NOTICE OF PENDENCY OF CLASS ACTION AND PROPOSED SETTLEMENTS

Transcription

1 UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY P. SCHOENFELD ASSET MANAGEMENT LLC, on behalf of itself and all others similarly situated, Plaintiff, - against - Civ. No (WHW) CENDANT CORP., WALTER A. FORBES, E. KIRK SHELTON, COSMO CORIGLIANO, CHRISTOPHER MC LEOD and ERNST & YOUNG, LLP, Defendants. NOTICE OF PENDENCY OF CLASS ACTION AND PROPOSED SETTLEMENTS TO: ALL PERSONS WHO PURCHASED OR OTHERWISE ACQUIRED SHARES OF AMERICAN BANKERS INSURANCE GROUP, INC. COMMON STOCK FROM JANUARY 27, 1998 THROUGH AND INCLUDING OCTOBER 13, 1998 (THE CLASS ) SUMMARY OF THE SETTLEMENTS Statement of Plaintiff Recovery Lead Plaintiff, P. Schoenfeld Asset Management LLC ( Schoenfeld or Lead Plaintiff ), represented by Lead Counsel, Abbey Spanier Rodd Abrams & Paradis, LLP ( Lead Counsel ), has entered into two proposed settlements that together will resolve all claims of the Lead Plaintiff and the Class against all defendants ( Defendants ) in this action (the Litigation ), as further described below. (All capitalized terms in this Notice are subject to and shall be controlled by the definitions set forth in the Stipulations of Settlement described below.) One proposed settlement is with Ernst & Young LLP ( E&Y ); the other is with Cendant Corporation ( Cendant ). These two proposed settlements (collectively, the Settlements ) are separate and independent. The settlement with Cendant (the Cendant Settlement ) is for $22,000,000 in cash, plus interest, and the settlement with E&Y (the E&Y Settlement ) is for $4,000,000 in cash, plus interest. Together, the Settlements will create two settlement funds (the Settlement Funds ) that total $26,000,000 in cash, plus interest. The amount of recovery per share will depend on when Class Members purchased and sold American Bankers Insurance Group, Inc. ( ABI ) common stock, the number of shares affected, and the amount of inflation per share, as more fully described below in the Plan of Allocation attached to this Notice. The experts on damages retained by Lead Plaintiff calculated that approximately 78.2 million shares of ABI common stock were traded between January 27, 1998 and October 13, 1998, inclusive (the Class Period ). Assuming that all eligible Persons in the Class elect to participate in the Settlements and both the Cendant Settlement and the E&Y Settlement are approved by the District Court, the average recovery for Persons in the Class who purchased prior to April 16, 1998 will be approximately $0.572 per share from the Settlements. Most Persons in the Class who purchased before April 16, 1998 will receive between $0.64 and $1.46 per share. The average recovery for Persons in the Class who purchased between April 16, 1998 and October 13, 1998 will be approximately 10.7 cents per share from the Cendant Settlement. Persons in the Class who purchased between April 16, 1998 and October 13, 1998 are not eligible to recover from the E&Y Settlement. Some Class

2 Members may recover more than the average and some may recover less, depending on when their shares were acquired, as more fully described in the accompanying Plan of Allocation of Net Settlement Fund ( Plan of Allocation ). Recovery amounts will be reduced by court-approved fees and expenses, as further explained below. Statement of Potential Outcome of Case The parties disagree on both liability and damages and do not agree on the average amount of damages per share that would be recoverable if Lead Plaintiff prevailed on all of its claims on behalf of the Class. Defendants deny that they are liable to Lead Plaintiff or the Class and deny that Lead Plaintiff or the Class have suffered any recoverable damages. Statement of Attorneys Fees and Costs Sought Lead Counsel will make an application to the United States District Court for the District of New Jersey (the District Court ) for an award of attorneys fees not to exceed one-third of the combined Cendant and E&Y Settlement Funds, and for reimbursement of costs and expenses, not to exceed $250,000, incurred in prosecuting the Class s claims. The total amount of such attorneys fees, costs, and expenses, if approved by the District Court, will be an average of approximately $0.196 per share for shares purchased before April 16, 1998 and $0.037 per share for shares purchased on or after April 16, Application will also be made for reimbursement to Lead Plaintiff of its reasonable costs and expenses incurred directly relating to the representation of the Class in an amount not to exceed $35,000. Lead Counsel has expended considerable time and effort in the prosecution of the Litigation on a contingent fee basis, and has advanced the expenses of the Litigation in the expectation that if Lead Counsel was successful in obtaining a recovery for the Class, Lead Counsel would be paid from such recovery. Identification of Attorneys Representatives Lead Counsel, identified below, is available to answer questions from Persons in the Class concerning any matter contained in this Notice: Jill S. Abrams, Esq. Abbey Spanier Rodd Abrams & Paradis, LLP 212 East 39th Street New York, NY (212) Reasons for the Settlements The principal reason for the Settlements is the benefit to be provided to the Class