Schwartz v. Cook et al

Filing 125

ORDER PRELIMINARILY APPROVING SETTLEMENT, PRELIMINARILY CERTIFYING A SETTLEMENT CLASS, APPROVING FORMS AND METHODS OF NOTICE, AND SETTING A FAIRNESS HEARING (granting 116 ). Fairness Hearing set for 6/15/2017 01:30 PM. Signed by Judge Beth Labson Freeman on 3/20/2017. (blflc1S, COURT STAFF) (Filed on 3/20/2017)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

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KRISTOPHER A. SCHWARTZ,

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Plaintiff,

No. 15-cv-03347-BLF

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ORDER PRELIMINARILY APPROVING
SETTLEMENT, PRELIMINARILY
CERTIFYING A SETTLEMENT CLASS,
APPROVING FORMS AND METHODS OF
NOTICE, AND SETTING A FAIRNESS
HEARING

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Judge: Hon. Beth Labson Freeman

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v.
ART COOK, ET AL.,

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Defendant.

Complaint Filed: July 20, 2015
Trial Date: September 25, 2017

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ORDER PRELIMINARILY APPROVING
SETTLEMENT, PRELIMINARILY CERTIFYING A
SETTLEMENT CLASS, APPROVING FORMS AND
METHODS OF NOTICE, AND SETTING A FAIRNESS
HEARING

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This is a case brought under the Employee Retirement Income Security Act (ERISA), 29 U.S.C.

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§ 1001 et seq., claiming breach of fiduciary duty. In a mediation conducted by the Honorable Edward

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A. Infante, Plaintiff and Defendants reached a settlement of the Action. A Settlement Agreement dated
as of September 8, 2016 (“Settlement Agreement”) was filed with the Court on January 9, 2017.

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Presented to the Court for preliminary approval is a settlement of this Action. The terms of the

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settlement are set out in a Settlement Agreement dated as of September 8, 2016 (the “Settlement

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Agreement”).1

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The Court has considered the proposed settlement to determine, among other things, whether to

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certify a class for settlement purposes and whether the settlement is sufficient to warrant the issuance of

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notice to members of the Class. Upon reviewing the Settlement Agreement and the Plaintiff’s Motion

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for Order Preliminarily Approving Settlement, Preliminarily Certifying a Settlement Class, Approving
Forms and Method of Notice, and Setting a Fairness Hearing (the “Motion”), it is hereby ORDERED,
ADJUDGED AND DECREED as follows:
1.

Class Findings:

The Court preliminarily finds that the requirements of the

United States Constitution, the Federal Rules of Civil Procedure, the Local Rules of the United States
District Court for the Northern District of California, and any other applicable laws have been met as to
the “Class” defined below, in that:

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1. All capitalized terms not otherwise defined in this Order shall have the same meaning ascribed to
them in the Settlement Agreement.

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ORDER PRELIMINARILY APPROVING
SETTLEMENT, PRELIMINARILY CERTIFYING A
SETTLEMENT CLASS, APPROVING FORMS AND
METHODS OF NOTICE, AND SETTING A FAIRNESS
HEARING

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a.

The Class is cohesive and well defined.

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b.

The members of the Class are ascertainable from records kept with respect

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to the Plans, and the members of the Class are so numerous that their joinder before the Court would be

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impracticable.
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c.

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preliminarily finds that there are one or more questions of fact and/or law common to the Class.
d.

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KELLER ROHRBACK L.L.P.

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Based on allegations in the Second Amended Complaint, the Court

Based on allegations in the Second Amended Complaint that the

Defendants engaged in misconduct affecting members of the Class in a uniform manner, the Court finds
that the claims of the Plaintiff are typical of the claims of the Class.

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e.

The Plaintiff will fairly and adequately protect the interests of the Class in

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that (i) the interests of Plaintiff and the nature of his alleged claims are consistent with those of the
members of the Class, (ii) there appear to be no conflicts between Plaintiff and the Class, and

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(iii) Plaintiff and the members of the Class are represented by qualified, reputable counsel who are

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experienced in preparing and prosecuting large, complicated ERISA class actions.

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f.

