UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
IN RE WORLDCOM, INC. SECURITIES
LITIGATION
MASTER FILE
02 Civ. 3288 (DLC)
This Document Relates To:
02 Civ. 3288 02 Civ. 4973 02 Civ. 8230
02 Civ. 3416 02 Civ. 4990 02 Civ. 8234
02 Civ. 3419 02 Civ. 5057 02 Civ. 9513
02 Civ. 3508 02 Civ. 5071 02 Civ. 9514
02 Civ. 3537 02 Civ. 5087 02 Civ. 9515
02 Civ. 3647 02 Civ. 5108 02 Civ. 9516
02 Civ. 3750 02 Civ. 5224 02 Civ. 9519
02 Civ. 3771 02 Civ. 5285 02 Civ. 9521
02 Civ. 4719 02 Civ. 8226 03 Civ. 2841
02 Civ. 4945 02 Civ. 8227 03 Civ. 3592
02 Civ. 4946 02 Civ. 8228 03 Civ. 6229
02 Civ. 4958 02 Civ. 8229 03 Civ. 7298
03 Civ. 7299
MEMORANDUM OF AGREEMENT
This Memorandum of Agreement (the "Agreement") is an agreement between (i)
the Lead Plaintiff, Alan G. Hevesi, Comptroller of the State of New York, as
Administrative Head of the New York State and Local Retirement Systems and as
Trustee of the New York State Common Retirement Fund, and the Additional Named
Plaintiffs, Fresno County Employees Retirement Association, the County of
Fresno, California, and HGK Asset Management, Inc., and the Class (as defined in
paragraph 1 below) (collectively, "Plaintiffs"), and (ii) Defendants Citigroup
Inc., Citigroup Global Markets Inc., formerly known as Salomon Smith Barney
Inc., Citigroup Global Markets Limited, formerly known as Salomon Brothers
International Limited, and Jack B.
Grubman (the "Citigroup Defendants") (collectively, the "Parties"), by and
through their undersigned attorneys. The Parties have reached an agreement in
principle for the settlement of the above-captioned litigation between them (the
"Action") on the terms set forth below and subject to court approval. This
Agreement outlines the principal terms of the proposed settlement (the
"Settlement") and is intended to be used as a basis for drafting a Stipulation
and Agreement of Settlement (the "Stipulation") and accompanying papers that
shall embody the terms set forth herein and such other and consistent terms as
are agreed upon by counsel for the Parties.
1. The Class consists of all persons who purchased or otherwise
acquired publicly traded securities of WorldCom, Inc. ("WorldCom"), during the
period between April 29, 1999 and June 25, 2002, inclusive (the "Class Period"),
excluding the defendants in the Action, members of the families of the
individual defendants in the Action, any entity in which any defendant in the
Action has a controlling interest, officers and directors of WorldCom and its
subsidiaries and affiliates, and the legal representatives, heirs, successors or
assigns of any such excluded party. See In re WorldCom, Inc. Securities
Litigation, No. 02 Civ. 3288 (DLC), 2003 WL 22420467, at * 2 & n.3 (S.D.N.Y.
Oct. 24, 2003).
