UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA In re WESTERN SAVINGS AND LOAN MDL Docket No. 995 ASSOCIATION/RTC SECURITIES LITIGATION This document relates to Brazlin v. Western Savings and Loan Association, et al., Civ-91-0078-PHX-SMM NOTICE OF PENDENCY AND SETTLEMENT OF CLASS ACTION TO: ALL PERSONS WHO PURCHASED THE 15-5/8% SUBORDINATED CAPITAL NOTES DUE JUNE 15, 1995 ( NOTES ) ISSUED BY WESTERN SAVINGS AND LOAN ASSOCIATION ( WESTERN ) DURING THE PERIOD COMMENCING WITH THE ISSUANCE OF THE NOTES IN JUNE 1985 THROUGH AND INCLUDING JUNE 15, 1989, INCLUSIVE: PLEASE READ THIS NOTICE CAREFULLY. THIS NOTICE RELATES TO PROPOSED SETTLEMENTS IN THIS CLASS ACTION AND, IF YOU ARE A SETTLEMENT CLASS MEMBER, CONTAINS IMPORTANT INFORMATION AS TO YOUR RIGHTS CONCERNING THE THREE SETTLEMENTS AS FURTHER DESCRIBED BELOW. YOU ARE HEREBY NOTIFIED, pursuant to Rule 23 of the Federal Rules of Civil Procedure, and an Order of the United States District Court for the District of Arizona (the Court ), that three separate and independent settlements with Deloitte & Touche USA LLP (the D&T Settlement ); with the FDIC, Western Savings & Loan Association and certain individual defendants (the FDIC/Western Settlement ); and with Gary Driggs (the Driggs Settlement ) (collectively referred to as the Settlements ) of the captioned litigation (the Litigation ) have been reached by the parties, which Settlements are subject to approval by the Court. The Settlements are embodied in three Stipulations of Settlement (the Stipulations ) on file with the Court. The Settlement Class for each of these Settlements is identical, but each settlement is separate and independent of the others, and must be separately considered and approved or disapproved on its own merits. YOU MAY CHOOSE TO PARTICIPATE IN ALL THREE OF THE SETTLEMENTS, OR ONLY IN ONE, OR TWO, OF THE SETTLEMENTS, ACCORDING TO THE PROCEDURES DESCRIBED BELOW. Each settlement, if approved, will result (a) in the creation of the Settlement Fund, (b) in the dismissal of the Litigation and the release of the Released Claims (as defined below) as against the Settling Defendants and other Released Persons (as defined below), and (c) the termination of the Litigation as against the defendants participating in that Settlement. This Notice is not intended to be, and should not be, construed as an expression of any opinion by the Court with respect to the truth of the allegations in the Litigation or the merits of the claims or defenses asserted. This Notice is to advise you of the proposed Settlements thereof and of your rights in connection therewith. I. DEFINITIONS This Notice incorporates by reference the definitions in the Stipulations, and all terms used herein will have the same meaning as set forth in the Stipulations. For convenience, certain terms, including some that are not defined in the Stipulations, are defined below. Some of the following definitions may differ from the definitions in each Stipulation, which are specific to the settlement embodied by each Stipulation. In any case where the definition differs from that in a Stipulation, the definition in the Stipulation controls. 1. Person means any individual, corporation, partnership, limited partnership, association, joint stock company, estate, legal representative, trust, unincorporated organization, or any other type of legal entity and any heirs, successors, or assigns. 2. Settlement Class" means all persons and entities who purchased Western Notes during the Settlement Class Period. The Settlement Class is divided into three subclasses: (1) purchasers in the initial offering, (2) purchasers after the initial offering but before information regarding the imminent failure of Western was widely disseminated, and (3) purchasers after information regarding the imminent failure of Western was widely disseminated. Excluded from the Settlement Class is Western, all of the Named Defendants, any entity in which such Named Defendants have or had a controlling interest, and the legal representatives, heirs, successors or assigns of such Named Defendants, and those Persons who timely and validly request exclusion from the Class pursuant to this Notice of Pendency and Settlement of Class Action. 3. Settlement Class Member or Member of the Settlement Class means a Person who falls within the definition of the Settlement Class as set forth in I.2 above. 4. Settlement Class Period means the period commencing with the issuance of Western Notes on June 25, 1985 through June 15, 1989, inclusive.
