IN THE UNITED S'I'A~ES DISTRICT COURT FOIL THE ~VESTEI2N DISTRICT OF T'ENNE~SEE WESTE~1 DIVISION IN RE REGIONS MORGAN KEEGAN SECURITIES, DERIVATIVE and ERISA LITI- GATION This Document Relates to: LandeNs, et al. v. Mogan Asset Management, Inc., et al., No. 2:08-cv-02260-SHM-dkv MDL Docket No. 2009 Judge Samuel H. Mays, Jr. Magistrate Judge Diane K. Vescovo STIPULATION AND AGREEMENT OF DERIVATIVE ACTION SEZ'TLEIVIENT This stipulation and agreement of settlement (the "Derivative Settlement Agreement") is made and entered into by and between, each by and through their respective counsel: (i) Derivative Plaintiffs Jeanette H. Landers, H. Austin Landers, the Estates of Charles M. Crump and Diana W. Crump, James H. Frazier, James P. Whitaker and Peggy C. Whitaker ("Derivative Plaintiffs" or "Plaintiffs"); (ii) the Open -End Funds (defined below); (iii) PricewaterhouseCoopers LLP ("PwC"); (iv) Defendant Regions Financial Corporation ("RFC"); (v) Defendant Regions Bank ("RB"); (vi) the Morgan Keegan Defendants (defined below); (vii) the Officer Defendants (defined below); and (viii) the Director Defendants (defined below) (collectively (iii) through (viii), "Defendants"; and together with Plaintiffs and the Open -End Funds, the "Parties"). WHEREAS: A. All capitalized words or terms herein shall have the meanings ascribed thereto herein and in Paragraph 1 below. B. Beginning in December 2007, shareholders filed several securities class action complaints in the United States District Court for the Western District of Tennessee on behalf of 479236.1
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IN THE UNITED S'I'A~ES DISTRICT COURTFOIL THE ~VESTEI2N DISTRICT OF T'ENNE~SEE
WESTE~1 DIVISION
IN RE REGIONS MORGAN KEEGAN
SECURITIES, DERIVATIVE and ERISA LITI-
GATION
This Document Relates to:
LandeNs, et al. v. Mogan Asset Management,Inc., et al.,
No. 2:08-cv-02260-SHM-dkv
MDL Docket No. 2009
Judge Samuel H. Mays, Jr.
Magistrate Judge Diane K. Vescovo
STIPULATION AND AGREEMENT OF DERIVATIVE ACTION SEZ'TLEIVIENT
This stipulation and agreement of settlement (the "Derivative Settlement Agreement") is
made and entered into by and between, each by and through their respective counsel: (i)
Derivative Plaintiffs Jeanette H. Landers, H. Austin Landers, the Estates of Charles M. Crump
and Diana W. Crump, James H. Frazier, James P. Whitaker and Peggy C. Whitaker ("Derivative
Plaintiffs" or "Plaintiffs"); (ii) the Open-End Funds (defined below); (iii)
PricewaterhouseCoopers LLP ("PwC"); (iv) Defendant Regions Financial Corporation ("RFC");
(v) Defendant Regions Bank ("RB"); (vi) the Morgan Keegan Defendants (defined below); (vii)
the Officer Defendants (defined below); and (viii) the Director Defendants (defined below)
(collectively (iii) through (viii), "Defendants"; and together with Plaintiffs and the Open-End
Funds, the "Parties").
WHEREAS:
A. All capitalized words or terms herein shall have the meanings ascribed thereto
herein and in Paragraph 1 below.
B. Beginning in December 2007, shareholders filed several securities class action
complaints in the United States District Court for the Western District of Tennessee on behalf of
479236.1
persons and entities who purchased or otherwise acquired shares of three "open-end" fixed-
income mutual funds that were offered by Defendant Morgan Keegan &Company, Inc.
("Morgan Keegan"). The three Open-End Funds were the Regions Morgan Keegan Select Short
Term Bond Fund ("STF"), the Regions Morgan Keegan Select Intermediate Bond Fund ("IBF"),
and the Regions Morgan. Keegan Select High Income Fund ("HIF"), each of which was a series
of Morgan Keegan Select Fund, Inc., a registered investment company (together with STF, IBF
and HIF, the "Open-End Funds" or "Funds"),I
C. A derivative action commenced by Derivative Plaintiffs in Chancery Court in
Shelby County, Tennessee, on March 28, 2008, was removed to federal court by Defendants on
April 29, 2008 under the style Landers, et al. v. Mogan Asset Management, Inc., et al., No. 08-
cv-2260-SHM-dkv (W.D. Tenn.) (the "Derivative Action Lawsuit").
D. In July 2008, Hyperion Brookfield Asset Management, Inc., a New York-based
investment adviser, assumed management of the Funds. New Directors for the Funds took office
at that time (the "New Board"). On recommendation of the New Board, the Funds' shareholders
voted to liquidate the Funds on May 29, 2009.
E. On September 23, 2008, Judge Samuel H. Mays, Jr. issued an Order consolidating
the class actions under the style In ~e Regions Morgan Keegan Open-End Mutual Fund
Litigation, No> 07-cv-02784-SMH-dkv (W.D. Tenn.) (the "Class Action Lawsuit").
F. In the Derivative Action Lawsuit, Derivative Plaintiffs filed their Verified
Shareholders' First Amended Derivative Complaint ("FADC") on October 13, 2009. All
Defendants, and the Funds, as nominal defendants, moved to dismiss the FADC on December
t Following shareholder approval of Hyperion Brookfield Asset Management as the Funds'
investment advisor in July 2008, the Funds were renamed Helios Select Short Term Bond Fund,
Helios Select Intermediate Bond Fund, and Helios Select High Income Fund; Morgan Keegan
Select Fund, Inc., was renamed Helios Select Fund, Inc.
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15, 2009. On September 24, 2010, the Court denied all motions to dismiss the FADC,
determined that Derivative Plaintiffs had made a demand on the Funds, and stayed the case
pending the response of the Funds to Derivative Plaintiffs' demand. The Court required the
Funds to file a report indicating the status of its investigation or a motion to dismiss the FADC
by October 25, 2010. The Funds requested an extension of the stay until November 30, 2010 to
allow them to complete their investigation. On November 30, 2010, the Funds filed a status
report notifying the Court that they had reached an agreement with Plaintiffs, reflected in a
Memorandum of Understanding (the "MOU" as subsequently amended (the "AMOU")). On
December 6, 2010, the District Court entered an order preliminarily approving the agreement
outlined in the MOU. As part of the Litigation, the Funds provided 510,000 pages of documents
to Plaintiffs, including 236,000 pages of PwC documents and work papers that PwC had
provided to the Funds.
G. On March 14, 2011, Plaintiffs and the Funds jointly moved for approval of the
Partial Settlement between the class and the Funds and approval of the AMOU. All Defendants
except the Funds opposed. The Court did not rule on this joint motion by Plaintiffs and the
Funds.
H. In the summer of 2013, the Parties retained former United States District Court
Judge Layn R. Phillips, a respected and experienced mediator in complex class actions, to assist
them in exploring a potential negotiated resolution of the claims asserted in the Class Action
Lawsuit and the Derivative Action Lawsuit. On July 18, 2013, Defendants provided Plaintiffs'
Counsel with more than 6.7 million pages of confidential documents and other confidential
information pursuant to an agreement in advance of the mediation. On December 17 and 18,
2013, the Parties met with Judge Phillips in Chicago, Illinois for two days of intensive settlement
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negotiations. The mediation sessions were preceded by an exchange of comprehensive
mediation statements and supporting evidence, including information from expert reports. While
these discussions narrowed the Parties' differences and clarified the merits and value of the
Parties' claims and defenses, no agreement was reached.
I. On February 19, 2014, the Parties resumed settlement negotiations with Judge
Phillips in New York, New York. The Parties ultimately reached an agreement-in-principle and
signed a "Proposed Term Sheet for Settlement of RMK Open-End Funds Litigation" (the
"Settlement Term Sheet") consistent with the terms and conditions set forth herein.
J. On February 25, 2014, the Parties advised the Court that they were working on a
resolution and requested that the Court stay issuance of any ruling on the motion for approval of
the Partial Settlement and AMOU pending the consummation of this Derivative Settlement
Agreement. As part of the Derivative Settlement, Plaintiffs and the Funds are withdrawing their
motion for approval of the Partial Settlement and the AMOU.
K. Plaintiffs, through their counsel, have conducted a thorough investigation relating
to the claims, defenses, and underlying events and transactions that are the subject of the
Derivative Action Lawsuit. This process included reviewing and analyzing: (i) over seven
million pages of nonpublic e-mails, valuation-related materials, and other pertinent documents
produced by the Funds, PwC, and the Morgan Keegan Defendants; (ii) over 200,000 pages of
audit workpapers produced by PwC; (iii) publicly available orders, reports, and other information
concerning the administrative enforcement proceedings brought by the SEC, multiple State
securities regulators, and the Financial Industry Regulatory Authority ("FINRA") against certain
Defendants related to some of the conduct at issue in the Class Action Lawsuit and the
Derivative Action Lawsuit; (iv) documents filed publicly by the Open-End Funds and certain
479236.1 4'
Defendants with the SEC; (v) other publicly available information and data concerning the Open-
End Funds and the claims asserted in the Complaint, including press releases, news articles, and
other public statements issued by or concerning the Defendants; (vi) research reports issued by
financial analysts concerning the Open-End Funds and securities held in the Open-End Funds'
portfolios; (vii) prospectuses and other offering documents related to the mortgage- and asset-
backed securities in which the Funds invested; (viii) pleadings filed in other pending lawsuits
naming certain of the Defendants herein as defendants or nominal defendants; and (ix) the
applicable law governing the claims and potential defenses. Plaintiffs' Counsel also reviewed
the deposition transcripts of certain employees of Defendants taken in the regulatory enforcement
actions and of FINRA arbitration proceedings that were based on some of the allegations in the
Class Action Lawsuit and Derivative Action Lawsuit. Plaintiffs' Counsel also consulted with a
qualified expert on damages and causation issues as well as with accounting and auditing and
investment company experts.
L. Defendants have denied and continue to deny any wrongdoing or any violation of
law, including any liability under the federal securities laws. Defendants have denied and
continue to deny each of the claims alleged by Plaintiffs on behalf of the Funds Shareholders and
the Funds, including all claims asserted in the Complaint.
M. This Derivative Settlement Agreement, whether or not consummated, any
proceedings relating to any settlement, or any of the terms of any settlement, whether or not
consummated, shall in no event be construed as, or deemed to be evidence of, an admission or
concession on the part of the Parties with respect to any claim of any liability or damage
whatsoever, or any infirmity in any claim or defense that has been or could have been asserted.
Defendants are entering into this Settlement to eliminate the burden, expense, uncertainty,
479236.1 5
distraction and risk of further litigation.
N. Plaintiffs believe that the claims asserted in the Derivative Action Lawsuit have
merit and that the facts and evidence reviewed and analyzed to date support the claims asserted.
However, Plaintiffs and their counsel recognize and acknowledge the expense and length of
continued proceedings necessary to prosecute the Derivative Action Lawsuit against Defendants
through trial and appeals. Plaintiffs and their counsel also have taken into account the uncertain
outcome and the risk of any litigation, especially in complex actions such as the Class Action
Lawsuit and the Derivative Action Lawsuit, as well as the difficulties and delays inherent in such
litigation. Plaintiffs' Counsel also are mindful of the possible defenses to the claims alleged in
the Derivative Action Lawsuit. Based on their investigation and evaluation, Plaintiffs and their
counsel believe that the Derivative Settlement set forth in this Derivative Settlement Agreement
confers substantial benefits upon the Funds and is in the best interests of Plaintiffs and the Funds.
The Funds likewise believe that this Derivative Settlement confers a substantial benefit upon and
is in the best interests of the Funds and their shareholders. The Funds' board also believes that,
in its business judgment, this Derivative Settlement is in the best interest of, and confers
substantial benefits upon, the Funds and their shareholders.
