9. Vacating, Reversing, or Modifying Judgment on Appeal. If, after a notice of appeal, the reviewing court vacates, reverses, or modifies the

22 Judgment such that there is a material modification to the Settlement, and that court s decision is not completely reversed and the Judgment is not fully affirmed on review by a higher court, then this Settlement will become null and void and the Parties will have no further obligations under it. A vacation, reversal, or modification of the Court awarded Attorney Fee Award, Cost Award, or Class/Collective Representative Enhancement will not constitute a vacation, reversal, or material modification of the Judgment within the meaning of this paragraph. A material modification would include, but not necessarily be limited to, any alteration of the Gross Settlement Amount, an alteration in the calculation of the Net Settlement Amounts, and any change to the calculation of the Individual Settlement Shares. 10. Disbursement of Settlement Shares and Payments. Subject to the District Court finally approving the Settlement, and provided that there are no objections or appeals to the District Court s Final Approval Order and Judgment, the Settlement Administrator shall distribute funds pursuant to the terms of this Agreement and the Court s Final Approval Order and Judgment. The maximum amount Defendant can be required to pay under this Settlement for any purpose is the Gross Settlement Amount of two million dollars ($2,000,000.00). The Settlement Administrator shall keep Defendant s Counsel and Class/Collective Counsel apprised of all distributions from the Gross Settlement Amount. The Settlement Administrator shall respond to questions from Defendant s Counsel and Class/Collective Counsel. No person shall have any claim against Defendant, Defendant s Counsel, Hunt, Class/Collective Counsel, or the Settlement Administrator based on the distributions and payments made in accordance with this Agreement. a. Funding the Settlement. Subject to the District Court finally approving the Settlement, and provided that there are no objections or appeals to the District Court s Final Approval Order and Judgment, the Settlement will be funded in three separate installments as follows: 1. Ten (10) calendar days after the Effective Date - 45% of the Gross Settlement Amount, or $900,000, shall be disbursed. This disbursement shall include 45% of the total Net Settlement Amounts, 45% of the Total Attorney Fee Award, 45% of the Cost Award, 45% of the Class/Collective Representative Enhancement, and 45% of the Settlement Administration Costs.

23 2. One hundred and fifty (150) calendar days after the first payment - 45% of the Gross Settlement Amount, or $900,000, shall be disbursed. This disbursement shall include 45% of the total Net Settlement Amounts, 45% of the Total Attorney Fee Award, 45% of the Cost Award, 45% of the Class/Collective Representative Enhancement, and 45% of the Settlement Administration Costs. 3. One hundred and fifty (150) days after the second payment - 10% of the Gross Settlement Amount, or $200,000, shall be disbursed. This disbursement shall include 10% of the total Net Settlement Amounts, 10% of the Total Attorney Fee Award, 10% of the Cost Award, 10% of the Class/Collective Representative Enhancement, and 10% of the Settlement Administration Costs. b. Disbursement of the Settlement. Subject to the District Court finally approving the Settlement, and provided that there are no objections or appeals to the District Court s Final Approval Order and Judgment, the Settlement will be disbursed in accordance with the following Disbursement Schedule: 1. Seven (7) calendar days after the funds are received by CPT from Defendant for the first payment - 45% of the Gross Settlement Amount, or $900,000, shall be disbursed. This disbursement shall include 45% of the total Net Settlement Amounts, 45% of the Total Attorney Fee Award, 45% of the Cost Award, 45% of the Class/Collective Representative Enhancement, and 45% of the Settlement Administration Costs. 2. Seven (7) calendar days after the funds are received by CPT from Defendant for the second payment - 45% of the Gross Settlement Amount, or $900,000, shall be disbursed. This disbursement shall include 45% of the total Net Settlement Amounts, 45% of the Total Attorney Fee Award, 45% of the Cost Award, 45% of the Class/Collective Representative Enhancement, and 45% of the Settlement Administration Costs. 3. Seven (7) calendar days after the funds are received by CPT from Defendant for the third payment - 10% of the Gross Settlement Amount, or $200,000, shall be disbursed. This disbursement shall include 10% of the total Net Settlement