2. The Citigroup Defendants shall pay to Lead Plaintiff, for the
benefit of the Class, in settlement of the claims against them, the Settlement
Amount (together with accrued interest on that amount calculated from the date
forty-five (45) days after preliminary approval of the Settlement, as defined in
the Stipulation, until the date when the Settlement receives Final Approval, as
defined in paragraph 9 below, at the interest rate for six-month United States
treasury bills on the date interest begins to run),
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to be deposited into an interest-bearing escrow account maintained by
Plaintiffs' Co-Lead Counsel (the "Settlement Fund") within five (5) days after
the date the Settlement has received Final Approval, as defined in paragraph 9
below. The Settlement Amount is $2.65 billion in cash; except that: (i) the
Settlement Amount(s) allocated to members of the Class who purchased shares of
WorldCom stock will be reduced by X% -- with "X" equal to the sum total of the
number of shares of common stock held by Class members who opt out of the Class
(the "Stock Opt-Outs"), expressed as a percentage of the number of shares of all
publicly held common stock of WorldCom outstanding on June 25, 2002, minus one
and one-half (l 1/2%) percent; provided that the percentage of the holdings of
the Stock Opt-Outs, exceeds one and one-half (l 1/2%) percent, otherwise "X" is
equal to zero (0); (ii) the Settlement Amount(s) allocated to members of the
Class who purchased May 2000 WorldCom notes will be reduced by Y% -- with "Y"
equal to the sum total of the face value of all May 2000 notes held by those
individual plaintiffs who opt out of the Class (the "May 2000 Debt Opt-Outs"),
minus an amount equal to one and one-half (1 1/2%) percent of the total face
value of all the debt securities issued by WorldCom pursuant to the May 2000
offering; provided that the sum total of the face value of all May 2000 notes
held by the May 2000 Debt Opt-Outs exceeds one and one-half (1 1/2%) percent of
the total face value of all the debt securities issued by WorldCom pursuant to
the May 2000 Offering, otherwise "Y" is equal to zero (0); and (iii) the
Settlement Amount(s) allocated to members of the Class who purchased May 2001
WorldCom notes will be reduced by Z% -- with "Z" equal to the sum total of the
face value all May 2001 notes held by those individual plaintiffs who opt out of
the Class (the "May 2001 Debt Opt-Outs"), minus an amount equal to one and
one-half (1 1/2%) percent of the total face
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value of all the debt securities issued by WorldCom pursuant to the May 2001
offering; provided that the sum total of the face value of all May 2001 notes
held by the May 2001 Debt Opt-Outs exceeds one and one-half (l 1/2%) percent of
the total face value of all the debt securities issued by WorldCom pursuant to
the May 2001 Offering, otherwise "Z" is equal to zero (0). For purposes of the
calculations provided for in this paragraph, the WorldCom security holdings of
the plaintiffs in the actions listed on Schedule A attached to this Agreement
who have not evinced their intention to "opt in" to the Class are excluded.
3. The Settlement Fund deposited into the escrow account designated by
Lead Plaintiff and all interest accruing thereon shall be deemed to be in the
custody of the Court and will remain subject to the jurisdiction of the Court
until such time as it is distributed to approved claimants. The Stipulation will
provide that the Settlement Fund shall be a "qualified settlement fund" within
the meaning of section 468B of the Internal Revenue Code and contain customary
terms complying with section 468B and Treasury regulations promulgated
thereunder and customary provisions concerning indemnification of the Citigroup
Defendants by the Settlement Fund for any tax liabilities of the Settlement
Fund.
4. Following execution of this Agreement, Lead Plaintiff, the Citigroup
Defendants, and their counsel shall use their best efforts to finalize and
execute, as soon as practicable, the Stipulation and such other documentation as
may be required or appropriate in order to obtain approval by the Court of the
Settlement. Promptly upon execution of the Stipulation, the Lead Plaintiff and
the Citigroup Defendants shall apply to the Court for preliminary approval of
the Settlement and for the
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scheduling of a hearing for consideration of final approval of the Settlement
and, in Lead Counsel and Lead Plaintiffs' discretion, the application for an
award of attorneys' fees and expenses. The Parties and their counsel shall use
their best efforts to obtain final Court approval of the Settlement. The
Settlement Fund, less the costs associated with notice to the class and
administration of the Settlement, applicable taxes, attorneys' fees and
reimbursement of expenses and experts fees, as approved by the Court, shall
constitute the Net Settlement Fund to be distributed in the manner set forth
below.