now. In summary, Lead Plaintiff believes that the Settlements are fair, reasonable, adequate and in the best interests of the Class considering the amount of the Settlements, the percentage of damages recovered, and the immediacy of recovery to the Class. Lead Plaintiff further recognizes and acknowledges the expense and length of continued proceedings that would be necessary to prosecute the Litigation against the Defendants through trial and appeals. Lead Plaintiff has considered the uncertain outcome and that the risks involved in succeeding at trial are substantial. The Private Securities Litigation Reform Act s proportionate liability requirements, under which a defendant may be obligated to pay only for the portion of damages for which that defendant is held responsible, may very well have placed a high proportion of liability on the Individual Defendants Walter A. Forbes, E. Kirk Shelton, Christopher K. McLeod, Cosmo Corigliano who would not have been able to shoulder anywhere near the amount that Cendant and E&Y have agreed to pay in the Settlements. The risks involved in reviving the post-april 15, 1998 claims are enormous given their dismissal by the District Court and the grounds for that dismissal. It is unlikely that the Class could have recovered the maximum amount 2

3 of estimated damages even if Lead Plaintiff prevailed at trial on all claims against E&Y, Cendant and the Individual Defendants in light of: (1) challenges to Lead Plaintiff s legal theories; (2) substantial disputes as to the underlying facts, (3) challenges to Lead Plaintiff s damages calculation; and (4) defenses to the amount of damages. PLEASE READ THIS NOTICE CAREFULLY AND IN ITS ENTIRETY. THIS NOTICE RELATES TO PROPOSED SETTLEMENTS OF THIS CLASS ACTION AND, IF YOU ARE IN THE CLASS, CONTAINS IMPORTANT INFORMATION AS TO YOUR RIGHTS CONCERNING THE SETTLEMENTS. Purpose of this Notice; Hearing 1. On April 10, 2006, the District Court preliminarily certified the following class: All persons who purchased or otherwise acquired shares of ABI common stock from January 27, 1998 through and including October 13, Excluded from the Class are Cendant, E&Y, each of their past, present and future partners, members, officers, directors, and executives, the Individual Defendants, Cendant Membership Services, Inc., James E. Buckman, Scott E. Forbes, Kevin T. Kearney, Michael P. Monaco, Anne M. Pember, Casper Sabatino, Mary Sattler, Henry R. Silverman and Steven P. Speaks, members of the immediate family of each of the foregoing, any entity in which any defendant has a controlling interest and the parents, subsidiaries, affiliates, legal representatives, heirs, executors, administrators, guardians, trustees, predecessors, successors and assigns of any such excluded party. Any Person in the Class who excludes him, her or itself from the Class by filing a request for exclusion in accordance with the requirements set forth in paragraph 35 below also will be excluded from the Class. 2. This Notice has been sent to you pursuant to Rule 23 of the Federal Rules of Civil Procedure and an Order of the District Court, dated April 10, The purpose of this Notice is to inform you of the Settlements with Defendants for the combined amount of $26,000,000, plus interest. If approved, the Settlements will resolve all claims of Lead Plaintiff and all Class Members against all Defendants. If the Settlements are approved, all of the Class Members claims will be released against the Cendant Released Parties and the E&Y Released Parties (as those terms are defined in the Stipulations, which definitions are set forth below). 3. A hearing (the Settlement Hearing ) will be held on July 24, 2006 at 10:00 a.m. before the Hon. William H. Walls, U.S.D.J., or any other judge sitting in his stead, at the Martin Luther King, Jr. Federal Building and U.S. Courthouse, Courtroom 4D, at 50 Walnut Street, Newark, New Jersey At the Settlement Hearing, the District Court will consider whether: (a) the Settlements should be approved as fair, reasonable and adequate to the Class; (b) the Plan of Allocation (described below) is fair and reasonable and should be approved; (c) Lead Counsel s application for an award of attorney s fees and reimbursement of costs and expenses should be approved as fair and reasonable; and (d) Lead Plaintiff s application for reimbursement of costs and expenses should be approved as fair and reasonable. Background of the Litigation and the Settlements 4. On October 14, 1998 and November 25, 1998, Schoenfeld and George Semerenko ( Semerenko ), respectively, filed class actions in the District Court against Cendant and the Individual Defendants alleging violations of the Securities Exchange Act of 1934 (the Exchange Act ) on behalf of themselves and a class of purchasers of shares of ABI common stock from March 23, 1998 through and including October 13, On February 9, 1999, Schoenfeld and Semerenko each filed an amended complaint (the Amended Complaints ) adding E&Y as a defendant and expanding the alleged class period to January 27, 1998 through and including October 13, Schoenfeld s and Semerenko s claims were based on one of two theories, depending on whether purchases of ABI stock were made before or after April 15, 1998, the date on which Cendant publicly disclosed that it had discovered accounting irregularities. Plaintiffs claims based on purchases of ABI common stock 3