24 Amounts, 10% of the Total Attorney Fee Award, 10% of the Cost Award, 10% of the Class/Collective Representative Enhancement, and 10% of the Settlement Administration Costs. 11. Un-cashed Checks. Class/Collective Members must cash or deposit their Individual Settlement Share checks within one hundred and eighty (180) calendar days after the checks are mailed to them. If any checks are not redeemed or deposited within ninety (90) days after mailing, the Settlement Administrator will send a letter indicating that unless the check is redeemed or deposited in the next ninety (90) days, it will expire and become nonnegotiable, and offer to replace the check if it was lost or misplaced. If any checks remain uncashed or not deposited by the expiration of the 90-day period after mailing the reminder notice, the Settlement Administrator will pay the funds represented by such unredeemed checks to the State of California Unclaimed Property Fund to be held in the name and of and for the benefit of such class members under California s escheatment laws. 12. Final Report by Settlement Administrator. Within ten (10) days after the second disbursement of all funds, the Settlement Administrator will serve on the Parties a declaration providing a final report on the disbursements of all funds. 13. Certificate of Completion of Administration of Settlement. Within fifteen (15) days of the second payment under the terms of this Settlement, the Settlement Administrator shall provide written certification, under penalty of perjury, of its completion of the Settlement Administration to counsel for all Parties. Within thirty (30) days of the second payment under the terms of the Settlement, Defendant shall file the written certification received from the Settlement Administrator with the District Court. 14. Defendant s Legal Fees. Defendant is responsible for paying for all of Defendant s own legal fees, costs, and expenses incurred in this Action outside of the Gross Settlement Amount. K. Participating California Class Members Released Claims: As of the Effective Date, Plaintiff and California Class Members who do not validly and timely request to be excluded from the Settlement shall release all claims for economic, noneconomic equitable, liquidated, nominal, restitutionary, injunctive, or other relief that are based on the facts stated in the Complaints Filed in this Matter or could have been stated based on the facts stated in the Complaints Filed in this Matter. The Participating California Class Members Released Claims include all claims for wages and related penalties actually alleged in the Action, by Plaintiff Emily Hunt, on behalf of herself and the California Class Members, based on the facts

25 stated in the complaint, including, but not limited to, that: (1) Defendant failed to compensate all time worked by Putative Class Members; (2) Defendant failed to pay overtime compensation; (3) Defendant failed to provide meal periods, or compensation in lieu thereof, including but not limited to any violation of California Labor Code sections and 512 and the applicable Industrial Welfare Commission Wage Order; (4) Defendant failed to authorize and permit rest periods, or compensation in lieu thereof, including but not limited to any violation of California Labor Code section and the applicable Industrial Welfare Commission Wage Order; (5) Defendant failed to provide itemized employee wage statements, including but not limited to any violation of California Labor Code sections 226, 1174, and 1175 and the applicable Industrial Welfare Commission Wage Order; (6) Defendant failed to timely pay wages due at termination, including but not limited to any violation of California Labor Code sections and 205; (6) Defendant engaged in unlawful business practices in violation of California Business and Professions Code section 17200, et seq; (7) Putative Class Members are entitled to declaratory relief to determine whether the practices alleged in the complaint are unlawful; (8) Putative Class Members are entitled to injunctive relief to halt any practices alleged in the complaint that are unlawful; (9) Putative Class Members are entitled to restitutionary damages under California Business & Professions Code sections 17200, et seq.; (10) Defendant is liable for attorneys fees and/or costs incurred to prosecute this action on behalf of Putative Class Members, including fees incurred for the services of Class Counsel; and (11) Defendant is liable for any other remedies, penalties, and interest, including but not limited to, under California Labor Code sections 201, 202, 203, 205, 226, 226.7, 510, 512, 1174, 1194, , 1197, , 2699, and the applicable Industrial Welfare Commission Wage Order. L. FLSA Collective Members Released Claims: As of the Effective Date, Plaintiff and members of the FLSA Collective who submit valid and timely Claim Forms shall release all claims for economic, non-economic equitable, liquidated, nominal, restitutionary, injunctive, or other relief that are based on the facts stated in the Complaints Filed in this Matter or could have been stated based on the facts stated in the Complaints Filed in this Matter. The Participating FLSA Collective Members Released Claims shall include all claims for wages under the FLSA, including but not limited to 29U.S.C. 201 et seq. M. Named Plaintiff s Release of Claims and General Release. As of the Effective Date, and in exchange for the Class Representative Enhancement to the Named Plaintiff in an amount not to exceed $10, (Ten Thousand Dollars and No Cents), in recognition of her work and efforts in obtaining the benefits for the Class, and undertaking the risk for the payment of costs in the event this matter had not successfully resolved, Named Plaintiff Emily Hunt also agrees to not seek or accept re-employment with Released Parties and gives the following general release of claims for herself and her respective spouse, heirs, successors and assigns, forever

