NOTICE OF CLASS ACTION SETTLEMENT

Transcription

1 UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS ARTHUR STEIN, EDWIN HUMPHRIES, DAVID BAILEY, and ROBERT MACCINI, on behalf of the Employee Investment Plan of Stone & Webster Incorporated and Participating Subsidiaries, and on behalf of its participants, and on behalf of the Employee Stock Ownership Plan of Stone & Webster Incorporated and Participating Subsidiaries, and on behalf of its participants, Plaintiffs, v. C.A. No. 01-cv WGY H. KERNER SMITH, DONNA R. BETHELL, J. ANGUS McKEE, DAVID N. McCAMMON, EDWARD J. WALSH, PETER M. WOOD, and PETER EVANS, Defendants. TO: NOTICE OF CLASS ACTION SETTLEMENT YOUR LEGAL RIGHTS MIGHT BE AFFECTED IF YOU ARE A MEMBER OF THE FOLLOWING CLASS: ALL PARTICIPANTS IN THE EMPLOYEE INVESTMENT PLAN ( EIP ) OF STONE & WEBSTER, INCORPORATED AND PARTICIPATING SUBSIDIARIES AND THE EMPLOYEE STOCK OWNERSHIP PLAN ( ESOP ) OF STONE & WEB- STER, INCORPORATED AND PARTICIPATING SUBSIDIARIES AT ANY TIME DURING THE PERIOD JANUARY 22, 1998 THROUGH AND INCLUDING MAY 8, 2000 (THE CLASS PERIOD ). A FEDERAL COURT AUTHORIZED THIS NOTICE. THIS IS NOT A SOLICITATION FROM A LAWYER. YOU HAVE NOT BEEN SUED. The Court preliminarily has approved a proposed settlement of a class action lawsuit brought under the Employee Retirement Income Security Act (often referred to as ERISA) (the Settlement ). The Settlement will provide for a payment in the amount of $8,000,000 (the Settlement Fund ) to the EIP and ESOP (collectively, the Plans ) and for allocation of the Settlement Fund to the members of the Class who had portions of their accounts invested in Stone & Webster, Incorporated common stock during the Class Period. The Settlement is summarized below. The Court has scheduled a hearing on final approval of the Settlement and on Named Plaintiffs motion for attorneys fees and expenses and for compensation to the Named Plaintiffs. That hearing before United States District Judge William Young has been scheduled for October 18, 2005, at 2:00 p.m. in Courtroom 18 of the United States District Court of Massachusetts, John Joseph Moakley U.S. Courthouse, 1 Courthouse Way, Boston, Massachusetts Any objections to the Settlement or to Named Plaintiffs motion for attorneys fees and expenses and for compensation must be served in writing on Class Counsel and on Defendants attorneys, who are identified in Section 15 of this Notice. The procedure for objecting is described in Section 15 of this Notice.

