SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK JINETTE GERVE, individually and on behalf of all others similarly situated, Index No. 157953/2012 Plaintiff, - against - B & H HEALTHCARE SERVICES, INC. DIBIA NURSING PERSONNEL HOME CARE AND WALTER GREENFIELD, Defendants. STIPULATION AND AGREEMENT OF SETTLEMENT This Stipulation and Agreement of Settlement ("Stipulation" or "Agreement") is entered into between (i) Plaintiff Jinette Gerve ("Plaintiff') and the Settlement Class, and (ii) Defendants B & H Healthcare Services, Inc., doing business as Nursing Personnel Home Care ("B&H"), and Walter Greenfeld s/h/a "Walter Greenfield" ("Greenfeld") (collectively, "Defendants"), by and through their undersigned attorneys. This Settlement Agreement states all of the terms of the settlement of this case ("Settlement") and is intended by the parties to fully and finally compromise, resolve, discharge, and settle the Released Claims subject to the terms and conditions set forth below. WHEREAS: The Litigation a. On November 13, 2012, Plaintiff served Defendants with a summons and notice, notifying them of her causes of action, and those of the class, against them.
b. On January 11, 2013, Defendants' original counsel, Goldberg & Rimberg, PLLC, appeared in the action and demanded service of a complaint. c. On April 30, 2013, Plaintiff served the complaint, alleging claims on behalf of a class of all current and former hourly paid home health care workers employed by Defendants in New York for work performed during the period November 13, 2006 through the date of judgment. The Class Action Complaint asserted violations of the New York Labor Law for failure to pay all wages due. d. Defendants moved to dismiss the complaint on June 21, 2013, claiming that documentary evidence demonstrated that Plaintiff had been paid all wages owed. On June 25, 2013, the parties entered into a stipulation extending Plaintiffs time to respond to Defendants' motion. e. On October 29, 2013, following full briefing and argument, this Comt denied Defendants' motion to dismiss by Decision and Order. f. On November 26, 2013, Defendants answered the Complaint. g. Plaintiff served a Notice to Produce on Defendants on November 4, 2013. h. Because of delays in discovery, Plaintiff repeatedly moved for extensions of time to move for class certification and this Court repeatedly granted Plaintiffs motions for extensions. l. On February 25, 2014, a Consent to Substitution of Counsel was filed with this Court substituting Tarter Krinsky & Drogin LLP as the attorneys for defendant Greenfeld in place of Goldberg & Rimberg, PLLC. After the consent to Substitution of Counsel was filed defendant Greenfeld sought a two or three week extension of time to produce documents. Plaintiff consented to this request. 2
j. On March 25, 2014, Defendants began their production of documents relating to Plaintiff and to Defendants' defenses, including documents with confidential information redacted and various redacted documents from its settlement with the New York State Department of Labor ("NY DOL"). Along with that production, Defendants served a draft proposed Stipulation and Order for the Production and Exchange of Confidential Information ("Confidentiality Stipulation"). Plaintiffs counsel returned a signed copy of the proposed Confidentiality Stipulation on April 22, 2014, which was so ordered by the Court on April 25, 2014. k. On April 17, 2014, Plaintiff submitted a FOIL request to the NY DOL, seeking documents regarding the NY DOL's investigation into wage claims against Defendant. Those documents were produced on December 30, 2014. l. On April 29, 2014, Defendants produced unredacted versions of the previously redacted documents pursuant to the Confidentiality Stipulation and filed an Amended Answer with Affirmative Defenses including, but not limited to, the defenses that Plaintiff is not a proper class representative and that Plaintiffs claims and the claims of the purported class are barred in whole or in part by the Stipulation of Settlement, with the NY DOL, covering the investigation of payment of wages from August 10, 2009, through November 19, 2013 ("NY DOL Settlement Period"). m. On May 1, 2014, Plaintiffs counsel advised that they had not received payroll records for the putative class members, the parties agreed to schedule a time to meet and confer regarding class discovery for May 7, 2014, and Defendants' counsel suggested requesting a preliminary conference with the Court to help facilitate discovery. 3
n. On May 8, 2014, counsel for Greenfeld filed a request for a preliminary conference. (The Court scheduled a conference for February 9, 2015, and after two adjournments the conference was held on March 23, 2015.) Plaintiff pressed for class discovery throughout this period. o. From July through September 2014, the parties continued to dispute whether class discovery was appropriate, and Plaintiff continued to press for discovery of the class members' payroll records for the period from November 13, 2006 through the present and advised Defendants that she could not make a settlement demand and proceed to mediation without that data. p. On September 16, 2014, Defendants provided to Plaintiff the DOL audit documents for 2012 and 2013, maintaining that employees included in its settlement with the NY DOL for that time period should be excluded from the class. q. As of March 23, 2015, Defendants had not produced putative class member documents in response to Plaintiffs Notice to Produce. r. On April 24, 2015, a Consent to Substitution of Counsel was filed with this Court substituting Tarter Krinsky & Drogin LLP as the attorneys for defendant B & H Health Services, Inc., in place of Goldberg & Rim berg, PLLC. s. During a June 8, 2015 comt conference, the parties entered into a stipulation whereby Defendants agreed to "substantially complete" production of documents in response to Plaintiffs document requests by June 19, 2015, and produce payroll records in electronic form. Defendants produced over 4,000 putative class member documents, including W2 wage payment documents for 2006-2014, on June 17, 2015. 4