The prosecution of separate actions by individual members of the Class

would create a risk of (i) inconsistent or varying adjudications as to individual Class members that
would establish incompatible standards of conduct for the parties opposing the claims asserted in the

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Action or (ii) adjudications as to individual Class members that would, as a practical matter, be

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dispositive of the interests of the other Class members not parties to the adjudications, or substantially

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impair or impede the ability of those persons to protect their interests.

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2.

Court preliminarily certifies the following class (the “Class”) for settlement purposes under Fed. R. Civ.
P. 23(b)(1) and (2): all Persons who were participants in or beneficiaries of the Plan from and after

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Class Certification: Based on the findings set out in paragraph 1 above, the

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ORDER PRELIMINARILY APPROVING
SETTLEMENT, PRELIMINARILY CERTIFYING A
SETTLEMENT CLASS, APPROVING FORMS AND
METHODS OF NOTICE, AND SETTING A
FAIRNESS HEARING

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September 1, 2012. Excluded from the Class are (i) the Defendants; and (ii) any beneficiary of any

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Defendant.

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3.

Class Representation: The Court appoints Plaintiff as class representative for

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the Class, and Keller Rohrback L.L.P. as Counsel for the Class.
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4.

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Preliminary Findings Regarding Proposed Settlement:

The Court

3101 NORTH CENTRAL AVENUE, SUITE 1400, PHOENIX, ARIZONA 85012

preliminarily finds that the proposed Settlement should be approved as (a) fair, reasonable and adequate,

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KELLER ROHRBACK L.L.P.

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(b) the product of serious, informed, arm’s-length, and non-collusive negotiations, (c) having no obvious

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deficiencies, (d) not improperly granting preferential treatment to Class representatives or segments of

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the Class, (e) falling within the range of possible approval, and (f) warranting notice to Class members

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of a formal fairness hearing, at which evidence may be presented in support of and in opposition to the

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proposed Settlement.
5.

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(the “Fairness Hearing”) to determine, among other things:

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Fairness Hearing: A hearing is scheduled for June 15, 2017 at 1:30 p.m.

a.

whether the Settlement should be approved as fair, reasonable and

b.

whether the Action should be dismissed with prejudice;

c.

whether the Notice and the means of disseminating same (i) constituted

adequate;

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the best practicable notice; (ii) constituted notice that was reasonably calculated, under the

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circumstances, to apprise members of the Class of the pendency of the Action, their right to object to the

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Settlement, and their right to appear at the Fairness Hearing; (iii) constituted due, adequate and

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sufficient notice to all persons entitled to notice; and (iv) met all applicable requirements of the Federal

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Rules of Civil Procedure and any other applicable law;

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ORDER PRELIMINARILY APPROVING
SETTLEMENT, PRELIMINARILY CERTIFYING A
SETTLEMENT CLASS, APPROVING FORMS AND
METHODS OF NOTICE, AND SETTING A
FAIRNESS HEARING

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d.

whether to enter a Final Approval Order as contemplated by the

Settlement Agreement; and

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e.

whether to award Class Counsel attorneys’ fees and expense

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reimbursement to be paid from the Settlement Fund pursuant to an application to be filed by Class
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Counsel no later than thirty days prior to the Fairness Hearing
6.

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Notice to Class: The settling parties have presented to the Court a proposed form

3101 NORTH CENTRAL AVENUE, SUITE 1400, PHOENIX, ARIZONA 85012

KELLER ROHRBACK L.L.P.

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of Notice, which is appended hereto as Exhibit 1. With respect to such form of Notice, the Court finds

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that such Notice fairly and adequately: (a) describes the terms and effect of the Settlement; (b) notifies

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the Class concerning the proposed plan of allocation described in the Notice; (c) notifies the Class that

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Class Counsel will request that the Court award attorneys’ fees not to exceed 33% of the Settlement

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Amount plus reimbursement of expenses not to exceed $25,000; (d) gives notice with respect to the
operation of the proposed Final Approval Order; (e) gives notice to the Class of the time and place of the

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Fairness Hearing; and (f) describes how the recipients of the Notice may object to approval of the

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Settlement. The settling parties have proposed the following manner of disseminating the Notice to

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members of the Class, and the Court finds that such proposed manner of dissemination is the best notice

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practicable under the circumstances and directs that Class Counsel shall:

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a.