2 This Notice contains summary information with respect to the Settlement. The terms and conditions of the Settlement are set forth in a Class Action Settlement Agreement (the Settlement Agreement ). The Settlement Agreement and additional information about this lawsuit are available from Berdon Claims Administration LLC (the Settlement Administrator ) at: or PLEASE READ THIS NOTICE CAREFULLY AND COMPLETELY. IF YOU ARE A MEMBER OF THE CLASS, THE SETTLEMENT WILL AFFECT YOUR RIGHTS. YOU ARE NOT BEING SUED IN THIS MATTER. YOU DO NOT HAVE TO APPEAR IN COURT, AND YOU DO NOT HAVE TO HIRE AN ATTORNEY IN THIS CASE. IF YOU ARE IN FAVOR OF THE SETTLEMENT, YOU NEED NOT DO ANYTHING. IF YOU DISAPPROVE, YOU MAY OBJECT TO THE SETTLEMENT PURSUANT TO THE PROCEDURES DESCRIBED IN SECTION 15 OF THIS NOTICE. YOUR LEGAL RIGHTS AND OPTIONS UNDER THE SETTLEMENT: YOU CAN DO NOTHING. NO ACTION IS NECESSARY TO RECEIVE PAYMENT. YOU CAN OBJECT (BY OCTOBER 6, 2005) YOU CAN GO TOA HEARING (TO BE HELD ON OCTOBER 18, 2005) If the Settlement is approved by the Court and you are a member of the Class, you will not need to do anything to receive a payment. The portion, if any, of the Settlement Fund will be allocated to an account set up for you in the Plans. If you wish to object to any part of the Settlement, you may (as discussed in Section 15 of this Notice) write to the Court and counsel about why you object to the Settlement. If you submit a written objection to the Settlement to the Court and counsel before the Court-approved deadline, you may (but do not have to) attend the Court hearing about the Settlement and present your objections to the Court. You may attend the Hearing even if you do not file a written objection, but you will only be allowed to speak at the Hearing if you file written comments in advance of the Hearing. These rights and options and the deadlines to exercise them are explained in this Notice. The Court in charge of this case still has to decide whether to approve the Settlement. Payments will be made only if the Court approves the Settlement and that approval is upheld in the event of any appeals. Further information regarding the litigation and this Notice may be obtained by contacting the Settlement Administrator at: Stone & Webster ERISA Litigation c/o Berdon Claims Administration LLC P.O. Box 9014 Jericho, NY Telephone: Facsimile: Website: IF THE ADDRESS TO WHICH THE NOTICE WAS SENT IS NOT YOUR CURRENT ADDRESS, PLEASE CONTACT THE SETTLEMENT ADMINISTRATOR TO PROVIDE YOUR CURRENT ADDRESS. 2

3 SUMMARY OF SETTLEMENT This litigation (the Action ) is brought under ERISA in which Plaintiffs allege that the Defendants breached fiduciary duties owed to the participants in and beneficiaries of the Plans by continuing to invest plan assets in the Stone & Webster Stock Fund during the Class Period. A Settlement Fund consisting of $8 million in cash is being established in the Action. The net amount in the Settlement Fund, including interest, and after payment of any taxes, expenses, approved attorneys fees and costs, and compensation to the Named Plaintiffs, will be paid to the Plans and will be allocated to Class members according to a Plan of Allocation to be approved by the Court. Statement of Potential Outcome of the Action As with any litigated case, Plaintiffs would face an uncertain outcome if the Action were to continue against the Defendants. Continued litigation of the Action against the Defendants could result in a judgment or verdict greater or lesser than the recovery under the Settlement Agreement, or in no recovery at all, or a judgment or verdict in favor of the Defendants. Throughout this Action, the Named Plaintiffs and the Defendants have disagreed on both liability and damages, and they do not agree on the amount that would be recoverable even if the Plaintiffs were to prevail at trial. Statement of Attorneys Fees and Costs Sought in the Action Class Counsel in the Action will apply to the Court for an order awarding to counsel for the Named Plaintiffs attorneys fees not in excess of 33% of the amount recovered in the Settlement, plus reimbursement of expenses. Any amount awarded will be paid out of the Settlement Fund. What Will the Named Plaintiffs Get? The Named Plaintiffs in the Action will share in the allocation of the money paid to the Plan on the same basis and to the same extent as all other members of the Class, except that, in addition, the Named Plaintiffs may apply to the Court for compensation of up to $10,000 each, as consideration for their considerable time and effort devoted to the prosecution of the Action on behalf of the Class. Any compensation awarded to Named Plaintiffs by the Court will be paid out of the Settlement Fund. 1. Why Did I Get This Notice Package? BASIC INFORMATION You or someone in your family are or may have been a participant in or beneficiary of the Stone & Webster EIP and/or the Stone & Webster ESOP. The Court caused this Notice to be sent to you because, if you fall within that group, you have a right to know about the Settlement and about all of your options, before the Court decides whether to approve the Settlement. If the Court approves the Settlement, and after any objections and appeals are resolved, the net amount of the Settlement Fund will be paid to the Plans and then allocated among Class members according to a Court-approved Plan of Allocation. This Notice package describes the litigation, the Settlement, your legal rights, what benefits are available, who is eligible for them, and how to get them. 2. Where Is This Lawsuit Pending? The Court in charge of this case is the United States District Court for the District of Massachusetts (the Court ). The Action is known as Arthur Stein, et al. v. H. Kerner Smith, et al., Civil Action No WGY, United States District Court for the District of Massachusetts. 3

