In Re: Refco, Inc. Securities Litigation 05-CV-8626-Lead...
Transcript of In Re: Refco, Inc. Securities Litigation 05-CV-8626-Lead...
Case 1:05-cv-08626-GEL Document 357 Filed 02/22/2007 Page 1 of 2
IN THE UNITED STATES DISTRICT COURTFOR THE SOUTHERN DISTRICT OF NEW YORK x
: 05 Civ. 8626 (GEL)In re REFCO, INC. SECURITIES LITIGATION :
: x
LEAD PLAINTIFFS’ NOTICE OF MOTION FOR (I) PRELIMINARYAPPROVAL OF PARTIAL SETTLEMENT WITH DEFENDANT BAWAG,
(II) PRELIMINARY CERTIFICATION OF CLASS FOR PURPOSES OFSETTLEMENT, (III) PRELIMINARY APPROVAL OF FORM AND MANNEROF NOTICE, AND (IV) SCHEDULING OF A FINAL APPROVAL HEARING
TO: All counsel of record
PLEASE TAKE NOTICE that upon the accompanying Stipulation and Agreement of
Settlement dated February 13, 2007 by and between Lead Plaintiffs and BAWAG, including
exhibits thereto; the Memorandum of Law dated September 8, 2006 (Docket No. 309) previously
submitted by the undersigned; and all other papers and proceedings herein, Lead Plaintiffs will
move this Court, at a place and time to be set by the Court, at the United States Courthouse at
500 Pearl Street, New York, New York, for an order (i) preliminarily approving the partial
settlement of this securities class action as against defendant BAWAG P.S.K. Bank für Arbeit
und Wirtschaft und Österreichische Postsparkasse Aktiengesellschaft (“BAWAG”);
(ii) preliminarily certifying a class for purposes of settlement pursuant to Rule 23 of the Federal
Rules of Civil Procedure; (iii) preliminarily approving the form and manner of notice to the
class; and (iv) scheduling a hearing on final approval of the partial settlement and Co-Lead
Counsel’s application for attorneys’ fees.
Case 1:05-cv-08626-GEL Document 357 Filed 02/22/2007 Page 2 of 2
DATED: February 22, 2007 GRANT & EISENHOFER P.A.
By: /s/ Stuart M. Grant Stuart M. Grant (SG-8157)James J. Sabella (JS-5454)45 Rockefeller Center, 15th FloorNew York, NY 10111Telephone: (646) 722-8500Facsimile: (646) 722-8501
- and -
Megan D. McIntyreJeff A. AlmeidaChristine M. MackintoshJill AgroChase Manhattan Centre1201 North Market StreetWilmington, DE 19801Telephone: (302) 622-7000Facsimile: (302) 622-7100
Attorneys for Lead Plaintiff PacificInvestment Management Company LLC andCo-Lead Counsel for the Putative Class
BERNSTEIN LITOWITZ BERGER& GROSSMANN LLP
By: /s/ Max W. Berger Max W. Berger (MB-5010)John P. Coffey (JC-3832)Salvatore J. Graziano (SG-6854)John C. Browne (JB-0391)Jeremy P. Robinson1285 Avenue of the AmericasNew York, NY 10019Telephone: (212) 554-1400Facsimile: (212) 554-1444
Attorneys for Lead Plaintiff RH CapitalAssociates LLC and Co-Lead Counsel forthe Putative Class
2
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 1 of 47
UNITED STATES DISTRICT COURT
i SOUTHERN DISTRICT OF NEW YORK
MASTER FILE NO,In re REFCO, INC. SECURITIES 05 Giv. $526 (GEL)LI'T'IGATION
STIPUL.ATl ON AND AGREEMENT OF SETTLEMENT
IThis stipulation and agreement of settlement is made and entered into by and
between bear! Plaintiffs RH Capital Associates LLC and Pacific lnvestment Management
Company LLC on behalf of themselves and the class of persons defined below (tile
"Class") and Defendant BAWAG P.S.K, Bank Mr Arbeit and Wirtschaft atndl
dsterreichische Postsparkasse Aktiengesellschaft ("BAWAG").
WHEREAS:
A. All capitalized wOkds or tern's riot otherwise defined herein shall have the
meaning for those words or tern's as set forth in the section below entitled "Definitions"
at 1 hereof.
B. Commencing in October 2005, multiple securities class action complaints
were fled against Refco, eertain of Refco's former officers and directors, Refco's
auditors, Refco's underwriters, and others,
C. By Order dated .February 8, 2006, the Court consolidated the class actions
and appointed RH Capital Associates LLC and Pacific Investment Management
1?I{+41 E3.6
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 2 of 47
Company LLC as Lead Plaintiffs, and appointed the law firms of Bernstein Litowitz and
Grant & Eisenhofer to serve as Co-Lead Counsel;
D. On or about March 30, 2006, Co-Lend Counsel connmenced settlement
discussions with .BAWAG's Counsel;
E. On April 3, 2006, based in part on those settlement discussions, when
Lead Plaintiffs filed in the Action the Complaint, they did not name BAWAG as a
defendant;
F. On May 5, 2006, lead Plaintiffs riled in the Action the Amended
Complaint, which, inter aliu, named BAWAG as a defendant, and asserted claims against
BAWAGP ursuant to Section 15 of the Securities Act of 1933 and Sections 10(b) and
20(a) of the Securities Exchange Act of 1934;
G. Co-Lead Counsel have conducted an investigation and analyzed the claims
h
and researched the applicable law with respect to the claims against BAWAG and its
potential defenses thereto;
11, Co-Lead Counsel and BAWAG's Counsel have continued to engage in
arms' length negotiations to resolve the claims by Lead Plaintiffs and the Class against
BAWAG, and have now Agreed to settle those claims on terms that include fimncial and
non-financial benefits to the Class, including the payment of at least S 108 million in cash
to the Class;
1. in order to facilitate BAWAG's ability to achieve a global resolution of its
potential liability relative to Refco in the Action and other cases and potential cases, Lead
Plaintiffs have agreed that to the extent they may obtain funds from the Global
Resolution Fund, which the USAO may establish to compensate, among others,
2
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 3 of 47
victimized Refco investors, those funds will be credited as partial payment of BAWAG's
obligations under this agreement;
}. In the course of these settlement discussions, BAWAG has trade available
for review by Ca-Lead Counsel certain documents pertinent to the Class's claims and
BAWAG's defenses to those claims, including all documents that BAWAG had provided
to the USAO and the Creditors ConYnlittee, and Co-Lead Counsel reviewed those
documents before Lead Plaintiffs agreed to this Settlement;
K. As part of these settlement discussions, BAWAG has briefed counsel for
Lead Plaintiffs and their consultants concerning the limited ability of BAWAG to pay
any judgment or settlement;
L. BAWAG acknowledges that the efforts of Lead plaintiffs, including the
filing of the Amended Complaint and the presentation of certain facts and arguments
t during the settlement discussions, contributed materially to BAWAG's agreentetat to fund
the Global Resolution 1"und and to pay the Settlement Amount set forth below in order to
resolve the Action;
lvl. Based upon their independent investigation and the BAWAG documents
they have reviewed, Co-tread Counsel and Lead plaintiffs have concluded that the terms
and conditions of this Stipulation are fair, reasonable and adequate to Lead Plaintiffs and
the Class, and in the Class's best interests, and have agreed to settle the claims raised in
the Action with BAWAG pursuant to the terms. and provisions of this Stipulation, after
considering (a) the substantial benefits that the Class will receive from the Settlement,
(b) the attendant risks of litigation, and (c) the desirability of permitting the Settlement to
be consummated as provided by the terms of this Stipulation; and
3
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 4 of 47
N. BAWAG continues to deny that it committed any acts or omissions giving
rise to any liability and/or violation of law, and is entering into this Settlement to avoid
the burden and expense of further litigation,
NOW THEREFORE, without any concession by Lead Plaintiffs that the Action
lacked merit, and without any concession by BAWAG of any liability or wrongdoing or
lack of merit in its defenses, it is hereby STIPULATED AND AGREED, by and among
the parties to this Stipulation, through their respective attorneys, subject to approval by
the Court pursuant to Rule 23(e) of the Federal Rules of Civil Procedure, in consideration
of the benefits flowing to the parties hereto, that all Settled Claims as against BAWAG
shall be compromised, settled, released and dismissed with prejudice, and without costs,
upon and subject to the following terms and conditions:
DEFINITIONS
1. As used hereinafter in this Stipulation, the following terms shall have the
following meanings:
's
a, "Action" means Irr re Refco, Irzc. Securities Litigation, No. 05 Civ.
8626 (GEL) (S.D.N.Y.), pending in the United States District Court for the Southern
District of New York.
b. "Amended Complaint" shall mean the amended complaint filed by
Lead Plaintiffs in this Action on May 5, 2006.15
c. "Approval Order" 111eans ally order` of the United States
Bankruptcy Court for the Southern District of New York approving the separate
settlement reached between BAWAG and the Creditors Committee;
4
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 5 of 47
d. "Authorized Claimant" means a Class Member who submits a
'I timely and valid Proof of Claimto the Claims Administrator and does not opt out.
$. "BAWAG" means BAWAG P.S.K. Bank fdr Arbeit and
Wirtschal@ and bsterreichische Postsparkasse Aktiengesellschaft.
' f. "BAWAG's Counsel" means the law firm of Dechert LLP.
i g "BAWAG Global Restitution Fund" means a fund to be created by
the USAO using the proceeds of a separate settlement between the USAO and BAWAG.
h. "BAWAG Settlement" or "Settlement" means the resolution of the
Action as against BAWAG in accordance with the terms and provisions of this
Stipulation.
i. "Bernstein Litowitz" means the law f irm of Bernstein Litowitz
Berger & Grossmann LLP, Co-Lead Counsel for Lead Plaintiffs and the Class.4I
j. "Clah-os Administrator" means the firm to be retained by Lead
Counsel, subject to Court approval, which shall process Proofs of Claim and administer
the Settlement A€nount to Authorized Claimants.
k. "Class" means all persons and entities who ptirchased or otherwise
acquired Refco Group Ltd., LLCIRefco Finance Inc. 9% Senior Subordinated Notes due
2012 (CUS1P Nos. 75866HAA5 and/or 75866I-IACI) and/or con -Imon stock of Refco
(CUSIP No. 758660109) during the Class Period and who were da €Waged thereby.
Excluded from the Settlement Class are: (i) Refco; (ii) the Defendants,(iii) any person or
entity who was a partner, executive officer, director, controlling person, subsidiary, or
affiliate of Refco or any Defendant during the Class Period; (iv) membe€ s of the
Defendants` immediate families; (v) entities in which Refco or any LDe fen dant has a
S
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 6 of 47
controlling interest; and (vi) the legal representatives, heirs, predecessors, successors or
assigns of any of the foregoing excluded persons or entities. Also excluded from the
Class is any person or entity who or which properly excludes himself, herself or itself by
filing a valid and timely request for exclusion in accordance with the requirements set
forth in the Notice.
1. "Class Distribution order" means an order of the Court approving
the Claims .Administrator's administrative determinations concerning the acceptance and
rejection of the claims submitted herein, and approving any fees and expenses not
previously applied for, including the fees and expenses of the Claims Administrator arid,
if the Effective Ante has occurred, directing payment of the Net Settlement fund to
Authorized Claimants.
M. "Class Member" means any person or entity who or which is a
k member of the Class and not excluded therefrom.
n. "Class Period'" means the period from August 5, 2004 through and
including October 17, 2005.
o. "Co-Lead Counsel" means the law firms of Benistein Litowitz and
Grant & Eisenhofer.
p "Complaint" shall mean the consolidated class action complaint
fled by Lead Plaintiffs in this Action on April 3, 2€106.
q "Confidentiality Agreement" means the confidentiality agreement
entered into between BAWAG and Co-Lead Counsel for the Lead Plaintiffs, dated July 7,
2006.
6
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 7 of 47
z:
r. "Contingent Payment" shall have the meaning set forth in 11 $
below.
s, "Court" means the United States District Cour t for the Southern
District of New York.
t. "`Creditors Committee" means Refco's Official Committee of
Unsecured Creditors in the Refco Bankruptcy Froceeding.
u, "Defendants" means all defendants named in the Amended
Complaint and any future named defendants.
V. "Effective Date" means the date upon which the Judgment has
became Final.
W. "Escrow Account" rneans the interest-bearing account maintained
,i by the Escrow Agent into which the Settlement Amount shall be deposited. Until the
Effective Date, the Escrow Account shall be controlled and maintained jointly by
Bernstein Litowitz and Grant & Eisenhofer, on behalf of Lead Plaintiffs and the Class.
X, "Escrow Agent" means the financial institution selected by Co-
Lead Counsel to receive, hold, invest and disburse the Settlement Amount pursuant to the
terms of this stipulation and the Escrow Agreement,
y. "Escrow Agreement" means the escrow agreement between
Bernstein L,itowitz, Grant & Eisenhofer and the Escrow Agent with respect to the Escrow
Account,
z, "Final," with respect to the Judgment, means the later of, 0) if
there is an appeal from the Judgment (other than an appeal pertaining solely to the
Court's approval of a flan of Allocation and/or the Court's award of attorneys' fees,
7
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 8 of 47
costs or expenses), the date of final affirmance on appeal and the expiration of the time
for any further judicial review whether by appeal, reconsideration or a petition for a writ
of certiorari and, if certiorari is granted, the date of final affirmance of the Judgment
following review pursuant to the grant; or (ii) the expiration of the time for the filing or
noticing of any appeal from the Judgment, which shall be thirty (30) days after the
Judgment is entered in the Court's docket. Any appeal or proceeding seeking judicial
review pertaining solely to 0) Court approval of the flan of Allocation of the Net
Settlement Fund; and/or (ii) the Court's award of attorneys' fees, costs or expenses, shall
not affect the time set forth above for the Judgment to become Final,
aa. "Grant & Eisenhofer" means Grant & Eisenhofer P.A., Co-Lead w
Counsel for Lead Plaintiffs and the Class.
bb. "Judgment" means the proposed judgment to be entered approving
the l3AWAG Settlement substantially in the farm attached hereto as Exhibit B.
cc. "Lead Plaintiffs" means RH Capital Associates LLC and Pacific
Investment Management Company LLC.
dd. "Net Settlement Fund" means the Settlement Fund less (i) Court
awarded attorneys' fees and expenses; (ii) Notice and Administration Expenses; (iii) any
required Taxes; and (iv) any other fees or expenses approved by the Court.
ee. "Non-Contingent Payment" has the meaning set forth in 118 below.