5. Representative Plaintiffs means Hyman Brazlin, Milton Saper, Garry J. Shuster, Manuel Wilkey and Herbert Dreiseszun. 6. Authorized Claimant means any Settlement Class Member whose claim for recovery has been allowed pursuant to the terms of the Plan of Allocation. 7. Claimant means any Settlement Class Member who files a Proof of Claim and Release in such form and manner, and within such time, as the Court shall prescribe. 8. Western means Western Savings and Loan Association and all present and former parents, subsidiaries, divisions and related or affiliated entities. 9. FDIC means the Federal Deposit Insurance Corporation, in its corporate capacity, as manager of the FSLIC Resolution Fund and as Statutory Successor to the Resolution Trust Corporation ( RTC ) as Receiver for Western Savings and Loan Association, F.A. 10. Individual Settling Defendants means John D. Driggs, Patricia Gail Driggs, Don C. Driggs, Mary Lynn Driggs, Robert M. Reade, Carole C. Reade, H. Wilson Sundt, Dorothy Sundt, A. Milton Whiting, Lorana Whiting, the Lewis J. Wright Estate, Charles Randall Paul, Jann Paul, Fred O. Stutenroth, Clark P. Cederlof, Robert E. Seddon, Jr., the Douglas H. Driggs Estate, the Junius E. Driggs Estate, Virginia Driggs, J. Morris Richards, Aloa Richards, Jerry R. Landis, Jaynette Landis, Brent W. Brown, Marilyn Brown, Peter S. Evans, Patti W. Evans, John Cotton, Janet Cotton, Gerald Miller, Donnalee Miller, Patricia S. Cederlof, Ann Seddon, Timothy P. Wright, Patricia Wright, and The Maricopa Partnerships, Inc. 11. D&T means Deloitte & Touche USA LLP. 12. Settling Defendants means FDIC, Western, the Individual Settling Defendants, D&T and Garry Driggs. 13. Notes means the 15-5/8% Subordinated Capital Notes due June 15, 1995 issued by Western. 14. Related Parties means each of a Settling Defendant s past or present directors, officers, employees, partners, principals, agents, underwriters, issuers, insurers, co-insurers, reinsurers, controlling shareholders, attorneys, accountants, auditors, banks or investment bankers, advisors, personal or legal representatives, predecessors, successors, parents, subsidiaries, divisions, joint ventures, assigns, spouses, heirs, associates, related or affiliated entities, any entity in which a Settling Defendant has a controlling interest, any members of their immediate families, or any trust of which any such person is the settlor or that is for the benefit of any such person or member(s) of his/her family, or any of their past or present officers, directors, employees, partners, principals or agents and all of their respective heirs, executors, spouses, personal representatives, administrators and assigns. 15. Released Persons means each of the Settling Defendants and their Related Parties. 16. Released Claims means and includes any and all claims or causes of action, including Unknown Claims as defined in paragraph I.17 hereof, demands, rights, liabilities, damages, losses, fees, costs and causes of action of every nature and description whatsoever, accrued or unaccrued, known or unknown, asserted or that might have been asserted, including, without limitation, claims for negligence, gross negligence, breach of duty of care and/or breach of duty of loyalty, fraud, breach of fiduciary duty, or violations of any state or federal statutes, rules or regulations, that now exist or heretofore existed that have been or could have been asserted in the Litigation by the Representative Plaintiffs or the Settlement Class Members, or any of them, against the Released Persons arising out of, relating to, or in connection with: (i) a Settlement Class Member s ownership, purchase(s) or sale(s) of Western Notes during the Class Period; (ii) the facts, transactions, events, occurrences, acts, disclosures, statements, omissions, or failures to act which were alleged or could have been alleged in the Litigation based upon the facts which were alleged; and/or (iii) any and all services D&T or any other Released Person performed or were engaged to perform with respect to Western, regardless of on whose behalf those services were claimed to have been performed. 