4 3. Who Are the Parties to this Action? The people who sued are called Named Plaintiffs, and the people they sued are called Defendants. The Named Plaintiffs in the Action are former employees of Stone & Webster. They are: Arthur Stein, Edwin Humphries, David Bailey and Robert Maccini. The Defendants in the Action are certain former directors and/or officers of Stone & Webster. They are: H. Kerner Smith, Donna R. Bethell, J. Angus McKee, David N. McCammon, Edward J. Walsh, Peter M. Wood, and Peter Evans. 4. What Is The Action About? PLAINTIFFS CLAIMS The Action claims that the Defendants violated fiduciary duties under ERISA that they owed to participants in the Plans. In the Consolidated Complaint, the Named Plaintiffs asserted causes of action for the losses they allege were suffered by the Plans as the result of the alleged breaches of fiduciary duty by the Defendants. The Action alleges that Defendants were fiduciaries of the Plans who breached their fiduciary duties to manage the Plans in a prudent fashion and disregarded the interest of the participants of the Plans by: failing to investigate and adequately monitor the suitability of acquiring and holding Stone & Webster stock in the Plans; acquiring and retaining Stone & Webster stock for the Plans which they knew or reasonably should have known was an imprudent investment for the Plans; continuing to offer Stone & Webster as an investment option for participants of the Plans; and failing to divest the Plans from their imprudent investments in Stone & Webster stock. The Named Plaintiffs also assert that defendant Smith made misleading statements about Stone & Webster to participants in the Plans. THE DEFENSES IN THE ACTION The Defendants vigorously deny that they have liability to the Plans or their participants or beneficiaries. If the litigation were to continue, the Defendants would raise numerous defenses to liability, including the following: They were not fiduciaries of the Plans, or, if they were fiduciaries, their fiduciary duties did not extend to the matters at issue in the Action; Stone & Webster stock was at all relevant times a prudent investment for the Plans and their participants; To the extent they were fiduciaries as to the matters at issue in the Action, Defendants are entitled to a presumption that their actions were reasonable, and Defendants prudently discharged all duties imposed on them by ERISA; Even if they failed to discharge one or more of their ERISA fiduciary duties, any such breach of fiduciary duty did not cause the losses alleged by the Plaintiffs. THE ACTION HAS BEEN AGGRESSIVELY LITIGATED Class Counsel have conducted an extensive investigation of the allegations in the Action and of the losses suffered by the Plans. In addition, through that investigation and through discovery of information in the Action, Class Counsel have obtained and reviewed hundreds of thousands of pages of documents, including documents and materials governing the Plans, communications with Plan participants, internal Stone & Webster documents, SEC filings, press releases, public statements, news articles and other publications, and other documents. On behalf of Named Plaintiffs: 4