NOW, THEREFORE, without any concession by Plaintiffs that the Derivative Action
Lawsuit lacks merit, and without any concession by Defendants of any liability or wrongdoing or
lack of merit in their defenses, it is hereby STIPULATED AND AGREED, by and among the
Parties to this Derivative Settlement Agreement, through their respective attorneys, subject to the
approval of the Court pursuant to Rule 23.1 of the Federal Rules of Civil Procedure, that, in
consideration of the benefits flowing to the Parties hereto, all Released Claims and all Released
Defendants' Claims as against all Released Parties shall be compromised, settled, released, and
479236.1 6
dismissed with prejudice and without costs, upon and subject to the following terms and
conditions.
DEFINITI01~1S
1. As used in this Derivative Settlement Agreement, the following terms shall have
the meanings set forth below:
(a) "Alternative Judgment" means a form of final judgment that may be
entered by the Court but in a form other than the form of Judgment provided for in this
Derivative Settlement Agreement and where none of the Parties hereto elects to terminate this
Derivative Settlement by reason of such variance.
(b) "Claims Administrator" means the firm to be retained by Plaintiffs'
Counsel, subject to the approval of the Funds' board of directors and the Court, to provide all
notices approved by the Funds' board of directors and the Court to administer the Derivative
Settlement.
(c) "Class Action Lawsuit" means In re Regions Morgan Keegan Open-End
Mutual Fa~nd Litigation, No. 2:07-cv-02784-SHM-dkv (W.D. Tenn.), along with all the cases
consolidated therewith.
(d) "Class Settlement" means the resolution of the Class Action Lawsuit as
against Defendants in accordance with the terms and provisions of the separate Stipulation and
Agreement of Class Settlement ("Class Settlement Agreement").
(e) "Class Settlement Amount" means the total principal amount of One
Hundred Ten Million and no/100 Dollars ($110,000,000.00) in cash.
(~ "Complaint" means the Verified Shareholders' First Amended Derivative
Action Complaint filed on October 13, 2009 (ECF No. 46 in Case No. 2:08-cv-02260-SHM-
479236,1 7
dkv).
(g) "Court" means the United States District Court for the Western District of
Tennessee, Western Division.
(h) "Defendants" means the Morgan Keegan Defendants, RFC, RB, the
Officer Defendants, the Director Defendants, and PwC.
(i) "Defendants' Counsel" means the law firms of Bass Berry &Sims PLC;
assigns, parents, subsidiaries, divisions, joint ventures, general or limited partners or
partnerships, affiliates, and limited liability companies; the spouses, members of the immediate
families and legal representatives.
(pp) "RFC" means Regions Financial Corporation. Regions Financial
Corporation is the parent company of Regions Bank, Morgan Asset Management, Inc. (now
known as Regions Investment Management, Inc.), Morgan Properties LLC, as well as several
other entities, and is the former parent company of Morgan Keegan &Company, Inc. and MK
Holding, Inc.
(qq) "Settlement Amount" means the total principal amount of One Hundred
Twenty-Five Million and no/100 Dollars ($125,000,000.00) in cash paid to settle the Derivative
Action Lawsuit and the Class Action Lawsuit pursuant to this Derivative Settlement Agreement
and the separate Class Settlement Agreement, respectively, which is divided between the Class
479236.1 16
Settlement Amount and the Funds Settlement Amount, as provided herein and in the Class
Settlement Agreement.
(rr) "Settlement Hearing" means the hearing to be held by the Court to
determine whether this proposed Derivative Settlement is fair, reasonable, and adequate and
should be approved.
(ss) "Summary Notice" means the Summary Notice of Pendency of Derivative
Action and Proposed Settlement and Motion for Attorneys' Fees and Expenses for publication,
which, subject to approval of the Funds' board of directors and the Court, shall be substantially
in the form annexed as Exhibit A-3 to Exhibit A hereto.
(tt) "Taxes" means all taxes on the income of the Funds Settlement Fund and
expenses and costs incurred in connection with the taxation of the Funds Settlement Fund
(including, without limitation, interest, penalties and the expenses of tax attorneys and
accountants).
(uu) "Unknown Claims" means any and all Released Claims, which Plaintiffs
or the Funds- do not know or suspect to exist in the Funds' favor at the time of the release of the
Released Defendant Parties, and any Released Defendants' Claims that Defendants do not know
or suspect to exist in his, her or its favor at the time of the release of the Released Plaintiff
Parties, which if known by him, her, it or them might have affected his, her, its or their
decisions) with respect to this Derivative Settlement. Unknown Claims include those claims in
which some or all of the facts comprising the claim may be unsuspected, or even undisclosed,
concealed, or hidden. With respect to any and all Released Claims and Released Defendants'
Claims, the Parties stipulate and agree that, upon the Effective Date, the Funds, Plaintiffs, and
Defendants, shall expressly, and by operation of the Judgment or Alternative Judgment shall
479236.1 l 7
have, expressly waived and relinquished any and all provisions, rights and benefits conferred by
any law of any state or territory of the United States, or principle of common law, which is
similar, comparable, or equivalent to Cal. Civ. Code § 1542, which provides:
A general release does not extend to claims which the creditor does
not know or suspect to exist in his or her favor at the time of
executing the release, which if known by him or her must have
materially affected his or her settlement with the debtor
Plaintiffs, the Funds, or Defendants may hereafter discover facts in addition to or different from
those which he, she, it, or they now knows) or believes) to be true with respect to the subject
matter of the Released Claims and the Released Defendants' Claims, but the Funds, Plaintiffs,
and Defendants shall expressly, fully, finally, and forever settle and release, and upon the
Effective Date and by operation of the Judgment or Alternative Judgment shall have settled and
released, fully, finally, and forever, any and all Released Claims and Released Defendants'
.Claims, known or unknown, suspected or unsuspected, contingent or non-contingent, whether or
not concealed or hidden, which now exist, or heretofore have existed, upon any theory of law or
equity now existing, heretofore have existed, or coming into existence in the future, including,
but not limited to, conduct which is negligent, reckless, intentional, with or without malice, or a
breach of any duty, law, rule or regulation, without regard to the subsequent discovery or
existence of such different or additional facts. The Funds, Plaintiffs, and Defendants
acknowledge that the inclusion of "Unknown Claims" in the definition of Released Claims and
Released Defendants' Claims was separately bargained for and was a key element of this
Derivative Settlement.
SCOPE AND EFFECT OF SETTLEMENT
2. The obligations incurred pursuant to this Derivative Settlement Agreement are
subject to approval by the Court and such approval becoming Final, and are in full and final
479236.1 1 g
disposition of the claims in the Derivative Action Lawsuit with respect to the Released Parties
and any and all Released Claims and Released Defendants' Claims.
3. By operation of the Judgment or Alternative Judgment, as of the Effective Date,
Plaintiffs, the Funds, and the Funds Shareholders on behalf of themselves and each of their
respective heirs, executors, trustees, administrators, predecessors, successors, and assigns, shall
be deemed to have fully, finally, and forever waived, released, discharged, and dismissed each
and every one of the Released Claims against each and every one of the Released Defendant
Parties, and Plaintiffs, the Funds, and the Funds Shareholders shall forever be barred and
enjoined from commencing, instituting, prosecuting, or maintaining any of the Released Claims
against any of the Released Defendant Parties.
4. By operation of the Judgment or Alternative Judgment, as of the Effective Date,
Defendants, on behalf of themselves and each of their respective heirs, executors, trustees,
administrators, predecessors, successors, and assigns by operation of the Judgment or Alternative
Judgment, shall be deemed to have fully, finally, and forever waived, released, discharged, and
dismissed each and every one of the Released Defendants' Claims, as against each and every one
of the Parties and shall forever be barred and enjoined from commencing, instituting,
prosecuting, or maintaining any of the Released Defendants' Claims against any of the Parties.
THE DERIVATIVE SETTLEMENT CONSIDE~2ATION
5. In full settlement of the claims asserted in the Derivative Action Lawsuit against
Defendants and in consideration of the releases specified in Paragraphs 3-4 above, RFC and PwC
shall, as they have separately agreed amongst each other, pay or cause to be paid the Funds
Settlement Amount into the Escrow Account within twenty (20) days after the Court enters the
Preliminary Approval Order and Plaintiffs' Counsel has provided Defendants' Counsel (or their
479236.1 19
designee) with complete and accurate wiring instructions, payment address, and a current,
complete and accurate Internal Revenue Service Form W-9 for the Funds Settlement Fund.
Under no circumstances will the Defendants be required to pay or cause to be paid in cash more
than the aggregate principal amounts of the Funds Amount and the Class Settlement Amount
pursuant to this Derivative Settlement Agreement and the separate Class Settlement Agreement,
respectively.
6. Defendants and Defendants' Counsel shall have no responsibility for, interest in,
ox liability whatsoever with respect to: (i) any act, omission, or determination of Plaintiffs'
Counsel, the Escrow Agent or the Claims Administrator, or any of their respective designees or
agents, in connection with the administration of this Derivative Settlement or otherwise; (ii) the
management, investment, or distribution of the Funds Settlement Fund; (iii) the Distribution
Order; (iv) the determination, administration, calculation, or payment of any claims asserted
against the Funds Settlement Fund; (v) any losses suffered by, or fluctuations in value of, the
Funds Settlement Fund; (vi) the payment of Notice and Administration Expenses, other than as
set forth in Paragraph 36 below; or (vii) the payment or withholding of any Taxes, expenses,
and/or costs incurred in connection with the taxation of the Funds Settlement Fund or the filing
of any returns.
7. The Funds shall provide or cause to be provided to Plaintiffs' Counsel and the
Claims Administrator, at no cost to Plaintiffs, Plaintiffs' Counsel, or the Claims Administrator,
lists of the names and addresses of the Funds Shareholders, the number of each Funds
Shareholder's shares and the Fund in which such shares were held on May 29, 2009.
USE AND TAX TREATMENT OF SETTLEMENT FUND
8. The Funds Settlement Fund shall be used: (i) to pay any Taxes; (ii) to pay Notice
479236.1 2~
and Administration Expenses; (iii) to pay any attorneys' fees and expenses awarded by the
Court; (iv) to pay any other fees and expenses awarded by the Court; and (v) to pay the claims
pursuant to the Distribution Order.
9. The Net Funds Settlement Fund shall be distributed to the Funds Shareholders as
provided in Paragraphs 20-27 below. The Net Funds Settlement Fund shall remain in the Escrow
Account prior to the Effective Date. All funds held in the Escrow Account shall be deemed to be
in the custody of the Court and shall remain subject to the jurisdiction of the Court until such
time as the funds shall be disbursed or returned, pursuant to Paragraph 36 of this Derivative
Settlement Agreement, and/or further order of the Court. The Escrow Agent shall invest funds in
the Escrow Account in instruments backed by the full faith and credit of, or insured by an
instrumentality of, the United States Government (or a mutual fund invested solely in such
instruments). Defendants and Defendants' Counsel shall have no responsibility for, interest in,
or liability whatsoever with respect to investment decisions executed by the Escrow Agent.
10. After the Funds Settlement Amount has been paid into the Escrow Account in
accordance with Paragraph 5 above, the Parties agree to treat the Escrow Account, and the Funds
Settlement Fund portion of the Escrow Account as a "qualified settlement fund" within the
meaning of Treas. Reg. § 1.468B-1. In addition, Plaintiffs' Counsel shall timely make, or cause
to be made, such elections as necessary or advisable to carry out the provisions of this paragraph,
including the "relation-back election" (as defined in Treas. Reg. § 1.468B-1) to the earliest
permitted date. Such election shall be made in compliance with the procedures and requirements
contained in such regulations. It shall be the responsibility of Plaintiffs' Counsel to timely and
properly prepare and deliver, or cause to be prepared and delivered, the necessary documentation
for signature by all necessary parties, and thereafter take all such actions as may be necessary or
479236.1 21
appropriate to cause the appropriate filing to occur.