4 prior to April 15, 1998 were founded on allegations that E&Y, Cendant and the Individual Defendants violated Section 10(b) of the Exchange Act by issuing or allowing to be issued materially false and misleading statements about Cendant s financial condition in the documents Cendant filed with the Securities and Exchange Commission in connection with the cash tender offer it commenced on January 27, 1998 for a majority of ABI s outstanding shares of common stock, and elsewhere. Plaintiffs post-april 15, 1998 claims against Cendant and the Individual Defendants were founded on allegations that Cendant violated Section 10(b) of the Exchange Act by making false and misleading statements concerning its intent to consummate an acquisition of ABI notwithstanding the accounting irregularities at CUC business units. 6. E&Y, Cendant and the Individual Defendants subsequently moved to dismiss the Amended Complaints on the ground that they failed to state a claim on which relief could be granted. E&Y contended, inter alia, that Plaintiffs had failed to allege that E&Y s alleged misrepresentations were made in connection with the purchase and sale of ABI securities. On April 30, 1999, the District Court granted the defendants motions and dismissed the Amended Complaints due to, inter alia, Plaintiffs failure to adequately plead the elements of reliance and loss causation, and because Plaintiffs had not alleged that the defendants misrepresentations were made in connection with the purchase or sale of ABI securities. P. Schoenfeld Asset Mgmt., LLC v. Cendant Corp., 47 F. Supp. 2d 546, 560, 562 (D.N.J. 1999). The District Court also dismissed, with prejudice, all claims asserted against E&Y on behalf of persons who purchased ABI common stock after April 15, On June 16, 2000, the United States Court of Appeals for the Third Circuit vacated the District Court s decision and remanded for further proceedings. Semerenko v. Cendant Corp., 223 F.3d 165, 187 (3d Cir. 2000). The Court of Appeals affirmed the dismissal with prejudice of all claims against E&Y asserted on behalf of persons who purchased ABI common stock after April 15, On December 15, 2000, Cendant moved the District Court for an order dismissing all claims based on purchases of ABI common stock made after April 15, 1998 for failure to plead fraud with particularity. On May 7, 2001, the District Court granted that motion and dismissed those claims. See P. Schoenfeld Asset Mgmt., LLC v. Cendant Corp., 142 F. Supp. 2d 589, 611 (D.N.J. 2001). 9. On May 22, 2001, the District Court consolidated the Semerenko action with and into the Schoenfeld action. Also on that date, pursuant to the District Court s May 7, 2001 order, Schoenfeld filed a Second Consolidated and Amended Complaint (the Second Amended Complaint ) setting forth additional facts as to defendant Christopher McLeod. On or about that same date, Schoenfeld moved the District Court for an order granting it leave to file an additional amended complaint that attempted to rectify certain pleading deficiencies identified by the District Court with respect to Schoenfeld s post-april 15, 1998 claims against Cendant on behalf of the Class. Cendant opposed that motion and on August 13, 2002, the District Court denied Schoenfeld s request. 10. On October 4, 2002, Cendant filed its answer to the Second Amended Complaint and asserted a crossclaim against E&Y for contribution pursuant to 15 U.S.C. 78u-4(f)(8). 11. On November 27, 2002, E&Y filed an answer to the Second Amended Complaint; an answer to Cendant s cross-claim; cross-claims and counterclaims against Cendant, the Individual Defendants; and third party claims against Cendant Membership Services, Inc., James E. Buckman, Scott. E. Forbes, Kevin T. Kearney, Michael P. Monaco, Anne M. Pember, Casper Sabatino, Mary Sattler, Henry R. Silverman and Steven P. Speaks. In this document, E&Y asserted, inter alia, claims for contribution pursuant to 15 U.S.C. 78u-4(f)(8). 12. All of the Defendants have denied the material allegations of the Amended Complaints and asserted various defenses. 13. On January 27, 2004, Schoenfeld moved for an Order certifying the Class pursuant to Rule 23 of the Federal Rules of Civil Procedure. Class discovery was conducted thereafter. On February 24, 2005, Cendant, E&Y and Walter A. Forbes each filed papers in opposition to Schoenfeld s motion for class certification. 4