17. Unknown Claims means claims that Settlement Class Members do not know or suspect to exist in their favor at the time of the release of the Released Persons which, if known by Plaintiffs, might have affected their settlement with Settling Defendants. Solely with respect to any and all Released Claims asserted against Settling Defendants, or any other Released Person, it is the intention of the parties hereto that, upon the Settlement Date, each of the Settlement Class Members does hereby expressly waive and relinquish, to the fullest extent permitted by law, the provisions, rights, and benefits of 1542 of the California Civil Code, which provides: 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 executing the release, which if known by him must have materially affected his settlement with the debtor, and any and all provisions, rights and benefits of any similar statute or law of the United States or any other jurisdiction. Upon the Settlement Date, each of the Settlement Class Members will be deemed to have settled and released fully, finally and forever, any and all Released Claims, asserted or unasserted, known or unknown, accrued or not yet accrued, suspected or unsuspected, contingent or non-contingent, whether or not concealed or hidden, without regard to the subsequent discovery or existence of such different or additional facts against Settling Defendants or any other Released Person. All of the foregoing is included within the definition of Unknown Claims. 2
18. Settlement Date is the date on which Judgment has been entered pursuant to some or all of the proposed Settlements, and that has become a final Judgement and is no longer subject to any appeal or further review. II. THE RIGHTS OF SETTLEMENT CLASS MEMBERS If you are a Member of the Settlement Class, you may receive the benefit of and you will be bound by the terms of each of the proposed Settlements described in Part V of this Notice, upon approval of it by the Court. If you do not wish to be included in the Settlement Class and you do not wish to participate in one or more of the proposed Settlements described in this Notice, you may request to be excluded. To do so, you must so state in writing no later than March 2, 2000. You must identify the settlement or settlements from which you wish to be excluded (the D&T Settlement, the FDIC/Western Settlement, and/or the Driggs Settlement), and you must set forth the name of this Litigation (Western Savings Securities Litigation, MDL Docket 995), your name, address and telephone number, and the name and address of the record owner if different from your own. You must also set forth the number of Western Notes purchased during the Settlement Class Period, the purchase price of the Notes, the date(s) of such purchase(s), the sales price of those Notes, and the dates of such sale(s), if any. The exclusion request should be addressed as follows: Western Savings Securities Litigation c/o Gilardi & Co., LLC P.O. Box 8040 San Rafael, CA 94912-8040 NO REQUEST FOR EXCLUSION WILL BE CONSIDERED VALID UNLESS ALL OF THE INFORMATION DESCRIBED ABOVE IS INCLUDED IN ANY SUCH REQUEST. If you validly request exclusion from one or more of the Settlements, (a) you will be excluded from the Settlement Class for each of the Settlements from which you have asked to be excluded; (b) you will not share in the proceeds of those Settlement(s); (c) you will not be bound by any judgments entered in the Litigation pursuant to those Settlement(s); and (d) you will not be precluded, by reason of your decision to request exclusion from those Settlement(s), from otherwise prosecuting an individual claim, if timely, against the Settling Defendants participating in the Settlement(s) from which you have asked to be excluded, based on the matters complained of in the Litigation. If you are a Member of the Settlement Class, you may, but are not required to, enter an appearance through counsel of your own choosing at your own expense. If you do not do so, you will be represented by Plaintiffs Settlement Counsel: Keith F. Park and Helen J. Hodges, Milberg Weiss Bershad Hynes & Lerach LLP, 600 West Broadway, Suite 1800, San Diego, California 92101. If the proposed Settlements (or any of them) are approved by the District Court, the District Court will enter the Judgment which will, among other things: 1. Approve the Settlement(s) embodied in the Stipulation(s) as fair, reasonable and adequate to the Settlement Class. 2. Dismiss the Class Actions against the Settling Defendants with prejudice, all parties to bear their own costs and attorneys fees. 3. Adjudge that the Members of the Settlement Class shall be deemed conclusively to have released the Released Claims against Settling Defendants and any other Released Person. 4. Bar and permanently enjoin all Members of the Settlement Class from prosecuting any of the Released Claims against Settling Defendants or any other Released Person. 