(a) For the purposes of 26 U.S.C. § 468B(g) and Treas. Reg. §1.468B-1
through 1.468B-5, the "administrator" responsible for the tax obligations of the QSF shall be
Plaintiffs' Counsel or their successors, who shall timely and properly file, report to recipients and
pay or cause each of these to be performed, all informational and other tax returns and payments
required by state and federal law to the payments made by the fund, the earnings on the fund
deposited in the Escrow Account and in successor accounts (including without limitation the
returns described in Treas. Reg. § 1.468B-2(k)). Such returns, reports to recipients and tax
payments (as well as the election. described above) shall be consistent with this subparagraph and
in all events shall reflect that all Taxes (including any estimated taxes, earnings, tax, interest, or
penalties) on the income earned on the funds deposited in the Escrow Account shall be paid out
of such funds as provided in subparagraph (c) hereof.
(b) All Taxes shall be paid solely out of the Escrow Account. In all events,
Defendants and Defendants' Counsel shall have no liability or responsibility whatsoever for the
Taxes or the filing of any tax returns or other documents with the Internal Revenue Service or
any other state or local taxing authority. In the event any Taxes are owed by any of the
Defendants on any earnings on the funds on deposit in the Escrow Account, such amounts shall
also be paid out of the Escrow Account. Any taxes or tax expenses owed on any earnings on the
Funds Settlement Amount prior to its transfer to the Escrow Account shall be the sole
responsibility of Defendants.
(c) Taxes shall be treated as allowed by law and shall be timely paid, or
caused to be paid, by Plaintiffs' Counsel out of the Escrow Account with the approval of the
Funds' board of directors but without prior order from the Court or approval by Defendants, and
479236. I 22
Plaintiffs' Counsel shall be obligated (notwithstanding anything herein to the contrary) to
withhold from distribution to Funds Shareholders any funds necessary to pay such amounts (as
well as any amounts that may be required to be withheld pursuant to the information reporting
and withholding obligations of the QSF). The Parties agree to cooperate with Plaintiffs' Counsel,
each other, and their tax attorneys and accountants to the extent reasonably necessary to carry out
the provisions of this paragraph.
ATTORNEYS' SEES AllTD EXPENSES
11. Plaintiffs' Counsel will apply to the Court for an award from the Funds
Settlement Fund of attorneys' fees and reimbursement of litigation expenses incurred in
prosecuting the Derivative Action Lawsuit, plus any earnings on such amounts at the same rate
and for the same periods as earned by the Funds Settlement Fund ("Fee and Expense
Application"). The award of attorneys' fees sought by Plaintiffs' Counsel shall not exceed 30
percent of the Funds Settlement Fund. Defendants and the Funds shall take no position with
respect to the Fee and Expense Application.
12. The amount of attorneys' fees and expenses awarded by the Court is within the
sole discretion of the Court. Any attorneys' fees and expenses awarded by the Court, plus
earnings thereon, shall be paid from the Funds Settlement Fund to Plaintiffs' Counsel
immediately after entry of the Order awarding such attorneys' fees and expenses,
notwithstanding the existence of any timely filed objections thereto, or potential for appeal
therefrom, or collateral attack on this Derivative Settlement or any part thereof.
13. Any payment of attorneys' fees and litigation expenses pursuant to Paragraphs
11-12 above shall be subject to Plaintiffs' Counsel's obligation to make refunds or repayments to
the Funds Settlement Fund of any paid amounts plus accrued earnings at the same net rate as is
479236.1 23
earned by the Settlement Fund, if this Settlement is terminated or fails to become effective for
any reason or if, as a result of any appeal or further proceedings on remand, or successful
collateral attack, the award of attorneys' fees and/or litigation expenses is reduced or reversed by
Final non-appealable court order. Plaintiffs' Counsel shall make the appropriate refund or
repayment in full no later than twenty (20) business days after receiving notice from a court of
appropriate jurisdiction of the termination of this Derivative Settlement or notice of any
reduction or reversal of the award of attorneys' fees and/or litigation expenses by Final non-
appealable court order.
14. With the sole exception of Defendants causing the payment of the Funds
Settlement Amount into the Escrow Account as provided for in Paragraph 5, Defendants shall
have no responsibility for, and no liability whatsoever with respect to, any payment to Plaintiffs'
Counsel in the Derivative Action Lawsuit that may occur at any time.
15. Defendants shall have no responsibility for, and no liability whatsoever with
respect to, the allocation of any attorneys' fees or expenses among any Plaintiffs' Counsel in the
Derivative Action Lawsuit, or any other Person who may assert some claim thereto, or any fee or
expense awards the Court may make in the Derivative Action Lawsuit.
16. Defendants shall have no responsibility for, and no liability whatsoever with
respect to, any attorneys' fees, costs, or expenses incurred by or on behalf of the Plaintiffs, the
Funds or the Funds Shareholders, whether or not paid from the Escrow Account.
17. The procedure for and the allowance or disallowance by the Court of any Fee and
Expense Application are not part of this Derivative Settlement set forth in this Derivative
Settlement Agreement, and are separate from the Court's consideration of the fairness,
reasonableness and adequacy of the this Derivative Settlement set forth in this Derivative
479236.1 24'
Settlement Agreement, and any order or proceeding relating to any Fee and Expense
Application, including an award of attorneys' fees or expenses in an amount less than the amount
requested by Plaintiffs' Counsel, or any appeal from any order relating thereto or reversal or
modification thereof, shall not operate to terminate or cancel this Derivative Settlement
Agreement, or affect or delay the finality of the Judgment or Alternative Judgment approving
this Derivative Settlement Agreement and the Derivative Settlement set forth herein, including,
but not limited to, the release, discharge, and relinquishment of the Released Claims against the
Released Defendant Parties, or any other orders entered pursuant to this Derivative Settlement
Agreement. Plaintiffs and Plaintiffs' Counsel may not cancel or terminate this Derivative
Settlement Agreement or this Derivative Settlement in accordance with Paragraph 32 or
otherwise based on the Court's or any appellate court's ruling with respect to fees and expenses
in the Derivative Action Lawsuit.
ADMINISTRATION EXPENSES
18. Except as otherwise provided herein, the Funds Settlement Fund shall be held in
the Escrow Account until the Effective Date.
19. Taxes and fees related to the Escrow Account and investment of the Funds
Settlement Fund may be paid as incurred from the assets held in the Escrow Account. After the
Effective Date, without further approval of Defendants or further order of the Court, Notice and
Administration Expenses may be paid from the Funds Settlement Fund as incurred.
DISTRIBUTION TO FUNDS SHAREHOLDERS
20. Plaintiffs' Counsel will apply to the Court for a Distribution Order, on notice to
Defendants' Counsel, approving the Funds' determinations of the distributions to be paid to the
Funds Shareholders and, if the Effective Date has occurred, directing the payment of the Net
479236.1 25
Settlement Fund to the Funds Shareholders. Said Distribution Order shall provide, inteN alia,
that the distributions made pursuant to said Distribution Order ("Funds' Distribution"), which
term shall have the same meaning as in the Plan of Allocation that is part of the separate Class
Settlement Agreement, shall, to the extent that such Funds' Distributions are paid to Funds
Shareholders who are also Class Settlement Members pursuant to said separate Class Settlement
Agreement, be set off against the distribution received by such Funds Shareholders who are also
Class Settlement Members from the Net Class Settlement Fund pursuant to the Class Settlement
Agreement but that the amount of such set-off shall not cause any Settlement Class IVlember's
pro rata
share of the Net Class Settlement Fund to be reduced below zero.
21. The Claims Administrator shall administer this Settlement under the supervision
of Plaintiffs' Counsel's and the Funds' board of directors and subject to the jurisdiction of the
Court. Except as stated in Paragraph 5 herein, Defendants and Defendants' Counsel shall have
no responsibility for, interest in, or liability whatsoever with respect to the administration of the
Derivative Settlement or the actions or decisions of the Claims Administrator and the Funds'
board of directors and Plaintiffs' Counsel, and shall have no liability to the Funds or the Funds
Shareholders in connection with such administration. The purpose of the distribution payment to
Funds Shareholders is to recover capital invested by the shareholders and which Derivative
Plaintiffs alleged was impaired by the actions complained of in the Complaint.
22. Defendants will take no position with respect to the Distribution Order. The
Distribution Order is a matter separate and apart from the proposed Derivative Settlement
between Plaintiffs, the Funds, and Defendants, and any decision by the Court concerning the
Distribution Order shall not affect the validity or finality of the proposed Derivative Settlement.
The Distribution Order is not a necessary term of this Derivative Settlement Agreement, and it is
479236.1 26
not a condition of this Derivative Settlement Agreement that any particular distribution order be
approved by the Court. The Funds, Plaintiffs, and Plaintiffs' Counsel may not cancel or
terminate this Derivative Settlement Agreement or the Settlement in accordance with Paragraph
32 or otherwise based on the Court's or any appellate court's ruling with respect to the
Distribution Order. Defendants and Defendants' Counsel shall have no responsibility or liability
for reviewing or challenging the Distribution Order, or the distribution of the Net Funds
Settlement Fund.
ADMINISTRATION OF THE DERIVATIVE SETTLEIl~IENT
23. Plaintiffs' Counsel shall be responsible for supervising the administration of this
Derivative Settlement and distribution of the Net Funds Settlement Fund by the Claims
Administrator in accordance with the direction of the Funds' board of directors. Defendants and
Defendants' Counsel shall have no liability, obligation, or responsibility for the administration of
this Settlement, or the distribution of the Net Funds Settlement Fund to the Funds Shareholders
Plaintiffs' Counsel shall be solely responsible for designating the Claims Administrator, subject
to the approval of the Funds' board of directors and the Court.
24. Payment pursuant to the Distribution Order shall be deemed Final and conclusive
against all Funds Shareholders.
25. All proceedings with respect to the administration, processing and determination
of claims described by Paragraphs 20-27 of this Derivative Settlement Agreement and the
determination of all controversies relating thereto, including disputed questions of law and fact
with respect to the validity of any distributions, shall be subject to the jurisdiction of the Court,
but shall not in any event delay or affect the finality of the Judgment or Alternative Judgment nor
require Defendants to participate in any such dispute, hearing, or controversy. Defendants will,
479236.1 27
however, cooperate and participate as reasonably necessary to aid the Court in answering any
questions regarding such proceedings.
26. No Person shall have any claim of any kind against the Released Defendant
Parties or their counsel with respect to the matters set forth in Paragraphs 20-27 or any
subsections of those Paragraphs.
27. No Person shall have any claim against Derivative Plaintiffs or Plaintiffs' Counsel
or the Claims Administrator, or other agent designated by Plaintiffs' Counsel, or the Funds or
Funds' counsel or the Funds' board of directors based on the distributions made substantially in
accordance with this Derivative Settlement Agreement and the Derivative Settlement contained
herein, the Distribution Order, or further orders) of the Court.
TERMS OF THE PRELIMINARY APPROVAL ORDER
28. Concurrently with its application for preliminary Court approval of the Derivative
Settlement contemplated by this Derivative Settlement Agreement and promptly upon execution
of this Derivative Settlement Agreement, Plaintiffs' Counsel shall apply to the Court for entry of
the Preliminary Approval Order, which shall be substantially in the form annexed hereto as
Exhibit A, which application shall not be opposed by Defendants or Defendants' Counsel, The
Preliminary Approval Order will, among other things, set the date and time for the Settlement
Hearing and prescribe the methods) for giving notice of the Settlement to the Funds
Shareholders.
TERMS OF THE JUDGMENT
29. If the Derivative Settlement contemplated by this Derivative Settlement
Agreement is approved by the Court, Plaintiffs' Counsel and Defendants' Counsel shall request
that the Court enter a Judgment substantially in the form annexed hereto as Exhibit B:
479236.1 2g
(a) finally approving the Settlement as fair, reasonable, and adequate, within
the meaning of Rule 23.1 of the Federal Rules of Civil Procedure, and directing its
consummation pursuant to its terms;
(b) directing that the Derivative Action Lawsuit be dismissed with prejudice
and that the Parties are to bear their own costs, except as otherwise provided in this Derivative
Settlement Agreement; and releasing the Released Claims;
(c) permanently barring and enjoining the institution and/or prosecution, by
the Funds, Derivative Plaintiffs, and the Funds Shareholders of any other action against the
Released Defendant Parties in any court or other tribunal, forum, or proceeding asserting any
Released Claims;
(d) permanently barring and enjoining the institution and/or prosecution, by
any Party of any other action against any other Party in any court ar other tribunal, forum, or
proceeding asserting any Released Claims;
(e) reserving jurisdiction over the Derivative Action Lawsuit and the QSF
created as a result of this Settlement, including all future proceedings concerning the
administration, consummation, and enforcement of this Derivative Settlement Agreement;
(~ finding, pursuant to Rule 54(b) of the Federal Rules of Civil Procedure,
that there is no just reason for delaying and directing entry of a final judgment; and
(g) containing such other and further provisions consistent with the terms of
this Derivative Settlement Agreement to which the Parties expressly consent in writing.