5. The Stipulation shall provide (among other terms): (a) for the entry
of an order by the Court preliminarily approving the Stipulation and Settlement
and directing that notice of settlement be provided to members of the Class; (b)
that the Citigroup Defendants have denied that they have committed any act or
omission giving rise to any liability and/or violation of law, and state that
they are entering into this Settlement solely to eliminate the uncertainties,
burden and expense of further protracted litigation, and that Plaintiffs,
without conceding any defect or lack of merit in the claims they have asserted,
acknowledge the uncertainties they face with respect to their claims; (c) that
neither this Agreement, nor the Settlement, nor any of their terms, nor any
press release or other statement or report by the Parties or by others
concerning this Agreement, the Settlement or their terms, shall constitute an
admission or finding of wrongful conduct, acts or omissions on the part of any
Citigroup Releasee (defined in paragraph 12 below) or be admissible in any
proceeding (other than one to enforce the terms of the Stipulation) for any
purpose whatsoever; (d) that the allocation of the Net Settlement Fund among the
members of the Class shall be subject to a plan of allocation ("Plan of
Allocation") that provides for the creation of three subclasses as described
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herein, subject to a further allocation plan within each subclass in the sole
discretion of the Lead Plaintiff ("Supplemental Plan of Allocation"), but shall
further provide that any decision by the Court concerning the Plan of Allocation
or the Supplemental Plan of Allocation shall not affect the validity or finality
of the proposed Settlement; (e) that the Net Settlement Fund shall be allocated
among the subclasses as follows: (i) 12.65% of the Net Settlement Fund to claims
asserted under the Securities Act of 1933 (the "Securities Act") by purchasers
of debt securities offered by WorldCom in May 2000; (ii) 42.35% of the Net
Settlement Fund to claims asserted under the Securities Act by purchasers of
debt securities offered by WorldCom in May 2001; and (iii) 45% of the Net
Settlement Fund to claims asserted under the Securities Exchange Act of 1934
(the "Exchange Act") by class members who, during the Class Period, purchased
WorldCom common stock and/or publicly-traded debt securities issued prior to the
beginning of the Class Period; (f) that Plaintiffs' Co-Lead Counsel may (but
need not at the time the Stipulation is filed) apply for and receive an award of
attorneys' fees and reimbursement of expenses from the Settlement Fund in such
amounts as may be approved by the Lead Plaintiff (consistent with the retainer
agreement entered into between Lead Plaintiff and Lead Counsel), and as approved
by the Court, and that any decision by the Court concerning the amount of any
fee award shall not affect the validity or finality of the proposed settlement;
and (g) that the Citigroup Defendants shall have the right to terminate the
Settlement as provided in paragraph 13 below.
6. Any award of attorneys' fees and expenses paid to Plaintiffs'
Co-Lead Counsel shall be paid solely from the Settlement Fund or other
settlements agreed to in this action.
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7. The Citigroup Defendants take no position and will take no position
with respect to the proposed Plan of Allocation and Supplemental Plan of
Allocation described in paragraph 5 above, or any other such plan as may be
approved by the Court. Both Plaintiffs and the Citigroup Defendants shall be
bound by the terms of this Agreement and by the Settlement, irrespective of
whether the Court disapproves or modifies the Plan of Allocation and/or
Supplement Plan of Allocation.
8. The Settlement is not a claims made settlement and if all conditions
of the Settlement are satisfied and there is a Final Judgment that is not
overturned or materially and adversely modified on appeal or as a result of
proceedings on remand of any appeal concerning approval of the Settlement, then
the Citigroup Defendants will relinquish their rights to an individual or
collective interest in the Settlement Fund. The Net Settlement Fund shall be
disbursed to Authorized Claimants upon approval by the Court. Lead Plaintiff
does not contemplate seeking a Supplemental Plan of Allocation until a later
date. No funds from the Net Settlement Fund shall be disbursed to the Class
until after all appeals from the Court's Final Judgment approving the Settlement
and any further proceedings on remand have been resolved, or the time for appeal
regarding the Settlement ("Final Approval") has expired. The Citigroup
Defendants will have no involvement in reviewing or challenging any Proof of
Claim and Release and will have no liability with respect to this process.
9. The Stipulation will provide that Bernard Ebbers, Scott Sullivan,
David Myers, Buford Yates, James C. Allen, Judith Areen, Carl J. Aycock, Max E.
Bobbitt, Francesco Galesi, Clifford L. Alexander, Jr., Stiles A. Kellett, Jr.,
Gordon S. Macklin, John A. Porter, Bert C. Roberts, Jr., John W. Sidgmore,
Lawrence C. Tucker,
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Arthur Andersen LLP, J.P. Morgan Chase & Co., J.P. Morgan Securities, Inc., J.P.
Morgan Securities Ltd., Banc of America Securities LLC, Deutsche Bank Alex.