26 releases the Released Parties from any and all charges, complaints, claims, liabilities, obligations, promises, agreements, controversies, damages, actions, causes of action, suits, rights, demands, costs, losses, debts, and expenses of any nature whatsoever, from the beginning of time through the date of her signature on this Agreement, known or unknown, suspected or unsuspected, including, but not limited to all claims arising out of, based upon, or relating to her employment with Defendant or the remuneration for, or termination of, such employment. Named Plaintiff s Release of Claims also includes a waiver of California Civil Code section 1542, which provides as follows: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR. This release excludes any release of any claims not permitted to be released by law. N. Miscellaneous Terms 1. No Admission of Liability. Defendant makes no admission of liability or wrongdoing by virtue of entering into this Agreement. Additionally, Defendant reserves the right to contest any issues relating to class certification and liability if the Settlement is not approved. Defendant denies that it has engaged in any unlawful activity, has failed to comply with the law in any respect, has any liability to anyone under the claims asserted in the Action, or that but for the Settlement, a Class should be certified in the Action. This Agreement is entered into solely for the purpose of compromising highly disputed claims. Nothing in this Agreement nor any communication, document, or anything else prepared in connection with this Settlement is intended or will be construed as an admission by Defendant of liability or wrongdoing of any substantive allegations or admission of propriety for class certification upon motion for class certification brought by Class Counsel should this Settlement not be given Final Approval. This Settlement and Plaintiff s and Defendant s willingness to settle the Action will have no bearing on, and will not be admissible in connection with, any litigation (other than solely in connection with this Settlement). 2. No Effect on Employee Benefits. The Class/Collective Representative Enhancement and/or Individual Settlement Share paid to Hunt and the Class/Collective Members shall not be deemed to be pensionable earnings and shall not have any effect on the eligibility for, or calculation of, any of the employee benefits (e.g., vacation, holiday pay, retirement plans, etc.) of

27 Hunt or the Class/Collective Members. The Parties agree that any Class/Collective Representative Enhancement and/or Individual Settlement Share paid to Hunt or the Class/Collective Members under the terms of this Agreement do not represent any modification of Hunt s or Class/Collective Members previously credited hours of service or other eligibility criteria under any employee pension benefit plan or employee welfare benefit plan sponsored by Defendant. Further, any Class/Collective Representative Enhancement shall not be considered compensation in any year for purposes of determining eligibility for, or benefit accrual within, an employee pension benefit plan or employee welfare benefit plan sponsored by Defendant. 3. No Solicitation of Individual Settlements. Defendant and its Counsel agree that until and unless the District Court does not grant final approval of the settlement and/or the settlement agreement to be drafted becomes null and void, Defendant and its Counsel will not attempt to procure any individual settlements from the Class Members. Should this clause be violated, Plaintiff reserves the right to terminate the Settlement Agreement. 4. Taxes. Class/Collective Members agree that they are not relying on Defendant regarding the proper tax treatment of Class Members Individual Settlement Shares and further agree to hold Defendant harmless for the tax consequences flowing from these payments and allocations. 5. Publicity. Class Counsel and Named Plaintiff agree to discuss the terms of this Settlement only in declarations submitted to the District Court to establish their adequacy to serve as Class/Collective Counsel, in declarations submitted to the District Court in support of motions for preliminary approval, final approval, for attorneys fees/costs, and any other pleading filed with the District Court in conjunction with the Settlement, and in discussions with Class Members in the context of administrating this Settlement. 6. Reemployment of Named Plaintiff. Emily Hunt confirms and agrees that she will not apply for, seek, or accept employment with VEP Healthcare, Inc. or any of its related entities as they are currently constituted. In the event Ms. Hunt does apply, VEP Healthcare, Inc. or any of its related entities that Ms. Hunt applies to may deny her such employment because of this Agreement, and such denial shall not constitute any violation of any laws, rules, or orders of any state, municipality, or of the United States. The Parties agree and acknowledge that by this Agreement, they seek an unequivocal, complete, and final dissolution of the employment relationship between Employee and Employer.