5. Reserve jurisdiction, without affecting the finality of the Judgment entered, over: (a) implementation of this Settlement and any award or distribution of the Settlement Fund, including interest earned thereon; (b) disposition of the Settlement Fund; (c) hearing and determining applications for attorneys fees, costs, interest and expenses (including fees and costs of experts and/or consultants) in the Class Actions; and (d) enforcing and administering the Stipulation(s). 6. Adjudge that: (a) The Settlement(s) embodied in the Stipulation(s) are entered into and made in good faith and are fair and equitable, within the meaning of Ariz. Rev. Stat. 12-2504 and 12-2506, and any other applicable laws; (b) All claims, however denominated, including but not limited to claims for contribution, indemnification, or reimbursement, against any of the Released Parties arising under federal or state law, including those based in tort, contract or any statute or body of law, which arise out of or in any way relate to the Class Actions or the subject matter of the Class Actions and which have been asserted or could have been asserted in the Class Actions or any other proceeding by any other defendant, and, to the extent legally permissible, all other Persons, are hereby extinguished, discharged, satisfied, and barred, and the future filing, institution, reinstitution and/or prosecution of such claims is hereby enjoined; and (c) Any judgment subsequently obtained by the Members of the Settlement Class against any other defendant determined to be jointly and severally liable, rather than severally liable only, with the Released Parties, or any of them, for any acts or omissions alleged in the Class Actions, will be reduced by the proportionate share of such jointly and severally liable 3
Released Persons fault for the total injury to the Members of the Settlement Class, and not pro tanto based upon the amount of the Settlement Fund. III. SETTLING DEFENDANTS STATEMENT AND DENIAL OF WRONGDOING AND LIABILITY Settling Defendants have asserted and continue to assert that all claims and contentions raised in the Class Actions are without merit, and Settling Defendants have denied and continue to deny all charges of wrongdoing or liability with respect to each and all of the claims and contentions that were alleged or that could have been alleged by the plaintiffs in the Class Actions, including, without limitation, all contentions concerning Settling Defendants conduct, as well as the contentions that such conduct constitutes wrongdoing or gives rise to legal liability or has caused damage to any plaintiffs. Settling Defendants have asserted and continue to assert many defenses to the plaintiffs claims and contentions in the Class Actions, and notwithstanding the Stipulation(s), Settling Defendants expressly assert their defenses have merit and that they have no liability to the plaintiffs. Neither the Stipulations nor any document referred to therein nor any action taken to carry out the Stipulations is, may be construed as, or may be used as an admission by or against Settling Defendants or any other Released Person of any fault, wrongdoing or liability whatsoever. Neither the Stipulations nor the Settlements set forth therein, nor any act performed or document executed pursuant to or in furtherance of the Stipulations or the Settlements: (i) is or shall be deemed to be or shall be used as an admission of Settling Defendants or any other Released Person, or any other Person, of the validity of any Released Claims or any wrongdoing by or liability of Settling Defendants or any other Released Person; (ii) is or shall be deemed to be or shall be used as an admission of any fault or omission of Settling Defendants or any other Released Person in any statement, release or written document or financial report issued, filed or made; and (iii) shall be offered or received in evidence against Settling Defendants or any other Released Person in any civil, criminal or administrative action or proceeding in any court, administrative agency or other tribunal other than such proceedings as may be necessary to consummate or enforce the Stipulations, the Settlements set forth therein, the releases provided pursuant thereto, and/or the Judgment, except that the Stipulations and the Exhibits thereto may be filed in the Class Actions or in any subsequent action brought against Settling Defendants, their