EFFECTIVE DATE OF DERIVATIVE SETTLEMENT, WADER OR TERMINATION
30. The Effective Date of this Derivative Settlement shall be the date when all of the
following shall have occurred:
479236.1 29
(a) entry of the Preliminary Approval Order, which shall be in all material
respects substantially in the form set forth in Exhibit A annexed hereto;
(b) payment of the Funds Settlement Amount into the Escrow Account as
provided for herein, and payment of the Class Action Settlement Amount as provided for in the
Class Action Settlement Agreement;
(c) RFC, the Morgan Keegan Defendants, PwC, the Funds, and the Derivative
Plaintiffs have not exercised their option to terminate either the Derivative Settlement Agreement
pursuant to Paragraphs 31 or 32, or the Class Action Settlement Agreement pursuant to the
provisions thereof;
(d) approval by the Court of the Derivative Settlement, following notice to the
Fund Shareholders and a hearing, as prescribed by Rule 23.1 of the Federal Rules of Civil
Procedure; and
(e) a Judgment, which shall be in all material respects substantially in the
form set forth in Exhibit B annexed hereto, has been entered, or be deemed under the Federal
Rules of Civil Procedure to have been entered, by the Court and has become Final.; or in the
event that an Alternative Judgment has been entered and none of the Parties elects to terminate
the Settlement by reason of such variance, that judgment has become Final.
31. Defendants, Plaintiffs, and the Funds each shall have the right to terminate the
Derivative Settlement and this Derivative Settlement Agreement by providing written notice of
their election to do so ("Termination Notice"), through counsel, to all other Parties hereto within
fourteen (14) calendar days o£ (a) the Court's refusal to enter the Preliminary Approval Order in
any material respect; (b) the Court's refusal to approve this Derivative Settlement Agreement or
any material part of it; (c) the Court's refusal to enter the Judgment in any material respect or an
479236,1 3 ~
Alternative Judgment; (d) the date upon which the Judgment or Alternative Judgment is modified
or reversed in any material respect by Final order of the United States Court of Appeals for the
Sixth Circuit or, if certiorari is granted, the Supreme Court of the United States; or (e) if for any
reason the Class Settlement is terminated or otherwise fails to become effective as set forth in
Paragraphs 39-41 of the Class Settlement Agreement. In the event of a termination of this
Settlement pursuant to the Supplemental Agreement as set forth in the Stipulation of Settlement
in the Class Action Lawsuit, this Derivative Settlement Agreement shall become null and void
and of no further force and effect, with the exception of the provisions of Paragraphs 35 and 36
which shall continue to apply.
32. In addition to all of the rights and remedies that the Funds and Derivative
Plaintiffs have under the terms of this Derivative Settlement Agreement, Derivative Plaintiffs or
the Funds shall also have the right to terminate the Settlement in the event that Defendants do not
pay, or cause to be paid, the Funds Settlement Amount as provided in Paragraph 5 above. In the
event of such failure to pay, the Funds or Plaintiffs can elect to terminate by providing written
notice to all other Parties to this Derivative Settlement Agreement. The termination is not
effective unless and until RFC and PwC fail to pay the Funds Settlement Amount within fourteen
(14) calendar days of such written notice.
33. (a) If, before the Derivative Settlement becomes Final, a trustee, receiver,
conservator, or other fiduciary is appointed under Title 11 of the United States Code
(Bankruptcy), or any similar law, and in the event of the entry of a Final order of a court of
competent jurisdiction determining the transfer of money or any portion thereof to the Funds
Settlement Fund by or on behalf of PwC or RFC to be a preference, voidable transfer, fraudulent
transfer, or similar transaction and any portion thereof is required to be returned, and such
479236.1 31
amount is not promptly deposited into the Funds Settlement Fund by others, then, at the election
of the Funds or Plaintiffs, the Parties shall jointly move the Court to vacate and set aside the
release given and the Judgment or Alternative Judgment entered, and Defendants, the Funds, and
Derivative Plaintiffs shall be restored to their litigation positions immediately prior to the
execution of the Settlement Term Sheet on February 19, 2014.
(b) Released Defendant Parties shall not object to (i) the distribution by the Funds of
the Net Funds Settlement Fund to the Funds Shareholders pursuant to the Funds' Plan of
Liquidation and as provided herein, and (ii) the payment of expenses and fees, as provided herein
from the Funds Settlement Fund.
34. If an option to withdraw from and terminate this Derivative Settlement
Agreement and Derivative Settlement arises under any of Paragraphs 31-33 above: (i) neither
Defendants, the Funds, nor Plaintiffs (as the case may be) will be required for any reason or
under any circumstance to exercise that option; and (ii) any exercise of that option shall be made
in good faith, but in the sole and unfettered discretion of Defendants or the Funds ar Plaintiffs, as
applicable.
35. In the event the Derivative Settlement is terminated or fails to become effective
for any reason, then the Derivative Settlement shall be without prejudice, and none of its terms
shall be effective or enforceable except as specifically provided herein; the Parties to this
Derivative Settlement Agreement shall be deemed to have reverted to their respective litigation
positions in the Derivative Action Lawsuit immediately prior to their execution of the Settlement
Term Sheet on February 19, 2014; and the Parties in the Derivative Action Lawsuit shall proceed
in all respects as if this Derivative Settlement Agreement and any related orders had not been
entered. In such event, the Settlement Term Sheet, this Derivative Settlement Agreement, or any
479236.1 32
aspect of the discussions or negotiations leading to this Derivative Settlement Agreement, shall
not be admissible in the Derivative Action Lawsuit and shall not be used by the Funds or
Plaintiffs against or to the prejudice of Defendants or by Defendants against or to the prejudice
of the Funds or Plaintiffs in any court filings, depositions, at trial, or otherwise.
36. In the event the Derivative Settlement is terminated or fails to become effective
for any reason, any portion of the Funds Settlement Amount previously paid on behalf of or by
Defendants, together with any earnings thereon, less any Taxes paid or due, less Notice and
Administration Expenses actually incurred and paid or payable from the Funds Settlement
Amount, shall be returned to the entities that made the payments) within ten (10) business days
after written notification of such event. In such event, at the request of Defendants' Counsel, the
Escrow Agent or its designee shall apply for any tax refund owed on the amounts in the Escrow
Account and pay the proceeds, after any deduction of any fees or expenses incurred in
connection with such application(s), for refund to the applicable funder or as otherwise directed.
NO ADMISSION OF WRONGDOING
37. Except as set forth in Paragraph 38 below, this Derivative Settlement Agreement,
whether or not consummated, and any discussions, negotiations, proceedings, or agreements
relating to the Derivative Settlement Agreement, the Derivative Settlement, and any matters
arising in connection with settlement discussions or negotiations, proceedings, or agreements,
shall not be offered or received against or to the prejudice of the Parties for any purpose, and in
particular:
(a) do not constitute, and shall not be offered or received against or to the
prejudice of Defendants as evidence of, or construed as, or deemed to be evidence of any
presumption, concession, or admission by Defendants with respect to the truth of any allegation
479236.1 33
by Plaintiffs and the Funds Shareholders or the validity of any claim that has been or could have
been asserted in the Derivative Action Lawsuit or in any litigation, including but not limited to
the Released Claims, or of any liability, damages, negligence, fault, or wrongdoing of
Defendants;
(b) do not constitute, and shall not be offered or received against or to the
prejudice of Defendants as evidence of a presumption, concession, or admission of any fault,
misrepresentation, or omission with respect to any statement or written document approved or
made by Defendants, or against or to the prejudice of Derivative Plaintiffs or the Funds as
evidence of any infirmity in the claims of Derivative Plaintiffs or the Funds;
(c) do not constitute, and shall not be offered or received against or to the
prejudice of Defendants or against or to the prejudice of Derivative Plaintiffs or the Funds, as
evidence of a presumption, concession or admission with respect to any liability, damages,
negligence, fault, infirmity, or wrongdoing, or in any way referred to for any other reason against
or to the prejudice of any of the Parties to this Derivative Settlement Agreement, in any other
civil, criminal, or administrative action or proceeding, or arbitration, other than such proceedings
as may be necessary to effectuate the provisions of this Derivative Settlement Agreement;
(d) do not constitute, and shall not be construed against Defendants,
Derivative Plaintiffs, or the Funds, as an admission or concession that the consideration to be
given hereunder represents the amount which could be or would have been recovered after trial;
(e) do not constitute, and shall not be construed as or received in evidence as,
an admission, concession, or presumption against Derivative Plaintiffs or the Funds that any of
their claims are without merit or infirm or that damages recoverable under the Complaint would
not have exceeded the Funds Settlement Amount.
479236.1 34
38. Defendants may file this Derivative Settlement Agreement and/or the Judgment or
Alternative Judgment in any action that may be brought against them in order to support a
defense or counterclaim based on principles of res judicata, collateral estoppel, release, good-
faith settlement, judgment bar or reduction, or any theory of claim preclusion or issue preclusion
or similar defense or counterclaim, or to effectuate the liability protection granted them under
any applicable insurance policies. The Parties may file this Derivative Settlement Agreement
and/or the Judgment or Alternative Judgment in any action that may be brought to enforce the
terms of this Derivative Settlement Agreement and/or the Judgment or Alternative Judgment.
All Parties submit to the exclusive jurisdiction of the Court for purposes of implementing and
enforcing the Derivative Settlement.
MISCELLANEOUS PROVISIONS
39. All of the exhibits to the Derivative Settlement Agreement, except any
Distribution Order, to the extent incorporated in those exhibits, are material and integral parts
hereof and are fully incorporated herein by this reference.
40. (a) RFC and PwC warrant that, as to the payments made on behalf of Defendants
pursuant hereto, at the time of such payment, RFC and PwC will not be insolvent, nor will the
payment render either one of them insolvent, within the meaning of and/or for the purposes of
the United States Bankruptcy Code, including Sections 101 and 547 thereof.
(b) Released Defendant Parties shall not claim in any other proceedings or actions
that the payments from the Funds Settlement Fund and the distributions from the Net Funds
Settlement Fund as provided herein constitute an act giving rise to bankruptcy or render any one
or more of the Funds insolvent, within the meaning of and/or for the purposes of the United
States Bankruptcy Code, including Sections 101 and 547 thereof.
479236.1 3 5
41. The Parties to this Derivative Settlement Agreement intend the Derivative
Settlement of the Derivative Action Lawsuit to be the full, final, and complete resolution of the
Released Claims and Released Defendants' Claims. Accordingly, the Parties agree not to assert
in any forum that the Derivative Action Lawsuit was brought, prosecuted, or defended in bad
faith or without a reasonable basis. The Parties and their counsel agree that each has complied
fully with Rule 11 of the Federal Rules of Civil Procedure in connection with the maintenance,
prosecution, defense, and settlement of the Derivative Action Lawsuit and shall not make any
applications for sanctions, pursuant to Rule 11 or other court rule or statute, with respect to any
claim maintenance, defense, or settlement in this Derivative Action Lawsuit. The Parties agree
that the amount paid and the other terms of the Derivative Settlement were negotiated at arm's
length in good faith by the Parties and their respective counsel, and reflect a settlement that was
reached voluntarily based upon adequate information and after consultation with experienced
legal counsel.
42. The Parties and their respective counsel agree that they will refrain from
disparaging each other in any publicly disseminated statements concerning the Derivative Action
Lawsuit. The Parties and their respective counsel also agree to keep the information disclosed to
them during the acts contemplated by the Derivative Settlement and this Derivative Settlement
Agreement (including confidential information exchanged in connection with the mediations
referenced in Paragraphs H and I above) confidential unless required to publicly disclose such
information by applicable law, except that this agreement excludes information that the Parties or
their counsel obtain through means independent of acts contemplated by this Derivative
Settlement or this Derivative Settlement Agreement.