"Notice" paeans the Notice of Pendency of Class Action, Tearing
oil Proposed Settlement and Attorneys' Fee Petition and Right to Share in Net Settle on
Fund which is to be sent to members of the Class substantially in the form attached hereto
as Exhibit l to Exhibit A hereto.
8
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 9 of 47
gg, "Notice and Administration Expenses" means all expenses
incurred in connection with the preparation and printing of the Notice; providing notice
tto the Class by mail, publication and other irieans; receiving and reviewing claims;
applying the flan of Allocation; corresponding with Class Members; and the costs of the
Claims Administrator.
hli. "Notice and Preliminary Approval order" means the proposed
order preliminarily approving the BAWAG Settlement, and directing notice to the Class
of the pendency of the Action and of the BAWAG Settlement, which shall be
substantially in the form attached hereto as Exhibit A.
ii. "flan of Allocation" meads the plan that Lead Plaintiffs will
submit to the Court at a later date and upon further notice to the Class that shall be
utilized for distribution of the Net Settlement Fund to Authorized Claimants in a manner
consistent Nvith the terms of this Stipulation, and as approved by the Court.
jj "Proof of Claim" means the fomt substantially in the fortis to be
approved by the Court and disseminated to Class Members at a future date, tivhich Class
Members shall be required to complete and return to the Claims Administrator in order to
substantiate their entitlement to a share of the Net Settlement Fund.
kk. "Publication Notice" means the Summary Notice of Pendency of
Class Action, Hearing on Proposed Settlement and Attorneys' Fee Petition and Right to
Share in Net Settlement Fund for publication substantially in the form attached as
Exhibit 2 to Exhibit A hereto.
9
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 10 of 47
ll "Refco" means Refco, Inc, and its predecessors and subsidiaries,
including, but not limited to, Refco Group Ltd., LLC, New Refco Group Ltd., LLC,
Refco Finance Holdings LLC, Refco Finance Inc., and Refco Capital Market$ Ltd.
mm. "Refco Bankruptcy Proceeding" means the consolidated
bankruptcy proceedings relating to Refco, currently pending in the Bankruptcy Court for
the Southern District of New York.
nn. "Released Parties" means the Settling Defendants and the Released
Plaintiff Parties collectively.
oo. "Released Plaintiff Parties" means the Lead Plaintiffs and their
,attorneys, trustees accountants, affiliates, subsidiaries, parents, predecessors, successors,
or related companies and any of their respective present or former officers, directors and
employees.
PP. "Sale price" means the Transaction Value as defined in a separate
Stipulation mid Order of Settlement reached between BAWAG and the Creditors
Committee and approved by the Approval Order.
qql "Sale Transaction" means the Sale Transaction as defined in a
separate Stipulation and Order of Settlement reached between BAWAG and the Creditors
Committee and approved by the Approval Order,
rr. "Settled Claims" means any and all claims, rights, demands,
obligations, controversies, debts, damages, losses, causes of action or liabilities of any
hind or nature whatsoever in law or in equity, including both known and Ucmown
Claims, held by any Class Member at any point from the beginning of time to the date of
the execution of this Stipulation, including but not limited to those which (i) were
ifl
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 11 of 47
asserted in the Action by Class Members against any of the Settling Defendants; or (ii)
could have been asserted in any forurn by any of the Class Nienxbers against any of tltie .
Settling Defendants, that arise out of or relate to the allegations of the Complaint and the
acquisition or disposition of Refco Group Ltd., LLC/Refco Finance Inc. 9% Senior
Subordinated Notes due 2012 and/or common stock of Refco during the Class Period.
ss. "Settling Defendants" means BAWACr, its direct and indirect
subsidiaries, parents, affiliates, predecessors, and successors, set forth in the attached
Schedule A, and their respective agents and attorneys, set forth in the attached Schedule
B, and all post, present, and future officers, directors and employees, except for the
individuals set forth in the attached Schedule C or any individuals who at any time
worked as an officer, director or employee of Refco, in their capacity as officer, director
or employee of Refco, excluding; any individual who sensed as an officer, director, or
hemployee of BAWAG Overseas, Inc. or 1.71" Capital, Inc, prior to the merger with or sale
of these entities to Refco and who was not otherwise employed by Refco.
tt. "Settling Defendants' Clainjs" means any and all claims, rights,
demands, obligations, controversies, debts, damages, losses, causes of action and
liabilities of any kind or nature whatsoever bi taut or in equity, including both known and
Unknown Claims, held at any point from the beginning of time to the date of the
execution of this Stipulation, which claims have been or could have been asserted by the
Settling Defendants against Any of the Released Plaintiff Parties and which arise out of or
relate in any way to the institution or maintenance of the Action..
11
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 12 of 47
uu. "Settlement Amount" means the Non-Contingen t Payment of
$10$,000,000 and the Contingent Payment of up to $37,000,000, as described more fully
' in 1118.10 below.
M "Settlement Fund" means W the Non-Contingent Payment of
sS108,000,000 in cash to be paid by or on behalf of BAWAG; (ii) any amounts paid
pursuant to the Contingent Payment; and (iii) any interest earned on any monies held in
the Escrow Account.
ww. ,settlement Hearing" means the hearing to be held by the Court to
determine whether the proposed BAWAG Settlement is fair, reasonable and adequate and
should be approved.
xx. "Stipulation" means this Stipulation and Agreement of Settlement.
F: yy, "Taxes" means all taxes on the income of the Settlement Fund and
expenses and costs incurred in connection with the taxation of the Settlement Fund
(including, without litnitation, expenses of tax attorneys and accountants).
xz. "Termination Notice" shall have the meaning set fart]; in 37
below.
aaa. "USAW means the United States Attojney for the Southern
District of New York.
bbb. "Untarnwn Claims" means any and all Settled Claims which Lead
Plaintiffs in the Action or any Class Member does not know to exist in his, her or its
favor at the time of the release of the Settling Defendants, and any Settling Defendants'
Claims which the Settling Defendants do not know to exist in its favor at the time of the
release of the Released Plaintiff Parties, which if known by them might have affected
12
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 13 of 47
their decisions with respect to the Settlement, wits, respect to any and all Settled Claims
II and Settling Defendants' Claiins, the Parties stipulate and agree that upon the Effective
Date, lead Plaintiffs and the Settling Defendants shall expressly, and each Class Member
shalt be deemed to Dave, and by operation of the Judgment shall have, expressly waived
any and all provisions, rights and benefits conferred by any law of any state or territory of
the United States, any law applicable in Austria 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 thecreditor does not know or suspect to exist in his or herfavor at the time of executing the release, which if knownby him or her must have materially affected his or hersettlement with the debtor.
Lead Plaintiffs and BAwAG acknowledge, and other Class Members by operation of law
shall be deemed to have acknowledged, that the inclusion of "Unknown Claims" in the
s definition of Settled Claims and Settling Defendants' Claims was separately bargained
s for and was a key element of this Settlement.
RELCAM
2, The obligations incurred pursuant to this Stipulation are in frill and final
disposition of the Action with respect to the Settling Defendants and any and all settled
Claims.
3, As of the Effective Date, Lead Plaintiffs and cacti Class Member oil behalf
r. of themselves, and each of their respective predecessors, successors, parents, subsidiaries,
affiliates, heirs, executors, trustees, and adr-ninistt'ators, by operation of the Judgment,
will release and forever discharge each and every Settled Claire, as against each and
every one of the Settling Defendants and shall forever be barred and enjoined from
13
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 14 of 47
commencing, instituting or maintaining any of the Settled Claims against any of the
Settling Defendants.
c}, As of the Effective Date, the Settling Defendants, on behalf of thernselves
and each and every of the Settling Defendants, by operation of the Judgment, will release
s`.
and forever discharge each and every Settling Defendants' Claim, and shall forever be
barred and enjoined from commencing, instituting or maintaining any of the Settling
Defendants' Claims against Any of the Released Plaintiff Parties,
S, Notwithstanding any release or other language that may be contained in
the Stipulation and Order of Settlement that may be entered by the Bankruptcy Court of
in any outer document {including, but not limited to, any order issued by the Bankruptcy .
Court for the Southem District of N(nv York in conne
ction with the separate Settlement
reached between BAWAG and the Creditors Committee) which purports to release or
otherwise extinguish or limit any claims that Lead Plaintiffs and/or members of the Class
have asserted or could assert against BAWAG (collectively, the "Bankruptcy Releases"),
the Parties agree that as long as the Settlement between Lead Plaintiffs and BAWAG is
approved by the Court, the Bankruptcy Releases shall be fully effective on their terms,
provided, however, the Bankruptcy Releases shall not release the claims of Lead
Plaintiffs and/or members of the Class in this Action, which clainis will be released only
through this Settlement between Lead Plaintiffs and BAWAG. Further, notwithstanding
any language that may be contained in the Bankruptcy Releases ar other documents
referenced above, if Hits Settlement or any future settlement between the Parties is
approved by the Court, nothing shall preclude members of the Class froth receiving
distributions from such Settlement or future settlement in this Action and receiving
14
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 15 of 47
distributions fro)" settlements reached between BAWAG and others in the Bankruptcy
y^ Court, to the extent that those Glass members have allowed claims as creditors or interest
holders in the Refco Bankruptcy Proceeding, Tile Panties further agree that, in the event
that this Settlement is not approved by the Court, and the Parties subsequently enter into a
future settlement, any future settlement will include the terms of this paragraph.
CLASS CERTIiFICATION,
6. Solely for purposes of this Settlement, BAWAG stipulates to (i)
certification of the Action as a class action, pursuant to Rules 23(a) and 23(b)(3) of the
Federal Rules of Civil Procedure, (ii) the appointment of Lead Plaintiffs as
representatives of the Class, and (iii) the appointment of Co-Lead Counsel as Class
Counsel pursuant to Rule 23(g) of the Federal Rules of Civil Procedure, Lead Plaintiffs
will move for, and BAWAG shall not oppose, entry of the Notice and Preliminary
Approval Order, which will certify the Action to proceed as a class action solely for
purposes of the Settlement.
THE SETTLEMENT, CONSIDERATION
7. In full settlement of the claims asserted in the Action against the Settling
Defendant and in consideration of thereleases specified in 113-S, above, BAWAG shall
provide Lead Plaintiffs with the monetary and non-3nanetary consideration described
below,
Monetary Consideration
8. BAWAG shall pay or cause to be paid to the members of the Class the
sutn of $108,000,000 in cash (the "Non-Contingent Payment"), and in the event BAWAG
1S
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 16 of 47
is sold for a Sale Price exceeding El .8 billion (euros) within two years after the Approval
! Order is entered, BAWAQ will pay to the rneMbers of the Class art additional cash sum
calculated as follows: 5% of the Sale Price of BAWAG above IF] .8 billion (euros), up to
a maximum additional payment to the Class not to exceed $32,000,00 0 (dollars) (the
,Contingent payment"). For currency conversion purposes, all amounts paid shall be
converted into U.S. dollars on the date such Contingent Payment is made.
9. The Settlement Amount shall be paid in accordance with the following
schedule:
a. BAWAG shall pay $25,000,000 of the Non-Contingent Payment
into the Escrow Account within thirty days after the Approval Order becomes a final
order that has not been stayed, vacated, reversed, or materially modified or amended, and
as to which; (i) the time to seek review, reargument, or rehearing has expired, and as to
Er' which no appeal or motion or petition for certiorari, review, or rehearing is }ending, or
(ii) if a stay, appear review, reargurnent, rehearing, or certiorari has been sought, the
order or judgrocnt has beers affirrned, or the request for stay, review, reargument,
rehearing, or certiorari has been denied and the time to seek further stay, appeal, review,
has expired, as a result of which such order orreargurrtent, rehearing, or certiorari
judgment has become final and non-appealable in accordance with app]icable ]aw;
provided, however, that the possibility that a motion under Pule 60 of the Federal Rules
of Civil Procedure, or Mule 9024 of the Federal Mules of Bankruptcy Procedure, may be
but has not then been filed witli respect to such order, shall not cause such order not to be
a final order.
16
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 17 of 47
b. Within thirty days of the earlier of (a) the closing of the Sale
Transaction of BAWAG or (b) one year After the date the Approval Order is entered,
BAWAG shall pay $75,000,000 of die Non-Contingent Payment into the Escrow
3 Account;
c. Should BAWAG be sold for a sale Price exceeding 61.8 billion^i •
(euros) within two years after the Approval Order is entered, BAWAG shall, within thirty
days after the closing of the Sale Transaction of BAWAG, pay tiie Contingent Payment
into the Escrow Account;
d. Within ten days after entry of the Notice and Preliminary Approval
,Order by the Court BAWAG shall pay $8,000,000 of the Noll-Contingent Payment into
the Escrow Account.
l0, Lead Plaintiffs agree that, in connection with each of the payments due
from BAWAG in accordance with 9(a)-(c) above, before demanding payment front
BAWAG they will use their reasonable best efforts bath to (a) apply to the USAO, on
behalf of the Class, to receive that payment froiii the BAWAG Global Resolution Fund,
and (b) pursue receipt of such payment, and further, that they will credit the receipt of
any monies received from the BAWAG Global Resolution Fund to reduce, dollar for
dollar, tl^e payment obligations of BAWAG pursuant to 11^19(A)-(c) in that order (i_e.,
19(a) first, then 119(b), then 419(c)). BAWAG agrees that it remains unconditionally
obligated to pay directly to the Class whatever amount is necessary to ensure that each of
the payments set forth in Jill 9(a)-(c) above is folly paid should the USA©, for any reason
whatsoever, fail to pay, in whole or in part, the Amounts required to be paid pursuant to
'1'119(a)-(c). BAWAG's obligation to pay the amounts set forth in 9(a)-(c) shall be
17
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 18 of 47
suspended while the USAO processes the aforementioned request(s), provided bowever,
%i that if the USAO fails to make full payment within 180 days of a scheduled payment
date, interest shall accrue on such amounts that remain unpaid at the then-applicable 3-
month LIBOR rate without compounding. if the USAO fails to make full payment of any
amount of the Non-Contingent Payment within 365 days of the scheduled payment date
in 119(b) or full payment of the Contingent Payment within 365 days of tite scheduled
payment date in 119(c), BAWAG shall, on or before the 366th day after the respective
scheduled payment dates, make such payments to the Escrow Account as are necessary
such that the Class receives full payment of the scheduled payment, plus interest as set
forth herein. Nonetheless, if the USAO makes a payment to the Class out of the
BAWAG Global Resolution Fund after BAWAG has made a direct payment to the Class
pursuant III 9(a), (b) or (c) above, the Class will transfer an amount equivalent to the
payment received front the USAO pursuant to that same subparagraph (i.e., 9(a), (b) or
(c)) to BAWAG within twenty days of receipt of such payrnent from the USAO. In no
event shall the funds received through the BAWAG Global Resolution Fund reduce the
payment obligation of BAWAG set forth in 11 9(d) above, even if that payment results in
total payments to the Class exceeding 9108 million.