t. Between June 19, 2015 and June 30, 2015, Defendants produced approximately 468,014 documents including payroll from 2011-2015 and about 13 volumes ohime sheets from 2006-2015 via a secure drop box. u. Payroll info1mation had not yet been provided for the Class Period from November 2006 through August 2011. A Santrax spreadsheet produced on June 19, 2015 identified employees by Social Security number and reflected hours worked per day for the period September 27, 2007 through September 25, 2011, but this document did not provide any wage rate or pay rate information for this time period. v. In December 2015, Defendants began a rolling production of over 60,000 pages of payroll registers ranging from 2006-2015. The payroll registers were in a PDF format and identified employees by name and detailed the amounts of the employees' biweekly paychecks. Only the post-2011 payroll registers provided information regarding hours worked per day or per week, or any pay rate information. The only information regarding hours worked per day and per week for the time period of 2006-2011, and which identified employees by name, was contained in handwritten weekly duty sheets that Class members filled out for each client and submitted to Defendants. Defendants produced each weekly duty sheet as a separate PDF file due to the way they had been maintained. While these weekly manual time sheets were, for the most part, maintained in chronological order, they were maintained in an un-alphabetized order and produced accordingly. w. At a court conference on March 28, 2016, a Compliance Conference Order was issued memorializing that the parties had agreed to pursue class mediation with a private mediator. 5
x. On April 19, 2016, Plaintiffs counsel noticed the deposition of B & H's payroll record keeper. Plaintiffs deposition was noticed on April 25, 2014. y. By letter dated April 21, 2016, Plaintiff informed Defendants that she was unable to make a settlement demand based on the documents Defendants had produced. z. On April 29, 2016, Defendants produced a Daily Hours Report that included information on daily hours worked for each employee, identified by name, for the time period beginning November 13, 2006 through November 15, 2009 (which was produced in Excel Format and did not include any wages or wage rate information), for the production of which Defendants informed Plaintiff that they utilized an outside consultant. Plaintiff similarly hired an outside consultant to assess Class damages based on the records provided. The Mediation aa. On July 6, 2016, Plaintiffs Counsel and Defense counsel participated in a fullday mediation with a private mediator, Ruth Raisfeld, in an effort to resolve the Action. The parties reached a settlement in principle that day pursuant to which Defendants agreed to pay $1,050,000 to resolve this action and memorialized it in a Settlement Term Sheet signed that day. bb. On July 11, 2016, at a previously scheduled compliance conference, the parties informed the Court of the settlement in principle. The Court entered an order giving plaintiff until September 30, 2016 to move for preliminary approval of the Settlement. 6
Benefits of the Settlement to the Class cc. Plaintiff and Plaintiffs Counsel believe that the monetary recovery provided by the Settlement constitutes an excellent result for Class Members based on the claims asserted, the evidence developed, the damages that might be proved against Defendants, and the ability of Defendants to pay a judgment. dd. Plaintiff and Plaintiffs Counsel further recognize and acknowledge the expense and length of continued proceedings necessary to prosecute the Class Action against Defendants through trial and appeals. They have also considered the uncertain outcome and the risk of any litigation as well as the difficulties and delays inherent in any such litigation. They are further mindful of the risks of collecting on any judgment and the likely delay in obtaining a final judgment and collecting it for the Class. Therefore, Plaintiff believes that it is desirable that the Released Claims be fully and finally compromised, settled, and resolved with prejudice as set forth herein. Based upon their evaluation, Plaintiff and Plaintiffs Counsel have determined that the Settlement set forth in this Stipulation is fair, reasonable and adequate, and in the best interests of the Plaintiff and the Class Members, and that it confers substantial benefits upon the Class Members. ee. Defendants state that they are entering into this Settlement to eliminate the uncertainties, burden and expense of further protracted litigation. The parties fmther agree that neither the Stipulation, nor the Settlement, nor any of their terms, shall constitute an admission or finding of wrongful conduct, acts or omissions on the part of any Releasee, or be admissible as evidence of any such wrongful act or omission in any judicial, arbitral, administrative or investigative proceeding, other than a proceeding to enforce the terms of the Stipulation. 7
NOW, THEREFORE, IT IS HEREBY STIPULATED, CONSENTED TO AND AGREED, by Plaintiff, for herself and on behalf of the proposed Settlement Class, and Defendants, that subject to the approval of the Court, the Class Action shall be settled and compromised and dismissed as to the parties, on the merits and with prejudice and the Released Claims shall be finally and fully compromised and settled as to the Released Parties, in the manner and upon the terms and conditions hereafter set forth: Definitions 1. The following capitalized terms, used in this Stipulation, shall have the meanings specified below: a. "Agreement" or "Stipulation" means this Stipulation and Agreement of Settlement. b. "Class" or "Class Members" or "Settlement Class" means the Plaintiff, and all current or former hourly employees who worked for Defendant B & H Healthcare Services, Inc. in the State of New York during the period from November 13, 2006 through and including December 31, 2015. c. "Class Action" means the case Gerve v. B & H Healthcare Services, Inc. dlb!a Nursing Personnel Home Care and Walter Greenfield, filed in New York Supreme Court, County of New York, Index. No. 157953/2012. d. "Class Counsel" means the law firm of Abbey Spanier, LLP. e. "Class Counsel's Attorneys' Fees" means the amount of attorneys' fees, costs and expenses awarded by the Court upon Class Counsel's application for an award of attorneys' fees, costs and expenses, consistent with the Notice sent to members of the Class in connection with this Settlement. 8