43. This Derivative Settlement Agreement may not be modified or amended, nor may
479236.1 36
any of its provisions be waived, except by a writing signed by all Parties hereto or their
successors.
44. The headings herein are used for the purpose of convenience only and are not
meant to have legal effect.
45. The administration and consummation of the Derivative Settlement as embodied
in this Derivative Settlement Agreement shall be under the authority of the Court, and the Court
shall retain jurisdiction for the purpose of entering orders providing for awards of attorneys' fees
and any expenses, and implementing and enforcing the terms of this Derivative Settlement
Agreement.
46. The waiver by one Party of any breach of this Derivative Settlement Agreement
by any other Party shall not be deemed a waiver of any other prior or subsequent breach of this
Derivative Settlement Agreement.
47. Except as provided in this Paragraph 47 and Paragraph 5 with respect to the
Defendants' agreement amongst themselves regarding allocation of responsibility for payment of
the Funds Settlement Amount, this Derivative Settlement Agreement and its exhibits constitute
the entire agreement among the Parties hereto concerning the Derivative Settlement of the
Derivative Action Lawsuit as against Defendants and each other, and no representations,
warranties, or inducements have been made by any Party concerning this Derivative Settlement
Agreement and its exhibits other than those contained and memorialized in such documents. It is
understood by the Parties that, except for the matters expressly represented herein, the facts or
law with respect to which this Derivative Settlement Agreement is entered into may turn out to
be other than or different from the facts now known to each party or believed by such party to be
true; each Party therefore expressly assumes the risk of the facts or law turning out to be so
479236.1 3 7
different, and agrees that this Derivative Settlement Agreement shall be in all respects effective
and not subject to termination by reason of any such different facts or law. The Parties agree that
provisions of the Class Settlement Agreement, including the provisions in the Plan of Allocation
regarding the offsets for money paid to Funds Shareholders from the Net Funds Settlement Fund,
that relate or are relevant to this Derivative Settlement Agreement are to be read consistently
with each other and are not within the exclusionary scope of this Paragraph 47.
48. Nothing in the Derivative Settlement Agreement, or the negotiations relating
thereto, is intended to or shall be deemed to constitute a waiver of any applicable privilege or
immunity, including, without limitation, attorney-client privilege, joint defense privilege, or work
product protection.
49. This Derivative Settlement Agreement may be executed in one or more
counterparts. All executed counterparts and each of them shall be deemed to be one and the
same instrument. Signatures sent by facsimile or by e-mail on a "pdf' document shall be deemed
originals.
50. This Derivative Settlement Agreement shall be binding when signed, but the
Derivative Settlement shall be effective only on the condition that the Effective Date occurs.
51. This Derivative Settlement Agreement shall be binding upon, and inure to the
benefit of, the successors and assigns of the Parties hereto.
52. Nothing in this Derivative Settlement Agreement removes the parties' obligations
under any Confidentiality Agreement including the July 17, 2013 letter agreement entered into
by the parties prior to mediation in this Derivative Action Lawsuit, and all such obligations shall
continue to be observed in accordance with that agreement.
53. The construction, interpretation, operation, effect and validity of this Derivative
479236,1 3 g
Settlement Agreement, and all documents necessary to effectuate it, shall be governed by the
laws of the State of Tennessee without regard to conflicts of laws, except to the extent that
federal law requires that federal law govern.
54. This Derivative Settlement Agreement shall not be construed more strictly against
one Party than another merely by virtue of the fact that it, or any part of it, may have been
prepared by counsel for one of the Parties, it being recognized that it is the result of arm's length
negotiations among the Parties, and all Parties have contributed substantially and materially to
the preparation of this Derivative Settlement Agreement.
55. All counsel and any other person executing this Derivative Settlement Agreement
and any of the exhibits hereto, or any related Settlement documents, warrant and represent that
they have the full authority to do so in the capacities stated therein, and that they have the
authority to take appropriate action in such capacities required to be taken pursuant to the
Derivative Settlement Agreement to effectuate its terms. The Funds and their counsel, Plaintiffs,
and Plaintiffs' Counsel represent and warrant that none of Plaintiffs' or Funds' claims or causes
of action referred to herein or that could have been alleged in the Derivative Action Lawsuit have
been assigned, encumbered, or in any manner transferred in whole or in part.
56 The Parties and their counsel agree to cooperate fully with one another in
promptly applying for preliminary approval by the Court of the Derivative Settlement and for the
scheduling of a hearing for consideration of final approval of the Derivative Settlement and
Plaintiffs' Counsel's application for an award of attorneys' fees and expenses, and to promptly
agree upon and execute all such other documentation as reasonably may be required to obtain
final approval by the Court of the Derivative Settlement.
57. Except as otherwise provided herein, each Party shall bear its own costs.
479236.1 39
IN WITNESS WHEREOF, the Parties hereto have caused this Derivative Settlement
Agreement to be executed, by their duly authorized attorneys, as of January 19, 2015,
LOCKRIDGE GRINDAL NAUEN ~.I~.I,.P,
s/Richard A. Lockridge
Richard A. LockridgeVernon J. Vander WeideGregg M. Fishbein100 Washington Avenue South
Suite 2200Minneapolis, MN 55401Tel: (612) 339-6900Fax: (612) 339-0981gmfishbein@locklaw, com
APPERSON CRUMP PLCs/Jerome A. BroadhurstJerome A. Broadhurst, TN BPR 12529
Charles D. Reaves, TN BPR 22550
6070 Poplar Avenue, Sixth Floor
Memphis, TN 38119-3954
Tel ; 901-260-5133Fax :901-435-5133j broadhurst@appersoncrump. com
ZIMIVIEItMAN REED, LLP.r/ Ca~od~n G. AndersonCarolyn G. AndersonPatricia A. Bloodgood1100 IDS Center80 South 8th StreetMinneapolis, MN 55402Telephone: 612-3~ 1-0400Fax: 612-341-0844Carolyn.Anderson@zimmreed. com
Coujasel for Derivative ~'laintzffs
PAUL HASTINGS LI.Ps/Kevin C. LogueKevin C. Logue75 East 55th StreetNew York, NY 10022Tel: (212) 318-6000
MAYNARD COOPER &GALE PCs/Peter S. FruinPeter S. FruinScott S. Brown2400 Regions Harbert Plaza1901 Sixth Avenue NorthBirmingham, AL 35203Tel: (205) 254-1000Fax: (205) [email protected]
SULLIVAN & CROMVVELL LLP
David B. Tulchin125 Broad StreetNew York, NY 10004Tel: (212) 558-4000Fax: (212) [email protected]
Coufzsel for ~eferidants Regioszs ~'ifa~rzcial
Corporcrtio~z, Regions Barak a~zd 1'llorgara Asset
1~~faagef;iefzt, Inc.
BASS BERRY & SIMS PLCs/Britt K. LathamBritt K. LathamW. Brantley Phillips, Jr.Joseph B. Crace, Jr.150 Third Avenue South, Suite 2800Nashville, TN 37201
479236.1 41
Tel.: 615-742-6200Fax: 615-742-2803blatham@bassberry. com
BASS SERRY & SIIVIS PI.0
Shepherd D. TateMichael A. Brady100 Peabody Place, Suite 900Memphis, TN 38103-3672Tel: (901) 543-5900Fax: (901) [email protected]
Cocrt~:sel for Defeaid~aat 1l~orgt~tt Keeg~~a & Co.,
I~tc. aytd lE~KHoldirzg, Inc.
KII2KLAND & ELLIS LLPs/Timothy A. DuffvTimothy A. DuffyEmily Nicklin300 North LaSalleChicago, IL 60654Tel: (312) 862-2000Fax: (312) [email protected]
BAKER DONELSON I3EARMAN CALDWELL
& BERKOWITZ
Leo M. Bearman165 Madison Avenue, Suite 2000Memphis, TN 38103Tel: (901) 526-2000Fax: (901) [email protected]
Coa~nsel for Defendant Pricewcrter/iotrseCoopers
~L~'
K & L GATES LLPs/Jeff~'ev B. MalettaJeffrey B. MalettaNicholas G. TerrisNicole A. Baker1601 K Street NWWashington, DC 20006
In re Regions Morgan Keegan Open-End Mutual Fund Litigation
c/o GCG
PO Box 9939
Dublin, Ohio 43017-5939
~~
INSTRU~TIE~I`dS FC?R PPat)OF t]~ CLA[M ACID ItEY., ASE ~`43RM
__
Plea
se carefully review the accompanying Notice prior to completing this Proof of Claim and the
information in Section B bel
ow. In Section B, your Re
cogn
ized
Claim has
been calculated for the sh
ares
you held in the Funds dur
ing th
e Ho
lder
s/Se
ller
s Loss Period (J
uly 3, 2006 through May 29, 2009) in
your Morgan Keegan and Company, In
c. ("MK") or
Morgan Asset Management, In
c. ("MAM") account. This calculation is based on information provided by MK or MAM. You will be required to confirm thi
s calculation provided for
your holdings in the
Funds or,
if you disagree, provide your holdings at th
e close of trading on July 3, 2006, all
pur
chas
es/a
cqui
siti
ons (i
nclu
ding
reinvested dividends) dur
ing th
e
Holders/Sellers Loss Period, al
l in
tere
st and dividends received du
ring
that Period, and all
redemptions during that Per
iod (including any sha
res you held on May 29, 2009).
In order to participate in the Class Settlement, al
l Potential Claimants must com
plet
e this Proof of Claim and Rel
ease
Form ("Proof of Claim") per the following instructions
and sign and mail it to the Administrator at th
e address above, postmarked no later than o, 2015.
If you are
required to submit documentation to sup
port
your claim and you have
diff
icuP
ty in locating documentation, or you are
not sure what documents might be considered as
adequate pr
oof
to su
ppor
t your claim, pu
rcha
ses/
acqu
isit
ions
, di
vide
nds/
inte
rest
re
ceiv
ed,
and sales/redemptions, you may review the
info
rmat
ion
on th
e website
www.rmkopenendfundse~tlement.com or www.morgankeeganlawsuit.com or contact the
Administrator at 1-888-895-9227
.
If you are an Excluded Person (see accompanying Notice for definition of "Excluded Person'), do not submit a Proof of Cla
im Yegardless of whe
ther
or not am
ount
s are shown for
Recognized Loss Amounts) or Recognized Cla
im in Section B below.
REQUIREMENTS FOR FILING A PROOF OF CLAIM
Your claim will be considered for payment only upon compliance with all
of th
e fo
llow
ing conditions to the ex
tent
that they are
applicable to you:
You must accurately complete all
por
tion
s of th
is Proof of Claim. If you agree with th
e calculation of your Recognized Loss Amounts) and Recognized Claim in Section B,
CHECK THE "YES" BOX and proceed to item 3.
If you do not agr
ee with th
e calculation of the
Reco;nized Loss Amounts) or Recognized Claim in Section B, you must carefully complete each applicable se
ctio
n of
Section C. Do not omi
t any req
uest
ed inf
orma
tion
regarding your po
siti
ons,
purchases/acquisitions, div
iden
ds/i
nter
est payments received, and sales/redemptions/transfers of the
Funds. This information is ne
cess
ary to determine your share of the Class Settlement if you do not abree with the calculation of the
Recognized Loss Amounts) or
Recognized Claim in Section B. If you can
not
list all
transactions in the
spaces provided in th
e Proof of Cla
im, or if you believe that you must or sh
ould
sup
ply additional
information with respect to any tra
nsac
tion
, attach additional sheets to th
is Proof of Claim, supplying th
e required information. Your name and Taxpayer Id
enti
fica
tion
Number
(Soc
ial Se
curi
ty number or Employer Identification Number) must be properly identified on each additional sheet of paper. DO NOT INCLUDE INFORMATION FOR ANY
FUND WITHOUT A FUND NL7MBER SPECIFICALLY LISTED IN SECTION C BELOW; TRANSACTIONS FOR INELIGIBLE FUNDS WILL NOT SE PROCESSED.