5 Class Counsel have opposed a motion by the Defendants to dismiss the Named Plaintiffs claims. That Motion was granted in part and denied in part by the Court, including dismissing certain claims originally asserted by Named Plaintiffs; Class Counsel filed a motion for certification of the Action as a class action. By Order dated September 15, 2004, the Court certified the Action to proceed as a class action lawsuit on behalf of the Class; Class Counsel have drafted and served on Defendants numerous discovery requests, have prepared and served responses to written discovery requests made by Defendants, and have taken and defended depositions of the Named Plaintiffs, former Stone & Webster officers and directors, and other third parties; Class Counsel have retained several proposed experts to investigate the facts, develop opinions, and prepare formal reports concerning the merits of the Action. SETTLEMENT DISCUSSIONS This Settlement is the product of extensive negotiations between Class Counsel and Defendants Counsel, including the services of an experienced mediator. Throughout the settlement negotiations, the Named Plaintiffs and the Defendants were advised by various consultants and experts, including individuals with expertise in ERISA fiduciary liability issues, insurance coverage issues, and estimating potential damages in cases involving ERISA fiduciary liability. 5. Why Is This Case a Class Action? In a class action, one or more plaintiffs, called Named Plaintiffs, sue on behalf of people who have similar claims. All of the individuals on whose behalf the Named Plaintiffs are suing are Class members. By Order, dated September 15, 2004, the Court certified this action to proceed as a class action lawsuit. 6. Why Is There a Settlement? The Court has not reached any final decisions in the Action. Instead, the Plaintiffs and the Defendants have agreed to a settlement. In reaching the Settlement, they have avoided the cost, the time and the uncertainty of a trial. At the time, the Parties reached their agreement in principle to settle this Action, it was scheduled to go to trial in December, As with any lawsuit, the Named Plaintiffs and the Class would face an uncertain outcome if this case went to trial. On the one hand, continuation of the case against the Defendants could result in a verdict greater than this Settlement. On the other hand, continuing the case could result in a verdict for less money than Named Plaintiffs have obtained in this Settlement, or even no recovery at all. The Settlement of the Action is also the product of a negotiation with one of Stone & Webster s insurers, National Union Fire Insurance Company of Pittsburgh, PA ( National Union ). Stone & Webster s insurance carriers, including National Union, had disclaimed coverage related to the Action, and Stone & Webster subsequently brought suit against them. Because of this situation, the Named Plaintiffs and Class Counsel were uncertain about their ability to collect on a judgment even if they had obtained a verdict greater than this Settlement. Based on all of these factors, the Named Plaintiffs and Class Counsel think the Settlement is in the best interests of the Plans and all Class members. 7. How Do I Know Whether I Am Part Of The Class? The proceeds of this Settlement will be allocated only to members of the Class, and then only according to a Court-approved Plan of Allocation. 5

6 You are a member of the Class if you were: A participant in the Employee Investment Plan of Stone & Webster, Incorporated and Participating Subsidiaries ( EIP ) and the Employee Stock Ownership Plan of Stone & Webster, Incorporated and Participating Subsidiaries ( ESOP ) at any time during the period January 22, 1998 through and including May 8, Excluded from the Class are Defendants herein, directors of Stone & Webster, members of their Immediate Families, and the heirs, successors or assigns of any of the foregoing. If you are a member of the Class, the amount of money you will receive, if any, will depend upon the Court-approved Plan of Allocation, described below in Section What Does The Settlement Provide? THE SETTLEMENT BENEFITS WHAT YOU GET A Settlement Fund consisting of $8,000,000 in cash is being established for the benefit of the Class. The net amount in the Settlement Fund, including interest, and after payment of taxes, Court-approved attorneys fees, costs, expenses and compensation to be paid to the Named Plaintiffs, and plan expenses and implementation costs to entities that help administer the EIP and ESOP will be paid to the trustee of the EIP Trust and the ESOP Trust. The remaining settlement proceeds (the Net Settlement Proceeds ) will be allocated to the EIP Trust and the ESOP Trust in proportion to the Aggregate Net Losses to each Plan attributable to its investment in Stone & Webster stock during the Class Period as follows: % of the Net Settlement Proceeds will be allocated to the EIP (the EIP Net Settlement Proceeds ) and % of the Net Settlement Proceeds will be allocated to the ESOP (the ESOP Net Settlement Proceeds ). The EIP Net Settlement Proceeds and the ESOP Net Settlement Proceeds will then be allocated to members of the Class according to a Plan of Allocation to be approved by the Court. See Section 9 below. You will have the option (a) to roll-over your funds into an eligible individual retirement plan (i.e., an individual retirement account or eligible individual retirement annuity), or (b) to take a cash distribution, in which case your distribution will be taxable and may be subject to early withdrawal penalties. Although this Settlement has been structured in a manner to preserve the tax benefits to plan participants who choose to roll over their funds into an eligible individual retirement plan, neither Lead Counsel, nor the plan administrator of the EIP or ESOP, has sought or received an opinion letter from the Internal Revenue Service ( IRS ) regarding the tax treatment of your roll-over distribution and there is no guarantee that the IRS would treat such a roll-over distribution as exempt from taxation or that the trustee of your IRS or other retirement vehicle will accept a roll-over distribution from the EIP or ESOP. You should consult with individual tax planner regarding the tax consequences of the settlement. All Class members and anyone claiming through them are deemed to fully release the Releasees from Released Claims. The Releasees include the Defendants, Stone & Webster, National Union, the Plans and their officers, directors, employees, attorneys, and agents. The Released Claims generally include all claims that were or could have been asserted in the Action. This means that Class members will not have the right to sue the Releasees for anything related to the investment of plan assets or to other alleged fiduciary misconduct during the Class Period concerning the Plans. 9. How Much Will My Payment Be? Each Class member s share of the Net Settlement Proceeds will be determined using a Court-approved Plan of Allocation. Your share of the Net Settlement Proceeds will depend on how the losses resulting from your investment in Stone & Webster stock during the Class Period compare to the losses resulting from the 6