f. "Settlement Class Period" means the period of time beginning November 13, 2006 through and including December 31, 2015. g. "Class Settlement Amount" means One Million, Fifty Thousand Dollars ($1,050,000), including Class Counsel's Attorneys' Fees, Incentive Award, Notice and Administration Costs, all as defined herein, to be paid by Defendants no later than October 6, 2016 into an escrow held by Tarter Krinsky & Drogin LLP, which shall be released to the Settlement Administrator no later than fifteen days after entry of a Final Order, as defined below in paragraph 1.1, in this action. h. "Code" means the Internal Revenue Code of 1986, as amended. i. "Court" means the Supreme Court of the State of New York, New York County, and any appellate court which may review any orders entered by the Supreme Court related to this Settlement. J. "Employee Taxes" mean all federal, state, and local taxes and other amounts that are required to be withheld by Defendants or by the Settlement Administrator on behalf of Defendants with respect to distributions of the Gross Taxable Class Payment paid from the Settlement Fund. k. "Employer Taxes" mean all federal, state, and local employment, unemployment, excise, or similar taxes and premiums on Defendants with respect to distributions from the Settlement Fund including Defendants' obligations to pay Social Security, Medicare, federal and state unemployment taxes and premiums, and Defendants' obligations to withhold certain Employee Taxes and specifically excluding Defendants' workers' compensation and disability obligations. Employer B & H Healthcare Services, Inc. shall pay its share of payroll taxes. 9
l. "Final Order" means the Order to be entered in the Class Action pursuant to paragraph 5 below. m. "Gross Taxable Class Payment" means the gross amount of compensation that all Class Members are entitled to receive from the Class Settlement Amount in payment for the Released Claims. n. "Incentive Award" means the amount, if any, approved by the Court as a reasonable incentive award to the Plaintiff as the sole class representative. o. "Notice" means a document substantially in the form attached hereto as Exhibit B, which shall be issued in English, Spanish, Russian, Haitian Creole, and Chinese. p. "Notice and Administration Costs" means the costs of providing notice and administering the Settlement as set forth in this Settlement Agreement. q. "Released Claims" means those claims released by the Class Members and the Plaintiff in connection with their employment in New York only in accordance with paragraph 19. r. "Settlement Administrator" means Strategic Claims Services, selected by Plaintiff to serve as the Court-appointed notice and settlement administrator. s. "Settlement Effective Date" means the first day following the last of the following occurrences: (i) The date the time to appeal or seek other judicial review! of the entry of the Final Order approving the Settlement has expired with no appeal or other judicial review having been taken or sought, provided however that the appeal of any order dealing solely with issues of allocation of the Settlement Fund shall not under any circumstances delay the Settlement Effective Date; or 10
(ii) If an appeal or other judicial review of the Final Order has been taken or sought: the date the Final Order is finally affirmed by an appellate court with no possibility of subsequent appeal or other judicial review therefrom in accordance with court rules; or the date the appeal(s) or other judicial review therefrom are finally dismissed with no possibility of subsequent appeal or other judicial review; or if remanded to the Court or to a lower appellate court following an appeal or other review, the date the Final Order is entered by the Court after remand and the time to appeal or seek permission to appeal or seek other judicial review of the entry of that Final Order has expired with no further appeal or other judicial review having been taken or sought. t. "Settlement Fund" means the Settlement Fund to be set up 111 accordance with the Agreement. u. "Tax Declaration" means a Form W-4 or such other analogous state or federal tax declaration as the Settlement Administrator may reasonably furnish to Class Members in accordance with this Agreement. v. "Treasury Regulations" mean the Treasury Regulations promulgated under the Code. Submission of the Settlement to Court for Approval 2. By October 14, 2016 or such other date as the parties may agree upon, Plaintiff shall apply to the Court for preliminary approval of the Settlement and for the scheduling of a hearing for consideration of final approval of the Settlement, and an application of an award of attorneys' fees, costs and expenses and incentive award for the Plaintiff. The parties agree to cooperate and take all steps necessary and appropriate to obtain preliminary and final approval of this Settlement, to effectuate its terms and to dismiss this action with prejudice. 11