2. If you do not agr
ee with the calculation of the
Rec
ogni
zed Loss Amounts) or Rec
ogni
zed Claim in section B, you must attach to thi
s Proof of Cla
ian legible copies of
annu
al, quarterly, or monthly account st
atem
ents
from MK (or
MAM), or broker confirmation
slips for pu
rcha
ses and/or redemptions, or
other proof satisfactory to th
e
Administrator confirming the
particulars of each po
siti
on, pu
rcha
se/a
cqui
siti
on, di
vide
nds/
inte
rest
received, and/or re
demp
tion
/tra
nsfe
r of Fund sha
res during the
Set
tlem
ent Class
Period. Please make sure that all
supporting documentation states your account name.
3. You must complete Se
ction D and sign this Proof of Claim.
laTOTE:
If Fund sha
res were owned jointly, al
l joint owners must sign th
e Proof of Claim. Ex
ecut
ors,
administrators, gua
rdia
ns, co
nser
vato
rs, trustees, and attorneys-i
n-fact may
complete and sign th
e Proof of Claim on behalf of Po
tential Claimants represented vy them, but they must ide
ntif
y such Potential Claimants and pro
vide
proof of th
eir authority
(for exa
mple
, currently ef
fect
ive letters testamentary, letters of ad
ministration, certification of tr
ust, power of at
torney) t
o complete and execute the
Proof of Claim on the
ir behalf
and to bind them in accordance with th
e terms th
ereo
f. Where a Potential Cla
iman
t has more tha
n one legal representative, the Proof of Claim must be executed by all
such
representatives. If you are
filing on behalf of a dec
ease
d claimant, you must provide a copy of th
e death certificate and a will or
probate documents or proof of joint ownership.
4.
Sepa
rate
Proofs of Cla
im sho
uld be submitted for each ty
pe of ac
coun
t in which Fund sha
res were held (e.g., a cla
im from joint owners sho
uld not in
clud
e the separate transactions
of just one of th
e joint ow
ners
; an individual should not combine transactions in a Roth or IRA account with transactions in a non
-Rot
h/IR
A. account).
5. See sec
tion
K. of th
e Notice (attached or available for download on the websites www.rmkopenendfundsettlement.com or ww
w.mo
rgan
keeg
anla
wsui
t.co
m) fo
r more information
on how your claim will be cal
cula
ted.
NOTE: It is not necessary to hi
re an attorney to represent you in or
der to file a claim or in order to pa
rtic
ipat
e in the Class Set
tlem
ent Fund;
however, you are
free to do so at
your expense if
you so choose.
QUESTIONS? CALL 1-888-895-9227 OR VISIT www.rmkopenendfundsettlement.com or www.morgankeeganlawsuit.com
PAGE 1 OF 9
6.
If you held Fund shares on May 29,
2009, you are
a Settlement Cl
ass Member (u
nles
s yo
u ar
e an Excluded Pe
rson
or voluntarily ex
clud
e yo
urse
lf from the Settlement Class) a
nd
must complete th
is Pro
of of Cla
im to sh
are in
the Cla
ss Set
tlem
ent.
You will al
so be en
titl
ed to sh
are in
the Fun
ds' Distribution, yo
u wi
ll not
nee
d to complete th
is Proof of Cla
im
to sha
re in the Fu
nds'
Dis
trib
utio
n, whi
ch will be paid to you without any
act
ion on you
r part.
Regi
ons Morgan Keegan Open-E
nd Funds
Settlement
For off
icia
l us
e on
ly
SECTION A: CONTACT INFORMATION
Last
Name (C
laim
ant)
Last
Name (B
eneficial Owner If D
ifferent fro
m Claimant)
Last Name (Co-
Beneficial Owner)
Company/Other En
tity
(If Claimant Is Not an In
divi
dual
)
Regions Morgan Keegan Open-End Mutual Fund
Liti
gati
oax Se
ttle
ment
Fund
In re Regions Morgan Keegan Open-End Mutual Fund
Liti
gati
ota,
Fil
e No. 2:
07-cv-02784
Landes, et al
. v. Morgan Ass
et Management, In
c., et al.,
File
No. 2:
08-c
v-02
260
Proof of Claim and Release Form
Please pri
nt or type
First Name (C
laim
ant)
Must be pos
tuaa
rked
no later tha
n
Firs
t Name (B
enef
icia
l Owner)
Firs
t Name (Co-Beneficial Owner)
<>, 2015
Cont
act Person far suc
h Company ar Other En
tity
Record Owner's Name (I
f Different Prom Cla
iman
t ox Beneficial C)wner Lis
ted Above, e.
g., B
rokerage Pir
nn, Bank, Tr
ustee, Nominee, et
c.)
Acco
unt Number (I
t Ctaimant Is Not an Individaai)
Trus
UOth
er Dat
e (If Applicable)
Address Li
ne 1
Addr
ess Li
ne 2 (I£A
~pli
cabl
e)
City
State
Zip Code
Foreign Pr
ovin
ce
Foreign Zip Code
❑ Check Here to Use Alternate Address for Dis
trib
utio
n OPTIONAL
Dist
ribu
tion
Address Line 1
Distribution Address Lin
e 2 (If Applicable)
Foreign Country
QUESTIONS? CALL 1-8
88-8
95-9
227 OR VISIT ww~~v.rmkopenendfundsettlement.com or www.morgankeeganlawsuit.com
PAGE 2 OF 9
Distribution Address City
State
Lip Code
Distribution Address Foreign Province
Telephone Number (Day)
Claimani's or Beneficial Owner's Eanployer Identification Number
or
Email Address
Foreib Zip Code
Telephone Number (N
ight)
Social Security Number
Foreign Counhy
Legal representatives of Po
tential Claimants must attach power of attorney or other instrument showing authority to act as such. See Instructions Item # 3 abo
ve.
TYPE OF CLAIMANT (check only one box):
❑ Individual
❑Joint Owners
❑Estate
❑Trust
❑Corporation
❑Partnership
❑Limited li
ability company ❑Private Pension Fund
❑Legal Representative
❑ IRA, Ro
th, Keogh, or
other type of in
dividual retirement plan (s
tate type of pl
an, mailing address, and name of cu
rrent custodian)
Other (
specify, describe on separate sheet)
SECTION B: CALCULATED RECOGNIZED LOSS AMOUNTS) AND RECOGNIZED CLAIM FOR CLAIMANTS WITH PURCHASES FROM MK DIRECTLY OR
THROUGH MAM
Please carefully review the information below.
Regions Moran Keegan Open-End Funds Settlement Fund Calculation of Recognized Loss Amount and Recognized Claim: The Regions Morgan Keegan Open-End Funds
Settlement Fund Recognized Loss Amount ~s, for each Fund, the amount inv
este
d at the beg
inni
ng of th
e Ho
lder
s/Se
llers Loss Period (July 3, 2006), plus all purchases/acquisitions
(including reinvested dividends) made during the Holders/
Sell
ers Loss Period, le
ss all interest or dividends received during the Holders/Sellers Loss Period (July 3, 2006 through May
29, 2009), le
ss all redemptions during the Settlement Class Period (including the amount received for any Fund shares owned at the end of tr
ading on May 29, 20
09); the Recobnized
Claim is the sum of al
l Recognized Loss Amounts} le
ss dis
trib
utio
ns received from the States' Fund and the SEC Fair Fund. The Class Distribution (
individual Claimants' respective
shares of th
e Net Class Settlement Fund) received by a Claimant who is also a Funds Shareholder will be reduced by their Funds Distribution.
If you DO NOT AGREE with one or more of the Recognized Loss Amount or Recognized Claim Calculations below or "iJNKNOWN" appears in those boxes, check "NO"; you
must then complete Section C below.
If you AGREE with the Recognized Loss Amount and Recognized Claim Calculations as stated, check "YES" and GO DIRECTLY TO SECTION D, as you wil
l not be required to
submit documentation for your claim.
If you have questions as you are completing the Proof of Claim, please call the Administrator for assistance at 1-888-895-9227.
REGIONS MORGAN KEEGAN OPEN-END FUNDS SETTLEMENT FUND —RECOGNIZED LOSS AMOUNTS) AND RECOGNIZED CLAIM CALCULATIONS
ESTABLISHED PER MK's RECORDS
Based on the net asset value of Fund shares held as of th
e close of tr
ading on July 3, 2006, pur
chas
es/a
cqui
siti
ons (
including reinvested dividends) during the Holders/Sellers Loss
Period (July 3, 2006 through May 29, 20
09); dividends/interest received and sales/redemptions during the Holders/Sellers Loss Period; the amount received for any shares held as of
the close of tr
ading oat May 29, 2009; and amounts received in the States Fund and SEC Fair Fund dis
trib
utio
ns:
QUESTIONS? CALL 1-888-895-9227 OR VISIT www.rmkopenendfundsettlement.com or www.morgankeeganlawsuit.com
PAGE 3 OF 9
If you invested in the
RMK SELECT SHORT-TERM BOND FUND, this is your RECOGNIZED LOSS AMOUNT:
Invested Amount
Less Recovered
Compensable
Plus Index
Reco n
ized Loss
gDo you agree with your
Reco
gniz
ed Loss Amount
Amount
Loss Calculation
Adjustment
Amount
calculation? (check one)
$$
$$
$fl YES
❑ NO
If you invested in the RMK SELECT INTERMEDIATE BOND FUND, this is your RECOGNIZED LOSS AMOUNT:
Invested Amount
Less Recovered
Compensable
Plus Index
Reco6nized Loss
bDo you agree with your
Recognized Loss Amount
Amount
Loss Calculation
Adjustment
Amount
Calculation? (check one)
$$
$$
$❑YES
~ NO
If you invested in the
RMK SELECT HIGH INCOME FUND, this is your RECOGNIZED LOSS AMOUNT°
Invested Amount
Less Recovered
Compensable
Plus Index
Reco n
ized Loss
gDo you agree with your
Reconized Loss Amount
Amount
Loss Cal
cula
tion
Adjustment
Amount
Calculation? (check one)
$$
$$
$DYES
❑ NO
Based on the RECOGNIZED LOSS AMOUNT for each of your investments in one or more of the RMK Select Funds, as
calculated above, th
is is your RECOGNIZED
CLAIM:
Total of Reco n
ized Loss
Less States' Fund
Less SEC Fair Fund
COGNIZED CLAIM
Do ou agr
ee with your Reco;nized
Amounts)
Dist
ribu
tion
Amount
Distribution Amount
Claim Calculation? (check one)
$$
$$
❑YES
❑ NO
PLEASE NOTE: IF
YOU ARE A FUNDS SHAREHOLDER, YOUR CLASS DISTRIBUTION WILL BE REDUCED BY YOUR FUNDS
DISTRIBUTION FOR ALL THREE FUNDS, WHICH THE FUNDS ESTIMATE WILL BE: $
IF YOU AGREE WITH THESE CALCULATED AMOUNTS, CHECK THE "YES" BOX AND PROCEED TO SECTION D BELOW. IF
YOU
DO NOT AGREE, PROCEED TO SECTION C.
SECTION C: SPECIAL INSTRUCTIONS FOR CLAIMANTS WHO DO NOT AGREE WITH THE RECOGNIZED LOSS AlVIOUNT(S) OR RECOGNIZED CLAIM
CALCUATIONS IN SECTION B OR IF THE RECOGNIZED LOSS AMOUNTS} CALCULATION IN SECTION B ABOVE READS "UNKNOWN."
For each Fund, se
parately list yo
ur opening position on July 2, 2007, pu
rcha
ses/
acqu
isit
ions
(including reinvested dividends) during the Settlement Class Pe
riod
{July 2, 2007 through
May 29, 2009), dividends/interest received during the Settlement Class Period, and sales/redemptions of th
e Funds during the Se
ttle
ment
Class Period. You may make copies of th
is
sche
dule
or attach add
itio
nal
lists of tz
-ansactions in the same format as the sch
edul
es bel
ow if more spa
ce is needed. Be sure to include your name and Social Security number or
employer identification number on all
separate sheets. For purposes of th
is schedule, you must list all
transactions in addition to dividends/interest received.