Within seven business days of entry of this Order, cause the Notice, with

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such non-substantive modifications thereto as may be agreed upon by the settling parties and presented

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to the Court2, to be mailed, by first-class mail, postage prepaid, to the last known address (as reflected in

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the records of Buckles Smith) of each Class member and the United States Department of Labor.

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At the Preliminary Approval Hearing, the Court directed the parties to make certain non-substantive
modifications to the Notice and the parties agreed to do so. The Court’s approval of the Notice is
conditioned on the parties making the changes specified on the record.

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ORDER PRELIMINARILY APPROVING
SETTLEMENT, PRELIMINARILY CERTIFYING A
SETTLEMENT CLASS, APPROVING FORMS AND
METHODS OF NOTICE, AND SETTING A
FAIRNESS HEARING

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Buckles-Smith shall provide Class Counsel with the names and last known addresses of the members of

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the Class. To the extent email addresses are available for Class member, the Notice shall be provided by

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email as well. Class counsel shall also post the Notice on its website.

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b.

By May 1, 2017, file with the Court and post on its website Class

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Counsel’s Application for an Award of Attorneys’ Fees and Reimbursement of Expenses.
c.

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KELLER ROHRBACK L.L.P.

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final approval of the Settlement.
At or before the Fairness Hearing, Class Counsel shall file with the Court a proof of timely
compliance with the foregoing mailing requirements.

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By May 1, 2017, file with the Court and post on its website the motion for

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Objections to Settlement: All of the following persons shall be referred to

herein as “Objectors”: any member of the Class who objects to the fairness, reasonableness or adequacy
of the Settlement, to any term of the Settlement Agreement, to Class Counsel’s Application for Award

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of Attorneys’ Fees and Reimbursement of Expenses, or to any provision of the proposed Final Approval

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Order. Any Objector must file with the Court a statement of his, her or its objection(s), specifying the

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reason(s), if any, for each such objection made, including any legal support and/or evidence that such

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Objector wishes to bring to the Court’s attention or introduce in support of such objection. Any

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Objector who wishes to appear at the Fairness Hearing must indicate such intent in the objection filed

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with the Court. The Objector must also mail or fax the objection and all supporting law and/or evidence

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to Class Counsel. The addresses for filing objections with the Court and service on counsel are as

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follows:

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ORDER PRELIMINARILY APPROVING
SETTLEMENT, PRELIMINARILY CERTIFYING A
SETTLEMENT CLASS, APPROVING FORMS AND
METHODS OF NOTICE, AND SETTING A
FAIRNESS HEARING

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To the Court:

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U.S. District Court, N.D. California, San Jose Division
280 S. First Street, Room 2112
San Jose, CA 95113
Attn: Clerk of the Court/Objections
Case 15-cv-03347-BLF, Schwartz v. Cook, Judge Beth Labson Freeman

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3101 NORTH CENTRAL AVENUE, SUITE 1400, PHOENIX, ARIZONA 85012

KELLER ROHRBACK L.L.P.

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To Class Counsel:
Gary A. Gotto, Esq.
Keller Rohrback LLP
3101 N. Central Ave., Suite 1400
Phoenix, AZ 85012
Fax: [phone]
The Objector and his, her or its counsel (if any) must both effect service of the objection on
counsel listed above and file it with the Court by May 15, 2017. Actual delivery or postmark by May

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15, 2017 shall be deemed timely. Any member of the Class or other person who does not timely file and
serve a written objection complying with the terms of this paragraph shall be deemed to have waived,

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and shall be forever foreclosed from raising, any objection to the Settlement, and any untimely objection

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shall be barred. Class Counsel shall file a reply to all such objections no later than June 5, 2017.

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8.

Appearance at Fairness Hearing: Any Objector who files and serves a timely,

written objection in accordance with paragraph 7 above may appear at the Fairness Hearing either in
person or through counsel retained at the Objector’s expense.

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9.

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Notice Expenses:

Reasonable expenses incurred by Class Counsel in the

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preparation and mailing of the Notice shall be paid solely from the Settlement Fund (by reimbursement

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to Class Counsel from the Settlement Fund upon notice to Defendants’ counsel), without further order of

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this Court.