3. Plaintiff shall apply to the Court for entry of the Preliminary Approval Order, substantially in the form attached hereto as Exhibit A: a. preliminarily approving the Settlement; b. appointing Strategic Claims Services as Notice and Settlement Administrator; c. certifying, pursuant to CPLR 901 and 902, the Settlement Class for settlement purposes only; d. appointing Jinette Gerve as Class Representative; e. appointing Abbey Spanier LLP as Class Counsel; f. setting a hearing (the "Fairness Hearing"), upon notice to the Class, to consider: (i) whether the Settlement should be approved as fair, reasonable and adequate to the Class Members, and dismissing the claims of Plaintiff and all Class Members against Defendants as set forth in this Stipulation, on the merits and with prejudice; and (ii) Class Counsel's application for an award of attorneys' fees, costs and expenses and for an incentive award for Plaintiff; g. setting the method of giving notice of the Settlement to the Class as described in the Proposed Preliminary Approval Order (Exhibit A) and in the Notice of Settlement of Class Action (Exhibit B); h. approving the form of notice attached hereto as Exhibit B; and i. setting a period of time during which members of the Class may opt out of or serve written objections to the Settlement or to the application for attorneys' fees, costs and expenses, as described in the Proposed Preliminary Approval Order (Exhibit A) and in the Notice of Settlement of Class Action (Exhibit B). 12
4. The parties hereby stipulate to certification of the Class, pursuant to Section 908 of the CPLR, solely for the purposes of the Stipulation and Settlement. 5. At the Fairness Hearing, Plaintiff shall request entry of a Final Order, substantially in the form attached hereto as Exhibit C, the entry of which is a condition of this Stipulation and Settlement: a. approving finally the Settlement as fair, reasonable and adequate, and directing its consummation pursuant to its terms; b. confirming certification of the Class solely for purposes of this Stipulation and the Settlement, and finding that each element for certification of the Class is met, for these limited purposes; c. resolving the Class Action and all of the claims asserted by the Class Members in the Litigation without costs (except as provided herein) and with prejudice, and releasing the Released Claims as against Defendants; d. reserving jurisdiction over this Class Action, including all further proceedings concerning the administration, consummation and enforcement of this Settlement; e. permanently barring, enjoining and finally discharging all claims as provided for in this Stipulation, below; and f. containing such other and further provisions consistent with the terms of this Settlement to which the parties hereto expressly consent in writing. 6. At the Fairness Hearing, Class Counsel may also request entry of an Order approving Class Counsel's application for an award of attorneys' fees, costs and expenses, consistent with the Notice sent to members of the Class in connection with this Settlement ("Class Counsel's Attorneys' Fees"). This disposition of Class Counsel's application for an 13
award of attorneys' fees and reimbursement of costs and expenses is not a material term of this Stipulation and it is not a condition of this Stipulation that such application be granted. Any disapproval or modification of the application for an award of attorneys' fees and reimbursement of costs and expenses by the Court shall not affect the enforceability of the Stipulation, provide any of the parties with the right to terminate the Settlement, or impose an obligation on Defendants to increase the Class Settlement Amount. Defendants will not oppose a reasonable application for attorneys' fees, costs and expenses made by Class Counsel, provided the amount of attorneys' fees, costs and expenses, when added to the Notice and Administration Costs, any Incentive Award, and the Gross Taxable Class Payment does not exceed the Class Settlement Amount. Class Counsel retains their rights to appeal any decision by the Court regarding the amount of the award of attorneys' fees, costs and expenses. Settlement Consideration 7. In full and complete settlement of the Class Action and the Released Claims, Defendants shall pay One Million, Fifty Thousand Dollars ($1,050,000) for the benefit of the Class (the "Class Settlement Amount") to the Settlement Fund. The Gross Taxable Class Payment, Class Counsel's Attorneys' Fees, any Incentive Award to the Plaintiff, and Notice and Administration Costs are to be paid out of the Class Settlement Amount. The Class Settlement Amount shall be paid provided the Settlement Agreement becomes effective. No portion of the Class Settlement Amount shall revert to Defendants under any circumstances, except the balance of the funds held in the Tax Escrow Account as provided in paragraph 11. 8. The amount of the Class Settlement Amount to which the Class Members will be entitled will be based upon each Class Member's entitlement to the Class Settlement Amount after accounting for deductions from the Class Settlement Amount for (a) the 14
Incentive Award, if any, to the Plaintiff as the sole class representative; (b) Notice and Administration Costs; and (c) Class Counsel Attorneys' Fees. Each Class Member shall be paid their pro-rata share from the Class Settlement Amount based upon the calculation of the amounts each Class Member is owed for unpaid wages. 9. If a Class Member would receive a distribution of less than twenty five dollars ($25), the payment will not be made and those funds will be allocated to Class Members with claims that are $25 or more. l 0. The costs of the Notice and Administration shall be paid out of the Class Settlement Amount as described below and otherwise in this Agreement. Such funds shall be used to pay the costs of notifying the Class, and otherwise administering the Settlement on behalf of the Class. In the event that the Settlement Agreement is not finally approved, any portion of the Notice and Administration Costs already spent or funds attributable to expenses incurred but not yet paid shall be non-refundable and payable by Defendants and any remaining portion of the Notice and Administration Costs not yet spent shall be returned to Defendants. Neither Plaintiff, nor Class Counsel shall have any obligation for Notice and Administration Costs. 11. The parties agree that the Class Settlement Amount paid to each Class Member constitute wages, all of which are subject to Employer Taxes and the Employee Taxes. Defendants agree to transfer to the Settlement Fund funds sufficient to pay the Employer's share of payroll taxes on the Class Settlement Amount paid to each Class Member, and further agree to pay this amount in addition to the Class Settlement Amount, which shall be held by the Settlement Administrator in a separate escrow account ("Tax Escrow Account") for the one-year period referenced in paragraph 23. The funds held in the Tax Escrow Account shall 15