QUESTIONS? CALL 1-888-895-9227 OR VISIT www.rmkopenendfundsettiement.com or www.morgankeeganlawsuit.com
PAGE 4 OF 9
The dat
e of ac
quis
itio
n and sa
le is the "trade" or "contract" date and not the "settlement" or "payment" dat
e. The acq
uisi
tion
price is the price paid without regard to commissions or
other expenses. The sale/redemption price is the amount received without regard to commissions or other expenses.
Use the Fund numbers bel
ow to identify you
r transactions in the sc
hedu
les th
at follow by Fund number. These Fund numbers may also appear on you
r statements.
For your
convenience, the short-form names of each Fund are included in parentheses aft
er the ful
l name of each Fund. Only Funds listed below are
eli
ible, The Fund numbers are provided
for your use in completing the transaction and dividend interest schedules.
FUND NAMES
FU1~tD NUMBERS
Regions Morgan Keegan Select Intermediate Bond Fund ("
Intermediate Bond Fund")
1
Regions Morgan Keegan Select High Income Fund ("
Select High Income Fund")
2
Regi
ons Morgan Keegan Select Sh
ort Term Bond Fund {"Short Term Bond Fund")
3
OPENING POSITIONS
Enter the number of Fund sha
res held at the opening of tr
ading on July 3, 2006, fo
r each of th
e Funds listed below; if greater th
an zer
o (0), please provide do
cume
ntat
ion.
Use you
r
statement for June 30, 2006 for your July 3, 2006 position. YOU MIDST INCLUDE A COPY OF YOUR MONTHLY, QUARTERLY, OR ANNUAL STATEMENT THAT SHOWS
YOUR FUND HOLDINGS ON JUNE 30, 20
06.
#FUND
NUMBER OF SHARES HELD ON JULY 3, 2006
PROOF ENCLOSED?
1Re
gion
s Morgan Keegan Select Intermediate Bond Fund ("
Intermediate Bond Fund")
o y o I.
1
2Regions Morgan Keegan Select High Income Fund ("
Select High Income Fund")
o y o N
3Re
gion
s Morgan Keegan Select Sh
ort Term Bond Fund ("
Short Term Bond Fund")
o y o N
PURCHASE S/AC QiJISITIONS
List the Fund number, dates) of ac
quisition, and number of shares ac
quir
ed (including reinvested dividends) during the Hol
ders
/Sel
lers
Loss Period
(July 3, 2006 through May 29,
2009. You should provide annual or quarterly statements, brokerage statements, or confirmation slips to document al
l
acquisitions; if you can
not locate such documentation, provide the doc
umen
tati
on upon which you rely in providing thi
s information. If you cannot
locate any such documentation, you may st
ill L
ist t
he tra
nsac
tion
information, b
ut you wi11 be contacted by mail to request additional in
form
atio
n.
IF NONE, CHECK HERE
❑
FUND NUMBER x
DATES) OF ACQUISITION
LIST CHRONOLOGICALLY
MM
DD
yyyy
NiJMBElt OF SHARES ACQUIRED
(INCLUDE REIlVVESTED DIVIDENDS)
PROOF ENCLOSED?
_,._
oY oN
i
/ /
oy oN
QUESTIONS? CALL 1-838-895-9227 OR VISIT www.rmkopenendfundsettlement.com or www
.mor
gank
eega
nlaw
suit
.com
PAGE 5 OF 9
- --.
._.
_._ . ___
— ___ _,—T ~
-
o Y o N
/
J
~ ~
oY oN
* See the cha
rt on page 5 of th
is Proof of Claim for a list of r'und numbers tha
t co
rres
pona
to the ei
igin
te rung names aurmg zne
~eniemen~ ~,~d55 rC
r~vu
.
DIVIDENDS/INTEREST PAYMENTS RECEIVED
List
the
Fund number, dat
es of div
iden
d/in
tere
st payments, and amounts rec
eive
d during the
Hol
ders
/Sel
lers
Loss Period (July 3, 2006 through May
29, 200
9). You sho
uld provide an
nual
or
quarterly statements, brokerage
statennents, or IRS Forms 1099-DIV or 1099-INT to document all
payments received. If you cannot locate suc
h do
cume
ntat
ion,
pro
vide
the documentation upon which you rel
y in
providing this in
form
atio
n. If you
cann
at loc
ate any suc
h do
cume
ntat
ion,
you may s
till l
ist th
e transaction in
form
atio
n, but you w
ill be contacted by mai
l to request additional
information.
IF NONE, CHECK HERE
p
FUND NUMBER x
DATES) OF DIVIDEND/INTEREST PAYMENT
LIST CHRONOLOGICALLY
MM
DD
YYYY
AMOUNT RECEIVED
PROOF ENCLOSED?
../
/oY oN
— __
$
t
/ ~
-_. _ __—
.~._.
o Y o N
—$
..,/
/oYoN
$
____
__ _.._ ___
_ .
_ ,,__
__—
, /
/ ,
~ ___
_ ._
_ _
o Y o N
~$
-
* S88 the Ch3
2't Ori p8ge 5 OT t1
11S YI'OOT OT 1:
181I
T1 FOT
311SI OI
t'Ullci IlUmDers Tn
d~ cUrreSputiu w Luc
cti
~ivi
c r uciu iiaiiic~ uu~
u~~ u~~
~..~
~~..
~~F~
~,..
.~u~
~ ~ ..~~..u.
SALES/ REI)EI~IPTIONS
List
the Fund num
ber,
dat
e(s)
, and number of shares redeemed dur
ing the
Holders/Sellers Loss Per
iod (July 3, 2006 thr
ough
May 29,
2009),
incl
udin
g an
y shares hel
d on May 29,
2009 tha
t we
re red
eeme
d th
reaf
ter.
You sho
uld provide annual or quarterly st
atem
ents
, br
oker
age st
atem
ents
,
or confirmaeion
slip
s to document
all re
demp
tion
s; if you can
not lo
cate
such documentation, pro
vide
the doc
umen
tati
on upo
n wh
ich yo
u re
ly in
providing th
is inf
orma
tion
. If
you cannot locate any such documentation, you
may still lis
t the tr
ansa
ctio
n information, but you
will be contacted by
mail to re u
est additional inf
orma
tion
. DATES) OF SALE/REDEMPTION
FUND NUMBER *
LIST CHRONOLOGICALLY
NUMBER OF SHARES SOLD/REDEEMED
PROOF ENCLOSED?
MM
DD
YYYY
--_ _
o Y o N
~—~ — ~ i - j ; ~ ---
-•—•
, ~
~~
~ --
~---
-~--
-~--
r-
_-~__~
~~.-_~_I_-
i ~
o Y o N
QUESTIONS? CALL 1-8
88-8
95-9
227 OR VISIT www
.rmk
open
endf
unds
ettl
emen
t.co
m or
wvwv.morgankeeganlawsuit.com
PAGE 6 OF 9
T
/ /
oY oN
~j
~ -~
r ~'
l--'
? 't
j
* See the chart on page 5 of th
is Proof of Claim for a li
st of Fund numbers tha
t correspond to the eligible Fund names during the Set#lement Class Period.
SECTION D: SUBSTITUTE FORM W-9
Employer Identification Number (f
or estates, t
rust
s, corporations, etc
.)Social Security Number (f
or individuals}
Check appropriate box for federal tax classification (
required): ❑
Ind
ivid
uaUS
ole pr
opri
etor
D C Corporation D P
artn
ersh
ip
~ Exempt pay
ee
D Trust/Estate D L
imited Liability Company ❑
Othe
r
Enier the tax classification C = C corporation, S = S corporation, P =partnership
Enter U.S. Taxpayer Identification Number (TIN) on the appropriate line, if
applicable. For individuals, th
is is your Social Security number (SSN). If you are not an individual or you
are an individual who is an employer or who is engaged in a U.S. trade or business as a sole pr
opri
etor
, you must enter an Employer Identification Number (EI
N).
If you are a
disregarded en
tity
claiming treaty ben
efit
s as a ~iybrid entity, enter you
r EIN. If you are anon-
United States citizen and ha
ve no SSN or EIN, please check "Not Applicable" bel
ow and
review the instructions that
fol
low.
D Not Applicable
If you are a U.S. citizen or other U.S. person, you are subject to the Substitute Form W-9 certifications, which are set
forth in Verifications 9, 10, and 11 below. Please see the
definition of "U.S. person" at irs.gov/pub/irs-pdf/fw9.pdf.
In the event you are not a U.S. citizen or other U.S. person, please cro
ss out Verifications 9, 10 and 11 and complete an appropriate Form W-8. The various options for Form W-8
are available fo
r download at ir
s.go
v/nu
b/ir
s-pd
f/fw
8ben
.pdf
(most common), ir
s.6ov/nub/irs-pdf/fw8eci.pdf, irs.~ov/nub/irs-pdf/fw8exp.ndf, or irs.gov/pub/irs-ndf/fw~imv.pdf.
If you are not a U.S. citizen or other U.S. person, you must submit a completed Form W-8 along wit
h this Pro
of of Claim or your claim will be deemed deficient, which may result in
rejection of your claim.
SECTION E: SUBll~IISSION TO JURISDICTION OF COURT A1VD ACKNOWLEDGEMENTS, VERIFICATION AND RELEASE
I (We) submit this Proof of Claim and Release Form'under the terms of th
e Stipulation and Agreement of Settlement described in the Notice. I (We) also submit to the ju
risdiction of
the Un
ited
States District Court for the Western District of Tennessee, Western Division, with respect to my (our) claim as a Settlement Class Member and for purposes of en
forc
ing
the release se
t forth herein. I (We) further acknowledge th
at I (we) wi
ll be bound by anti subject to the terms of th
e Fina
l Judgment and Order of Dismissal tha
t may be en
tere
d in the
Lawsuits. I (We) ag
ree to furnish add
itio
nal information to the Claims Administrator to support thi
s claim if req
uest
ed to do so. I (We) have no
t submitted any other claim in thi
s
Settlement covering the same purchases, acquisitions', and sales/redemptions of sha
res in the Funds during the Settlement Class Per
iod and know of no other Person having done so on
my (o
ur) b
ehalf.
The undersigned represents and certifies iTNDER PENALTY OF PERJURY that:
1.
I (We) he
reby warrant and represent tha
t I (we) am (are) not (a) excluded from tl~
e Settlement Class as defined herein, in the accompanying Notice, and in the Settlement
Agreement; or (b) the Ad
mini
stra
tor,
an employees) of the Administrator, or a persons) as
sisting the Administrator in its role as the Administrator.
2. If signing thi
s Pr
oof of Claim on behalf of a corporation, partnership, or other business entity, I (we) have the legal au
thor
ity to act on its behalf and execute th
is Pro
of of
Claim and have represented my (our) au
thority to sig
n below an
d/or
am (are) pr
oviding documentation of su
ch authority if I
am (we are) a
cting on behalf of a trust, e
state, or
under teams of an assignment of in
terest from
tale original shareholder.
3.
I (~~Je) und
erst
and that the Administrator may req
uire
add
itio
nal information from me (us) in order to
validate or pay my (our) claim, and I (we) agree to provide any
information requested by the Administrator for those purposes. If n
ecessary, I
(we) au
thorize the Administrator to obtain and review any and all
trading records relevant to my
QUESTIONS? CALL 1-888-~95-9227 OR VISIT www.rmkopenendfundsettlement.com or www.morgankeeganlawsuit.com
PAGE 7 OF 9
(our) t
ransactions in the Funds from any brokerage firm or other entity that ha
s possession of such records and furt
her consent to the release of suc
h records by such brokerage
firm or other en
tity
to the Administrator.
4. I (We) hereby acknowledge fui
i and complete satisfaction of, and do hereby fully, fi
nally and forever settle, r
elease and discharge from the Released Claims each and
all of tl
~e
Released Defendant Parties as those terms and terms related thereto are defined in the Settlement Agreements and exhibits thereto.
5. This release shaIl be of no force or effect unless and un
til the Court approves the Settlement Agreement and the Effective Date (as defined in the Settlement Agreement) has
occurred.
6. I (We) he
reby warrant and represent tha
t I (we) have not assigned or transferred or purported to assign or transfer, voluntarily or involuntarily, any claim or other matter
released pursuant to thi
s release or any other part or portion thereof or any interest therein.