5 14. Lead Counsel has conducted an extensive investigation relating to the allegations of wrongdoing pertaining to each defendant in the Litigation and the alleged damages suffered by the Class, including the review of hundreds of thousand of documents produced by Cendant, the Individual Defendants, E&Y, the Florida Department of Insurance and third parties relating to the issues in the case. Lead Counsel also consulted extensively with experts retained to review and advise on various issues in the case, including the damages that Lead Plaintiff would seek to prove at any trial. 15. Settlement negotiations between Lead Counsel and counsel for Cendant, and between Lead Counsel and counsel for E&Y, occurred during the spring and summer of On April 10, 2006, the Parties presented to the District Court separate proposed stipulations of settlement between Lead Plaintiff and Cendant (the Cendant Stipulation ) and between Lead Plaintiff and E&Y (the E&Y Stipulation ) (together, the Stipulations ). Description of the Settlements 16. The Cendant Settlement, which provides for a full settlement of the Litigation against Cendant and the Individual Defendants, is for $22,000,000 in cash (the Cendant Settlement Amount ). 17. The E&Y Settlement, which provides for a full settlement of the Litigation against E&Y, is for $4,000,000 in cash (the E&Y Settlement Amount ). 18. Simple interest will accrue on both the Cendant Settlement Amount and the E&Y Settlement Amount (less $150,000 to be advanced from each of the Cendant Settlement Amount and E&Y Settlement Amount to Lead Plaintiff for the cost of providing notice to the Class and for settlement administration) beginning on the date of District Court approval of the Settlements at the lesser of: (a) the federal funds target rate published in The Wall Street Journal on the date of District Court Approval of the Settlements or (b) 5% simple interest per year. Such interest shall continue to accrue on the respective Settlement Amounts through the date on which Cendant makes the payment of the Cendant Settlement Amount, as provided in the Cendant Stipulation, and E&Y makes the payment of the E&Y Settlement Amount, as provided in the E&Y Stipulation, which is required to be no later than five (5) business days following the date on which the Settlements becomes final and are no longer subject to any appellate review (the Effective Date ). 19. All costs and expenses incurred by or on behalf of the Lead Plaintiff and the Class associated with the Settlements including, but not limited to, any administrative costs and costs of providing notice of the Settlements to the Class, will be paid in equal amounts from the two Settlement Funds. Any award by the District Court of attorneys fees and expenses to Lead Counsel and/or Lead Plaintiff will be paid separately from each of the two Settlement Funds in such amounts as the District Court approves and directs. Releases and Dismissal of the Action 20. If the Cendant Settlement is approved, in consideration for the Cendant Settlement Amount, the District Court will enter an Order and Final Judgment that will dismiss all the Class Members claims against Cendant and the Individual Defendants with prejudice. The District Court will bar and permanently enjoin Lead Plaintiff and each Class Member (with the exception of those who timely and properly request exclusion from the Class by June 30, 2006), whether or not such Class Member has submitted a Proof of Claim, from prosecuting any Released Claims (as defined below in paragraph 24) against any of the Cendant Released Parties (as defined below in paragraph 22), and each such Class Member shall be conclusively deemed to have fully, finally and forever released, relinquished and discharged any and all such Released Claims against the Cendant Released Parties. 21. If the E&Y Settlement is approved, in consideration for the E&Y Settlement Amount, the District Court will enter an Order and Final Judgment that will dismiss all the Class Members claims against E&Y with prejudice. The District Court will bar and permanently enjoin Lead Plaintiff and each Class Member (with the exception of those who timely and properly request exclusion from the Class by June 30, 2006), whether or not such Class Member has submitted a Proof of Claim, from prosecuting any Released Claims 5

6 (as defined below in paragraph 24) against any of the E&Y Released Parties (as defined below in paragraph 23), and any such Class Member shall be conclusively deemed to have fully, finally and forever released, relinquished and discharged any and all such Released Claims against the E&Y Released Parties. 22. Cendant Released Parties means: (a) Cendant, its past, present and future parent entities, affiliates, subsidiaries, predecessors and successors, and each of their assigns, insurers, partners, officers, directors, controlling persons, representatives, employees, agents, attorneys, counsel, underwriters, and financial or investment advisors; (b) the Individual Defendants and each of their successors, assigns, agents, heirs, executors, trustees, personal representatives, estates or administrators; and (c) Cendant Membership Services, Inc., James E. Buckman, Scott E. Forbes, Kevin T. Kearney, Michael P. Monaco, Anne M. Pember, Casper Sabatino, Mary Sattler, Henry R. Silverman and Steven P. Speaks and each of their successors, assigns, agents, heirs, executors, trustees, personal representatives, estates or administrators. 23. E&Y Released Parties means E&Y and its past, present and future parent entities, affiliates, subsidiaries, predecessors, and successors and each of their assigns, insurers, partners, principals, members, officers, directors, controlling persons, representatives, employees, agents, attorneys, counsel, executors, trustees and administrators, as well as the assigns, heirs, insurers, executors, trustees, general or limited partners or partnerships, personal representatives, estates, administrators, families and spouses of each of the foregoing. 