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ORDER PRELIMINARILY APPROVING
SETTLEMENT, PRELIMINARILY CERTIFYING A
SETTLEMENT CLASS, APPROVING FORMS AND
METHODS OF NOTICE, AND SETTING A
FAIRNESS HEARING

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10.

Defendants’ counsel and Class Counsel shall promptly

Service of Papers:

furnish each other with copies of any and all objections and notices of intention to appear at the Fairness
Hearing that come into their possession.

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11.

Termination of Settlement: This Order shall become null and void, and shall be

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without prejudice to the rights of the Parties, all of whom shall be restored to their respective positions

3101 NORTH CENTRAL AVENUE, SUITE 1400, PHOENIX, ARIZONA 85012

existing as of September 7, 2016, (pursuant to the provisions of paragraph 8.4 of the Settlement

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KELLER ROHRBACK L.L.P.

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Agreement), if the Settlement is terminated or does not reach the Effective Date under the terms of the

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Settlement Agreement. In such event, paragraph 8.4 of the Settlement Agreement shall govern the rights

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of the Parties.
12.

Use of Order: Under no circumstances shall this Order be construed, deemed or

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used as an admission, concession or declaration by or against any of the Defendants of any fault,
wrongdoing, breach or liability. Nor shall the Order be construed, deemed or used as an admission,

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concession or declaration by or against Plaintiff or the Class that their claims lack merit or that the relief

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requested in the Action is inappropriate, improper or unavailable, or as a waiver by any party of any

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defenses or claims he, she or it may have.

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Dated: March 20, 2017

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_______________________________
Honorable Beth Labson Freeman
United States District Judge

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ORDER PRELIMINARILY APPROVING
SETTLEMENT, PRELIMINARILY CERTIFYING A
SETTLEMENT CLASS, APPROVING FORMS AND
METHODS OF NOTICE, AND SETTING A
FAIRNESS HEARING

Exhibit 1

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN JOSE DIVISION
KRISTOPHER A. SCHWARTZ,
Plaintiff,

No. 15-cv-03347-BLF

v.
ART COOK, ET AL.,

Judge: Hon. Beth Labson Freeman
Defendant.

NOTICE OF PROPOSED SETTLEMENT OF ERISA CLASS ACTION LITIGATION,
PROPOSED BAR ORDER, SETTLEMENT FAIRNESS HEARING, AND PROPOSED
AWARD OF ATTORNEYS’ FEES AND REIMBURSEMENT OF EXPENSES
TO:
ANY PERSON WHO WAS A PARTICIPANT IN OR BENEFICIARY OF THE
BUCKLES-SMITH ELECTRIC COMPANY EMPLOYEE STOCK OWNERSHIP
PLAN (THE “PLAN”) AT ANY TIME FROM AND AFTER SEPTEMBER 1, 2012
A federal court authorized this Notice. This is not a solicitation from a lawyer.
The Court has preliminarily approved a proposed settlement of a class action
lawsuit brought under the Employee Retirement Income Security Act (the
“Settlement”). The Settlement is with all of the defendants in the litigation. The
terms of the Settlement are contained in a Settlement Agreement dated as of
September 8, 2016 (the “Settlement Agreement”), a copy of which is available by
contacting Class Counsel identified below. Capitalized terms used in this Notice and
not defined herein have the meanings assigned to them in the Settlement Agreement.
The Settlement will provide for payments to the Plan and for allocation of those
payments to the Class Members. It is summarized below.
The Settlement provides for an injunction that will bar Class members from
asserting certain claims against the Defendants.
The Court has scheduled a hearing to evaluate the fairness and adequacy of the
Settlement, at which the Court will consider Plaintiffs’ motion for final approval of
the Settlement, and for an award of attorneys’ fees and reimbursement of expenses.