7. I (We) agre
e th
at under no circumstances shall Defendants or their counsel, Lead or Derivative Plaintiffs or their counsel, t
he Funds or their counsel, th
e Ad
mini
stra
tor or it
s agents
incur any
liability to me (u
s) or to any other person if it
makes a distribution in accordance with the list of al
l Authorized Claimants and their Recognized Claims as approved by
the Court and th
at I am (we are) enjoined from taking any action in contravention of this provision.
S.
If I ~m (we are) a cus
todi
an, t
rustee, or professional investing on behalf of and rep
rese
ntin
g more tha
n one Potential Claimant in a pooled investment end or entity, I
(we} al
so
attest that any distribution received will be allocated for the be
nefi
t of cu
rrent or former pooled investors and not for the ben
efit
of management.
9. The number shown on this f
orm
is my (our) correct Taxpayer Identification Number (e
ither Social Security number or Employer Identification Number).
10.
I (We) certify that I am (we are) U
nited States citizen(s), re
sident(s), or entity(ies).
11.
I (We) certify that I am (we are) n
ot subject to backup withholding under the provisions of Se
ction 3406(a)(1)(C) of th
e Internal Revenue Code.
NOTE: If you have been notified by the Internal Revenue Ser
vice
that you are subject to backup withholdin ,please strike out the language that you are not subject to
backup wit
hhol
ding
in the certification in item # 11 abo
ve.
I (We) de
clare under penalty of perjury under the laws of th
e United States of America tha
t ail of th
e foregoing information su
ppli
ed on the Proof of Claim by the undersigned is true
and correct and that the documents submitted herewith are true and genuine. The Internal Revenue Ser
vice
does not require your consent to any provision other than the
certification required to avoid backup withholding listed in item # 11 of the Ve
rifi
cati
on section above.
Signature
Date
Print name
Signature of Jo
int Claimant (if a
ny)
Date
Print name Here
If the Claimant is other than an individual (
e.g., t
rust, es
tate
, company, or other business entity) or if the Claimant is not the person completin; this form (e.g., attorney
-in-
fact, third-party claim
-fil
ing service, nominee), th
e following must als
o be provided:
ignatare o p
erson si~mg on e a o
annant
ate
rmt name ere
Capa
city
/tit
le of pe
rson signing (Executor, President, CEO, Tr
ustee, et
c.)
PROOFS OF CLAIM MUST BE POSTMARKED BY o, 2015.
ACCURATE CLAIMS PROCESSING TAKES A SIGNIFICANT AMOUNT OF TIME. THANK YOU FOR YOUR PATIENCE.
ANY PERSON WHO KNOWINGLY SUBMITS A FALSE PROOF OF CLAIM IS SUBJECT TO PENALTIES FOR PERJURY AND OTHER VIOLATIONS OF FEDERAL LAW.
Submission of th
is Proof of Claim does not ensure tha
t you wil
l share in the distribution of th
e Settlement.
REMINDER CHECKLIST
1. PLEASE COMPLETE SECTIONS B AND D OR B, C, AND D AND SIGN THE PROOF OF CLAIM. If this claim is being made on behalf of joint owners, ALL OWr]ERS
MUST SIGN.
QUESTIONS? CALL 1-888-~95-9227 OR VISIT www.rmkopenendfundsettlement.com or www.morgankeeganlawsuit.com
PAGE 8 OF 9
2.
If re
quired, REMEMBER TO ATTACH SUPPORTING DOCUMENTATION. Do not
use
a hig
hlig
hter
on this form ot°
any sup
port
ing do
cuix
aent
s. Supporting do
cume
ntat
ion
includes tra
de con
firm
atio
ns, official mon
thly
, qu
arte
rly or
annual brokerage ac
coun
t statements.
3. DO NOT SEND ORIGINAL DOCUMENTS; SEND ONLY COPIES.
4. Keep a copy of
your Pr
oof of
Cdaim and supporting do
cume
ntat
ion for yo
ur records; su
ppor
ting
doc
umen
tati
on can
not be
ret
urne
d to
you
once th
e documents are submitted.
5. The Cla
ims Administrator wi
ll ack
nowl
edge
receipt of you
r Pr
oof of Cia
im by mai
l within 60 day
s. Your cla
im is no
t deemed by the Cla
ims Ac
flmi
nist
rato
r to be submitted
unless you
rec
eive
an acknowledgment po
stca
rd. If
you
do not
receive an ac
know
ledg
ment
pos
tcar
d within 60 days, ple
ase call the
Cla
ims Ad
mini
stra
tor at 1-8
88-8
95-9
227.
Also
, yo
u ca
n su
bmit you
r cl
aim using a service th
at provides yo
u with pro
of of mailing, su
ch as registered ox ce
rtif
ied ma
il, re
turn
receipt req
uest
ed; ex
pres
s ma
il that does not
waive signature; or co
urie
r se
rvic
e.
6. If
you
move or ch
ange
your name aft
er submitting this Pro
of of Ci
aim,
plea
se not
ify the ad
mini
stra
tor;
failure to hav
e a correct add
ress
an file with the
adm
inis
trat
or may result in
forf
eiture of any pa
ymen
t fr
om the net distribution fund tha
t is
ret
urne
d to
the adm
inis
trat
or as un
deli
vera
ble by the
Uni
ted States Postal Service.
QUESTIONS? CALL i-888-895-9227 OR VISIT www
.rmk
open
endf
unds
ettl
emen
t.co
m or
www.morgankeeganlawsuit.com
PAGE 9 OF 9
IN THE iTNITED STATES DISTRICT COURT
FOR THE WES~'ERN DISTRICT OF '~'ENNESSEE
WESTE~ZN DIi~ISION
IN RE REGIONS MORGAN KEEGANSECURITIES, DERIVATIVE and ERISA
LITIGATION
This Document Relates to:
In re Regions MoNgan Keegan Open-EndMutual Fund Litigation,
No. 2:07-cv-02784-SHM-dkv
and
Landes, et al. v. Morgan Asset Management,Inc., et al.,
No. 2: 08-cv-02260-SHM-dkv
MDL Docket No. 2009
SUMMARY NOTICE OF PENDENCYAND PROPOSED
SETTLEMENT OF CLASS ANDDERIVATIVE ACTIONS AND MOTION
FOR ATTORNEYS' FEES ANDEXPENSES
Si1MMAI~Y NO'~ICE OF SETT~,EMENT OF CLASS AND DERIVATIVE ACTIONS
TO: (1) Persaigs who purchased during t~~e period December 6, 2004 l~hrough Decen~her C,
21107 ar held and/or redeemed during the ~ariad July 3, 2006 ti~roagh May 29, 2009
shires iii the 12egions Morgan Deegan Select Short Term Band Funt~ ("STF")
(MSTBX, ItSTCX, MSBIX), the Regions Morga~i Keegan Select I~~ter~a~ecliate Bond
Futtcl ("IBF") (MINX, RIBCX, RIBI~, and/or the Regions Morgan Keegan Select
Hig~~ IYicor~ae ]Fund ("HIF") (NII~~, RHICX, RE~I~ (collectively "the Funds") end
~~vl~o are not excluded by the terms of the settle~i~ent ("Settle ~eg~t Class"}.1
(2) Persons w~io were shat°ehaldea~s of o~~e or ~t~ore of the Funds on May 29, 2009
~v~ie~i tine Funds' shareholders a~sproved the forin~al Iit~~aiciation of the Funds and ~~vlxo
are i~ot excl~dec~ by tl~e terms of the setttenient ("Funds SlYarehoiders").
YOU ARE HEREBY NOTIFIED, pursuant to Rules 23 and 23.1 of the Federal Rules of Civil
Procedure and an order of the Court, that a proposed settlement has been entered into between
Plaintiffs and Defendants in the above-captioned Class Action Lawsuit and Derivative Action
Lawsuit ("Settlement"). This proposed settlement includes (1) a Settlement Class in the above-
captioned Class Action Lawsuit between Lead Plaintiffs the Estate of Kathryn S. Cashdollar,
Dajalis Ltd., Jeanette H. and H. Austin Landers, and Frank D. Tutor ("Lead Plaintiffs"), on behalf
of themselves and a Settlement Class that has been preliminarily certified for purposes of settlement
only, and Defendants Morgan Keegan &Company, Inc., Morgan Asset Management, Inc., MK
Holding, Inc., Regions Financial Corporation, Regions Bank; Morgan Keegan Select Fund, Inc. and
1 All capitalized terms used in this Summary Notice are defined in the Stipulation and Agreement
of Class Settlement (the "Class Settlement Agreement"), dated as of January 19, 2015, or in the
Stipulation and Agreement of Derivative Action Settlement ("Derivative Settlement Agreement"), dated
as of January 19, 2015.
its portfolios or "series": STF (n/k/a Helios Select Short-Term Fund), IBF (n/k/a Helios Select
Intermediate Bond Fund), and HIF (n/k/a Helios Select High Income Fund) ("Funds"); Allen B.
Morgan, Jr., J. Kenneth Alderman, Jack R. Blair, Albert C. Johnson, William Jeffries Mann, James
Stillman R. McFadden, W. Randall Pittman, Mary S. Stone, Archie W. Willis, III, Carter E.
Anthony, Brian B. Sullivan, Joseph C. Weller, J. Thompson Weller, G. Douglas Edwards, Charles
D. Maxwell, David M. George, Michele F. Wood, James C. Kelsoe, Jr., David H. Tannehill, and
Thomas R. Gamble; and PricewaterhouseCoopers LLP ("Defendants"), and (2) a settlement in the
Derivative Action Lawsuit between and among Derivative Plaintiffs H. Austin and Jeanette H.
Landers, James H. Frazier, James P. and Peggy C. Whitaker, and the Estates of Charles M. and
Diana W. Crump on behalf of the Funds; the Funds, as nominal defendants; and Defendants, except
Messrs. Mann, Anthony, Edwards, George, and Gamble. The Settlement provides for the payment
by certain Defendants in the amount of $125 million in cash ("Settlement Amount"). Pursuant to
an agreement between Lead and Derivative Plaintiffs and the Funds, it is proposed that $110 million
of the Settlement Amount be allocated to the Class ("Class Settlement Amount") and $15 million to
the Funds ("Funds Settlement Amount"); the Funds Settlement Amount is to be further allocated
among the Funds in accordance with their respective losses and distributed to the Funds
Shareholders ("Funds' Distribution"). A full description of the Class and Derivative Settlements can
be found in the Notice of Pendency and Proposed Settlement of Class and Derivative Actions and
Motion for Attorneys' Fees and Expenses (the "Notice").
A hearing will be held before the Honorable Samuel H. Mays, Jr. of the United States District Court
for the Western District of Tennessee, Western Division, in the Clifford Davis/Odell Horton Federal
Building, 167 North Main Street, 11th Floor Courtroom #2, Memphis, Tennessee 38103 at _
.m:, on , 2015 to, among other things: determine whether the proposed
Settlement should be approved by the Court as fair, reasonable, and adequate; determine whether
the proposed Plan of Allocation of the Net Class Settlement Fund should be approved as fair and
reasonable; determine whether the Funds' Distribution should be approved as fair and reasonable;
and consider the application of Lead Counsel and Derivative Plaintiffs' counsel for an award of
attorneys' fees and payment of litigation expenses. The Court may change the date of the hearing
:without providing another notice.
IF YOU ARE A MEMBER OF THE CLASS, YOUR RIGHTS WILL BE AFFECTED BY
THE PROPOSED SETTLEMENT AND YOU MAY BE ENTITLED TO RECEIVE MONEY
FROM THE NET CLASS SETTLEMENT FUND. If you have not yet received the full printed
Notice and a Proof of Claim and Release Form ("Proof of Claim"), you may obtain copies of these
documents by contacting the Claims Administrator:
In ~e Regions Mogan Keegan Open-End Mutual Fund Litigation
Claims Administratorc/o GCG
PO Box 9939Dublin, Ohio 43017-5939Phone: 1-888-895-9227
![Snow White Stipulation of Evidence[1]](https://static.documents.pub/doc/80x56/577d33d21a28ab3a6b8bd8a9/snow-white-stipulation-of-evidence1.jpg)