24. Released Claims means any and all claims, actions and causes of action in law or in equity or otherwise, suits, obligations, debts, demands, agreements, promises, liabilities, controversies, damages, losses, attorneys fees, costs or expenses of any kind whatsoever, whether based on common law or on any federal, state, local or administrative statute, rule, regulation, or other law or right of action, foreseen or unforeseen, matured or unmatured, known or unknown, accrued or not accrued, suspected or unsuspected, fixed or contingent, and whether or not concealed or hidden, that are based upon, relate to, arise from or are connected in any way with any transaction involving ABI common stock during the Class Period, including, without any limitation upon the generality and scope of the foregoing, and simply in order to describe the foregoing, claims that: (a) are based upon, relate to, arise from or are connected in any way with any facts, circumstances, statements, omissions, events or other matters alleged or referred to in the Amended Complaints, the Second Amended Complaint, or any other complaints filed in the Litigation; or (b) have been or could have been asserted against the Cendant Released Parties or the E&Y Released Parties by or on behalf of Lead Plaintiff or the Class in the Amended Complaints, the Second Amended Complaint, or any other complaints filed in the Litigation. 25. Unless otherwise ordered by the District Court, each Class Member who does not timely and properly request exclusion from the Class in the manner provided below in paragraph 35 shall be deemed to have waived, and by operation of the Order and Final Judgment shall have waived, (a) any and all rights and benefits conferred by Section 1542 of the Civil Code of the State of California, which provides as follows: A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of execution of the release, which if known by him must have materially affected his settlement with the debtor, and (b) any and all provisions, rights and benefits conferred by any law of any state or territory of the United States, or principle of common law, which is similar, comparable, or equivalent to Section 1542 of the Civil Code of the State of California. Each such Class Member shall also be deemed to have: (a) acknowledged the significance and consequences of this waiver of the provision of Section 1542 and any similar laws; (b) waived the provisions and protections of Section 1542 and any similar laws; and (c) assumed full responsibility for any loss that may be incurred by reason of such waiver, or by reason of their release of any unknown and unsuspected claims. Distribution of Settlement Funds; Plan of Allocation 26. After approval of the respective Settlements by the District Court and upon satisfaction of the other conditions to the Settlements, the Settlement Funds will be distributed as follows: (a) To pay all costs and expenses incurred in connection with providing notice to the Class, locating 6

7 Persons in the Class, soliciting claims, assisting with the filing of claims, administering and distributing the Settlement Funds to the Class Members, processing proofs of claim, processing requests for exclusion and costs; (b) To pay taxes and related expenses owed by or in relation to the Settlement Funds; (c) Subject to the approval and further order(s) of the District Court, for payment of all attorneys fees and expense reimbursement as may be awarded by the District Court to Lead Counsel and/or Lead Plaintiff; (d) Subject to approval and further order(s) of the District Court, and upon the Effective Date, to distribute the remainder of the Settlement Funds (the Net Settlement Funds ) to Class Members who submit a valid Proof of Claim ( Authorized Claimants ) as provided in the Cendant Stipulation and E&Y Stipulation and in the manner set forth in the Plan of Allocation, or as otherwise ordered by the District Court. 27. There will be no return to Cendant or E&Y of any settlement payment if the Settlements are finally approved and the Effective Date occurs. All Settlement Funds will be used, as described above, for the benefit of Class Members. 28. The complete proposed Plan of Allocation, which was prepared by Lead Counsel without any involvement by Defendants and which includes a detailed description of the reasons for the Plan as presented, is annexed at the end of this Notice. Lead Plaintiff has reviewed the Plan of Allocation and recommends that it be approved as fair, reasonable and in the best interests of the Class. 29. Approval of the Settlements is independent from approval of the Plan of Allocation. Any modification or other determination with respect to the Plan of Allocation will not affect the Settlements, if approved. 