Noll-Monetary Consideration,
l l . Subject to Austrian bank secrecy laws and pursuant to the Confidentiality
Agreement, BAWAG shall provide Co-Lead Counsel with access to such documents and
financial information that Lead Plaintiffs believe are reasonably necessary to aonf)rm the
information provided during the course of settlement negotiations. Subject to the
provisions of the Austrian bank secrecy laws and pursuant to the Confidentiality
18
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 19 of 47
Agree€r€ent, BAWAG agrees, that it span, upon reasonable request, be under a continuing
} obligation to provide Lead plaintiffs with copies of all Rtefco-related documents provided
in the future to the USAO and/or the Creditors Committee.
11 BAWAG shall in good faith and subject to Austrian bank secrecy laws
provide reasonable cooperation to assist Lead Plaintiffs in their prosecution of claims
against other defendants and/or prospective defendants in the Action. BAWAG's
cooperation shall include malting reasonably available to Lead Plaintiffs for interviews
and depositions (without the need for subpoenas) in Austria then-current BAWAG
employees familiar with the aforementioned documents and the matters alleged in the
Amended Complaint, provided, however, that Lead Plaintiffs agree that the tinning of
such interviews and/or depositions will be subject to coordination with the USAO and
Securities and Exchange Commission,
USE AND ADMINIS'T'RATION OF SETTLEM ENT- TUNA
13• The Settlement Fund 3nay be used: (i) to pay any Taxes; (ii) to pay Notice
and Administration Expenses; (iii) to pay any attorneys' fees and expenses awarded by
the Court; (iv) to pay any other fees and expenses approved by the Court; and (v) to pay
claims of Authorized Claimants determined valid for payment; provided, however, that
Co-Lead Counsel agree that funds used to pay any attorney's fee award shall not be
drawn fro€n funds that are paid to the Settlement Fund through the BAWAG Global
Resolution Fund,
14. The Net Settlement Fund shall remain in the Escrow Account until the
Fffective Date, whereafter the Net Settlement Fund shall be distributed to Authorized
Claimants as provided in ¶1122-25 hereof. All funds held by the Escrow Agent shall be
19
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 20 of 47
deemed to be in the custody of the Court, and shall remain subject to the jurisdiction of
the Court anti! such time as the fonds shall be distributed or returned pursuant to this
Stipulation and/or further order of the Court. The Escrow Agent shall invest any funds in
the Escrow Account in United States Treasury Bills or, if approved by each of the Co-
Lead Counsel and Lead Plaintiffs, in money market funds with one or more of the fifty
i3(50) largest banking institutions in the United States, and shall collect and reinvest all
` interest accrued thereon. The Lead Plaintiffs have structured the Escrow Account so that
will qualify as a "qualified settlement fund," as that ten-a is defined in Treas. Reg.
§1.468B-1, which has been promulgated under Section 468E of the internal Revenue4.
Code of 1986, as amended) and the parties hereto accordingly agree to treat the
Settlement Fund as a Qualified Settlement Fund within the meaning of Treasury
Regulation 41.468B-1, and that Bernstein Litowitz and Grant & Eisenhofer, as
administrators of the Settlement Fund within the meaning of Treasury Regulation
1 §1,46813-2(k)(3), shall be responsible for timely filing tax returns and any relevant tax
filings and documentation relating thereto for the Settlement Fund and timely paying
from the Settlement Fund any Taxes owed with respect to the Settlement Fund.
f3AWAG's Counsel as transferor agrees to provide promptly to Bernstein Litowitz the
required statement described in Treasury Regulation §1.468B-3(e); provided, ;hat since
the Settling Defendants are not US persons and are not US taxpayers, the Settling
k Defendants do not file US federal income tax returns and thus, the Settling Defendants
cannot file the required statement with their US tax return, its this regulation appears to
require.
20
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 21 of 47
15. All Taxes shall be paid out of the Settlement Fund, and shall be timely
paid by the Escrow Agent without prior Order of the Court. Any Tax returns prepared
for the Settlement Fund (as well as the election set forth therein) shall be consistent with
the previous paragraph, and in all events shall reflect that all Taxes (inc)uding any
Uinterest or penalties) on the income earned by the Settlement Fund shall be paid out of the
Settlement Fund as provided herein. The Settlement Fund shall indemnify and hold the
Settling Defendants ha y-nless for Taxes and related expenses (including without
limitation, taxes payable by reason of any such indemnification), if any, payable by the
Settling Defendants by mason of the income earned on the Settlement Fund, The Settling
Defendants shall notify the Escrow Agent pron7ptiy if they receive any notice of any m
claim for Taxes relating to the Settlement Fund.
i?
16. Co-Lead Counsel may pay from the Settlement Amount all reasonabletz
costs and expenses associated with the administration of the Settlement, including,
without limitation, the actual costs of identifying and notifying Class Members and
printing and mailing the Notice and Proof of Claim, publication of the Publication
Notice, reimbursement to nominee owners for forwarding the Notice and Proof of Claim
to their beneficial owners, the administrative expenses incurred and fees charged by the
Claims Administrator in connection with mailing notices and processing the submitted
claims, and any other Notice and Administration Expenses. In the event that the
X Settlement is terminated, as provided for herein, Notice and Administration Expenses
paid or accrued in connection with this paragraph shall not be returned to the persons
who paid the Settlement Amount up to a maximum amount of $300,000.00.
21
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 22 of 47
17. Co4Lead Counsel Will apply to the Court for a Class Distribution Order,
oil notice to 13AWAG's Counsel , approving the Claims Administrator's administrative
determinations concerning the acceptance and rejection of the claims submitted herein
and approving any fees and expenses not previously applied for, including the fees and
expenses of the Claims Administrator, and, if the Effective Date has occurred, directing
the payment of the Net Settlement Fund to Authorized Claimants.
18. This is not a claims-made settlement. As of the Effective Date, with the
exception of the Class's obligation to return payments to BAWAG if payn,et,ts are later
obtained Eton, the BAWAG Global Resolution Fund (as set forth in paragraph 10 above),
and the teens of paragraph alt} below, neither the Settling Defendants nor any person
paying the Settlement Amount or any portion of the Settlement Amount on behalf of the
Settling Defendants steall have any right to the return of ti,e Settlement Fund or any
portionthereof irrespective of the number of Proofs of Clain, f ailed, the collective at„ount
of losses of Authorized Claimants, the percentage of recovery of losses, or the amounts to
be paid to Authorized Claimants from the Net Settlement Fund. In the event that the
Settlement is terminated or fails to become effective for any reason prior to the Cffective
Date, the Class shall return to BAWAG the $8 million Non -Continget,t Payment paid in
accordance wit!, paragraph 9(d) above, subject to the provisions of paragraph dD.
19. The Claims Administrator will administer the Settlement tinder Co-Lead
Counsel's supervision and subject to the jurisdiction of the Court. The Settling
Defendants will !lave no responsibility for tite administration of the Settlement, and shall
have no liability to the Class in connection with such administration . Co-Lead Counsel
will cause the Claims Administrator to mail the Notice (and, at a later date, the Proof of
22
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 23 of 47
Claim) to those members of the Class whose addresses may be identified through
reasonable effort. Co-Lead Counsel will publish the Publication Notice of the proposed
Settlement in the national edition of The Y41'all Street .Iotrf •t7a1 within ten (it?) days of the
mailing of the Notice, or in such other form or planner as may be ordered by the Court.
ATTt)RNEYS' FEES Al^'l^ ^^CPENSES
20. At any time prior to distributionto the Class, upon reasonable notice to
Class Members, Co-Lead Counsel, on behalf of all plaintiffs' counsel in the Action, may
apply to the Court for an award from the Settlement Fund of attorneys' fees not to exceed
7%r of the Non-Contingent Payment; provided, however, that funds used to pay any
attorneys' fee award shall not be drawn from funds that BAWAG may pay to the
Settlement Fund through the BAWAG Global Resolution Fund. BAWAG will take no
position on any request for atto:ney's fees by Co-Lead Counsel other than to
affirmatively acknowledge that the efforts of Lead Plaintiffs and Co-Lead Counsel,
including the filing of the Amended Complaint and the presentation of certain facts and
arguments during the settlement discussions, contributed materially to BAWAG's
Agreement to fiend the BAWAG Global Resolution Fund and to pay the Settlement
Amount to the Class. Any attorneys' fees as are awarded by the Court shall be paid from
the Settlement Fund to Co-Lead Counsel within five (5) business days of the entry of the
xOrder awarding such attorneys' fees, notwithstanding the existence of any timely filed
objections thereto, or potential for appeal therefrom, or collateral attack on the Settlement
or any part thereof, subject to the obligation of Co-Lead Counsel and each such plaintiffs'
counsel to refund to the Settlement Fund, within ten (10) days, the amount received by
each plus accrued interest at the rate paid on the Escrow Account by the financial
23
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 24 of 47
institution holding it, if and when, as a result of any appeal and/or further proceeding on
remand, or successful collateral attack, the fee or cost award is reduced or reversed, if the
award order does not become final, if the Settlemment itself is voided by any patty as
provided herein, or if the Settlement is later reversed or modified by any court. CO-Lead
iCounsel shall allocate the attomeys' fees among plaintiffs' counsel itr a Manner in which
they in good faith believe reflects the contributions of such counsel to the prosecution and
settlement of the Action with the Settling Defendants. Co-Lead Counsel will indemnify
and hold the Settling; Defendants harmless for any claims by any Class :member regarding
attorneys' fees.
21. Lead Plaintiffs and Co-head Counsel may not cancel or terminate the
Stipulation or the Settlement in accordance with' 37 or otherwise based on this Court's
or any appellate court's Tulin; solely with respect to any application for attorneys' fees
and expenses or other fee and expense award in the Action. The Settling Defendants
have no responsibility or liability for the allocation of attonteys' fees.
blSTR^BUTI4N TD AUTHORIZED CLAIMANTS
22, The Claims Administrator shall deternnine each Authorized Claimant's pro
rata silare of the Net Settlement Fund based upon each Authorized Claimant's
Recognized Loss as set forth in $ 23 below.
23. The distribution of the Net Settlement Fund to Class Members shall be
subject to the flan of Allocation, which Lead plaintiffs shall propose in their discretion,
at a later point and subject to ftt ►'ther notice to Class Members. The Settling Defendants
will take no position with respect to such flan of Allocation; such Flan of Allocation is a
matter separate and apart ftorn the proposed Settlement between Lead Plaintiffs and the
24
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 25 of 47
Settling Defendants, and any decision by the court concerning the Plan of Allocation
shall not affect the validity or finality of the proposed Settlement.
24, The Plan of Allocation is not a necessary term of this Stipulation and it is
not a condition of this Stipulation that any particular plan of allocation be approved by
the Court. Lead Plaintiffs and Co-Lead Counsel may not cancel or terminate the
Stipulation or the Settlement in accordance with'{ 37 or otherwise based on this Court's
or any appellate court's ruling solely with respect to the Plan of Allocation or any plan of
allocation in the Action. The Settling Defendants have no responsibility or liability for
allocation of the Net Settlement Fund.
25, Each Authorized Claimant shall be allocated a pro rata share of the Net
Settlement Fund based oil the Plan of Allocation. The Settling Defendants will have no
involvement or responsibility in reviewing or challenging claims.
ADMINISTRATION OF THE SETTLEMENT
26. Any member of the Class who fails to timely submit a valid Proof of
Claim will not be entitled to receive any of the proceeds fi-om the Net Settlement Fund
but will otherwise be bound by all of the terms of this Stipulation and the Settlement,
including the terms of the Judgment to be entered in the Action and the releases provided
for herein, and will be barred from bringing any action against the Settling Defendants
concerning the Settled Claims,
27. Co-Lead Counsel shall be responsible for supervising the administration
of the Settlement and disbursement of the Net Settlement Fund. The Settling Defendants
shall have no liability, obligation or responsibility for the administration of the
25
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 26 of 47
Settlement, the allocation of the Settlement proceeds or the reviewing or challenging of
claims of members of the Class.