7 investments of all other Class members in Stone & Webster stock during the Class Period. Because the Net Settlement Proceeds are less than the total losses alleged by the entire Class, your proportionate recovery will be less than your Net Loss. You are not responsible for calculating the amount you may be entitled to receive under the Settlement. This calculation will be done as part of the implementation of the Settlement. Your Net Loss will be calculated separately for the EIP and the ESOP. For the purposes of this Settlement, your proportionate share of the Net Proceeds will be calculated as follows: FOR THE EIP. Your net loss for the EIP ( EIP Net Loss ) will be calculated. It generally will be equal to: the dollar amount of your account balance in the EIP invested in Stone & Webster stock at the beginning of the Class Period, plus the dollar amount added to your account balance in the EIP invested in Stone & Webster stock during the Class Period, including any dividend payments reinvested in Stone & Webster stock, minus the dollar amount of your account balance in the EIP invested in Stone & Webster stock at the end of the Class Period, minus the dollar amount of all dispositions of Stone & Webster stock during the Class Period credited to your account balance in the EIP, and minus the dollar amount of any non-vested Stone & Webster stock that was forfeited during the Class Period. If the difference is less than or equal to zero, your EIP Net Loss will be $0. The EIP Net Losses of all members of the Class will be aggregated. You then will be assigned an EIP Net Loss Percentage, showing the percentage of your EIP Net Loss in relation to the EIP Net Losses of all Class Members. Your share of the EIP Net Proceeds will be computed by multiplying the EIP Net Proceeds by your EIP Net Loss Percentage. FOR THE ESOP Your net loss for the ESOP ( ESOP Net Loss ) will be calculated. It generally will be equal to: the dollar amount of your account balance in the ESOP invested in Stone & Webster stock at the beginning of the Class Period, plus the dollar amount added to your account balance in the ESOP invested in Stone & Webster stock during the Class Period, including any dividend payments reinvested in Stone & Webster stock, minus the dollar amount of your account balance in the ESOP invested in Stone & Webster stock at the end of the Class Period, minus the dollar amount of all dispositions of Stone & Webster stock during the Class Period credited to your account balance in the ESOP, minus the dollar amount of any non-vested Stone & Webster stock that was forfeited during the Class Period. If the difference is less than or equal to zero, your ESOP Net Loss will be $0. The ESOP Net Losses of all members of the Class will be aggregated. You then will be assigned an ESOP Net Loss Percentage, showing the percentage of your ESOP Net Loss in relation to the ESOP Net Losses of all Class Members. Your share of the ESOP Net Proceeds will be computed by multiplying the ESOP Net Proceeds by your ESOP Net Loss Percentage. DO NOT WORRY IF YOU DO NOT HAVE RECORDS THAT SHOW YOUR PLAN ACTIVITY. Your share of the Net Settlement Proceeds will be calculated from the records of the EIP and the ESOP. If you have questions regarding the Plan of Allocation, please contact the Settlement Administrator listed in Section 20 of this Notice. 7