30. Neither Cendant nor E&Y shall have any liability or responsibility whatsoever to any Person with respect to any matter relating to the administration or distribution of the Settlement Funds, and no Person shall have any claim against E&Y or Cendant with respect to such matters under any circumstances. Cendant s and E&Y s complete and entire responsibility with regard to the Settlements shall be fully and finally discharged upon payment of the respective Settlement Amounts to the Escrow Agent as provided in the Stipulations. Participation in the Settlement; Proofs of Claim 31. Only those Persons in the Class who purchased or otherwise acquired shares of ABI common stock during the Class Period and were damaged thereby (with the exception of those who timely and properly request exclusion from the Class by June 30, 2006 as described in paragraph 35 below) are eligible to share in the distribution of the Net Settlement Funds. Each such Class Member must submit a Proof of Claim, which must be postmarked no later than August 24, 2006, to the address set forth in the attached Proof of Claim form. Unless otherwise ordered by the District Court, any Class Member who fails to submit a Proof of Claim post-marked by August 24, 2006 shall be forever barred from receiving any payments pursuant to the Settlements, but will, in all other respects, be subject to the provisions of the Cendant Stipulation and E&Y Stipulation, including the terms of any judgment entered and the releases given, as described in paragraphs 20 through 25 above. 32. The Proof of Claim, which accompanies this Notice, includes a general release of each of the Cendant Released Parties and E&Y Released Parties. Each Proof of Claim must be supported by such documents as specified in the Proof of Claim. 33. The District Court has reserved jurisdiction to allow, disallow or adjust, on equitable grounds, the claim of any Class Member. The District Court also reserves the right to modify the Plan of Allocation without further notice to the Class. Payment pursuant to the Plan of Allocation attached hereto or as modified by the District Court shall be conclusive against all Authorized Claimants. 7

8 Exclusion from the Settlement 34. Any Person in the Class who wants to maintain the right to sue one or more of the Cendant Released Parties or E&Y Released Parties about the legal issues in this case must exclude him, her or itself from the Class. Any Person who excludes him, her, or itself from the Class will not be eligible to receive any payment from the Settlement Funds. Lead Plaintiff has entered into separate side letters with each of Cendant and E&Y providing, respectively, that Cendant may terminate the Cendant Settlement and E&Y may terminate the E&Y Settlement if Class members representing a specified percentage of the maximum number of shares of ABI common stock outstanding at any time during the Class Period elect to exclude themselves from the Class. 35. If you wish to be excluded from the Class, you must submit a written request for exclusion that includes your name, address and telephone number. In your request for exclusion you should state: I wish to be excluded from the class. Your letter should state the date(s), price(s) and number(s) of shares of all your purchases or other acquisitions and sales or other dispositions of any ABI common stock during the Class Period. Your mailed request for exclusion must be postmarked no later than June 30, If you choose to be excluded from the Class, please mail your request to the Claims Administrator at: ABI/Cendant Securities Litigation c/o Berdon Claims Administration LLC Post Office Box 9014 Jericho, NY If you ask to be excluded from the Class, you will not receive any distribution from the Net Settlement Fund, and you cannot object to the Settlements. You will not be legally bound by anything that happens in this lawsuit, and you may be able to sue one or more of the Cendant Released Parties and E&Y Released Parties in the future if you wish to do so. The Settlement Hearing 37. On July 24, 2006 at 10:00 a.m., the Honorable William H. Walls, or any other judge sitting in his stead, will hold a hearing (the Settlement Hearing ) in Courtroom 4D of the Martin Luther King, Jr. Federal Building and U.S. Courthouse, located at 50 Walnut Street, Newark, New Jersey 07101, for the purpose of separately considering: (a) Whether the Litigation should be certified as a class action on behalf of the Class for purposes of the Settlements only; (b) Whether an Order and Final Judgment should be entered: (i) approving the Cendant Settlement as fair, reasonable and adequate; (ii) dismissing with prejudice claims made on behalf of the Class against Cendant and the Individual Defendants; and (iii) barring all Class Members from prosecuting, pursuing, or litigating any of the Released Claims against any of the Cendant Released Parties; (c) Whether an Order and Final Judgment should be entered: (i) approving the E&Y Settlement as fair, reasonable and adequate; (ii) dismissing with prejudice claims made on behalf of the Class against E&Y; and (iii) barring all Class Members from prosecuting, pursuing, or litigating any of the Released Claims against any of the E&Y Released Parties; (d) Whether the proposed Plan of Allocation should be approved as fair, reasonable and adequate; (e) Whether and in what amount to approve Lead Counsel s application for attorneys fees and reimbursement of costs and expenses; and 8