That hearing, before the Hon. Beth Labson Freeman, has been scheduled for
__________, 2017, at ___.m. in Courtroom 3, of the United States District Court for
the Northern District of California, San Jose Courthouse, 280 South 1st Street, San
Jose, California 95113.
Any objections to the settlement or to the potential award of attorneys’ fees and
expense reimbursement must be served in writing on Class Counsel and on counsel
for all of the Defendants. The procedure for objecting is described below.
This Notice contains summary information with respect to the Settlement. The
terms and conditions of the Settlement are set forth in the Settlement Agreement.
The Settlement Agreement is available from Class Counsel listed on Page 3 below.
PLEASE READ THIS NOTICE CAREFULLY AND COMPLETELY. IF YOU
ARE A MEMBER OF THE SETTLEMENT CLASS TO WHOM THIS NOTICE IS
ADDRESSED, THE SETTLEMENT WILL AFFECT YOUR RIGHTS. YOU ARE NOT
BEING SUED IN THIS MATTER. YOU NEED NOT APPEAR IN COURT, AND YOU
NEED NOT HIRE AN ATTORNEY IN THIS CASE. IF YOU ARE IN FAVOR OF THE
SETTLEMENT, YOU NEED NOT DO ANYTHING. IF YOU DISAPPROVE, YOU MAY
OBJECT TO THE SETTLEMENT PURSUANT TO THE PROCEDURES DESCRIBED
BELOW.
Your Legal Rights and Options in the Settlement:
You May Do Nothing.
No Action is Necessary to Participate
in the Settlement.

If the Settlement is approved by the Court and
you are a member of the Class, you do not
need to do anything to participate in the
Settlement. If the Court grants final approval
to the Settlement, you will receive notice
thereof with further information regarding
payment.

You May Object

If you wish to object to any part of the
Settlement or the requested attorneys’ fees
and costs you may (as discussed below) write
to the Court and counsel about what you find
objectionable.

(by ______, 2017)

You May Attend the Hearing
(to be held on ______, 2017)

If you have submitted a written objection to
the Court and counsel, you may (but do not
have to) attend the Court hearing about
Settlement and present your objections to the
Court.

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These rights and options – and the deadlines to exercise them – are explained in this
Notice.

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The Court in charge of this case still has to decide whether to grant final approval to the
Settlement. Payments will be made only if the Court grants final approval of the
Settlement and that approval is upheld in the event of any appeals.
Further information regarding the litigation and this Notice may be obtained by

contacting Class Counsel:
Gary A. Gotto, Esq.
Keller Rohrback LLP
3101 N. Central Avenue, Suite 1400
Phoenix, AZ 85013
Phone: [phone]
Email: [e-mail]
WHAT THIS NOTICE CONTAINS
Summary of Settlement ....................................................................................................
1.

Why did I get this Notice package? ...........................................................

2.

What is the lawsuit about? .........................................................................

3.

Why is there a Settlement? ........................................................................

4.

How do I know whether I am part of the Settlement? ...............................

5.

What does the Settlement provide? How much will I receive? ..................

6.

How can I get a payment? ..........................................................................

7.

When would I get my payment? ................................................................

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Can I get out of the Settlement? .................................................................

9.

Do I have a lawyer in the case? .................................................................

10.

How will the lawyers be paid? ...................................................................

11.

How do I tell the Court if I don’t like the Settlement? ..............................

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12.

When and where will the Court decide whether to approve
the Settlement? ..........................................................................................

13.

Do I have to come to the hearing? .............................................................

14.

May I speak at the hearing? .......................................................................

15.

What happens if I do nothing at all? ..........................................................

16.

How do I get more information? ................................................................

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This litigation (the “Action”) is a case that concerns allegations that defendants breached
fiduciary duties they owed to the Buckles-Smith Electric Company Employee Stock Ownership
Plan (the “Plan”) and it participants. Copies of the Second Amended Complaint (the
“Complaint”) and certain other documents filed in the Action are available from Class Counsel
identified above. The Plaintiff in the Action is Kristopher A. Schwartz. The defendants in the
Action (“Defendants”) are Art Cook, Roger Stanger, Ronald Zimmerman, Buckles-Smith
Electric Company, and Bankers Trust Company of South Dakota.
SUMMARY OF SETTLEMENT
1.

A Gross Settlement Fund of $350,000 will be established to settle the Action.

2.

The net amount in the Settlement Fund, including interest, and after payment
of any taxes and approved reserves, costs, fees, and expenses, will be allocated
among the Class members based on their respective ending Plan stock account
balances, as further described in Section 5 below.