2& For purposes of determining the extent, if any, to which a Class Member
shall be entitled to be treated as an "Authorized Claimant,,, the fallowing conditions shat]
apply;
a, each Class Member shall be required to submit a Proof of Claire
signed under penalty of peiJury, and supported by such documents as are designated
therein, including proof of the claimant's loss, or such other documents or proof as Lead
Counsel, in its discretion, may deem acceptable and subject to the approval of the Court,
b. All Proofs of Claim must be submitted by the date specified
thereon unless such period is extended by Order of the Court. Any Class Member who
fails to submit a Proof of Claim by such date shall be forever barred from receiving any
payment pursuant to this Stipulation (unless, by Order of the Court, a later submitted
proof of Claim by such Class Men'iber is approved), but shall in all other respects be
bound by all of the terms of this Stipulation and the Settlement, including the terms of the
Judgment to be entered in the Action and the releases provided for herein, and will be
barred from bringing any action against the Settling Defendants concerning the Settled
Claims, A Proof of Claim shall be deemed to have been submitted when posted, if
received with a postmark indicated on the envelope and if mailed first-class postage
x prepaid and addressed in accordance with the instructions thereon, provided that it is
received before the motion for the Class Distribution Order is filed. In all other cases, the
Proof of Claim shall be deemed to have been submitted when actually received by the
Claims Administrator;
26
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 27 of 47
c. Each Proof of Claim shall be submitted to and reviewed by tlae
Claims Administrator, who shall determine in accordance with this stipulation and under
the supervision of Co-Lead Counsel, the extent, if any, to which each claim shall be
allowed, subject to review by the Court pursuant to subparagraph (e) below;
;sd. Proofs of Clain? that do not meet the submission requirements may
be rejected. Prior to rejection of a Proof of Clainl, the Claims Administrator Shall
communicate with the claimant in order to afford the claimant the opportunity to remedy
curable deficiencies in the Proof of Claim submitted. The Claims Administrator, under
supervision of Co-Lead counsel, shall notify, in a timely fashion and in writing, all
claimants whose proofs of Claim they propose to reject in whole or in part, setting forth
the reasons therefore, and shall indicate in such notice that the claimant whose claim is to
j
be rejected in whole or in part has the right to a review by the Court if such claimant so
desires and if such claimant complies with the requirements of subparagraph (e) below,
e. if any claimant who is notified by the Claims Administrator that
the Claims AdministZ mi tOr intends to reject his, her or its claimer in whole or in part desires
to contest such rejection, such claimant must, within twenty (20) days after the date of
mailing of the notice required in subparagraph (d) above, serve upon the Claims
Administrator a notice and statement of reasons indicating the clainmant's grounds for
contesting the rejection along with any supporting documentati on, and specifically
requesting a review thereof by the Court. If the dispute concerning the claim cannot be
otherwise resolved, Co-L,ead Counsel shall thereafter present the request for review to the
Court; and
27
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 28 of 47
f. The administrative determinations of the Claims Administrator
iaccepting and rejecting claims shall be presented to the Court, on notice to BAWAG's
Counsel, for approval by the Coui •i in the Class Distribution Order,
79. Each claimant shall be deemed to have submitted to the jurisdiction of the:j
Court with respect to the claimant's claim, and the claim will be subject to investigation4!
and discovery under the Federal Mules of Civil Procedure, provided that such
investigation and discovery shall be limited to that claimant's status as a Class Member
and the validity and amount of the claimant's claim. In connection with the processing of
the Proofs of Claim, no discovery shall be allowed on the merits of the Action or of the
Settlement.
30. Payment pursuant to this Stipulation shall be deemed final and conclusive
against all Class Members. All Class Members whose claims are not approved by the
Court shall be barred front participating; in distributions front the Net Settlement Fund,
rbut otherwise shall be bound by all of the terms of this Stipulation and the Settlement,
including; the tenns of the dud tnent to be entered in the Action and the releases provided
for herein, and will be barred from bringing any action Against the Settling Defendants
concerning the Settled Claims.
31. All proceedings with respect to the administration, processing and
determination of claims described in this Stipulation and the determination of all
controversies relating thereto, including disputed questions of law and fact with respect to
the validity of claims, shall be subject to the jurisdiction of the Court•
32. The Net Settlement Fund shall be distributed to Authorized Claimants by
the Claims Administrator only aver the Effective hate and after all claims have been
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 29 of 47
processed and all claimants whose claims have been rejected or disallowed, in whole or
vided the opportunity to communicate with the Claimsin part, have been notified and pro
Administrator concerning such rejection or disallowance; provided, however, that a
distribution may occur pending any appellate court's ruling solely with respect to the
scope of the bar order provision of the Judgment, as set forth in ¶ 35 herein.
TERMS OF THE PRE, LIMIN..A.RY APPRgVAL ORDER
33. Coilcur^'e11tly with their application for preliminary Coull approval Of the
Settlement contemplated by this Stipulation, and promptly after execution of this
Stipulation, Co-head Counsel shall apply to the Court for entry of an Order Preliminarily
Approving Settlement of the Action, substantially in the form of the Preliminary
Approval Order annexed hereto as Cxhibit A.
34, The Settlement is conditioned upon the Approval Order by the Bankruptcy
Court becoming a final order that has not been stayed, vacated, reversed, or materially
modified or amended, and as to which: (i) the time to seek review, reargument, or
rehearing has expired, and as to which no appeal or motion or petition for certiorari,
review, or rehearing is pending, or (ii) if a stay, appeal, review, reargument, rehearing, or
certiorari has been sought, the order or judgment has been affirmed, or the request for
stay, review, reargument, rehearing, or certiorari has been denied and the time to seek
further stay, appeal, review, reargument, rehearing, or certiorari has expired, as a result of
which such order or judgment has become final and non-appealabl e in accordance with
applicable law; provided, however, that the possibility that a motion under Mule 60 of the
Federal Rules of Civil Procedure, or Rule 9021 of the Federal Rules of Bankruptcy
Procedure, may be but has not then been filed with respect to such order, shall not cause
29
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 30 of 47
such ardor not to be a final order. Should this condition not be met, the Settlement shalli
be null and void.
:iTERMS OF THE JCIDGM)EN'X
35. If the Settlement contemplated by this Stipulation is approved by the
Court, Co-Lead Counsel and BAWAG's Counsel shall jointly request that the Court enter
a Judgment substantially in the form annexed hereto as Exhibit B. The Judgment shall
contain a provision barring claims for contribution to the fullest extent permitted by 15
U.S.C. §78u-4(f)(7) and any other applicable law or regulation, by or against the Settling
Defendants. Nothing herein is intended to broaden the language of the Private Securities
Litigation Reform Act of 1995.
35.5 The Judgment shall also contain a provision barring Claims for
contribution or indemnity (or any other claim against the Settling .Defendants where the
injury to the Non-Settling Defendant is the Non-Settling Defendant's actual or threatened
liability to the Lead Plaintiffs and other Class Members), arising out of or related to the
claims or allegations asserted by Lead Plaintiffs in the Action, whether such claims arise
under state, federal or foreign law as claims, cross-claims, counterclaims, or third-party
claims, whether asserted in the Action, in this Court, in any federal or state court, or in
any other court, arbitration proceeding, administrative agency or other forum in the
United States or elsewhere. In any lawsuit brought by a putative member of the Class in
the Action who has properly opted out of the Settlement (an "Opt Out Action."), BAWAGU
will not contend that the bar orders provided in the Stipulation and Judgment shall bar a
claim over in the Opt Out Action by a Non-Settling Defendant. The foregoing sentence
pertains solely to the bar orders in the Stipulation and Judgment and has no effect
30
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 31 of 47
whatsoever on any release or bar order in any other proceeding or settlement agreement
or on any other defense or claim of the Settling Defendants.
35.6 The judgment shall also contain a provision stating that any final verdict
or judgment that may be obtained by or on behalf of the Class or a Class Member against
a Non-Settling Defendant or Non-Settling Defendants shall be reduced by the greater
of (i) an amount that corresponds to the percentage of responsibility of the Settling
Defendants for common damages; or (ii) the amount paid by or on behalf of the Settling
Defendants to the Class for common damages.
36. The Settlement is conditioned upon final court approval, dismissal of the
Action as to BAWAG with prejudice, and the Judgment becoming Final. Should those
conditions not be met, the Settlement slrall be null and void.
T1vI2MINA.TION
)y37. BAWAG and Lead Plaintiffs shall have the right to terminate the
Settlement and this Stipulation by providing written notice of their election to do so
("Termination Notice") to all - other parties thereto within thirty (30) days of (a) the
Court's declining to enter the Preliminary Approval Order in any material respect, (b) the
Court's refusal to approve this Stipulation or any material part of it; (c) the Court's
declining to enter the judgment in any material respect; (d) the date upon which the
judgment is modified or reversed in any material respect by the United States Court of
Appeals or the Supreme Court of the United States; or (e) in the event that the Court
enters a judgment in a form other than the judgment ("Alternative Judgment") and none
of the parties hereto elects to terminate this Settlement, the date upon which such
Alternative judgment is modified or reversed in any material respect by the United States
31
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 32 of 47
Court of Appeals or the Supreme Court of the United States. The award of attorneys'
fees, if any, to Co,Lead Counsel is not a basis for termination of this Settlement
y Agreement.
38. $AWAG, at its discretion, has the option to withdraw from the Settlement
if (i) holders of 5% (five percent) of the snares eligible to participate in the Settlement opt
ii holders of 5% (five percent) of the notes eligible to participate in th
out, and/ore
( }
Settlement opt out. Co-Lead Counsel shall have the right to communicate with the
holders of such shares and/or notes and, if a sufficient nufnber of them withdraw their
trequests for exclusion such that the total number of shares and/or notes eligible to
paiticipate. in the Settlement represented by the remaining "opt outs" represents less than
5% of the total nu}nber of shares and/or notes eligible to participate in the Settlement,
BAWAG's notice of termination shall be deemed' withdrawn. BAWAG must exercise its
Y option to terminate in writing to Co-head Counsel within ten business days after
` receiving notice that the last opt out is filed that would exceed the 5% threshoid for either
}
stock or notes, or the option is'waived.
39. Except as otherwise provided herein, in the event the Settlement is
terminated or fails Co become effective for any reason, then the Settlement shall be
without prejudice and none of its terms shall be effective or enforceable except as
specifically provided herein, the parties to this Stipulation shall be deemed to have
reverted to their respective status in the Action as of May 31, 2006 and, except as
otherwise expressly provided, the parties in the Action shall proceed in all respects as if
this Stipulation and any related orders had not been entered. In such event, the fact and
terms of this Stipulation shall not be admissible in any trial of this Action,
32
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 33 of 47
40. tf tine Settlement Amount, or any portion thereof, is to be returned
pursuant to the provisions of this Stipulation, any portion of the Settlement Amount
previously paid by or on behalf of the Settling Defendants, plus interest earned less ally
Taxes paid or due (in which case the deducted funds will be used to pay such Taxes) with
respect to such interest income, and less any Notice and Administration Costs actually
paid or incurred up to $300,044, shall be returned to the source of such payrnetnts 0e„
BAWAG or the BAWAG Global Resolution Fund).
NO ADMISSION OF WRONGDOING
41, This Stipulation, whether or not consummated, and any negotiations,
proceedings or agreements relating to the Stipulation, tine Settlement, and any matters
arising in connection with settlement negotiations, proceedings, or agreements:Y.j a. shall not be admissible in any action or proceeding for any reason,
other than an action to enforce the terms hereof;
b, shall not be described as, construed as, offered or received against
the Settling Defendants as evidence of anal/or deemed to be evidence of any presumption,
concession, or admission by the Settling Defendants of the truth of any fact alleged by
Lead Plaintiffs; the validity of any claim that has been or could have been asserted in the
Action or in any litigation; the deficiency of any defense that has been or could have been
asserted in the Action or in any litigation; ar any liability, negligence, fault, or
wrongdoing of the Settling Defendants;
C, shall not be described as, construed as, offered or received against
Lead Plaintiffs or any Class Members as evidence of any infirmity in the claims of said
33
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 34 of 47 .
Lead Plaintiffs and the Class or that damages recoverable under the Amended Coiriplaint
would not have exceeded the Settlement Amount;
d. shall not be described as, construed as, offered or received against
any of the parties to this Stipulation, in any other civil, criminal or administrative action
or proceeding, provided, however, that (i) if it is necessary to refer to this Stipulation to
effectuate the provisions of this Stipulation, it ntay be referred to in such proceedings,
and (ii) if this Stipulation is approved by the Court, tine Settling Defendants may refer to
it to effectuate the liability protection granted them hereunder; and
e. shall not be described as or construed against the SettlingK
Defendants or the Lead Plaintiff's and any Class Members as an admission or concession
that the consideration to be given hereunder represents the amount which could be or
would have been awarded to said Lead Plaintiffs or Class Members after trial,
MISCELLANJGQUS I'R©YI5IQNS
42. All of the exhibits attached hereto are hereby incorporated by reference as
though fully set forth herein.
43. BAWAG warrants as to itself that, as to tine payments made by or on
behalf of it, at the tillie of such payment that BAWAG made or caused to be made
pursuant to 8-14 above, it was not insolvent nor did tier will the payment required to
be made by or on behalf of it render BAWAG insolvent within the meaning of and/or for
the purposes of the United States Bankruptcy Code, including §§ 101 and 547 thereof.
This warranty is made by BAWAG and not by BAWAG's Counsel.
44. if case is commenced in respect of BAWAG (or any insurer contributing
funds to the Settlement Amount on behalf of BAWAG) under Title 11 of the united
34
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 35 of 47
States Code (Bankruptcy), or a trustee, receiver or conservator is appointed under any
similar law, and in the event of the entry of a filial order of a court of competent
jurisdiction determining the transfer of money to the Settlement Fund or any portion
thereof by or on behalf of BAWAG to be, a preference, voidable transfer, fraudetlent
transfer or similar transaction, and any portion thereof is rewired to be returned, and such
amount is not promptly deposited to the Settlement Fund by others, then, at the election
of Lead Plaintiff's, the parties shall ,jointly move the Court to vacate and set aside tite
releases given and the Judgment entered in favor of the Settling Defendants pursuant to
this Stipulation, which releases and Judgment shall be null and void, and the palsies shall
be restored to their respective positions to the litigation as of May 31, 2006, and any cash
amounts in tite Settlement Fund shall be returned as provided above.
i 45. The parties to this Stipulation and Agreement of Settlement intend the
settlement of the Action to be a final and complete resolution of all disputes asserted or
which could be asserted by Lead Plaintiffs and Class Members against tite Settling
Defendants with respect to the Settled Claims. Accordingly, Lead Plaintiffs and the
Settling Defendants agree not to assert in any forum that the Action was brought or
defended in bad faith or without a reasonable basis. The parties hereto shall assert no
claims of any violation of Rule 1 I of the Federal Rules of Civil Procedure relating to the
maintenance, defense or settlement of the Action. The parties agree that the amount paid
and the other tetras of the Settlen-lent were negotiated at arm's length in good faith by the
Parties, and reflect a settlement that was reached voluntarily after' consultation with
experienced legal counsel.
35
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 36 of 47
46, This Stipulation may not be inodifled or amended, nor may any of its
provisions be waived, except by a writing signed by all parties hereto or their successors-
ill-interest.
47. The headings herein are used for the purpose of convenience only and are:i"i
not meant to have legal effect.