9 (f) Whether and in what amount to approve Lead Plaintiff s application for reimbursement of costs and expenses. 38. The Settlement Hearing may be continued or adjourned from time to time by the District Court at the Settlement Hearing or any continued or adjourned session thereof without further notice to the Class or Class Members. 39. Any Class Member who does not exclude him, her or itself from the Class may appear at the Settlement Hearing and be heard on any of the foregoing matters, provided, however, that no such person shall be heard unless his, her or its objection or opposition is made in writing and is filed, together with copies of all other papers and briefs that he, she or it wishes to be considered at the Settlement Hearing and served no later than June 30, 2006, showing due proof of such service, on Lead Counsel: Jill S. Abrams, Esq. Abbey Spanier Rodd Abrams & Paradis, LLP 212 East 39th Street New York, NY and on counsel for Cendant: Samuel Kadet, Esq. William F. Clarke, Jr., Esq. Skadden, Arps, Slate, Meagher & Flom LLP Four Times Square New York, NY and on counsel for E&Y: Bennett W. Lasko, Esq. Mayer, Brown, Rowe & Maw LLP 71 S. Wacker Drive Chicago, IL Unless otherwise ordered by the District Court, any Class Member who does not make and serve his, her or its objection or opposition in the manner described above shall be deemed to have waived all objections and opposition to the Settlements and any matters connected with them. Notice to Banks, Brokers and Other Nominees 41. Banks, brokerage firms, institutions, and other persons who are nominees who purchased or otherwise acquired ABI common stock during the Class Period, are required within ten (10) days of receipt of this Notice, to: (a) provide the Claims Administrator with the names and addresses of the beneficial owners of stock, preferably in an MS Excel data table, setting forth: (i) title/registration; (ii) street address; (iii) city/state/zip, electronically in MS Word or WordPerfect files (label size Avery 5162) or on computer generated mailing labels; or (b) forward a copy of this Notice to each such beneficial owner and provide the Claims Administrator with written confirmation that the Notice has been so forwarded. You are entitled to the reimbursement of any reasonable expenses actually incurred in the research of records and either providing them to the Claims Administrator or mailing this Notice to your beneficial owners after submitting a written request 9

10 and supporting documentation to the Claims Administrator. Any such correspondence in compliance with this paragraph should be addressed to the Claims Administrator as follows: ABI/Cendant Securities Litigation c/o Berdon Claims Administrator LLC Post Office Box 9014 Jericho, NY Telephone: (800) Facsimile: (516) Website: Examination of Papers and Inquiries 42. This Notice contains only a summary of the terms of the proposed Settlements. For a more detailed statement of the matters involved in this Litigation, reference is made to the pleadings, to the Cendant and E&Y Stipulations and to other papers filed in this Litigation which may be inspected at the Office of the Clerk of the United States District Court for the District of New Jersey, Martin Luther King, Jr. Federal Building & U.S. Courthouse, 50 Walnut Street, Newark, New Jersey during regular business hours of each business day. The Cendant and E&Y Stipulations represent the entire agreements between Lead Plaintiff and Cendant, and between Lead Plaintiff and E&Y, respectively, and any inconsistencies between the Stipulations and this Notice will be controlled by the language of the Stipulations. 43. Inquiries regarding this Litigation and/or the Settlements should be addressed as follows: Jill S. Abrams, Esq. Abbey Spanier Rodd Abrams & Paradis, LLP 212 East 39th Street New York, NY (212) Additional copies of the Notice and Proof of Claim or copies of the Stipulations of Settlement can be requested by contacting the Claims Administrator as set forth above. PLEASE DO NOT CONTACT THE DISTRICT COURT REGARDING THIS NOTICE. Dated: April 24, 2006 BY ORDER OF THE COURT 10

11 PLAN OF ALLOCATION OF NET SETTLEMENT FUND AMONG CLASS MEMBERS A. The Net Settlement Fund ($26 million plus the interest earned thereon less all taxes, approved costs, fees and expenses) will be distributed to members of the Class who submit valid Proofs of Claim ( Authorized Claimants ). You must submit the completed claim form and the required documentation so that it is either postmarked or otherwise received by the Claims Administrator no later than August 24, B. The Claims Administrator shall determine each Authorized Claimant s pro rata share of the Net Settlement Fund based upon each Authorized Claimant s Recognized Loss. The Recognized Loss formula is not intended to be an estimate of the amount of what a Class Member might have been able to recover after a trial; nor is it an estimate of the amount that will be paid to Authorized Claimants pursuant to the Settlement. The Recognized Loss formula is the basis upon which the Net Settlement Fund will be proportionately allocated to the Authorized Claimants. C. The proposed Plan of Allocation reflects Plaintiffs allegations that from the beginning of the Class Period on January 27, 1998 through April 15, 1998, the trading prices of ABI common stock were higher than they would have been had the defendants not materially misrepresented the financial condition of Cendant. The proposed Plan of Allocation takes into account the fact that Plaintiffs claims against E & Y were only for the period January 27, 1998 