8 10. How Can I Get A Payment? You do not need to file a claim. However, after the Settlement is approved, you will receive an Election Form, giving you the option (a) to roll-over your funds into an eligible individual retirement plan (i.e., an individual retirement account or eligible individual retirement annuity) or (b) to take a cash distribution, in which case your distribution will be taxable and may be subject to early withdrawal penalties. You will need to complete the Election Form in order to make your instructions known to the trustee of the Plans. If you do not complete and return an Election Form, your share of the Net Settlement Proceeds will be automatically rolled over into an individual retirement account created for you. IF YOU NO LONGER LIVE AT THE ADDRESS TO WHICH THE NOTICE WAS MAILED, IT IS IMPORTANT THAT YOU PROVIDE THE SETTLEMENT ADMINISTRATOR WITH YOUR NEW ADDRESS. 11. When Will I Get My Payment? Payment is conditioned on several matters, including the Court s approval of the Settlement and such approval becoming final and no longer subject to any appeals to any court. Upon satisfaction of those conditions, the Net Settlement Proceeds will be rolled over or distributed pursuant to your directions as soon as possible after final approval has been obtained for the Settlement (which includes exhaustion of any appeals). Any appeal of the final approval may take several years. Any accrued interest on the Settlement Fund will be included in the amount paid to the EIP Trust and the ESOP Trust and allocated to Class members. THERE WILL BE NO PAYMENTS IF THE SETTLEMENT AGREEMENT IS TERMINATED The Settlement Agreement may be terminated on several grounds, including if: (a) the Court does not approve or materially changes the Settlement, or (b) either as changed by the Court or as a result of reversal or modification on appeal, the Court s Final Order in the case does not satisfy certain terms of the Settlement. Should the Settlement Agreement be terminated, the Settlement will be terminated and the Action will proceed as if the Settlement Agreement had not been entered into. 12. Can I Choose to Exclude Myself from the Class or the Settlement? No. You do not have the right to exclude yourself from the Settlement. This Action was certified under Federal Rule of Civil Procedure 23 (b)(1) as a non opt-out class action. Thus, it is not possible for any participants or beneficiaries to exclude themselves from the benefits of the Settlement. As a Class member, you will be bound by any judgments or orders that are entered in the Action for all claims that were or could have been asserted in the Action or are otherwise included in the release under the Settlement. Although you cannot opt-out of the Class and the Settlement, you can object to the Settlement and ask the Court not to approve it. See Section 16 below. 13. Do I Have A Lawyer In The Case? THE LAWYERS REPRESENTING YOU The Plaintiffs and the Class have been represented in this case by two law firms: Shapiro Haber & Urmy LLP and McRoberts, Roberts & Rainer, LLP. Shapiro Haber & Urmy has been appointed by the Court to be Class Counsel in the Action. You will not be charged directly by these lawyers. If you want to be represented by your own lawyer, you may hire one at your own expense. 8

9 14. How Will The Lawyers Be Paid? Class Counsel have litigated this Action on a contingent basis, which means that they were at risk of being paid nothing for their efforts if they were not successful in recovering money on behalf of the Class. Class Counsel have taken the risk of advancing the expenses of the Action, including substantial expert witness fees. Class Counsel will file a motion for an award of attorneys fees and expenses to be paid out of the Settlement Fund. This motion will be considered at the Fairness Hearing. Class Counsel will apply for an award of attorneys fees of not more than 33% of the recovery, plus reimbursement of expenses incurred in connection with the prosecution of the Action. 15. How Do I Tell The Court If I Don t Like The Settlement? If you are a Class member, you can tell the Court that you do not agree with the Settlement or some part of it, including the attorneys fees and expenses the attorneys intend to seek or the compensation requested for the Named Plaintiffs. You can give reasons why you think the Court should not approve it. To object, you must send a letter or other written filing saying that you object to the Settlement in Arthur Stein, et al. v. H. Kerner Smith, et al., Civil Action No. 01-cv WGY, United States District Court for the District of Massachusetts. Be sure to include your name, address, telephone number, signature, and a full explanation of all reasons you object to the Settlement. Your written objection must be served on the following counsel and must be postmarked no later than October 6, 2005: CLASS COUNSEL DEFENDANTS COUNSEL Thomas G. Shapiro Jordan D. Hershman Edward F. Haber Bingham McCutchen LLP Michelle H. Blauner 150 Federal Street Shapiro Haber & Urmy LLP Boston, MA State Street Boston, MA Attorneys for Defendant H. Kerner Smith Attorneys for the Named Plaintiffs and the Class John D. Donovan, Jr. Ropes & Gray LLP One International Place Boston, MA Attorneys for Defendants Other Than H. Kerner Smith You must also file your objection with the Clerk of the United States District Court for the District of Massachusetts. The address is: Clerk of the United States District Court for the District of Massachusetts, John Joseph Moakley, U.S. Courthouse, l Courthouse Way, Boston, MA Your objection must be postmarked no later than October 6, THE COURT S FAIRNESS HEARING The Court will hold a hearing to decide whether to approve the Settlement as fair, reasonable, and adequate (the Fairness Hearing ). You may attend the Fairness Hearing, and you may ask to speak, but you do not have to attend. 9