3.

As a result of the Settlement, all Class members will be deemed to have
released all Claims against all Defendants arising out of the allegations or facts
in the Complaint, as further described in Section 5 below.

As with any litigation, Plaintiff would face an uncertain outcome if the Action were to
continue against the Defendants. Continued litigation of the Action could result in a judgment or
verdict greater or lesser than the recovery under the Settlement Agreement, or in no recovery at
all. The Plaintiff has concluded that the Settlement is reasonable and that it is in the best
interests of the Class to accept the Settlement rather than face the risks associated with continued
litigation of the Action.

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Throughout this litigation, the Plaintiff and the Defendants have disagreed on both
liability and damages. The Defendants have denied and continue to deny the claims and
contentions alleged by the Plaintiff. Nevertheless, the Defendants have taken into account the
uncertainty and risks inherent in any litigation and have concluded that it is desirable that the
Action be fully and finally settled on the terms and conditions set forth in the Settlement
Agreement.
1. Why did I get this Notice package?
You or someone in your family is/are or may have been a participant in or beneficiary of
the Plan. The Court ordered that this Notice to be sent to you because, if you fall within that
group, you have a right to know about the Settlement and about all of your options before the
Court decides whether to approve the Settlement. If the Court grants final approval of the
Settlement, and after any objections and appeals are resolved, and subject to certain conditions in
the Settlement Agreement, a certain portion of the Settlement Fund may become available to be
paid to the Plan and then allocated among the Plan accounts of Class members. This Notice
package describes this Action, the Settlement, your legal rights, what benefits are available, who
is eligible for them, and how to get them.
2. What is the lawsuit about?
The Action claims that the Defendants were fiduciaries of the Plan and violated fiduciary
duties under ERISA that they owed to the Plan and its participants. The Complaint alleges that
as a result of the fiduciary breaches, shares of Buckles-Smith Electric Company stock that had
been held by the ESOP were redeemed during 2012-2014 at inadequate prices.

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The Defendants deny that they breached any duty or took any wrongful actions in regards
to the Plan and deny they have liability to the Plan or its participants or beneficiaries. If the
litigation were to continue, the Defendants would raise numerous defenses to liability, including
that the transactions at issue are not subject to ERISA, that the prices paid to redeem shares were
adequate and proper, that they did nothing wrong in terminating the Plan, and that they fully
performed all fiduciary duties imposed on them by ERISA.
3. Why is there a Settlement?
This Settlement is the product of extensive, arm’s-length negotiations between Class
Counsel and the Defendants’ counsel, including the services of an experienced mediator. The
Court has not reached any final decisions on the merits of Plaintiff’s claims against the
Defendants. Instead, the Plaintiff and the Defendants have agreed to a settlement to end the
lawsuit. In reaching the Settlement, they have avoided the cost and time of a trial. As with any
litigation, the Plaintiff would face an uncertain outcome if this case went to trial. On the one
hand, pursuing the case against the Defendants could result in a verdict greater than this
Settlement. On the other hand, continuing the case against the Defendants could result in a
verdict for less money than Plaintiff has obtained in this Settlement, or even no recovery at all.
Based on these factors, the Plaintiff and his attorneys believe the Settlement is in the best
interests of all Class members. Additional information concerning the Settlement and these
factors is available in the motion for preliminary approval of the Settlement Agreement, which
may be obtained from Class Counsel identified above.

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4. How do I know whether I am part of the Settlement?
United States District Judge Beth Labson Freeman has preliminarily certified that
this Settlement shall proceed on behalf of a Class defined as follows: all Persons who
were participants in or beneficiaries of the Plan from and after September 1, 2012, other
than any Defendant or any beneficiary of any Defendant.
If you are a Class Member, your share of the Net Settlement Fund, if any, will be
determined as described in Section 5 below.
5. What does the Settlement provide? How Much Will I Receive?
A Settlement Fund consisting of $350,000 will be established to settle the Action. The
Settlement Agreement provides that certain costs of notice and allocation of proceeds will be
paid from the Settlement Fund. In addition, Class Counsel will petition the Court for an award
of attorneys’ fees (not to exceed 33% of the gross Settlement Fund) plus reimbursement of
expenses (not to exceed $25,000), which amounts if awarded will be paid from the Settlement
Fund. After payment of these amounts and any applicable taxes, the net amount in the
Settlement Fund will be allocated among the members of the Class. Each Class member’s
allocable share shall be a percentage derived by dividing (i) such Class member’s Plan stock
account balance at the date of the Plan termination (June 16, 2014), or, as to any Class member
who terminated service with Buckles Smith prior to June 16, 2014, at the date of termination, by
(ii) the total of all Class members’ stock account balances at the date of the Plan termination,
June 16, 2014, or, as to any Class member who terminated service with Buckles Smith prior to
June 16, 2014, at the date of termination.