insurers or any other Released Person in order to support a defense or counterclaim of Settling Defendants or any other Released Person of res judicata, collateral estoppel, release, good faith settlement, or any theory of claim or issue preclusion or similar defense or counterclaim, including, without limitation, specific enforcement of the Settlements embodied in the Stipulations by way of injunctive relief. IV. CLAIMS OF THE PLAINTIFFS AND BENEFITS OF SETTLEMENT Notwithstanding the Stipulations, the Members of the Settlement Class expressly assert that the claims alleged in the Class Actions have merit and give rise to liability on the part of Settling Defendants. Neither the Stipulations nor any document referenced therein, nor any action taken to carry out the Stipulations is, may be construed as, or may be used as an admission by or against the Plaintiffs that any of their claims are without merit or that the maximum recoverable damages does not exceed the amount of the Settlement Fund, as defined herein. Plaintiffs Settlement Counsel recognize the expense and length of continued proceedings necessary to prosecute the Class Actions against the Settling Defendants through appeals and trial. Plaintiffs Settlement Counsel also have taken into account the uncertain outcome and the risk of any litigation, especially in complex actions such as the Class Actions, as well as the difficulties and delays inherent in such litigation. Plaintiffs Settlement Counsel have, therefore, determined that the Settlements set forth in the Stipulations are a reasonable and fair resolution of the plaintiffs claims against the Settling Defendants and are in the best interest of the plaintiffs and the Settlement Class. V. THE PROPOSED SETTLEMENTS Settlements have been reached in the Litigation between the Plaintiffs and the Settling Defendants which are embodied in the three Stipulations on file with the Court. The attorneys for Representative Plaintiffs, on the basis of, among other things, a thorough investigation of the facts and the law relating to the acts, events, and conduct complained of and the subject matter of the Litigation, have concluded that the proposed Settlements are fair to and in the best interests of the Settlement Class. While the Settling Defendants deny all charges of wrongdoing and deny liability, they have agreed to settle the Litigation on the basis proposed in order to put to rest all further controversy and to avoid substantial expenses and the inconvenience and distraction of burdensome and protracted litigation. The following description of the Settlements in the Litigation is only a summary, and reference is made to the text of the Stipulations, on file with the Court, for a full statement of their provisions: 1. The Settlement Funds consist of the following contributions from the following Settling Defendants: D&T $2,050,000 FDIC, Western and Individual Defendants 100,000 Gary Driggs 50,000 Each of these amounts is earning interest. 4
2. The Court has previously approved settlements with First Interstate Bank and Streich Lang, P.A. in the amounts of $150,000 and $1,750,000, respectively. 3. Upon approval of the Stipulations by the Court and entry of a judgment that becomes a final judgment and upon satisfaction of the other conditions to the Settlements, the Settlement Funds, consisting of the amounts listed above in V.1 and V.2, totaling $4,100,000, or the total of the Settlements that are approved, will be allocated as follows: (a) To pay the costs and expenses incurred in connection with processing the claims of Settlement Class Members; (b) To pay fees to counsel for Representative Plaintiffs and reimburse Representative Plaintiffs and their counsel for the out-of-pocket expenses and costs incurred in connection with this Litigation, if and to the extent allowed by the Court; (c) To pay the reasonable costs incurred in the preparation of any tax returns required to be filed on behalf of the Settlement Fund as well as the taxes (and any interest and penalties determined to be due thereon) owed by reason of the earnings of the Settlement Fund, including all Taxes and Tax Expenses as defined in the Stipulations; and (d) To pay the claims of Authorized Claimants, subject to the releases provided in, and the other conditions embodied in, the Stipulations. 