be used solely for purposes of paying the Employer's share of any payroll taxes for those Class Members who are actually issued checks for their pro-rata share of the Settlement Amount. At the end of the one-year period referenced in paragraph 23, the balance of funds held in the Tax Escrow Account shall revert to Defendants. The Settlement Administrator shall calculate the amounts of the Employer Taxes and Employee Taxes and shall provide counsel for Defendants with the calculations and amounts of the Employer Taxes and Employees Taxes calculated within fifteen (15) days after the entry of the Final Order, only if the data provided is accurate and complete (i.e. valid social security numbers, accurate payment amounts, accurate list, etc.). Defendants shall have a period of fifteen (15) days to review the calculations and amounts of the Employer Taxes and Employee Taxes calculated for purposes of verifying the amounts. Once the amounts of the Employer Taxes and Employee Taxes are verified, the Employer's share of any applicable taxes shall be transferred to the Tax Escrow Account within thirty (30) days thereafter. The parties agree that the Class Settlement Amount paid to the Class Members will be net of the Employee Taxes. 12. Class Counsel may request that, subject to Court approval, the Plaintiff be paid $15,000 as the Incentive Award. Payment of any Incentive Award will be made from the Class Settlement Amount. The Settlement Administrator shall issue the Plaintiff a Form I 099 with respect to the Incentive Award. 13. The Class Seitlement Amount shall be funded by Defendants in the following manner: (i) Defendants shall pay the Class Settlement Amount into an escrow held by Tarter Krinsky & Drogin LLP no later than October 6, 2016, and Tarter Krinsky & Drogin LLP as escrow agent and/or trustee is appointed to take custody of, deposit, and remit the Settlement Amount in accordance with this Settlement Agreement. (ii) Funds shall be released from 16
escrow to cover the reasonable costs of notice as such costs are incurred. Such funds, except for Notice and Administration Costs, shall be retained in escrow until the Settlement Effective Date. (iii) No more than fifteen days after entry of a Final Order in this action, the balance of the Class Settlement Amount will be released to the Settlement Administrator. 14. No Retaliation Against Class Members. Retaliation by Defendants against Class Members for participating in or not excluding themselves from the Settlement is strictly prohibited by the Settlement. Class Members' managers and co-workers will not be told by Defendants whether Class Members participate or exclude themselves from the Settlement. NOTICE TO CLASS 15. Defendants have provided a listing of all Class Members, including Social Security numbers, dates of birth, last known addresses and telephone numbers (the "Class List"). Defendants have also provided data sufficient to determine the length of time a Class Member was employed as an hourly employee by Defendants in the state of New York during the Class Period. The Class List is based on the data kept in the ordinary course of business in Defendants' payroll databases. The parties agree that the contents of the Class List and Class Employment Information are confidential and shall not be shared with third parties other than the Settlement Administrator, which shall also agree to keep the contents of the Class List and Class Employment Information confidential. 16. Notice shall be accomplished by mailing the Notice Documents to the Class Members' last known addresses within 15 business days of the Court issuing its Order of Preliminary Approval of the Class Notice, and Scheduling a Final Fairness Hearing. Prior to mailing Notice (Exhibit B), the Settlement Administrator shall process the Class List against the National Change of Address Database maintained by the United States Postal Service ("USPS"). 17
With respect to Notices that are returned as undeliverable, if forwarding addresses are provided by the USPS, the Settlement Administrator shall re-mail Notice Documents immediately. If Notice is undeliverable, the Settlement Administrator shall use standard skip tracing devices based on Lexis/Nexis or similar databases to obtain forwarding address information and re-mail the Notice to those Class Members. 17. If the Court orders additional forms of notice and settlement administration, such additional costs shall be paid out of the Class Settlement Amount as part of the Notice and Administration Costs. COMPREHENSIVE WAIVER, RELEASE, AND DISMISSAL 18. The Released Claims against Defendants shall be folly, finally and forever released, relinquished and discharged with prejudice and on the merits, without costs to any party (other than as provided herein), upon entry of the Final Order and the occurrence of the Settlement Effective Date. 19. Subject to final approval by the Court of the Settlement, and for good and valuable consideration set forth herein, the receipt and sufficiency of which is hereby acknowledged, the Plaintiff and all Class Members, other than those who Opt Out of the Class, on behalf of themselves, their heirs, executors, administrators, successors, assigns and other personal representatives, freely and unconditionally relinquish, waive and release and forever discharge each of the Defendants and any of their affiliates, parents, subsidiaries, divisions, related companies, and their predecessors, successors, assigns, current or former employees, agents, shareholders, officers, directors and representatives from all possible claims, complaints, liabilities, promises, obligations, demands, agreements, damages (including back pay), debts, dues, sums of money, covenants, and lawsuits of any nature whatsoever, whether presently 18