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All Class members are deemed to fully release the Defendants from “Class Released
Claims.” Class Released Claims are defined as any and all actual or potential claims, actions,
causes of action, demands, obligations, liabilities, attorneys’ fees, expenses and costs, whether
known or unknown, that were brought or could have been brought as of the date of the Fairness
Hearing by Plaintiff arising out of the allegations or facts contained in the Second Amended
Complaint or in any other Complaint filed in the Action, including but not limited to claims
related to the termination of the Plan. Class Released Claims are not intended to include the
release of any rights or duties arising out of the Settlement Agreement, including the express
warranties and covenants in the Settlement Agreement. It is a condition to the effectiveness of
the Settlement that the Court’s Final Approval Order enjoin Class members from bringing any
Class Released Claims in the future.
The Settlement Agreement may be terminated on several grounds, including if the Court
does not approve or modifies the Settlement. Should the Settlement Agreement be terminated,
the Settlement will be terminated, and the Action will proceed as if the Settlement had not been
reached.
The above description of the operation of the Settlement is only a summary. The
governing provisions are set forth in the Settlement Agreement (including its exhibits), which
may be obtained by contacting Class Counsel listed at [phone].
6. How can I get a payment?

You do not need to file a claim for recovery. If you are a Class member entitled to a
share of the Net Settlement Fund and if the Settlement is approved by the Court, your Allocable

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Share of the Net Settlement Fund will be allocated to you and paid out as you specify at a later
date.
7. When would I get my payment?
Payment is conditioned on several matters, including the Court’s approval of the
Settlement and such approval becoming final and no longer subject to any appeals to any court.
Subject to these limitations, and upon satisfaction of various conditions, the Net Settlement Fund
will be allocated among members of the Settlement Class as described in the Section 5 above as
soon as possible after final approval has been obtained for the Settlement (which includes
affirmation on appeal, if any) Any appeal of the final approval could take one or more years.
8. Can I get out of the Settlement?

You do not have the right to exclude yourself from the Settlement. The Settlement is
conditioned upon the Court certifying the Action under Federal Rule of Civil Procedure 23(b)(1)
and (2) as a non “opt-out” class action. This is consistent with ERISA, which provides that
breach of fiduciary duty claims under ERISA may be brought by participants on behalf of
ERISA plans, and any judgment or resolution necessarily applies to all plan participants and
beneficiaries. Thus, it is not possible for any participants or beneficiaries to exclude themselves
from the benefits of the Settlement. As a Class member, you will be bound by any judgments or
orders that are entered in the Action for all claims that were asserted in the Action or otherwise
included in the release under the Settlement.
Although you cannot opt out of the Settlement, you can object to the Settlement and ask
the Court not to approve it. See Section 11, below.

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9. Do I have a lawyer in the case?
The Court has appointed the law firm of Keller Rohrback, LLP, located in Seattle,
Washington and Phoenix, Arizona, as Class Counsel in the Action. You will not be charged
directly by these lawyers. If you want to be represented by your own lawyer, you may hire one
at your own expense.
10. How will the lawyers be paid?
Class Counsel will request that the Court award attorneys’ fees not to exceed 33% of the
Settlement Fund ($116,666), plus reimbursement of expenses not to exceed $25,000. Class
Counsel will file an application with the Court for an award of attorneys’ fees and expenses no
later than thirty days prior to the Fairness Hearing, and this application can be obtained from
Class Counsel. The following section sets forth instructions if you wish to tell the Court that you
do not agree with any part of the Settlement or with the proposed award of attorneys’ fees and
expenses.