10 16. When And Where Will The Court Decide Whether To Approve The Settlement? The Court will hold a Fairness Hearing at 2:00 p.m. on October 18, 2005 before the Honorable Chief Judge William G. Young. The Fairness Hearing will take place at the United States District Court for the District of Massachusetts, John Joseph Moakley U.S. Courthouse, 1 Courthouse Way, Boston, Massachusetts 02210, Courtroom 18, 5th Floor. At the Fairness hearing, the Court will consider whether the Settlement is fair, reasonable, and adequate. If there are objections, the Court will consider them. After the Fairness Hearing, the Court will decide whether to approve the Settlement. The Court will also rule on the motions for attorneys fees and expenses and for an award of compensation to the Named Plaintiffs. We do not know how long these decisions will take. 17. Do I Have To Come To The Hearing? No. Class Counsel will answer questions the Court might have. But you are welcome to come at your own expense. If you send an objection, you do not have to come to Court to talk about it. As long as you mail your written objection on time, it will be before the Court when the Court considers whether to approve the Settlement as fair, reasonable, and adequate. You also may pay your own lawyer to attend the Fairness Hearing, but such attendance is not necessary. 18. May I Speak At The Hearing? If you are a Class member, you may ask the Court for permission to speak at the Fairness Hearing. To do so, you must send a letter or other paper called a Notice of Intention to Appear at Fairness Hearing in Arthur Stein, et al. v. H. Kerner Smith, et al., Civil Action No. 01-cv WGY, United States District Court for the District of Massachusetts. Be sure to include your name, address, telephone number, and your signature. Your Notice of Intention to Appear must be served on the attorneys listed in Section 15 of this Notice, postmarked no later than October 6, 2005, and must be filed with the Clerk of the Court at the address listed in Section 15 of this Notice. 19. What Happens If I Do Nothing At All? IF YOU DO NOTHING If you do nothing and you are a Class member, you will participate in the settlement of the Action as described above in this Notice if the Settlement is approved. 20. How Do I Get More Information? GETTING MORE INFORMATION This Notice summarizes the proposed Settlement. The complete Settlement is set forth in the Settlement Agreement. You may obtain additional copies of this Notice by contacting the Settlement Administrator at: Stone & Webster ERISA Litigation c/o Berdon Claims Administration LLC P.O. Box 9014 Jericho, NY Telephone: Facsimile: Website: 10

11 and a complete copy of the Settlement Agreement by visiting the website above. Further information regarding the Action and this Notice may be obtained by contacting Class Counsel at: Thomas G. Shapiro Edward F. Haber Michelle H. Blauner Shapiro Haber & Urmy LLP 53 State Street Boston, MA Attention: Stone & Webster ERISA Litigation PLEASE DO NOT CONTACT THE COURT OR THE CLERK S OFFICE FOR INFORMATION Dated: September 1, 2005 BY ORDER OF THE COURT UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS 11

12 Stone & Webster ERISA Litigation c/o Berdon Claims Administration LLC P.O. Box 9014 Jericho, NY IMPORTANT LEGAL INFORMATION PRESORTED FIRST-CLASS MAIL U.S. POSTAGE PAID PEARL PRESSMAN LIBERTY COMMUNICATIONS GROUP