48. The administration and consummation of the Settlement as ernbodied in
this Stipulation shall be under the authority of the Court, and the Court shall retain
jr►►•isdiction for the purpose of entering orders providing for awards of attorneys' fees and
expenses to Co-Lead Counsel and enforcing the terms of this Stipulation.
49. The waiver by one party of any breach of this Stipulation by any other
party shall not be deemed a waiver of any other prior or subsequent breach of this
Stipulation.
s 5U, This Stipulation and its exhibits constitute tite entire agreement among; the
parties hereto concerning the S`Gttlement of the Action as against the Settling Defendants,
and no representations, warranties, or inducements have been made by any party hereto
concerning this Stipulation and its exhibits other than those contained and memorialized
ill such documents.
51. This Stipulation may be executed in one or more counterparts. All
executed counterparts and each of them shall be deemed to be one and the same
instrument provided that counsel for the parties to this Stipulation shall exchange Among
thenrselves original signed counterparts.
52. This Stipulation shall be binding when signed, but the Settlement shall be
effective only oil the condition that the Effective Date occurs.
36
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 37 of 47
53. This Stipulation shall be binding upon, and inure to the benefit of, the
successors and assigns of the parties hereto.
{ 54. The construction, interpretation, operation, effect and validity of this
Stipulation, and all documents necessary to effectuate it, shall be governed by the internal
laws of the State of New York without regard to conflicts of laws. except to the extant
that federal law requires that federal law govern.
55. This Stipulation shall not be construed more strictly against one party than
another inerely by virtue of the fact that it, or any part of it, n ay have been prepared by
counsel for one of the parties, it being recognized that it is the result of ann's length
negotiations among the parties, and all parties have contributed substantially and
materially to the preparation of this Stipulation.
i 56_ All counsel and any other person executing this Stipulation and any of the
exhibits hereto , or any related settlement documents, w;)TTant and represent that they have
the full authority to do so, and that they have the authority to take appropriate action
required or permitted to be talon pursuant to the Stipulation to effectuate its terns:
57.Co-Lead Counsel and BAWAG's Counsel agree to cooperate fully with
one another in seeking Court approval of the Preliminary Approval Order, the Stipulation
and the Settlement,and to promptly agree upon and execute all such other doc,ulnentation
as reasonably may be required to obtain final approval by the Court of the Settlement.
37
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 38 of 47 .
IN W)rrn^SS WHEMOF, Lead Plaintiffs and BA'VJAG have caused this
5tiprilation to be exoouted, by their duty authorized attorneys, as of February4,007.
GRANT & EISENRt3FBR P.A. MCRERT LLP
ii
By ,L ^., .//lam f By
r _and ^ Cour^rel for BA WACY P.S.K, Bank firrArbett and WirtsahaW andO.Vierretchfsche pwisparkaml?Aktic r:gesc llsel:u,^
BERNSTL'IN LITOWITZ BERG ER& GRossMANN LLP
- Y
s By MILA it .r is
Co ,Lead Counsel for Lead Platrzllffs cmd the Class
38
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 39 of 47
F; IN WITNE SS wnEREOF, Lead Plaintiffs and BAWAG have caused US
Stipulation to be executed, by their duly authorized attorneys, as of February , 2007.
GRANT & BISENHOFER P.A. DECHERT LLP
By -By,
-acid- Catsnsel for• BAWAG P.SX. Ba k flirArbeltund Wrrtschaft andosterr-eichische postspar•kasse41wengeselIschafl
BERNSTEIN LIT©WITZ BERGER& GROSSMANN LLP
` By
a:l
CO-Lead Counsel for Lead Alaintiffs and the Class
38
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 40 of 47
Schedule A
AVB Affiliates"Ingebe" Industrie- u. Gewerbe-Beteiligungsgesellsehaft m.b.H.Austinvest AnstaltAI-ALTERNATIVE INVESTMENTS LTD.Alinea PrivatstiftungAlinea Holding GmbHALPHARENT s.r.o.Athena Wien Beteiligungen AGAUST-INGEBE Beteiligungsverwaltung GmbH.AUSTFINANZVERWALTUNG S.A.AUSTOST ANSTALTAUSTOST HANDELS UND TREUHAND LIMITEDAUSTOST HANDELS- UND TREUHANDGESELLSCHAFT M.B.H.B.I.S. BAWAG Internet Services GmbHB.L.H. BAWAG Leasing Holding GmbHBAWAG Allianz Mitarbeitervorsorgekasse AGBAWAG Bank CZ a.s.BAWAG banka d.d.BAWAG Beteiligungsmanagement GmbHBAWAG CAPITAL FINANCE (JERSEY) II LIMITEDBAWAG CAPITAL FINANCE (JERSEY) III LIMITEDBAWAG CAPITAL FINANCE (JERSEY) LIMITEDBAWAG FINANCE HOLDING LIMITEDBAWAG Finance Malta Ltd.BAWAG Finanzanalyse GmbHBAWAG INTERNATIONAL FINANCE LIMITEDBAWAG Invest Consult GmbHBAWAG Leasing & Fleet KftBAWAG Leasing & fleet s.r.o.BAWAG Leasing & Fleet Sp. z 0.0.BAWAG Leasing Rt.BAWAG Malta Bank LimitedBAWAG P.S.K. Datendienst Gesellsehaft m.b.H.BAWAG P.S.K. Fuhrparkleasing GmbHBAWAG P.S.K. IMMOBILIEN AGBAWAG P.S.K. IMMOBILIENLEASING GmbHBAWAG P.S.K. Kommerzleasing GmbHBAWAG P.S.K. LEASING GmbHBAWAG P.S.K. LEASING GmbH & Co. Hochholzerhof Errichtungs- and Vermietungs-KG.BAWAG P.S.K. LEASING GmbH & Co. MOBILIENLEASING KG.BAWAG P.S.K. MOBILIENLEASING GmbHBAWAG P.S.K. Vermietungs- and Leasing GmbHBAWAG Wohnbaubank AktiengesellschaftBAWAG Wohnbauholding GmbH
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 41 of 47
BETARENT s.r.o.bezahlen.at Internet-Service GmbHBodensee LimitedBPI Holding GmbHBPI Holding GmbH & Co KEG,BPI Holding GmbH & Co. Betriebsanlagenverwaltungs KG.BPI Holding GmbH & Co. Immobilien and Anlagen KG.BSH BAWAG Strategie Holding GmbHC e l e s t e Trust reg.C. & P. Leasing-Gesellschaft m.b.H.Cafe Bawag Betriebsgesellschaft m.b.H.CARNI Industrie-Immobiliengesellschaft m.b.H.Cromer Capital Management Ltd.CROMER FINANCE LTD.Cromer International LimitedE-C-B Beteiligungsgesellschaft m.b.H.easybank AGEinlagensicherung der Banken and Bankiers Gesellschaft m.b.H.EURO RAIL INVEST LIMITEDFC Leasing GmbHFCH alpha Finanzierungsvermittlung GmbHFCH beta. Finanzierungsvermittlung GmbHFFE Finanzierungsvermittlungsgesellsehaft m.b.H. in Liqu.FinHaus s.r.o.Gara Feuerwehrzentralen Leasing Gesellschaft m.b.H.Gara Holding GmbHGara RPK Grundstiicksverwaltungsgesellsehaft m.b.H.Genossenschaftskiiche der bei der Osterreichischen Postsparasse tatigen Bediensteten,registrierte Genossenschaft mit beschrankter Haftung in Liqu.Hafner See-Liegenschaftsverwaltungsgesellschaft m.b.H.HBV Holding and Beteiligungsverwaltung GmbHHFE alpha Handels-GmbHIDG Immobilien Development Gesellschaft m.b.H.IDG Immobilien Development Gesellschaft m.b.H, & Co KGIngebe beta Immobilienholding GmbHIngebe COR Finanzierungsberatung GmbH in Liqu.Ingebe Immobilienhandels- and Vermittlungs-GmbH.Ingebe Medien Holding GmbHISTRO - RECOVERY, s.r.o.ISTRO ASSET MANAGEMENT, spray. spol., a.s.Istrobanka a.s.ISTROFINANCE, s.r.o.ISTROLEASING, s.r.o.ISTRORENT, s.r.o.Kinomax spolka z. ograniezona odpowiedzialnosciaKLB Baulandentwicklung GmbH
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 42 of 47
Kommunalleasing GmbHKongreBhotel Linz Betriebsgesellschaft m.b.H.KongreBhotel Linz Errichtungsgesellsehaft m.b.H.L. 136sendorfer Klavierfabrik GmbHM. Sittikus Sir. 10 Errichtungs GmbH.MAP Handels GmbHMARVE Immobilienentwicklungsgesellsehaft m.b.H.MFT + RA, s.r.o.Monte Brook Corporate Assets Ltd.Obernosterer - Beteiligungsgesellschaft m.b.H.OMNITEC Informationstechnologie-Systemservice GmbHP,S.K. Beteiligungsverwaltung GmbHP.S.K. Handel and Vermietung GmbH.P.S.K. IMMOBILIENLEASING GmbHP.S.K. Liegenschaften Vermietungs- and Verwaltungsgesellschaft m.b.H.P.S.K. Versicherungs- and Finanzservice GmbHP.S.K. Zahlungsverkehrsabwicklungs GmbHP.S.K.Versicherung AGPLATO Grundstiicksverwertung GmbHPluto Beteiligungsverwaltung GmbHPOLESTAR LIMI'T'EDPT Immobilienleasing GmbHPULAWSKA Planungs- and Errichtungsges.m.b.H.R & B Leasinggesellschaft m.b.H.RAIL TRANS INVEST LIMITEDRealplan Beta Liegenschaftsverwaltung Gesellschaft m.b.H.RF 17 BAWAG Immobilienleasing GmbHRF 2 BPI Holding GmbH & Co. KG.RF 4 BAWAG P.S.K. LEASING GmbH & Co. OHG.RF BAWAG Leasing Gesellschaft m.b.H.RF elf Realitatenverwertungsgesellsehaft m.b.H.RF ftfzehn BAWAG Mobilien-Leasing Gesellschaft m.b.H.RF neun BAWAG P.S.K. LEASING GmbH & Co. KG.RF sechs BAWAG P.S.K. LEASING GmbH & Co. KG.RF zehn BPI Holding GmbH & Co KG.RF zwolf BAWAG Leasing Gesellschaft m.b.H.Rhein LimitedRVG Immobilienholding GmbHRVG, Reaiitatenverwertungsgesellsehaft m.b.H.SPARDA Bank AktiengesellschaftSTART Immobilienleasing GmbHStiefelkonig d.o.o.Stiefelkonig Schuhhandels Gesellschaft m.b.H.Stiefelkonig spol, s.r.o.Stiefelkonig trgovinas cevlji d.o.o.STK Beteiligung GmbH
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 43 of 47
TADEMA Leasing and Beteiligung Gesellschaft m.b.H.UHW Finanzierungsdienstleistungen beta GmbHuni venture Beteiligungs AGOKK Holding Gesellschaft m.b.H.Osterreichische V erkehrskreditbank AGBond Classic Ltd.CAP Holding AGCDC City Investments Ltd.Conservative Properties Ltd.First Investors Assets Ltd.Moore Classic Ltd. Var Portfolio Ltd.
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 44 of 47
OGB entitiesOsterreichischer GewerkschaftsbundOGB Vermogensverwaltungsgesellschaft m.b.H.OGB Beteiligungsgesellschaft m.b.HAnteiisverwaltung BAWAG P.S.K. AGOsterreichische Gewerkschaftliche Solidariti t Privatstiftung
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 45 of 47
Current Supervisory Boardfamily name first nameMuhm WernerSellitsch SiegfriedStein DworaHochleitner AlbertKothbauer MaxKovarik GeorgSchenz RichardZraunig GabrieiaFraiBI MonikaGOstel ManuclaJakubovits BrigitteLeeb RudolfProll BeatrixStreibel-Zarfl Ingrid
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 46 of 47
Schedule S
Schedule B includes the following, their predecessors, successors, and all employees, partners,members, shareholders, agents, and representatives thereof
KPMG Wirtschaftsprufungs- and Steuerberatungs GmbHDeloitte Wirtschaftsprtifungs GmbHExinger GmbHDeloitte FSl Consulting GmbH
Schedule B also includes the following, their predecessors, successors, affiliates, parents, andsubsidiaries, and all employees, partners, members, shareholders, agents, and representativesthereof:
Fellner Wratzfeld & Partner Rechtsanwalte GmbHDr. Harry Neubauer and Dr. Christa Springer, RechtsanwalteMcDermott Will & EmeryDechert LLPJaksch, Schoeller & RielSchoenherrr Rechtsanwdlte GmbHAllen & Overy LLP
Case 1:05-cv-08626-GEL Document 357-2 Filed 02/22/2007 Page 47 of 47
Schedule C
Helmut ElsnerJohann ZwettlerHubert KreuchJosef SchwarzeckerChristian ButtnerPeter Nakowitz
Case 1:05-cv-08626-GEL Document 357-3 Filed 02/22/2007 Page 1 of 11
EXHIBIT AfA
Case 1:05-cv-08626-GEL Document 357-3 Filed 02/22/2007 Page 2 of 11
IN THE UNITED STATUS DISTRICT COURTFOR THE SOUTHERN DISTRICT OF NEW YORK x
05 Civ. 8626 (GEL)
In re REFCO, INC. SECURITIES LITIGATION
x
1
ORDER PRELIMINARILY APPROVINGPROPOSED SETTLEMENT WITH DEFENDANT BAWAG,
WHEREAS, by Order dates! February 8, 2005, Pacific Investment Management
Company LLC and RH Capital Associates LLC were appointed by this Court to serve as Lead
H
Plaintiffs oil behalf of the Class in /it re Refco, 111c, Securities Litigation, No, 05 Civ, 8626
(GEL.) (S.D.N.Y.) (the "Action"); ,.