known or unknown by Plaintiff and all Class Members, which may have arisen during the Class Period that arise from, involve, or relate to Plaintiffs claims in the Complaint, provided that such waiver and release does not preclude claims arising out of employment by any entity not named in the Complaint. "All possible claims" include but are not limited to any and all claims for damages of whatever kind or nature whatsoever, injunctive relief, attorneys' fees, expenses and costs arising from, involving or relating to Plaintiffs claims in the Complaint. Administration and Distribution of the Settlement 20. Class Counsel or their anthorized agents, subject to the approval of the Comt, shall administer and oversee distribution of the Settlement Fund. As part of the Preliminary Approval Order, Class Plaintiff shall seek appointment of the Settlement Administrator. 21. The Class Settlement Amount shall be applied in the following order and priority: a. To pay the Notice and Administration Costs including the costs of notifying the Class, and otherwise administering the Settlement on behalf of the Class. b. Subject to the approval of the Court and to paragraph 7 of this Settlement Agreement, to pay to Class Counsel the amount awarded by the Court as Class Counsel's Attorneys' Fees. c. Subject to the approval of the Court and to paragraph 12 of this Settlement Agreement, to pay to Plaintiff the amount awarded by the Court as an Incentive Award. d. Subject to paragraphs 28-35, to pay taxes and related expenses owed by the Settlement Fund on earnings from the Class Settlement Amount. e. Subject to the approval and further order(s) of the Court and subject to paragraph 8, to distribute the Class Settlement Amount remaining after the distributions made 19
pursuant to paragraphs 21 a.-d. to Class Members in accordance with paragraph 8, or as otherwise ordered by the Court (the "Gross Taxable Class Payment"), net of Employee Taxes. 22. Using the methodology set forth in paragraph 8, the Settlement Administrator shall calculate the final amounts due to each Class Member and shall provide an accounting to Class Counsel of the monies to be distributed to the Class, net of the Employee Taxes. 23. In the event that there is any balance left in the Settlement Fund one year after the initial distribution and after the Settlement Administrator's reasonable eff01is to locate Class Members, any such balance shall be contributed to a cy pres recipient such as a Paraprofessional Healthcare Institute (PHI). 24. Class Members will be subject to and bound by the provisions of this Stipulation and the Final Order. Any Class Member who fails to timely cash their check received pursuant to this Stipulation shall be forever barred from receiving any payments pursuant to this Stipulation. 25. Prior to the distribution of the Class Settlement Amount to Class Members, Class Counsel shall present for the approval of the Court a final accounting of the receipts to and disbursements from the Class Settlement Amount and the proposed distribution of the Class Settlement Amount. No such distribution shall be made in the absence of an order approving the accounting and the proposed distribution. 26. Payment from the Class Settlement Amount made pursuant to and in the manner set forth above shall be deemed conclusive of compliance with this Settlement Agreement. 27. No Class Member shall have any claim against the Plaintiff, Defendants, the Settlement Administrator, or any of their counsel, based on the Settlement Administrator's 20
determinations regarding distributions made substantially in accordance with this Stipulation and/or orders of the Court. Settlement Fund 28. By October 6, 2016, Defendants shall transfer the Class Settlement Amount into an escrow held by Tarter Krinsky & Drogin LLP to be held as a separate trust constituting a Qualified Settlement Fund as described in Treasury Regulation l.468b-l. Defendants shall cause the Trustee to take such steps as shall be necessary to qualify the Settlement Fund under Code 468B and the regulations promulgated pursuant thereto. Defendants shall be considered the "transferor" within the meaning of Treasury Regulation l.468b-l(d)(l ). The Settlement Administrator shall be the "administrator" within the meaning of Treasury Regulation l.468b- 2(k)(3). Defendants shall promptly take such actions necessary to secure an order of the Court to establish the Settlement Fund in accordance with the terms hereof al the same time as the application for preliminary approval of the Settlement. Class Counsel shall cooperate as necessary to obtain such order. The Court shall retain jurisdiction over the administration of the Settlement Fund. Defendants shall supply to the Settlement Administrator and to the Internal Revenue Service the statement described in Treasury Regulation l.468b-3( e)(2) no later than February 15th of the year following each calendar year in which Defendants make a transfer to the Settlement Fund. It is intended that the transfers to the Settlement Fund will satisfy the "all events test" and the "economic performance" requirement of Code 461 (h)(l ), and Treasury Regulation 1.461-1 (a)(2). Accordingly, Defendants shall not include the income of the Settlement Fund in its income. Rather, the Settlement Fund shall be taxed on its modified gross income, excluding the sums transferred to it, and shall make payment of resulting taxes from its own funds. In computing the Settlement Fund's modified gross income, deductions shall be 21