28 7. Integrated Agreement. After this Agreement is signed and delivered by all Parties and their counsel, this Agreement and its exhibits will constitute the entire Agreement between the Parties relating to the Settlement, and it will then be deemed that no oral representations, warranties, covenants, or inducements have been made to any party concerning this Agreement or its exhibits, other than the representations, warranties, covenants, and inducements expressly stated in this Agreement and its exhibits. 8. Authorization to Enter Into Settlement Agreement. Class/Collective Counsel and Defendant s Counsel warrant and represent that they are authorized by Plaintiff and Defendant, respectively, to take all appropriate action required or permitted to be taken by such Parties under this Agreement to effectuate its terms, and to execute any other documents required to effectuate the terms of this Agreement. The Parties and their counsel will cooperate with each other and use their best efforts to effect the implementation of the Settlement. In the event the Parties are unable to reach agreement on the form or content of any document needed to implement this Agreement, or on any supplemental provisions that may become necessary to effectuate the terms of this Agreement, the Parties will seek the assistance of the District Court, and in all cases, all such documents, supplemental provisions, and assistance of the District Court will be consistent with this Agreement. 9. Exhibits and Headings. The terms of this Agreement include the terms set forth in the attached exhibits, which are incorporated by this reference as though fully set forth herein. Any exhibits to this Agreement are an integral part of the Settlement and must be approved substantially as written. The descriptive headings of any paragraphs or sections of this Agreement are inserted for convenience of reference only and do not constitute a part of this Agreement. 10. Interim Stay of Proceedings. The Parties agree to stay and hold all proceedings in the Action in abeyance, except such proceedings necessary to implement and complete the Settlement, pending the Final Approval Hearing to be conducted by the District Court. 11. Amendment or Modification of Agreement. This Agreement, and any and all parts of it, may be amended, modified, changed, or waived only by an express written instrument signed by counsel for all Parties or their successors-in-interest. 12. Agreement Binding on Successors and Assigns. This Agreement will be binding upon, and inure to the benefit of, the successors and assigns of the Parties, as previously defined.

29 13. No Prior Assignment. Plaintiff hereby represents, covenants, and warrants that they have not directly or indirectly, assigned, transferred, encumbered, or purported to assign, transfer, or encumber to any person or entity any portion of any liability, claim, demand, action, cause of action or rights herein released and discharged. 14. Applicable Law. All terms and conditions of this Agreement and its exhibits will be governed by and interpreted according to the laws of the State of California, without giving effect to any conflict of law principles or choice of law principles. 15. Fair, Adequate, and Reasonable Settlement. The Parties and their respective counsel believe and warrant that this Agreement reflects a fair, reasonable, and adequate settlement of the Action and have arrived at this Agreement through arms-length negotiations, taking into account all relevant factors, current and potential. 16. No Tax or Legal Advice. The Parties understand and agree that Defendant is neither providing tax or legal advice, nor making representations regarding tax obligations or consequences, if any, related to this Agreement, and that Class/Collective Members will assume any such tax obligations or consequences that may arise from this Agreement, and that Class/Collective Members shall not seek any indemnification from Defendant or any of the Released Parties in this regard. The Parties agree that, in the event that any taxing body determines that additional taxes are due from any Class/Collective Member, such Class/Collective Member assumes all responsibility for the payment of such taxes. 17. Jurisdiction of the District Court. The District Court shall retain jurisdiction with respect to the interpretation, implementation, and enforcement of the terms of this Agreement and all orders and judgment entered in connection therewith, and the Parties and their counsel hereto submit to the jurisdiction of the District Court for purposes of interpreting, implementing, and enforcing the Settlement embodied in this Agreement and all orders and judgments in connection therewith. 18. Invalidity of Any Provision. Before declaring any provision of this Agreement invalid, the Parties request that the District Court first attempt to construe the provisions valid to the fullest extent possible consistent with applicable precedents, so as to define all provisions of this Agreement valid and enforceable.

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