4. If you timely request exclusion from one or more of the Settlements, you will not share in the proceeds of those Settlements. ANY PAYMENT TO YOU WILL BE CALCULATED BASED ON THE PROCEEDS IN THE NET SETTLEMENT FUND AS DEFINED BELOW FROM THE SETTLEMENT(S) IN WHICH YOU HAVE CHOSEN TO PARTICIPATE. For example, if you request exclusion from the D&T Settlement, the Net Settlement Fund from which your share of the settlement proceeds will be calculated will be reduced by $2,050,000. In order to share in the full amount of the Settlement Funds identified in paragraphs V.1 and V.2, you cannot request exclusion from any of the proposed Settlements. 5. The Settling Defendants have no role in the creation or implementation of the Plan of Allocation, and none of the Settling Defendants shall have any responsibility for, interest in, or liability whatsoever with respect to the investment or distribution of the Settlement Fund, the Plan of Allocation, the determination, administration, calculation or payment of claims, the payment or withholding of taxes, or any losses incurred in connection therewith, and no Person shall have any claim against any Released Person regarding or relating to the acts and events described in this paragraph. 6. Subject to the approval by the Court of the Plan of Allocation described below, the balance of the Settlement Fund (the Net Settlement Fund ) shall be distributed to Settlement Class Members who submit valid, timely Proof of Claim and Release forms ( Authorized Claimants ) as follows: (a) Each Person claiming to be an Authorized Claimant shall be required to submit a separate Proof of Claim and Release signed under penalty of perjury and supported by such documents as specified in the Proof of Claim and Release as are reasonably available to the Authorized Claimant. (b) All Proof of Claim and Release forms must be postmarked or received by May 2, 2000. Unless otherwise ordered by the Court, any Settlement Class Member who fails to submit a Proof of Claim and Release within such period, or such other period as may be ordered by the Court, shall be forever barred from receiving any payments pursuant to the Stipulations, but will in all other respects be subject to the provisions of the Stipulations and the final judgments entered by the Court. (c) To the extent there are sufficient funds in the Net Settlement Fund for each settlement in which an Authorized Claimant has chosen to participate, each Authorized Claimant will receive an amount equal to the Authorized Claimant s Claim, as defined below. If, however, the amount in the Net Settlement Fund is not sufficient to permit payment of the total Claim of each Authorized Claimant, then each Authorized Claimant shall be paid that percentage of the Net Settlement Fund that each Authorized Claimant s Claim is of the total of the Claims of all Authorized Claimants. A Claim will be computed as follows: (1) A recessionary method of calculating damages has been adopted for the Plan of Allocation. The inflation per Note has been calculated by subtracting the Value from the price paid for the Note at the time of purchase. The Value was determined to be whatever portion of the promised return on the Notes a Settlement Class Member realized. The Value was calculated by summing the interest payments received and discounting these payments by the promised yield of 15-5/8%. The Value also includes 2% of par, or $20.00 per Note, representing the market value of the Notes at the end of the Settlement Class Period. In addition, the Court has ruled that Persons who purchased their Notes in the initial offering of the Notes, as opposed to the aftermarket, did not suffer a harm separate from Western and that their claims are derivative of Western s and, hence they have no direct claim against the Settling Defendants. To account for the risk that this ruling might not be reversed, the Claims of Settlement Class Members who purchased their Notes in the initial offering will be discounted by 10%. Retention Damages All Note purchasers during the Settlement Class Period who retained their Notes as of the close of trading on June 15, 1989 shall have a Claim which shall be calculated as the number of Notes purchased times the inflation per Note at the time of purchase per the schedule shown below. Selling Damages Note purchasers who sold for a loss during the Settlement Class Period shall have a Claim which shall be calculated as the difference between the inflation per Note on the date of purchase and the inflation per Note on the date of sale per the schedule shown below. 5