WHEREAS, the parties have made an application, pursuant to Rule 23 of the Federal
Rules of Civil Procedure, for an order preliminarily approving the partial settlement
("Settlement") of the Action in accordance with the Stipulation and Agreement of Settlement
dated February 13, 2007 between Lead Plaintiffs and defendant BAWAG P.S.K. Bank. fur Arbeit
and Wirtschaft and Osterreichische Postsparkasse Aktiengesellschaft ("BAWAG") (the
"Stipulation"), which sets forth the terms and conditions for a proposed Settlement and for the
release of certain claims and the dismissal of the Action against BAWAG with prejudice upon
the ternns and conditions set forth therein;
WHEREAS, the Court has not certified the Action as a class action, but is being asked to
preliminarily certify a settlement Class, for purposes of this Settlement only, consisting of all
persons and entities that purchased or otherwise acquired Refco Group Ltd., LLC/ Refco Finance
Inc. 9% Senior Subordinated Notes due 2012 (CUSIP Nos. 75866HAA5 and/or 758661-IACI)
Case 1:05-cv-08626-GEL Document 357-3 Filed 02/22/2007 Page 3 of 11
and/or common stock of Refco (CUSIP No. 758660109) during; the period August 5, 2004
through and including October 17, 2005 (the "Class Period") and who were damaged thereby;
WHEREAS, Lead Plaintiffs' proposed definition of the settlement Class excludes (i)
Refco; (ii) the Defendants; (iii) any person or entity who was a partner, executive officer,
director, controlling person, subsidiary, or affiliate of Refco or any Defendant dtiring the Class
Period; (iv) members of the Defendants` immediate families; (v) entities in which Refco or any
Defendant has a controlling interest; and (vi) the legal representatives, heirs, predecessors,
successors or assigns of any of the foregoing excluded persons or entities. Also excluded from4
the Class is any person or entity who or which properly excludes himself, herself or itself by
g in a valid and timely request for exclusion in accordance with the requirements set forth infiling
the Notice.
WHEREAS, the Court having (1) read and considered the First Amended Consolidated
Class Action Complaint, filed in this Action on May 5, 2006; (2) read and considered Lead
Plaintiffs' Notice of Motion for (I) Preliminary Approval of Partial settlement With Defendant
BAWAG, (11) Preliminary Certification of Class for Purposes of Settlement (I11) Preliminary
Approval of Form and Manner of Notice, and (IV) Scheduling of a Final Approval !-fearing,
together with the accompanyin g Memorandum of Law; (3) read and considered the Stipulation
between counsel for BAWAG and counsel for Lead Plaintiffs; and (4) heard and considered
arguments by counsel for Lead Plaintiffs and BAWAG in favor of preliminary approval of the
Settlement and preliminary certification of the Settlement Class for purposes of the Settlement;
WHEREAS, the Court finds, upon a preliminary evaluation, that the proposed Settlement
falls within the range of possible approval criteria, as it provides a beneficial result for the
Case 1:05-cv-08626-GEL Document 357-3 Filed 02/22/2007 Page 4 of 11
Settlement Class and appears to be the product of good faith, infonited and non-collusive
negotiations between experienced and able counsel for the settling parties;
WHEREAS, the Court also finds, upon a preliminary evaluation, that the Settlement
Class should be apprised of the Settlement, allowed to file objections thereto and to appear at the
Settlement Hearing, or alternatively, be afforded a reasonable opportunity to opt out of the
Action;
WHEREAS, the Court finds, upon a preliminary evaluation, that the Notice and the
Publication Notice attached hereto as Exhibits 1 and 2, respectively, and the methodology
described in Paragraph 6 of this Order for the publication and dissemination of such Notice and
Publication Notice: (i) are the best practicable notice; (ii) are reasonably calculated, tinder the 4
circumstances, to apprise Class Members of the pendency of the Action and of their right to
object or exclude themselves from the proposed Settlement and to object to Co-Lead Counsel's
application for attorneys' fees; (iii) are reasonable and constitute due, adequate and sufficient
Notice to all persons and entities entitled to receive notice; and (iv) meet all applicable
requirements of the Federal Rules' of Civil Procedures, the United States Constitution (including
the Due Process Clause), the Private Securities Litigation Reform Act of 1995 (15 U.S.C. 78u-4,
et seq.), the Rules of the Court and any other applicable law; and
WHEREAS, unless otherwise stated herein, all defined terms contained herein shall have
the same meanings set forth in the Stipulation.
NOW THEREFORE, IT IS HEREBY ORDERED:
1. Class Findin gs — For purposes of the Settlement of this Action as against BAWAG (and
only for such purposes, and without an adjudication of the merits), the Court preliminarily finds that the
requirements of the Federal Rules of Civil Procedure, the United States Constitution, the Rules of the
Case 1:05-cv-08626-GEL Document 357-3 Filed 02/22/2007 Page 5 of 11
Court and any other applicable law have been met as to tine Settlement Class described in the paragraphs
above in that:
a. The identities of the Settlement Class members are likely to beascertainable from records kept by Refco and/or its agents, and from otherobjective criteria, and the Settlement Class members are so numerous thattheir joinder before the Court would be impracticable.
b. Lead Plaintiffs have alleged numerous questions of fact and law commonto the Settlement Class.
c, Based on allegations in the Action that BAWAG engaged in misconductunifornnly affecting members of the proposed Settlement Class, the Courtpreliminarily finds that the claims of the Lead Plaintiffs in the Action aretypical of the claims of the proposed Settlement Class,
d. The Court finds that Lead Plaintiffs will fairly and adequately protect theinterest of the proposed Class in that Wtine interests of Lead Plaintiffs andthe nature of their alleged claims are consistent with those of the membersof the Settlement Class, (ii) there appear to be no conflicts between oramong the lead Plaintiffs and the Settlement Class, (iii) Lead Plaintiffshave been and appear to be capable of continuing to be active participantsin both the prosecution and the settlement of the Action, and (iv) Lead
Plaintiffs and the Settlement Class members are represented by qualified,reputable counsel who are experienced in preparing and prosecuting large,complex securities Fraud class actions,
e. The Court preliminarily finds that, for settlement purposes in the Action asagainst SAWAG, questions of law or fact common to members of theSettlement Class predominate over any questions affecting only individualmembers of the Settlement Class and that a class-action resolution in themanner proposed by the Stipulation would be superior to other availablemethods for a fair and efficient adjudication of the Action. In makingthese preliminary findings, the Court has considered, among other factors,(i) the interest of the Settlement Class members in individually controllingthe prosecution or defense of separate actions, (ii) the impracticability orinefficiency of prosecuting or defending separate actions, (iii) the extentand nature of any litigation concerning these claims already commenced,and (iv) the desirability of concentrating the litigation of the claims in aparticular forum.
2. Preliminary Class Certifleation fo3• Settlement Put • tores Witli SAWAG M.. Based on
the findings set out in paragraph l above, the Court preliminarily certifies the following Settlement
Case 1:05-cv-08626-GEL Document 357-3 Filed 02/22/2007 Page 6 of 11
Class for settlement purposes only under Fed. R. Civ. P. 23(a) and (b)(3) in tite Action: all persons and
entities that purchased or otherwise acquired Refco Group Ltd., LLCI Refco Finance Inc. 9% Senior
Subordinated Notes due 2012 (CUSIP Nos. 75866HAA5 and/or 75866HAC1) and/or common stock of
Refco (CUSIP No. 758666109) during the Class Period and were damaged thereby. The Settlement
Class excludes (i) Refco; (ii) the Defendants; (iii) any person or entity who was a partner, executive
officer, director, controlling person, subsidiary, or affiliate of Refco or any Defendant during the Class
Period; (iv) members of the Defendants ` immediate families; (v) entities in which Refco or any
Defendant has a controlling interest; and (vi) the legal representatives, heirs, predecessors, successors or
assigns of any of the foregoing excluded persons or entities. Also excluded from the Class is any person
or entity who or which properly excludes himself, herself or itself by film a valid and time/ request forg Y
exclusion in accordance with the requirements set forth in the Notice.
3. Pr•eliminary AT)TWoval of Settlement — The Court hereby preliminarily approves
tite Settlement, as embodied in the Stipulation, as being fair, reasonable and adequate as to the
Settlement Class members, subject to further consideration at the Settlement Hearing described
below.
4. Settlement Hearing -- A hearing (the "Settlement Tearing"} shall be held on
2007 at before the Honorable Gerard E. Lynch in the United
States District Court for the Southern District of New York, United States Courthouse, 500 Pearl
Street, New York, NY, 10007. The purpose of the Settlement Hearing will be to determine
whether the proposed Settlement on the terms and conditions provided for in the Stipulation is
fair, reasonable and adequate to the Class and should be approved by the Court; whether the
Judgment as provided in the Stipulation should be entered herein; and whether Co-Lead
Counsel's application for attomeys' fees should be granted.
Case 1:05-cv-08626-GEL Document 357-3 Filed 02/22/2007 Page 7 of 11
5. Approval of Form and Content of Notice — The Court approves, as to form and
content, the Notice and the Publication Notice, attached hereto as Exhibits I and 2, respectively,
and finds that the inailing and distribution of the Notice and the publication of the Publication
Notice in the manner and form set forth in Paragraph 6 of this Order meet the requirements of
Rule 23 of the Federal Rules of Civil Procedure, the Securities Exchange Act of 1934, as
amended by Section 2113(a)(7) of the Private Securities Litigation Reform Act of 1995, 15
U.S.C. `; 78u-4(a)(7), and clue process, and is the best notice practicable under the circumstances
and shall coltstitute due and sufficient notice to all persons and entities entitled thereto.
6. Retention of Claims Administrator and Manner of Notice — Lead Counsel are
authorized to retain The Garden City Group, Inc. ("Claims Administrator") to supervise k
hereby
and administer the notice procedure as well as the processing of claims as more fully set forth
below:
(a) Not later than , 2007 (the "Notice Date"), Lead Counsel
shall cause a copy of the Notice substantially in the form attached to the Stipulation as Exhibit I
to be mailed by first-class mail to all Class Members who can be identified with reasonable
effort;
(b)Not later than 2007, Lead Counsel shall cause the
Publication Notice, substantially in form attached to the Stipulation as Exhibit 2, to be published
on one occasion in the national edition of The Wall Street Journal; and
(e) Not later than 2007, Lead Counsel shall serve on
BAWAG's Counsel and file with the Court proof, by affidavit or declaration, of such mailing
and publication.
Case 1:05-cv-08626-GEL Document 357-3 Filed 02/22/2007 Page 8 of 11
7. Nominee Procedures. — Norninees who purchased or acquired Refco Group Ltd.,
LLC/Refco Finance Inc. 9% Senior Subordinated Notes Due 2012 or Refco, Inc. common stock
for the benefit of another person or entity during the Class Period shall be requested to send the
Notice to all such beneficial owners within ten (10) days after receipt thereof, or send a list of the
names and addresses of such beneficial owners to the Claims Administrator within ten (10) days
of receipt thereof in which event the Claims Administrator shall promptly nail the Notice to
such beneficial owners.
$. Ex.clusiou From the Class — All Settlement Class members who do not timely
and validly request exclusion from the Settlement Class shall be bound by all proceedings,x
determinations, orders and judgments in the Action relating to the Settlement, including, but not
limited to, the releases provided for therein, whether favorable or unfavorable to the Settlement
Class, Settlement Class men-ibers who wish to exclude themselves from the Settlement Class
shall request exclusion within the time and in the manner set forth in the Notice, including
mailing; or delivering a written request for exclusion such that it is postmarked no later than
2007, to: In re Rgfco, Inc. Securities Litigation, c/o The Garden City Group,
Inc., Claims Administrator, P.O. Box 9087, Merrick, NY 11566, as provided in the Notice.
9. Appearance and Objections at Fairness Hearin g, — Any Settlement Class
member may enter an appearance in the Action, at their own expense, individually or through
counsel of their own choice, in which case such counsel must file with the Clerk of Court and
deliver to Co-Lead Counsel and BAWAG's Counsel a notice of appearance such that it is
received by , 2007, or as the Court may otherwise direct. Any Settlement
Class member who does not enter an appearance will be represented by Co-head Counsel. Any
Settlement Class member may appear and show cause, if he, she or it has any such cause, why
Case 1:05-cv-08626-GEL Document 357-3 Filed 02/22/2007 Page 9 of 11
the proposed Settlement of the Action should or should not be approved as fair, reasonable and
adequate, or why a Judgment should or should not be entered thereon; or why Co-Lead
Counsel's application for attorneys' fees should not be granted; provided, however, that no
Settlement Class member or any other person or entity small be heard or entitled to contest the
approval of the terms and conditions of the proposed Settlement, or, if approved, the Final
Judgment to be entered thereon approving the same or the award of attorneys' fees to Ca-Lead
Counsel, unless that person or entity has filed written objections and copies of any such papers
and briefs with the Clerk of the Court for the United States District Court for the Southern
District of New York, on or before , 2007, and unless copies of such
written objection papers and briefs are received by each of the following:
Attorney for BAWAG:
Andrew Levander, EsquireDECHERT LLP30 Rockefeller PlazaNew York, NY 10112-2200
Co-Lead Counsel:
Megan D. McIntyre, EsquireGRANT & EISENIAOFER, P.A.Chase Manhattan Centre1201 N. Market Street, Suite 2100Wilmington, DE 19901
John R Coffey, EsquireBERNSTEIN LITOWITZ BERGER & GROSSMANN, LLP
1285 Avenue of the AmericasNew York, NY 10019
The Claims Administrator:
In re Refco Inc. Securities Litigationc/o The Garden City Group, Inc.Claims Administrator
Case 1:05-cv-08626-GEL Document 357-3 Filed 02/22/2007 Page 10 of 11
P.0. Sox 9087Merrick, NY 11 566
The objections and/or briefs filed by the objecting Settlement Class member must contain a
statement of his, her or its objection, as well as the specific reasons, if any, for each objection,
including the legal support the Settlement Class member wishes to bring to the Court's attention
and any evidence the Settlement Class member wishes to introduce in support of his, her or its
objection. Any Settlement Class member who does not make his, her or its objection in the
manner provided herein shall be deemed to have waived such objection and shall be forever
barred and foreclosed fi •om making any objection to the fairness, reasonableness or adequacy of
the proposed Settlement, or to the approval of Co-Lead Counsel's fee application.
10. Fees. and ]Expenses — All reasonable costs incurred in identifying and notifying
Settlement Class members, as well as in administering the Settlement, shall be paid as set forth in
the Stipulation. At or after the settlement Hearing, the Court shall determine whether any
application for attorneys' fees shall be approved. Neither BAWAG nor BAWAG's Counsel
shall have any responsibilit y for any application for attorneys' fees submitted by Co-Lead
Counsel, and such matters will be considered separately from the fairness, reasonableness and
adequacy of the Settlement.