allowed, to the extent permitted by law, for its administrative costs and other deductible expenses incuned in connection with the operation of the Settlement Fund, including, without limitation, state and local taxes and legal, accounting, and other fees relating to the operation of the Settlement Fund. 29. Upon establishment of the Settlement Fund, the Trustee shall apply for an employer identification number for the Settlement Fund utilizing Internal Revenue Service Form SS-4 and in accordance with Treasury Regulation l.468b-2(k)(4). 30. If requested by either Defendants or the Settlement Administrator, the Settlement Administrator, the Trustee and Defendants shall fully cooperate in filing a relation-back election under Treasury Regulation l.468b-l 0)(2) to treat the Settlement Fund as coming into existence as a settlement fund as of the earliest possible date. 31. Following the deposit as described in paragraph 13 of this Agreement, Defendants shall have no responsibility, financial obligation or liability whatsoever with respect to the Settlement Fund. Rather, subject to paragraphs 8 and 10, the Settlement Administrator shall have sole authority and responsibility for the administration of such funds and income thereon, disbursements of such funds, and payment of the Employee Taxes, taxes imposed on the Settlement Fund, and administrative costs in accordance with the provisions hereof, subject only to the rights of Defendants and Class Counsel to seek redress for any breach of the terms hereof. 32. The Settlement Administrator shall cause to be filed, on behalf of the Settlement Fund, all required federal, state, and local tax returns, information returns and tax withholdings statements, including any Forms 1099, or comparable forms, with respect to its payment of the attorneys' fees, in accordance with the provisions of Treasury Regulation l.468b-2(k)(l) and Treasury Regulation l.468b-2(1)(2)(ii). The Settlement Administrator may, at the expense of 22
the Settlement Fund, retain legal counsel and an independent, certified public accountant to consult with and advise the Settlement Administrator and the Trustee with respect to the preparation and filing of such materials and the federal, state and local tax compliance of the Settlement Fund. Either Defendants or the Settlement Administrator, independently or jointly, may, but are not required to, apply to the Internal Revenue Service and/or any applicable state taxing authority for an advance ruling as to any issue pertinent to the qualification of the Settlement Fund under Code 468B and Treasury Regulations promulgated thereunder, its tax status under applicable state law, and/or its tax payment, repo1ting and withholding duties. Subject to any contrary holdings in any such ruling: a. The distributions from the Settlement Fund to the Class Members shall be treated as "wages" or "compensation" paid by the Settlement Fund during the calendar year of payment. Class Members may file with the Settlement Fund a Tax Declaration. Any Class Member who does not file a Tax Declaration with the Settlement Fund shall have taxes withheld at the rate for a single person claiming no withholding exemptions. Other than amounts withheld by the Settlement Administrator pursuant to paragraph 32.b., Class Members and Plaintiff shall be responsible for payment of appropriate federal, state, and local income taxes on any claim paid out pursuant to this Agreement. The parties agree that no portion of any distributions from the Settlement Fund to the Class Members is made in satisfaction of any excluded liability as described in Treasury Regulation l.468b-l (g), related to the Settlement Funds. b. The Employee Taxes shall be paid from the Settlement Fund. c. The Employer Taxes shall be paid by the Defendants for those Class Members who are actually issued checks for their pro-rata share of the Class Settlement Amount, as determined in accordance with paragraph 11 of this Agreement. 23
d. The Employee Taxes and other payroll tax withholding rates on all distributions from the Settlement Fund will be as determined by applicable law. The Settlement Administrator's good faith determination as to withholding rates shall be final, provided that should an advance ruling be sought pursuant to paragraph 32 by either Defendants or the Settlement Administrator in regard to the obligation for, or rate of, any taxes, the parties and the Settlement Administrator shall be bound by the ruling of the appropriate taxing authority. e. The Settlement Administrator shall process all payments to the Class Members and disburse all the Employee Taxes, and all other taxes or payments payable with respect to processing payroll checks. The Settlement Administrator shall prepare and file any tax or information returns associated with such payments and taxes, including Internal Revenue Service Forms W-2. 33. The taxable year of the Settlement Fund shall be the calendar year in accordance with Treasury Regulation l.468b-2u). The Settlement Fund shall utilize the accrual method of accounting within the meaning of Code 446(c). 34. The Settlement Fund shall be invested in United States Treasury bills or FDICinsured money market funds primarily invested in the same, provided that such portions of the Settlement Fund as may reasonably be required to pay current Settlement Fund administrative expenses, taxes or disbursements to Class Members or Class Counsel may be deposited in bank accounts which are federally insured to the greatest extent practicable, and neither Plaintiff, Defendants, the Class Members, Class Counsel, nor Defendants' Counsel, shall be responsible for any such investments or any losses suffered to the Settlement Fund. All federal, state, and local taxes imposed with respect to income earned by, or property of, the Settlement Fund, shall be paid from the Settlement Fund. 24
35. The Settlement Administrator may amend, either in whole or in part, any administrative provision of this Section (paragraphs 28 to 35) or the trust instrument through which the Settlement Fund is established to maintain the qualification of the Settlement Fund pursuant to the above-described authorities provided that the rights and liabilities of the parties hereto and the Class are not altered thereby in any material respect, upon written notice of Class Counsel and Defendants' Counsel. Effect of Disapproval, Cancellation or Termination of Agreement 36. If the Court does not enter the Preliminary Approval Order substantially in the form annexed as Exhibit A hereto, or if the Settlement Effective Date does not occur, then this Stipulation shall be cancelled and terminated, unless all parties who are adversely affected thereby, in their sole discretion within thirty (30) days from the date of the mailing of such ruling to such parties, provide written notice to all other parties hereto of their intent to