Brown Inc. (formerly known as Deutsche Bank Securities Inc.), Chase Securities
Inc., Lehman Brothers Inc., Blaylock & Partners, L.P., Credit Suisse First
Boston Corp., Goldman, Sachs & Co., UBS Warburg LLC, ABN/AMRO Inc., Utendahl
Capital Partners, L.P., Tokyo-Mitsubishi International plc, Westdeutsche
Landesbank Girozentrale, BNP Paribas Securities Corp., Caboto Holding SIM
S.p.A., Fleet Securities, Inc., Mizuho International plc (each individually and
with any foreign affiliate through which May 2001 notes were distributed,
"Non-Settling Entity/Individual"; collectively the "Non-Settling
Entities/Individuals"), are permanently BARRED, ENJOINED and RESTRAINED from
commencing, prosecuting, or asserting any claim for indemnity or contribution
against the Citigroup Releasees (as that term is defined in paragraph 12 below)
(or any other claim against the Citigroup Releasees where the injury to the
Non-Settling Entity/Individual is the Non-Settling Entity's/Individual's
liability to the Plaintiffs), arising out of or related to the claims or
allegations asserted by Plaintiffs in the Complaint, whether arising under
state, federal or foreign law as claims, cross-claims, counterclaims, or
third-party claims, whether asserted in the Complaint, in this Court, in any
federal or state court, or in any other court, arbitration proceeding,
administrative agency, or other forum in the United States or elsewhere.
10. At their election, J.P. Morgan Chase & Co., J.P. Morgan
Securities, Inc., J.P. Morgan Securities Ltd., Banc of America Securities LLC,
Deutsche Bank Securities Inc., Chase Securities Inc., Lehman Brothers Inc.,
Blaylock & Partners, L.P., Credit Suisse First Boston Corp., Goldman, Sachs &
Co., UBS Warburg LLC,
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ABN/AMRO Inc., Utendahl Capital Partners, L.P., Tokyo-Mitsubishi International
plc, Westdeutsche Landesbank Girozentrale, BNP Paribas Securities Corp., Caboto
Holding SIM S.p.A., Fleet Securities, Inc., Mizuho International plc (each
individually and with any foreign affiliate through which May 2001 WorldCom
notes were distributed, "Underwriter"; collectively, the "Non-Settling
Underwriters") may, within 45 days after written notice to all Underwriter
Defendants of the execution of this Agreement, settle the Securities Act claims
asserted against them in the Complaint on the same terms, modified to reflect
each Underwriter's proportionate share of the relevant offerings, as the
Citigroup Defendants. Any Underwriter that chooses not to enter into such a
settlement nevertheless shall be entitled to judgment credit in an amount equal
to the maximum amount permitted under applicable law.
11. In the event that the Court, after a hearing conducted on
notice pursuant to Fed. R. Civ. P. 23(e) (the "Settlement Fairness Hearing"),
shall ultimately approve the Settlement, the Parties shall submit to the Court
an Order and Final Judgment directing consummation of the Settlement, confirming
the certification of the Class, approving the terms and conditions of the
Settlement as described above, providing for the payment of attorneys' fees and
expenses, as described above, reserving jurisdiction over the effectuation of
the Settlement and barring and enjoining Plaintiffs and members of the Class
from prosecuting in this Action or any other action or proceeding any Released
Claims (as that term is defined below), and further providing for the following:
(a) the dismissal of this action on the merits and with prejudice as against
Plaintiffs and members of the Class; (b) the release by Plaintiffs and all
members of the Class of all claims of every nature and description, known and
unknown, arising out of or relating to
9
investments (including, but not limited to, purchases, sales, exercises, and
decisions to hold) in securities issued by WorldCom, as well as options or
derivatives based on the value of securities issued by WorldCom, arising out of
or relating to any analyst research reports or other statements relating to
WorldCom, or arising out of or relating to any disclosures, registration
statements or other statements by WorldCom, including without limitation all
claims asserted by or that could have been asserted by Plaintiffs or any member
of the Class (the "Released Claims"), against the Citigroup Defendants, their
respective present and former parents, subsidiaries, divisions and affiliates,
the present and former employees, officers and directors of each of them, the
present and former attorneys, accountants, insurers, and agents of each of them,
and the predecessors, heirs, successors and assigns of each (together, the
"Citigroup Releasees"), and any person or entity in which any Citigroup Releasee
has or had a controlling interest or which is or was related to or affiliated
with any Citigroup Releasee; and (c) the release by the Citigroup Defendants and
their counsel, of Plaintiffs, their respective present and former parents,
subsidiaries, divisions and affiliates, Plaintiffs' Co-Lead Counsel and
assisting counsel, the present and former employees, officers and directors of
each of them, the present and former accountants, insurers, and agents of each
of them, and the predecessors, heirs, successors and assigns of each, and the
members of the Class from any claims relating to the institution or prosecution
of the Action. The releases described in this paragraph do not operate to
preclude any plaintiff or claimant from making any claim with respect to any
funds made available as a result of the WorldCom bankruptcy, WorldCom's
settlement with the Securities and Exchange Commission, or any other
10
regulatory agency fund. Moreover, nothing in this paragraph is intended to
release any claims asserted by the Class against the Non-Settling
Entities/Individuals.