If the inflation per Note on the date of purchase was less than the inflation per Note on the date of sale, there shall be no Claim since the Settlement Class Member was overpaid more, due to the alleged fraud, upon sale of his, her or its bonds than he, she or it overpaid when the bonds were purchased. PURCHASED OR SOLD PRIOR TO OR BETWEEN 6 INFLATION PER $1,000 / NOTE June 1985 $ 574.24 July 16, 1985 553.96 August 16, 1985 527.36 September 16, 1985 518.18 October 16, 1985 520.19 November 16, 1985 544.63 December 16, 1985 640.87 January 16, 1986 627.42 February 16, 1986 648.92 March 16, 1986 695.36 April 16, 1986 699.23 May 16, 1986 686.79 June 16, 1986 742.40 July 16, 1986 779.60 August 16, 1986 775.49 September 16, 1986 763.83 October 16, 1986 757.12 November 16, 1986 705.35 December 16, 1986 761.65 January 16, 1987 779.54 February 16, 1987 783.63 March 16, 1987 797.68 April 16, 1987 786.68 May 16, 1987 760.64 June 16, 1987 838.92 July 16, 1987 846.30 August 16, 1987 834.90 September 16, 1987 808.47 October 16, 1987 798.24 November 16, 1987 715.49 December 16, 1987 770.82 January 16, 1988 774.01 February 16, 1988 789.67 March 16, 1988 800.31 April 16, 1988 773.43 May 16, 1988 731.52 June 16, 1988 747.71 July 16, 1988 716.77 August 16, 1988 715.81 September 16, 1988 704.85 October 16, 1988 703.87 November 16, 1988 602.88 December 16, 1988 545.00 January 16, 1989 320.00 February 16, 1989 230.00 March 16, 1989 230.00 April 16, 1989 150.00 May 16, 1989 60.00 June 16, 1989 0.00
(2) The date of purchase or sale is the contract or trade date as distinguished from the settlement date. (3) For Settlement Class Members who made multiple purchases or multiple sales during the Class Period, the earliest sale shall be matched with the earliest purchase and chronologically thereafter for purposes of the Claim calculations. (4) The Court has reserved jurisdiction to allow, disallow or adjust the Claim of any Settlement Class Member on equitable grounds. (d) Payment pursuant to the Plan of Allocation set forth above shall be conclusive against all Authorized Claimants. No Person shall have any claim against Plaintiffs Settlement Counsel or any claims administrator or other agent designated by Plaintiffs Settlement Counsel based on distributions made substantially in accordance with the Stipulations and the Settlements contained therein, the Plan of Allocation, or further orders of the Court. All Settlement Class Members who fail to complete and file a valid and timely Proof of Claim and Release shall be barred from participating in distributions from the Settlement Fund (unless otherwise ordered by the Court), but otherwise shall be bound by all of the terms of the Stipulations. 7. Settling Defendants shall have no responsibility for, interest in, or liability whatsoever with the respect to the investment or distribution of the Settlement Fund, the Plan of Allocation, the determination, administration, calculation or payment of claims, the payment or withholding of taxes, or any losses incurred in connection therewith, and no Person shall have any claim against any Released Person regarding or relating to the acts and events described in this paragraph. 8. The Settlement Fund, less deductions for fees, costs and expenses allowed by the Court and taxes due, will be maintained by the Escrow Agent for the benefit of the Settlement Class, as provided in the Stipulations. 9. If the proposed Settlements are approved by the Court, the Court will enter judgments which will dismiss the Litigation as against the Settling Defendants (or so many of them as participate in approved Settlements) with prejudice, and bar and permanently enjoin the Representative Plaintiffs and each Settlement Class Member from prosecuting the Released Claims against the Released Persons, and any such Settlement Class Member will be conclusively deemed to have released any and all such Released Claims against the Released Persons. The Court will retain jurisdiction over implementation of the Settlements and disposition of the Settlement Fund, hearing and determining any application by Representative Plaintiffs counsel for attorneys fees, costs, and expenses (including fees and costs for experts and/or consultants), and enforcing and administering the Stipulations, including any releases executed in connection therewith. VI. NOTICE TO BANKS, BROKERS, AND OTHER NOMINEES Banks, brokerage firms, institutions, and other Persons who are nominees who purchased Western Notes for the beneficial interest of other Persons as of any day from June 1985 through and including June 15, 1989 are