to April 15, 1998 and that E&Y s $4 million settlement payment will be applied only to Class Members purchases during that time period. The proposed Plan also takes into account that the District Court dismissed Plaintiffs claims that, for the period from April 16, 1998 through October 13, 1998, Cendant and the Individual Defendants had made materially false and misleading statements regarding their intent to consummate the ABI acquisition, notwithstanding the accounting irregularities at Cendant s CUC business units. As a result, persons who purchased ABI shares during that time period will receive 10% of their damages. D. Based on the foregoing, and for purposes of this Settlement only, Recognized Loss will be calculated as follows: 1. For each share of ABI common stock purchased during the period January 27, 1998 through February 27, 1998, and: a. sold prior to September 24, 1998, the Recognized Loss is zero; b. sold during the period September 24, 1998 through October 13, 1998, the Recognized Loss is $0.06 per share; c. sold during the period October 14, 1998 through January 11, 1999, the Recognized Loss is $0.10 per share; d. retained through January 11, 1999, the Recognized Loss is $0.10 per share. 2. For each share of ABI common stock purchased during the period March 2, 1998 through March 13, 1998, and: a. sold prior to April 16, 1998, the Recognized Loss is zero; b. sold during the period April 16, 1998 through July 14, 1998, the Recognized Loss is $0.94 per share; c. retained through July 14, 1998, the Recognized Loss is $0.64 per share. 3. For each share of ABI common stock purchased during the period March 16, 1998 through April 15, 1998, and: a. sold prior to April 16, 1998, the Recognized Loss is zero; b. sold during the period April 16, 1998 through July 14, 1998, the Recognized Loss is $1.46 per share; 11

12 c. retained through July 14, 1998, the Recognized Loss is $1.46 per share. 4. For each share of ABI common stock purchased during the period April 16, 1998 through July 13, 1998, and: a. sold prior to July 14, 1998, the Recognized Loss is zero; b. sold during the period July 14, 1998 through September 23, 1998, the Recognized Loss is $0.02 per share; c. sold during the period September 24, 1998 through October 13, 1998, the Recognized Loss is $0.13 per share; d. sold during the period October 14, 1998 through January 11, 1999, the Recognized Loss is $0.19 per share; e. retained through January 11, 1999, the Recognized Loss is $0.18 per share. 5. For each share of ABI common stock purchased during the period July 14, 1998 through September 23, 1998, and: a. sold prior to September 24, 1998, the Recognized Loss is zero; b. sold during the period September 24, 1998 through October 13, 1998, the Recognized Loss is $0.11 per share; c. sold during the period October 14, 1998 through January 11, 1999, the Recognized Loss is $0.15 per share; d. retained through January 11, 1999, the Recognized Loss is $0.13 per share. 6. For each share of ABI common stock purchased during the period September 24, 1998 through October 6, 1998, and: a. sold prior to October 7, 1998, the Recognized Loss is zero; b. sold during the period October 7, 1998 through October 13, 1998, the Recognized Loss is $0.06 per share; c. sold during the period October 14, 1998 through January 11, 1999, the Recognized Loss is $0.04 per share; d. retained through January 11, 1999, the Recognized Loss is $0.01 per share. 7. For each share of ABI common stock purchased during the period October 7, 1998 through October 13, 1998, the Recognized Loss is zero. E. General Provisions 1. FIFO: In processing claims, the first-in, first-out basis ( FIFO ) will be applied to both purchases and sales. 2. Prices: The price per share, paid or received, shall be exclusive of all commissions, taxes and fees. 3. Short Sales: The date of covering a short sale is deemed to be the date of purchase of ABI common stock. The date of a short sale is deemed to be the date of sale of ABI common stock. Shares originally sold short prior to the Class Period will have a zero Recognized Loss. 4. Purchase/Sale Dates: The date of a purchase or sale of ABI common stock is the trade date, and not the settlement date. 12

13 5. De Minimis: No payment will be made on any claims where the potential distribution amount is $10 or less, but the Authorized Claimant will otherwise be bound by the final judgment entered by the Court. 6. Electronic Filing: If your trading activity during the Class Period exceeds 50 transactions, you must provide, in an electronic file, all purchase and sale information required in the Schedule of Transactions. For a copy of instructions and parameters concerning such a submission, contact the Claims Administrator by phone: (800) ; by fax (516) ; or via the website at: 7. Supporting Documentation: You must attach to your claim form copies of brokerage confirmations, monthly statements or other documentation of your transactions in ABI common stock in order for your claim to be valid. If such documents are not available, a complete list of acceptable supporting documentation can be found on the Claims Administrator s website: Failure to provide this documentation could delay verification of your claim or result in rejection of your claim. 13