1 l . Continuance of Hearin g, —The Court reserves the right to adjourn the date of the
Settlement Hearing without further notice to Settlement Class members and retains jurisdiction
to consider all further applications arising out of or connected with the proposed Settlement. The
Cot€rt may approve the Settlement, with such modifications as may be agreed to by the parties to
the Stipulation, if appropriate, without further notice to the Settlement Class,
12. Termination of Settlement, -- This Order shall become null and void, and be
without prejudice to the rights of Lead Plaintiffs, the Settlement Class members, and BAWAG,
Case 1:05-cv-08626-GEL Document 357-3 Filed 02/22/2007 Page 11 of 11
all of whore shall be restored to their respective positions existing immediately before this Court
entered this Order, if: 0) the proposed Settlement is not finally approved by the Court, or does
not become final, pursuant to the terms of the Stipulation; or (ii) the proposed Settlement is
terminated or does not become effective for any other reason. In such events, the Stipulation
shall become null and void and of no further force and effect.
13. Use of Order•, — This Order shall not be construed or used as an admission,
concession or declaration by or against BAWAG of any fault, wrongdoing, breach, or liability.
Nor shall the Order be construed or used as an admission, concession or declaration by or against
Lead Plaintiffs, or the Settlement Class members, that their claims tack merit, that their damages
are in any way limited, or that the relief requested in the Action is inappropriate, improper, or k
unavailable, or as a waiver by any party of any defenses or claims he, she, or it may have,
IT IS SO ORDERED.
Dated: , 2007 BY THE COURT
Hon. Gerard E. Lynch
UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK
Case 1:05-cv-08626-GEL Document 357-4 Filed 02/22/2007 Page 1 of 16
EXHIBIT I
.v
Case 1:05-cv-08626-GEL Document 357-4 Filed 02/22/2007 Page 2 of 16
UN ITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK x
05 Civ. 8626 (GEL)
In re Rl FCO, INC. SECURITIES LITIGATION
x
NOTICE OF (I) PENDENCY AND PROPOSED PARTIALSETTLEMENT OF CLASS ACTION WIT H
SETTLEMENTII II,EARING ON pROPOSED PARTIAL
If for Supurchased or therwise acquired Refcotes
due 2012 (CU5 P N€rs.i 758 6HAA5 and/orl 75866HAC1) and/or
Senior Nos dRefco, Inc. common stock (
CUSIP No. 758666109) between August 5, 2004 and October
17, 2005, inclusive, you might be a member of the class to this action entitling you to relief
in connection with a partial settlement of the action.
•ized this Notice. This is not a solicitation -0111 a lawyer.A jec/c'rcrl court cart/€or
ass actionThe Court has preliminarily approved a parti al
Refco, Inc. cort^ nor€^i stockl and Refcabrought by investors who claim that the prices ofGroup Ltd., LLC/ Refco Finance Inc, bonds were artificially inflated as a result of false
statements, non-disclosures , and fraudulent conduct in violation of the federal securities
laws.
The partial settlement is between Lead Plaintiffs pacific Investment Management
Company LLC and RH Capital Associates LLC, oil of themselves and theproposed Settlement Class (defined below), and defendant BAWAG P.S.K. Bank FittArbeit and Wirtschaft rind Osterreichische Postsparkasse Aktiengesellschaft("BAWAG"). It is only a partial settlement because it does not resolve the plaintiffs'
claims against forty-three (43) other defendants.
BAWAG will pay a minimu m of $108 million in cash to settle the lawsuit, with the
possibility of an additional payment of up to $ 3 2 million if certain conditions are met.
After payment of costs and expenseelse Settlementl Cla shNo pro
ceeds i non has been E^ ade yet
investors who are n-iembers oof the amount to be distributed.
The two sides disagree on the amount of money that could have been recovered if the
plaintiffs wan at trial.
Although the fee agreement en
a fee of uptoa19%ha plaintiffs' Glass'
s attorneys
have en titled the attorneysplaintiffs' attorneys have
defined below), due to then timingeand^3 circumstances l^of thisContingent paymentsettlement.
Case 1:05-cv-08626-GEL Document 357-4 Filed 02/22/2007 Page 3 of 16
The settlement was reached because it provides significant benefits to investors and
avoids the costs and risks of continuing the lawsuit against BAWAG.
If you are a member ofthe
ected whether you act or note Read this enot ice ecarefu ly to seep
legal rights will be affected what
your options are in connection with the partial settlement.
. .', "- m x '.sh.' a'""•...:, yZ',5sa 3" ra CIO Me`^v4'`^;•z'^^.^^ai r•
5 ht -`^'?^,19 r.^.,$rt iyP^ ` y '^° hv'i,{Y off• ^' .1 1"" „^"+7F`!^€3£a„`^^`Ls 'i'?. ^s r5 ^; _^?= H^5' .§ ^^$ .'s'Y o ,Yd' ^k g S 4?^ gr ^"u. '^ a l 3 k T'FV,, fi `r 'rr ;.^,+E {;5 " "`r'i°'7.ia^"
$ ^ ^ ^y ^ u& y "^^?°^^" :' ^^ e^ ^L .;, ^ ^ ^e .r"^• ,w. >^:^,^ a ^Y ^,}^
Ef`N^,,,.x"4Gr^.rs r,.df, s^^s^'^^ ^a dM1"'I",',^„4'ix^Cw.^' ice'" ^'^ ,'^i Nr
190.OF 119
This is the only way to get a settlement payment. if you wish to
Remain a Member of theremain a member of the Settlement Class, you do not need to
Settlement Classtake any action in response to this notice at this time. At a
(no action required) future date, you will be provided. with a proof of claim formwhich you must submit to establish your entitlement to a l#
payment, x
Exclude Yourself if you exclude yourself, you will not get a settlement payment.(by , 2007)
If you do not exclude yoursel f, b
youtllel Court ab out Yourpart of the settlement, youmay write
(by , 2007) objections.
if you have submitted a written objectio€l to the settlement toAttend the Hearing the Court, you may (but do not have to) attend the hearing about
(on , 2007) file settlement and speak to the Court about your objections.
These rights and options -- and the deadlines to exercise them -- are explained in this
Notice.
The Court in charge of this case still has to decide whether to approve the settlement.Payments will be made only if the Court approves the settlement and that approval is
upheld in any appeals. Please be patient.
r ti>-^,,-r n`r q-acry',;Y,^F.,^- w.>a "^ c'grz^'*y'G^4^. ;^w.^p; ix'sy_^;^r^, '^;^y^;.^:bssr^^,v^[a4 ^SS-,t dp '"^""^.^'^ ^,`^vM'';.5'^"?'^ 0. ^r^s rw^r b ^^'.^. 3^^ y"-„^, „r'4^^. ,n n^ ti^ „• * S•+^ ^y^^ ^ ark7 ^ ^^'^^^ "^ s p .b " a c^ ' i' t c s^ f^ ^^^ ^ i[ # `:``^; w^^ ^s^ ^,sni'm r f 3 f^:'^°^ ^-^ r
Page 4BASIC INFORMATION
I, Why did I get this Notice?
2, What is a class action?
3. What is this lawsuit about?
Case 1:05-cv-08626-GEL Document 357-4 Filed 02/22/2007 Page 4 of 16
4.What should I do if my address changes, or if this notice was sent
to the wrong address?
WHO IS IN THE SETTLEMEN T CLASS Page 6
5, How do I know whether I am a member of the Partial Settlement?
6. Are there exceptions to being included?
7. I ant still not sure whether I am included.
Page 7SUMMARY OF THE SETTLEMENT ttleent
8. 11ow and when was theSettlement PartialSprovide?reached?
9. What does tine Partiallo. What are the reasons for the Partial Settlement?
11.What is the potential outcome of the lawsuit absent the Partial
settlement?
THE SETTLEMENT BENEFITS » WHAT YOU GET Page 8
f
12. I-low much will be distributed to investors? µ
13, How tnuch will my payment be?
hPage 9
HOW TO GET A PAYMENT 14, What do I have to do to receive a share of the Partial Settlement?
15, When will I receive my payment?
16. What am I giving up to get a payment or stay in the Settlement
Class?17.
Can i receive payments in both the Partial settlement and the
Refco Bankruptcy?
EXCLUDING YOURSELF FROM THE SETTLEMENT Page 10
Ig. What if I want to be excluded from the Partial settlement?
19, If I don't exclude myself, can 1 sue BAWAG for the same thing
later?
20. If I exclude myself, can I get money from the Partial Settlement?
THE LAWYERS REPRESENTING YOU Page 12
21, Do I have a lawyer in the case?22, How will the lawyers be paid?
OBJECTING TO THE SET'T'LEM ENT OR THE ATTORNEYS' FEES Page 12
23. How do I tell the Court if I don't like the Partial settlement?
24. What's the difference between objecting and requesting exclusion?
25.When and where will the Court decide whether to approve the
Partial Settlement?
26, Do I have to come to the hearing?
27. May I speak at the hearing?
3
Case 1:05-cv-08626-GEL Document 357-4 Filed 02/22/2007 Page 5 of 16
Page 14IF YOU DO NOTHING
28. What happens if I do nothing at all?Page 15
GETTING MORE INFORMATION
29. Are there more details about the Partial Settlement?
30. How do I get more infor€nation?
BASIC INFORMATION x
MW
4f M4 ^E53' rr 4^;t€y''da4na^^3ti ENR6M^»r
You or someone in your family may have purchased or acquired Refco Inc. common
stack (CUSIP Na. T586GG109)CUSIP Nos. 866HAA5^and or75866HACI)ebetween^AugustSubordinated Notes due 20125, 2004 and October 17, 2005. The Court caused this Notice to be sent to
you because, if you4
purchased or acquired those securities during that period, you have a right to know about the iroposed Partial Settlement of a class action lawsuit, and about all of your options, before the
nl
Court decides whether to approve the Partial Settlement.
This Notice describes the lawsuit, tine Partial Settlement, your legal rights, what benefits
are available, who is eligible for them, and how to get them.
The Court in charge of this case is the United States District Court for the Southern
District of New York. The case is known as In re fi'ef^o Inc. Scclirities I,itrgatio);, Case Number
05 C€v. 8626 (GEL)
- ,^ ,,,z3vw ^c.'s' , c? ^z^^ ^-a ' X z` "^'s ^sl e K'I^9 yak°^^
' 42 s, ' ^4 p'ay's-7^ f ^a t 4 rv` M € S".°,f`'`a,5wr,b,.rco'-,'.`r. rrc,r '.. sc
#fE;ierrv.:. kais 3at.^',:s!,.,4^ „ ^.>"^r T.x ,.F3 .
entatives sueIn a class action, one or more plaintiffs called ee^^d^v'du Plaintiffs
and entities on behalfon behalf of people who have similar claims. All of tli
the class representative s are suing are known as class members. One court resolves the issues to
the case for all class members, thoseof procedure.
hohose o exclude thernselves from the class
if exclusion is permitted by app1 cab e
ti at a ,^7aa^s'e'ai z
-^, g.e',^,'Cr'x^'7`.*H ',Yc'rin°,4''r" „^':-n,t 4S t 5s?.`^ 9i^^{'^, 'r q 3i^t ° w^ `G.''^m' ^i1,.`v.Yia..,^',aa4:.^^.;..^=-:^r^+
This lawsuit (the "Action") is a class action alleging violations of the federal securities
laws by persons affiliated with Refco, Inc. and its predecessors and affiliates (including,limited to, Refco Group Ltd., LLC, Refco Finance Holdings LLC, and Refco Finance Inc.).Refco, Inc, and its predecessors and affiliates are referred to collectively as the "Company" or
,, Refco" in this Native. The Court has appointed Pacific Investment Management Company LLCand RR Capital Associates LLC ("Lead Plaintiffs") to serve as Lead Plaintiffs in the Action, and
Counselel onobehalf of tile class.E 1eThe Action is broughthas appointed the law firmstGrossmann LLP to serve as Co - Leadagainst forty-four (44) individuals and entities, including certain current and for€ner executive
4
Case 1:05-cv-08626-GEL Document 357-4 Filed 02/22/2007 Page 6 of 16
officers of Refco, the members of Refco's audit committee, Refco's outside auditing firm (GrantThornton LLP), fifteen Wall Street investment banks, the private equity firm of Thomas H. LeePartners, L.P. and its affiliates, and BAWAG (collectively, the "Defendants').
The First Amended Consolidated Class Action Complaint (the "Complaint"), which wasfiled in the Action oil 5, 2005, alleges that the Defendants violated the federal securitieslaws in numerous ways, including: engaging in negligent and fraudulent activities that concealedRefco's true financial condition from investors, and using accounting practices that violatedgenerally accepted accounting principles and caused Refco's published financial statements forthe years ended February 29, 2002, February 28, 2003, February 28, 2004, February 28, 2005,and the quarter ended May 31, 2005, to be materially false and misleading.
As alleged in the Complaint, a little more than two months after completing an initialpublic offering ("lPO"), Refco admitted that its financial statements "should no longer be reliedupon" because the Company had concealed hundreds of millions of dollars of tincollectiblereceivables owed to the Company by an entity owned by its Chief Executive Officer, PhillipBennett ("Bennett"). The Complaint further alleges that while this admission only partiallyrevealed the true extent of the problems at the Company, it set into moton a chain of events andsubsequent disclosures that led to Refco's abrupt collapse into bankruptcy.
P.
The Complaint alleges that the Defendants either actively participated in the Company'smanipulative accounting practices and misstatements during the Class Period, or knew or shouldhave known about them in the exercise of due diligence. The Complaint alleges that BAWAGparticipated in the scheme to defraud investors by, among other things, engaging in numeroussham loan transactions with Refco that had no purpose other than to allow Refco to temporarilyreplace related party receivables with third party loans on its books just before the end of itsfinancial accounting periods, thereby concealing from investors the existence of significant
related party receivables.