proceed with the settlement under the terms of the Preliminary Order and/or Final Order as they may be modified by the Court. Such notice shall be provided on behalf of Plaintiff and the Class Members by Class Counsel. No party shall have any obligation whatsoever to proceed under any terms other than substantially in the form provided and agreed to herein. If any patty hereto engages in a material breach of the terms hereof, any other party, provided that it is in substantial compliance with the terms of this Stipulation, may terminate this agreement on notice to the breaching party or initiate an action for enforcement. The non-breaching patty shall be entitled to reasonable attorneys' fees and expenses incurred to enforce the terms and conditions in the Agreement. Prior to terminating this agreement, the non-breaching patty shall provide the breaching party with ten (I 0) business days written notice of the alleged breach within which time the allegedly 25
breaching patty shall be permitted to cure the alleged breach, unless such breach is not amenable to cure or if time is of the essence. 37. In the event this Stipulation is terminated or cancelled or the Settlement Effective Date fails to occur, then within ten (I 0) business days after Class Counsel give written notice to Counsel for Defendants, or Counsel for Defendants gives written notice to Class Counsel, the balance of the Notice and Administration Costs, less any funds paid therefrom or funds attributable to expenses incurred but not yet paid, shall be refunded as directed by Counsel for Defendants In such event, the parties shall be deemed to have revetted nunc pro tune to their respective status as of the date and time immediately before the execution of this Stipulation and they shall proceed in all respects as if this Stipulation and related orders had not been executed and without prejudice in any way from the negotiation, fact, or terms of this Settlement, and without prejudice to the claims, defenses or rights of any party. Miscellaneous Provisions 38. All of the exhibits to be attached hereto shall be incorporated by reference as though fully set forth herein. This Settlement shall not be construed in favor of or against any pa1ty by reason of the extent to which any party or such party's counsel participated in the drafting of the Settlement. 39. The Notice to Class shall be issued and distributed to Class Members in English, Spanish, Russian, Haitian Creole, and Chinese. 40. This Stipulation may be amended or modified only by a written instrument signed by Class Counsel and Counsel for Defendants, provided any such amendment or modification is not contrary to law or an order of the Comt. 26
41. Neither the Stipulation nor the Settlement, nor any act performed or document executed pursuant to or in furtherance of the Stipulation or the Settlement: (i) is or may be deemed to be or may be used as an admission or evidence of the validity of any Released Claim or of any wrongdoing or liability of Defendants; or (ii) is or may be deemed to be or may be used as an admission or evidence of any liability, fault or omission of Defendants in any civil, criminal or administrative proceeding in any court, arbitration proceeding, administrative agency or other forum or tribunal in which Defendants are or becomes parties, other than in such proceedings as may be necessary to consummate or enforce the Stipulation, the Settlement or the Final Order. 42. The waiver by one party of any breach of this Stipulation by any other party shall not be deemed a waiver of any other prior or subsequent breach of this Stipulation. No rights under this Settlement may be waived except in writing and signed by the waiving party. 43. This Stipulation and its exhibits constitute the entire agreement among these parties, and no representations, warranties or inducements have been made to the patties concerning this Stipulation or its exhibits, other than the representations, warranties and covenants contained and memorialized in such documents. 44. In the event that there exists a conflict or inconsistency between the terms of this Stipulation and the terms of any exhibit to be attached hereto, the terms of this Stipulation shall prevail. 45. This Stipulation may be executed in one or more counterparts. All executed counterparts and each of them shall be deemed to be one and the same instrument. 27
46. Parties and their respective counsel of record agree that they will use their best effmts and will cooperate to obtain all necessary approvals of the Court required by this Stipulation. 47. Each of the undersigned counsel signing this Stipulation represents that such counsel has authority to enter into the terms and conditions of, and to sign this Stipulation on behalf of his or her identified clients, subject to Co mt approval. 48. This Stipulation shall be binding upon and shall inure to the benefit of the successors and assigns of the parties hereto. 49. Notices required by this Stipulation shall be submitted either by any form of overnight mail or in person, with an email copy, to: Judith L. Spanier ABBEY SPANIER, LLP 212 East 39 111 Street New York, New York 10016 212-889-3700 jspanier@abbeyspanier.com COUNSEL FOR PLAINTIFF AND THE CLASS Laurent S. Drogin TARTER KRINSKY & DROGIN LLP 1350 Broadway New York, New York 10018 212-216-8000 ldrogin@tarterkrinsky.com COUNSEL FOR DEFENDANTS 50. This Stipulation shall be governed by and construed in accordance with the laws of the State of New York, without regard to choice of law principles. The Court shall retain 28
jurisdiction over actions or proceedings based upon, including the enforcement of, this Stipulation or any of its tenns. All parties to this Stipulation shall be subject to the jurisdiction of the Court for all purposes related to this Stipulation. Dated: October 13, 2016 FOR PLAINTIFF AND CLASS MEMBERS: ABBEY SPANIER, LLP dith L. Spanier 212 East 39 h St et New York, New York 10016 212-889-3700 FOR DEFENDANTS: TARTER KRINSKY & DROGIN LLP Lau nt S. Drogin Tara Toevs Carolan TARTER KRJNSKY & DROGIN LLP 1350 Broadway New York, New York 10018 212-216-8000 29