requested within ten (10) days of receipt of this Notice, (1) to provide Plaintiffs Settlement Counsel with the names and addresses of such beneficial purchasers, or (2) to forward a copy of the Notice to each such beneficial purchaser and provide Plaintiffs Settlement Counsel with written confirmation that the Notice has been so forwarded. The reasonable costs and expenses of complying with this provision will be paid upon submission of appropriate documentation. Additional copies of the Notice may be obtained from Plaintiffs Settlement Counsel for forwarding to such beneficial owners. All such correspondence to Plaintiffs Settlement Counsel should be addressed as follows: Western Savings Securities Litigation c/o Gilardi & Co., LLC P.O. Box 8040 San Rafael, CA 94912-8040 VII. ATTORNEYS FEES, COSTS AND EXPENSES OF REPRESENTATIVE PLAINTIFFS ATTORNEYS Counsel for the Representative Plaintiffs in the Litigation will apply to the Court at the conclusion of the Hearing described below for an award of attorneys fees of up to one-third of the aggregate amount of the Settlement Fund plus, to the extent not previously paid, reimbursement of litigation expenses and disbursements actually incurred, together with the interest earned on said sums. Such sums as may be granted by the Court will be paid from the Settlement Fund. VIII. THE HEARING A hearing (the Hearing ) will be held before the Honorable Stephen M. McNamee at United States District Court, District of Arizona, United States Courthouse, 230 N. 1st Ave., Room No. 6077, Phoenix, Arizona 85025, on March 24, 2000, at 1:30 p.m., for the purpose of determining whether the proposed Settlements are fair, reasonable, adequate and in good faith and whether they 7
should be approved by the Court; whether judgment should be entered dismissing the Litigation on the merits and with prejudice as against the Settling Defendants; whether the proposed Plan of Allocation of the Settlement Fund should be approved; and determining the amount of plaintiffs counsel s attorneys fees and reimbursement of expenses. The Hearing may be adjourned from time to time by the Court at the Hearing or any adjourned session thereof without further notice. Any Member of the Settlement Class who has not requested exclusion may appear at the Hearing to show cause why the proposed Settlements should not be approved, or the Litigation should not be dismissed on the merits with prejudice as against the Settling Defendants, why the proposed Plan of Allocation should not be approved and to present any opposition to the application of plaintiffs counsel for fees, costs and expenses; provided, however, that no such Person will be heard, unless his or her objection or opposition is made in writing and is filed, together with copies of all other papers and briefs to be submitted by him or her to the Court at the Hearing, with the Court no later than March 2, 2000, and showing due proof of service on: and Counsel for certain Settling Defendants: MILBERG WEISS BERSHAD HYNES & LERACH LLP KEITH F. PARK HELEN J. HODGES 600 West Broadway, Suite 1800 San Diego, CA 92101 LAW OFFICES OF BART MORRISON & HECKER L.L.P. BROWN & BAIN PATTERSON, P.C. MICHAEL PARRISH MICHAEL CLYDE BART PATTERSON 2800 North Central Avenue, 2901 North Central Avenue Two Renaissance Square Suite 1600 Suite 2000, P.O. Box 400 40 North Central Avenue, Suite 2500 Phoenix, AZ 85012 Phoenix, AZ 85001-0400 Phoenix, AZ 85004 Unless otherwise ordered by the Court, any Member of the Settlement Class who does not make his or her objection or opposition in the manner provided will be deemed to have waived all objections and opposition to the fairness, reasonableness and adequacy of the proposed Settlements, the Plan of Allocation, and to the request of plaintiffs counsel for fees, costs and expenses. IX. EXAMINATION OF PAPERS AND INQUIRIES 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 Stipulations of Settlement and to other papers filed in this action which may be inspected at the Office of the Clerk of the United States District Court, United States Courthouse, 230 N. 1st Ave., Room No. 6077, Phoenix, Arizona 85025, during business hours of each business day. Inquiries regarding the Litigation should be addressed as follows: Western Savings Securities Litigation c/o Gilardi & Co., LLC P.O. Box 8040 San Rafael, CA 94912-8040 DO NOT CONTACT THE COURT REGARDING THIS NOTICE. DATED: January 21, 2000 BY ORDER OF THE COURT UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA 8