12. The consummation of the Settlement as provided herein shall be
subject to the following conditions: (a) the drafting and execution of the
Stipulation and such other documentation as may be required to obtain final
court approval of the Settlement; and (b) final court approval of the
Settlement. In addition, the Citigroup Defendants may, in their sole discretion,
withdraw from and terminate the Settlement if final Court approval is not
obtained of a bar provision that reflects the terms set forth in paragraph 10 of
this Agreement.
13. Plaintiffs' Co-Lead Counsel may apply to the District Court
after preliminary approval for up to $3,000,000 out of the Settlement Fund to
cover Notice and Administration Costs (as defined in paragraph 15 below)
incurred by Plaintiffs' Co-Lead Counsel in connection with this Settlement.
Plaintiffs' Co-Lead Counsel shall refund to the Citigroup Defendants the
remaining balance of the Settlement Fund, net of Notice and Administration Costs
incurred, including any interest actually earned, within 5 days if the
Settlement is overturned or materially and adversely modified on appeal or as a
result of further proceedings on remand of any appeal with respect to the
Settlement, or otherwise does not become effective.
14. Any Notice and Administration Costs, as well as all applicable
taxes, shall be paid out of the Settlement Fund. Notice and Administration Costs
shall include, among other things, the cost of publishing summary notice in the
national and international editions of The Wall Street Journal or other national
news service, printing and mailing the full Notice and Proof of Claim and
Release, as directed by the Court, and
11
the cost of processing proofs of claim and distributing the Net Settlement Fund
to Class members who timely submit a valid Proof of Claim and Release.
15. If the Settlement outlined in this Agreement is not approved by the
Court or is terminated: (a) the Settlement shall be without force and effect
upon the rights of the Parties hereto, and none of its terms shall be effective
or enforceable; and (b) the Parties shall revert to their litigation positions
immediately prior to the execution of this Agreement. Neither this Agreement,
nor the Settlement, nor the fact of the existence of this Agreement or the
Settlement, nor any of the terms of this Agreement or the Settlement, nor any
press release or other statement or report by the Parties or by others
concerning this Agreement, the Settlement, their existence or their terms, nor
any negotiations or proceedings hereunder, shall be offered or received in
evidence in any trial of this Action or any other action or proceedings, nor
shall they be deemed to constitute any evidence or admission of liability or
wrongdoing on the part of any of the Citigroup Defendants or Releasees, which is
expressly and unequivocally denied.
16. Plaintiffs and the Citigroup Defendants agree to apply jointly to
the Court promptly after execution of this Agreement for severance of the claims
against the Citigroup Defendants from the claims against the Non-Settling
Entities/Individuals, and for a stay and adjournment of all deadlines as between
the Citigroup Defendants and Plaintiffs relating to such severed claims for
eight months. The Citigroup Defendants acknowledge, however, that further
discovery of the Citigroup Defendants may be sought in connection with Lead
Plaintiff's prosecution of claims against the Non-Settling Entities/Individuals.