11. How do I tell the Court that I don’t like the Settlement?
If you are a Class Member, you can object to the Settlement if you do not like any part of
it. You can give reasons why you think the Court should not approve it. You can ask the Court
to deny approval by filing an objection. You can’t ask the Court to order a larger settlement; the
Court can only approve or deny the settlement. If the Court denies approval, no settlement
payments will be sent out and the lawsuit will continue. If that is what you want to happen, you
must object.

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To object, you must send a letter or other written statement saying that you object to the
Settlement in Schwartz v. Cook, et al., United States District Court for the Northern District of
California, San Jose Division, No. 15-cv-03347-BLF. Be sure to include your name, address,
telephone number, signature, and a full explanation of all of the reasons for your objection.
Your written objection must be filed with the Court, and mailed to the counsel listed below
no later than ________________, 2017, at the following addresses:
Clerk of the Court:
Clerk’s Office
Second Floor
RM 2112
United States Courthouse
280 South First St.
San Jose, CA 95113
Class Counsel and Defendants’ Counsel:
Gary A. Gotto
R. Bradford Huss
KELLER ROHRBACK L.L.P.
TRUCKER HUSS, APC
3101 N. Central Ave., Ste 1400
One Embarcadero Center, 12th Floor
Phoenix, AZ 85012
San Francisco, CA 94111
Plaintiffs’ Class Counsel

Counsel to Defendant Bankers Trust Company of South
Dakota

:
Gregory O’Hara, Esq.
Lauren M. Michals, Esq.
NIXON PEABODY LLP
One Embarcadero Center, 18th Floor
San Francisco, CA 94111-3600
415-984-8300
Counsel for Defendants Art Cook, Roger Stanger, Ronald Zimmerman and Buckles-Smith
Electric Company

12. When and where will the Court decide whether to approve the Settlement?

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The Court will hold a Fairness Hearing at ____.m. on ______, 2017, at the United States
District Court for the Northern District of California, San Jose Courthouse, 280 South First
Street, San Jose, California, 95113, in Courtroom 3. At that hearing, the Court will consider
whether the Settlement is fair, reasonable, and adequate. If there are objections, the Court will
consider them. After the Fairness Hearing, the Court will decide whether to grant final approval
of the Settlement. The Court will also rule on the motions for attorneys’ fees and expenses. It is
uncertain how long it will take the Court to issue these decisions. The date of the Fairness
Hearing may change without further notice. Class Members are advised to check
www.KellerSettlements.com or the Court’s PACER website (see Section 16 below) to confirm
that the date has not changed.
13. Do I have to come to the hearing?
No. Class Counsel will answer questions the Court might have. But you are welcome to
attend at your own expense. If you send an objection, you do not have to come to Court to talk
about it. As long as you mailed your written objection on time, it will be considered by the
Court when the Court considers whether to approve the Settlement as fair, reasonable and
adequate. You also may pay your own lawyer to attend the Fairness Hearing, but attendance is
not necessary.
14. May I speak at the hearing?
If you are a Settlement Class member, you may ask the Court for permission to speak at
the Fairness Hearing.

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15. What happens if I do nothing at all?
If you do nothing and you are a member of the Class, you will participate in the
Settlement of the Action as described above in this Notice if the Settlement is granted final
approval.
16. How do I get more information?
This Notice summarizes the proposed Settlement. The complete settlement is set forth in
the Settlement Agreement. You may obtain a copy of the Settlement Agreement by contacting
Class Counsel listed at Page 3 above. You may review the Court’s docket and the documents
filed in this Action on-line or in person. To access materials online, you must first register at
www.pacer.gov and then navigate www.cand.uscourts.gov/cm/ecf. To access materials
personally, visit the Clerk’s Office, 16th Floor, 450 Golden Gate Avenue, San Francisco, CA
94102. The case number for the Action is 15-cv-03347-BLF. In addition, this Notice, the
Court’s Preliminary Approval Order, the Motion for Final Approval of the Settlement, and Class
Counsel’s Application for Award of Attorneys’ Fees and Reimbursement of Expenses will be
available at www.KellerSettlements.com.

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