The Parties agree that if, at the expiration of the eight-month period, the
Settlement still has not received Final Approval, as defined in paragraph 9
above, that
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the parties will jointly apply for a further stay and adjournment. In the event
the Settlement is not approved by the Court or is terminated, the Parties agree
that, subject to Court approval: the Parties may take additional discovery in
this Action for a period of not less than three months following such
non-approval or termination, with expert and pre-trial motion practice,
including without limitation summary judgment motions, to follow the closure of
the additional discovery period; no application shall be made by Plaintiffs to
consolidate the severed claims against the Citigroup Defendants with the claims
asserted against the Non-Settling Entities/Individual; any trial of the claims
against the Citigroup Defendants in this Action shall commence no earlier than
eight months after such non-approval or termination; and, in all events, any
trial of the claims against the Citigroup Defendants shall not be scheduled
until after the completion of the trial of the claims asserted against the
Non-Settling Entities/Individuals. Lead Plaintiff and the Citigroup Defendants
also agree jointly to apply to the Court promptly after execution of this
Agreement (a) for a stay of all proceedings in all the actions consolidated or
coordinated with the Action under the caption In re WorldCom, Inc. Securities
Litigation, Master File No. 02 Civ. 3288 (DLC), for a period of three weeks,
until May 31, 2004; (b) for an extension of the fact discovery cut-off for a
period of three weeks, until July 9, 2004; and, (c) for a seven-week extension
of all other deadlines provided for by the Court in all the actions consolidated
or coordinated with the Action under the caption In re WorldCom, Inc. Securities
Litigation, Master File No. 02 Civ. 3288 (DLC), except the dates set for filing
of the Joint Pretrial Order and motions in limine and the start date set for the
trial of the above-captioned litigation. Plaintiffs acknowledge that, given the
amount of discovery taken by them of the Citigroup
13
Defendants and others to date, including extensive document and other written
discovery as well as numerous depositions, Plaintiffs are satisfied that an
adequate factual record has been established that supports the Settlement and
hereby waive any right to conduct further discovery to assess or confirm the
Settlement.
17. Plaintiffs and the Citigroup Defendants' agree jointly to apply for
a stay of the appeal pending before the Second Circuit of this Court's order
granting certification of a class action, In re WorldCom, Inc. Securities
Litigation, No. 03-9350 (the "Appeal"). In the event the Settlement is not
approved by the Court or is terminated, Plaintiffs and the Citigroup Defendants
agree jointly to apply to reinstate the Appeal on an expedited basis. Nothing in
this Agreement, the Settlement, the fact of the existence of this Agreement or
the Settlement, or any of the terms of this Agreement or the Settlement shall
affect, or shall be construed to affect, the merits of the Citigroup Defendants'
Appeal or the Citigroup Defendants' arguments in support of their Appeal, or the
Lead Plaintiff's arguments in opposition to the Appeal.
18. Plaintiffs and the Citigroup Defendants agree jointly to provide
notice to the Second Circuit Court of Appeals of the execution of the Agreement,
and to further provide notice that, until such time as an opinion issues in
California Public Employees' Retirement System v. Bobbitt, et al., No. 04-0219,
or a fixed opt-out date is established, the Parties will be unable to seek Final
Approval of the Settlement.
19. Plaintiffs' Co-Lead Counsel may designate the settlement claims
administrator, subject to Court approval.
20. The Parties agree that the Settlement and Plan of Allocation set
forth herein constitutes a fair, reasonable and adequate resolution of the
claims that
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Plaintiffs asserted against the Citigroup Defendants, and that it promotes the
public interest. The Parties further agree that unless ordered by the Court,
they will not publicize, disseminate, refer to, or otherwise distribute to any
third party any information regarding the negotiations between the Parties, or
any information or documents they have obtained from the other side in
connection with the Action, whether the information was obtained through
document or other written discovery, or through depositions, or otherwise.
21. Except for attorney notes, pleadings, other Court submissions and
transcripts of depositions, Plaintiffs agree to return to the Citigroup
Defendants, at the Citigroup Defendants' option, all discovery obtained from the
Citigroup Defendants within thirty (30) days after all the claims in the
above-captioned litigation against all Defendants have either been settled,
tried to final judgment, or otherwise resolved.
22. This Agreement may be executed in counterparts, including by
signature transmitted by facsimile. Each counterpart when so executed shall be
deemed to be an original, and all such counterparts together shall constitute
the same instrument. The undersigned signatories represent that they have
authority from their clients to execute this Agreement.
23. The Parties acknowledge that this Agreement constitutes the entire
agreement between the Parties, entered into following substantial arm's length
negotiations between the Parties in an effort to resolve all claims that have
been or could be asserted by Plaintiffs on behalf of the Class against the
Citigroup Defendants.
24. The terms of this Agreement and Settlement shall inure to and be
binding upon the Parties and their successors in interest. This Agreement may be
15
amended or modified only by a written instrument signed by each of the
respective Parties hereto, or their counsel acting on their behalf.
25. All applications to the Court with respect to any aspect of this
Settlement shall be presented to and determined by United States District Judge
Denise L. Cote (the "Court"). Upon execution of this Agreement, the Parties
shall promptly advise the Court of the Settlement.
26. The Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without regard to choice of law principles,
to the extent that federal law does not apply. Any action based on this
Agreement or to enforce any of its terms shall be venued in the United States
District Court for the Southern District of New York, which shall retain
jurisdiction over all such disputes.
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IT IS HEREBY AGREED by the undersigned as of May 7, 2004.
BERNSTEIN LITOWITZ BERGER &
GROSSMANN LLP BARRACK, RODOS & BACINE
By: /s/ Max W. Berger By: /s/ Jeffrey W. Golan
------------------------------ ----------------------------
Max W. Berger Leonard Barrack
John P. Coffey Jeffrey W. Golan
1285 Avenue of the Americas 3300 Two Commerce Square
New York, New York 10019 2001 Market Street
(212) 554-1400 Philadelphia, Pennsylvania 19103
(212) 554-1400
Co-Lead Counsel for the Class and on Behalf of Lead Plaintiff
Alan G. Hevesi, Comptroller of the State of New York
PAUL, WEISS, RIFKIND,
WHARTON & GARRISON LLP
By: /s/ Martin London
-------------------------
Martin London
Brad S. Karp
Eric S. Goldstein
1285 Avenue of the Americas
New York, New York
(212)373-3000
On Behalf of the Citigroup Defendants
Additional Class Plaintiffs' Counsel:
BERMAN DEVALERIO PEASE
TABACCO BURT & PUCILLO SCHOENGOLD & SPORN, P.C.
By: /s/ Joseph J. Tabacco By: /s/ Samuel P. Sporn
---------------------------- --------------------------
Joseph J. Tabacco Samuel P. Sporn
425 California Street, Suite 2025 Christopher Lometti
San Francisco, California 94104 Cannon's Walk
(415) 433-3200 19 Fulton Street, Suite 406
New York, New York 10038
(212)267-8137
On Behalf of Class Plaintiffs County of
Fresno and Fresno County Employees' On Behalf of Class Plaintiff HGK
Retirement Association Asset Management
17
STATEMENT BY THE MEDIATORS
Pursuant to appointment by the Honorable Denise L. Cote, United States
District Judge, we have presided over the extensive negotiations between the
Parties that led to this Agreement. We can state based on our discussions with
the Parties and the information made available to us, that this Settlement was
negotiated in good faith and the Settlement and the allocation between the
Securities Act and Exchange Act claims are in the public interest.
/s/ Robert W. Sweet, U.S.D.J. /s/ Michael H. Dolinger, U.S.M.J.
- ------------------------------- ----------------------------------
Robert W. Sweet, U.S.D.J. Michael H. Dolinger, U.S.M.J.
18
SCHEDULE A
1. Almeda County Employees' Ret. Ass'n, et al. v. Ebbers, et al., No.
03 Civ. 0890 (S.D.N.Y.);
2. Am. Int'l Group, et al. v. Ebbers, et al., No. 03 Civ. 9823
(S.D.N.Y.);
3. Board of Trs. of the Teachers' Ret. Sys. of Illinois v. WorldCom, et
al., No. 03 Civ. 0168 (S.D.N.Y.);
4. California Pub. Employees' Ret. Sys., et al. v. Ebbers, et al., No.
03 Civ. 167 (S.D.N.Y.);
5. Carpenters Pension Trust for S. Cal. v. Ebbers, et al., No. 03 Civ.
7806 (S.D.N.Y.);
6. Crane, et al. v. Ebbers, et al., No. 04 Civ. 1521 (S.D.N.Y.);
7. Heavy & General Laborers' Locals 472 & 172 Pension & Annuity Funds,
et al. v. Citigroup, Inc., et al., No. 03 Civ. 3860 (S.D.N.Y.);
8. Illinois St. Bd. of Inv. v. Ebbers, et al., No. 03 Civ. 0170
(S.D.N.Y.);
9. Illinois Mun. Ret. Fund v. Citigroup Inc., et al., No. 03 L 772
(Illinois Circuit Court, Madison County);
10. Inter-Local Pension Fund of the Graphic Comm. Int'l Union v.
Citigroup, Inc. et al., No. 04 Civ. 1522 (S.D.N.Y.);
11. Los Angeles Bd. of Fire & Police Pension Comm'rs, et al. v. Ebbers,
et al., No. 03 Civ. 2839 (S.D.N.Y.);
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12. Maine St. Ret. Sys. v. Citigroup, Inc., et al., No. 03 Civ. 6226
(S.D.N.Y.);
13. Maintenance Employees Teamsters Local 416 Pension Funds, et al. v.
Ebbers, et al., No. 03 Civ. 4500 (S.D.N.Y.);
14. Maryland-National Capital Park & Planning Comm'n Employees' Ret.
Sys. v. Citigroup, Inc., et al., No. 03 Civ. 3859 (S.D.N.Y.);
15. Minnesota St. Bd. of Inv. v. Citigroup, Inc., et al., No. 03 Civ.
1283 (S.D.N.Y.);
16. Municipal Employees Ret. Sys. of Mich., et al. v. Citigroup, Inc.,
et al., No. 03 Civ. 6227 (S.D.N.Y.);
17. New Mexico State Inv. Council, et al. v. Clifford Alexander, et al.,
No. D-101-CV-200400790 (New Mexico District Court, Santa Fe County);
18. New York City Employees' Ret. Sys., et al. v. Ebbers, et al., No. 02
Civ. 8981 (S.D.N.Y.);
19. Northwestern Mut. Life Ins. Co. v. Citigroup, Inc., et al., No. 03
Civ. 9824 (S.D.N.Y.);
20. Pacific Life Ins. Co., et al. v. J.P. Morgan Chase & Co., No. 03
Civ. 6225 (S.D.N.Y.);
21. Public Employees Ret. Sys. of Ohio, et al. v. Ebbers, et al., 03
Civ. 338 (S.D.N.Y.);
22. Regents of the Univ. of Cal. v. Salomon Smith Barney, Inc., et al.,
No. 03 Civ. 6219 (S.D.N.Y.);
20
23. Retirement Sys. of Alabama, et al. v. J.P. Morgan, et al., No. CV
2002 1947(a) (Alabama Circuit Court, Montgomery County);
24. Screen Actors Guild-Producers Pension & Health Plans, et al. v.
Ebbers, et al., No. 03 Civ. 0891 (S.D.N.Y.);
25. State of Alaska Dept. of Revenue, et al. v. Citigroup, Inc., et al.,
No. 03 Civ. 6592 (S.D.N.Y.);
26. State Univs. Ret. Sys. of Illinois v. Ebbers, et al., 03 Civ. 0169
(S.D.N.Y.);
27. State of Wis. Inv. Bd. v. Ebbers, et al., No. 03 Civ. 4499
(S.D.N.Y.);
28. Steelworkers Pension Trust v. Citigroup, et al., No. 03341
(Pennsylvania Court of Common Pleas, Philadelphia County);
29. SunTrust Bank, et al. v. Ebbers, et al., No. 02 Civ. 9520
(S.D.N.Y.);
30. Teachers Ret. Sys. of Louisiana v. Ebbers, et al., No. 03 Civ. 4498
(S.D.N.Y.);
31. Tennessee Consolidated Ret. Sys. v. Citigroup Inc., et al., No 3:03-
0128 (M.D. Tenn.);
32. United Food & Commercial Workers Union Local 880-Retail Food
Employers Joint Pension Fund, et al. v. Ebbers, et al., No. 03 Civ. 0337
(S.D.N.Y.);
33. Washington St. Inv. Bd. v. Citigroup, Inc., et al., No. 03 Civ. 0892
(S.D.N.Y.);
21
34. West Virginia Inv. Mgmt. Bd. v. WorldCom, Inc., et al., No. 03 Civ.
0171 (S.D.N.Y.).
22