The Complaint asserts two different sets of claims. The first is a series of strict liabilityand negligence-based claims pursuant to tine Securities Act of 1933 ("Securities Act"), which areasserted against the Defendants who are statutorily responsible for the untrue statements in theprospectuses and registration statements pursuant to which Refco issued securities to the public.The second set of claims consists of fraud-based claims under the Securities Exchange Act of
1934 ("Exchange Act") against those Defendants who directly participated in the fraudulentscheme and those who knew about or were reckless with respect to discovering the fraud. TheComplaint alleges seven (7) separate claims against BAWAG, including claims pursuant toSection 15 of the Securities Act and Sections 10(b) and 20(a) of the Exchange Act.
To the extent Defendants v respondedongdo g for liability tota ny Class member.
tl3e claims
against them and specifically denied ally
The Court has made no determination on the merits of the claims against BAWAG or
against any other Defendants.
5
Case 1:05-cv-08626-GEL Document 357-4 Filed 02/22/2007 Page 7 of 16
1.,J WW 5- g='W -.3!21 :31-1
if this Notice was sent to you at the wrong address, or
if your address changes in the
future, please send prompt written notification of your correct address
to the Claims
Administrator at the following address'
In re Refco Inc. Securities Litigation
c/o The Garden City Group, Inc.
Claims Administrator
P,O. Box 9087
Merrick, NY 11566
wHO IS IN THE SETTLEMENT C:LASS,
u TE 511 . . .....31-11E, Do
ly certified for purposes of the Partial Settlement a SettlementThe Court has prelin-imari ions identified below, the following individualsClass that consists of, subject to certain except
and entities:
,,III pet-so ils and entities that purchased or otherwise acquired
Refco Gl•olip Ltd,, LLCIRqfbo Finance Inc, 9% Se"'o"
Subordinated Notes due 2012 (CUSIP Nos. 75866HAA5 andlor
75866HACI) and/or com"'o) , stock of Refco (CUSIP No,
during the Class Period, acrd 11,ho were damaged
75866G]09)thereb-y.
P2
MEN
Even if you fall within the settlement Class definition, you are not a membesofa
ficer,
e
Settlement Class if you are a Defendant in the Action; if you were a partner, executi
director, controlling person, subsidiary, or affiliate of Refco or any Defendant between August 5,
2004 and October 17, 2005; if you are an immediate family member of any Defendant;
if you are
an entity in which Refco or any Defendant has a controllin g interest; or if you are a legal
representative, heir, predecessor, successor or assign of any of these excluded persons or entities.
tggj —R RE ^gT
If you are still not sure whether you are included, you can ask for help, which will be
provided to you at no cost, you can call the Claims Administrator toll free a t (888) 212-5574, or
write to the Claims Administrator at the address stated in the answer to Question #4 above.
6
Case 1:05-cv-08626-GEL Document 357-4 Filed 02/22/2007 Page 8 of 16
SUMMARY OF SETTLEMENT
y` pi^"'^,^.r.., >s[n f^ + ti3;^z '^''^ ti''>^C "'^e^^' y 'og1':^ t 7 r S `J u' '^b3 f T a ^.+` ,.!..:
"i,,. -'^, i.cZq;y--%e }^,,!.x ,ec *"^:z5:,,,z.roc.azax,[=^<.:n,^a:°r:,,.'a°rn vm.4s^c."a r5°r,usia.,^,:'?.,,.,:
Lead Plaintiffs reached an agreement-in-principle with BAWAG
and regarding
BAWAG signedalSettlement on May 31, 2006, On February —, 2007, LeadStipulation and Agreement of Settlement (the "Stipulation") to formalize their agreement.
The Partial Settlement was reached after arms-length negotiation between Co-.eaaccess to,
Counsel and counsel for BAWAG, and only aft erclaims
Cunsel hade es to those
and reviewed, certain documents pertinent to the Class's
claims, including documents that BAWAG has provided to the United States Attorneys Office
("USAO"), (ii) investigated and analyzed all available evidence, and (iii) researched theapplicable law with respect to the Class's claims against BAWAG and the potential defenses
thereto.
"'r L '`y S u y? i s .s ° e r +y ,f" > ''' ^'.v, h } 1h ^„ g .*>r ! 31 4 3 -^. i `^ r i44- ^
r ^ ^,'9 t^ Ff i ' k .,.'`.^t:a'a : nMITI-..,y^:-, ^: r. rx ^,.ki rw;,. r?:.^,^.^....^,so-
In the Partial Settlement, BAWAG agrees to pay 5108 million (tile "Non-Contingent
^,Payment") to the Settlement
Cwitl^in it^vod earasnafter the United that
StaBtes Bankruptcy Court mexceeding E1.8 billion (euros)
entersy
an order approving BAWAG's^oep^aia^Cees)tt^l^^^ settlement 11 pay hetSettteil^entmClass an
Unsecured Creditors ("Creditors'additional surn of 5% of the amount by which the sale price of BAWAG exceeds -Contingent1 lion(euros), up to a maximurn additional payment of $32 million (dollars) (Payment"). The Non-Contingent Payment and the Contingent Payment are collectivel
y referred
to as the "Settlement Amount.
After the parties reached agreement on the terms of the partial Settlement, BAWAG
entered into an agreement of sale which, if consummated, may trigger BAWAG's obligation to
pay the maximurn Contingent Pa ent
of $32 million (dollars). Closing of the sale is presently
expected to occur in the first ha of
The Settlement Amount will be paid in installments, with $8 million to be paid within ten
days after preliminary approval o f
ovin Partial
thei lCr Creditors' Committee paid within
thirty days after the order app g the closing of thebecomes final, and $75 million to be paid within thirty days of the earlier of (a) withsale of BAWAG, or (b) one year a fter entry
n ent Payment, , if any, ll tbeg pa d within thirty days afterthe Creditors Committee, The Col g Y payment, Leadthe closing of the sale of BAWAG. With the exception of the i3itial $& millionPlaintiffs have agreed to accept payment of the Settlement Amount from funds to be paid by
ayBAWAG into a restitution fiend managed by
to SAO, subject
anyBAWAG'sa onot paid entito 1p80
any amounts that the USAO fails to pay, pay
days of the scheduled payment date.
Under the tennis of the Partial Settlement, BAWAG also agrees to reasonably cooperatewith Lead Plaintiffs in providing copies of documents and in making ennployees available for
7
Case 1:05-cv-08626-GEL Document 357-4 Filed 02/22/2007 Page 9 of 16
interviews and depositions, so as to reasonably assist Lead Plaintiffs in their prosecution ofclaims against other Defendants and/or prospective defendants in this Action.
if the Partial Settlement is approved by the Court, all members of the settlement Class
will be deemed to have released all claims against BAWAG, its direct and indirect subsidiaries,parents, affiliates, predecessors, and successors, and their respective agents, attorneys, and past,present, and future officers, directors and employees, as agreed by the parties, (collectivel
y , the
"Releasees") that arise out of or relate to the allegations in the Complaint and the acquisition ordisposition of Refco Group Ltd., LLC/ Refco Finance lnc.'s 9% Senior Subordinated Notes due
004 and October 17, 2005. This means2012 and/or Refco common stock between August 5, X..
drat, upon Court approval, all Settlement Class membe rs
or anynotl ettl Re easees^tolnasserting any of the claims described above agains taddition, if the Court approves the Partial Settlement, BAWAG will be precluded from suing theLead Plaintiffs, members of the Settlement Class, or Co-Lead Counsel in connection with the
Action.
s t ,e ^l^ 3Ong" , r '4y.^^ v ^ ^ ^` ^ ^
y ^ sLdes"A5rwa mow.. aFMr7.^,,.
Lead Plaintiffs agreed to the Partial settlement because of the substantial monetary Fafter
benefit it will provide to the Class, compared to the risk that re cover
the y mit l^tAs tl alny 1 agated 9a contested period of litigation which could extend years
would facecase, the plaintiffsan uncertain outcome if the case went to trial. Evert if the
BAWAGplaintiffs were su
ccessful at tat vely,BAWAG
migh
tmight
bankrupt,1peal the
sold , unableverdict, result in further
judgment at that time.uncertainty and delay.
BAWAG agreed to the Partial Settlement to settle and terminate all existing or potentialclaims against it, to eliminate the risk of a substantial judgment against it, and to avoid theburden and expense of further litigation, without acknowledging any fault
,
or liability.
ry ro ^tv, v'`.n ^ w a'.¢ ^ - ' ''^ nr i' v ^^ Otis d n ^Y^ s' ^^" .Y^iS^^ ^rF{ r ^^';;kx
s' ^r iSd^ ^ 3 V^ y^ ^^r rq i j g kx
^ ^ Lf fs w4
Lead Plaintiffs and BAWAG do not agree on the average amount of damages per sharethat would have been recoverable front BAWAG if Lead Plaintiffs were to hav
e
BAWAGeach claim asserted. The issues o il which the parties disagree include: (1)whether7 whether
engaged in conduct that would give rise to liability conduct alle edl laws;
to constitute a violation ofBAWAG acted with scienter with respect to the con gSection 10(b) of the Exchange Act; (3) whether BAWAG has valid defenses to any of the claims
against it; and (4) the amount, if any, by which the prices of Refeo's securities were artificially
inflated as a result of BAWAG's alleged violations of the federal securities laws.
8
Case 1:05-cv-08626-GEL Document 357-4 Filed 02/22/2007 Page 10 of 16
THE SETTLEMENT BENEFITS - WHAT YOU GE T/ ^^ rte,
F,r N Y n, p `x'F.crw,fiyz s`'w ro ^"^,^;i'rv?^i+au°^ „'^r
ius'^'.+rW'"^'e`r.F'^* +gl h?'u,?z 3"^s ,t°^`''.Z E .R id $u.. aJ f'.'u31.
`,M.F .,". k^."t d;.
The Partial Settlement will create a cash settlement fund in the aggregate principal
amount of between S10 g million and $140 million, depending upon whether and to what extentSAWAG's obligation to pay the maximum Contingent Payment is triggered. After deduction ofthe costs of notice and administration, certain taxes and tax-related expenses, and any attorneys'fees that are approved by the Court, the balance of the settlement fund, plus accrued interest, will
be available for distribution to members of tine Settlement Class. Co-LeadaateC unsel Twill re
quest
Leadattorneys' fees of 7% of the Non-Contingent Payment. Ass b
Counsel estimate that the net amount to be distributed to the Settlement Class will be between
SRS million and $130 milliona vaw x.s-^,
b^TQ„€
; yq , e z 3 r T {;,;.cti no r` s sifr^C '^ yr^,
tll x },l a^*s 'F .43a}7 r ", 'ya'F' a f '4,wr^A '1F ^xa ' °S;z-.".;^. ,L.Svh's
MEWfK^g.
The amounts to be distributed to individual Settlement Class members will depend on avariety of factors, including: the amount, if any, of the Contingent payment; the number of other
Settlement Class members who submit valid proof of d forms; the number of bonds or sharesclaim ^s
of stock you purchased; the prices and dates of those purchases; and the prices and dates of any
sales of your bands or stock. The manner of divi dithe Complai^t,
purchasers of bonds and purchasers of stock, and between hehas not yet been determined. Depending upon which securities you purchased and the timing ofyour transactions, you may be entitled to recover for all, none, or only some of the claims
asserted in the Complaint.
The arnount to be distributed to Settlement Class members on a per share basis will
depend on future Court proceedings and factual and legal analysis, and it is therefore not possible
to estimate the amount of any such distribution at the present time. After further notice to the
Settlement Class and an opportunity to be beard, Lead Plaintiffs will seek Court approval of aplan of allocation that will govern calculation of Settlement Class members' individual
distributions,
HOW TO GET A PAYNIFNT
kaT,'S;s ., y 5 E v ^ 3s ,.>P S ^ L i h - " t 9 tin r B a ^ {, Lr,Y.' ,. ^ :.. ...: ! F^`^::....7 rx ,,._.'SD h,;i.^„„h^ . ..,..
if you are a member of the Settlement Class, you will have tosubmihareproof
o f Panorainform and supporting documentation in order to establish your entitlement
Settlement. Those who act to exclude themselves from the Settlement Class, and those who fail
to submit timely and valid proof of claim forms with adequate supporting documentation, will
not be entitled to share in the Partial Settlement,
Proof of claim forms have not yet been prepared, and you need not submit a proof of
claim or any other documentation of your claim at this time. You will be provided with a
proof of claim form, and instructions on how to complete and submit it, in a future notice to be
9
Case 1:05-cv-08626-GEL Document 357-4 Filed 02/22/2007 Page 11 of 16
disseminated in a similar planner as this notice. To ensure that you receive copies of future
notices, you may write to the Claims Administrator at the following address to request that you
be added to the mailing list for notices in In re Refco, ltrc. Securities Litigation:
In re Refco 111c, Securities Litigationc/o The Garden City Group, Inc.Claims AdministratorA.O. Box 9087Merrick, NY 11566
Please retain all records of your ownership of, or transactions in, Refco's stock and
bonds, as they may be needed to document your claim. p
s^ ^- xn r^' x'. r ,.a xa4. 7`' i
gall 4 ' „ } 3# C r ^ N
F ndr. ^L y IRE'.
n w
,+ t sv'^."ri'zr"£a^ t 'C P k, F` r1 ^{v' a:P ^ ^.rN.e fqd i.:'.r'r ti.,^4,f r ` SYwx :a:y-NOM a.E,. ^,.y_1
Because BAWAG's payments under the Partial Settlement will be made in installmentsover a period of time, the Lead Plaintiffs do not anticipate being able to distribute the settlementproceeds to members of the Settlement Class for at least a year from pow, and possibly longer,
in the interest of the Sett lementDistribution may also be delayedAc on and to i alloworder 1for the BAWAG r
number and cost of distributions during the course of the ,settlement proceeds to be distributed in combination with future settlements or recoveries from
other Defendants.
Any settlement payments are also contingent upon the Court approvin g the Partial
Settlement and on such approval becoming final and no longer subject to any appeals. Even ifthe Court approves the Partial Settlement, there still might be appeals, which can take more than
a year to resolve.
The money paid by BAWAG ill the Partial Settlement will be kept in an interest-bearingaccount until it is ready for distribution, and the accrued interest will be added to the principal
that will be distributed to the Settlement Class.J ^.rYr:S"e re^ e .f^-¢^,o-.x.,u F'.N
i r,wt a sk` o.r aa Y^h4x '' a"*''+6" uw M''rtR;d?.a' w.,. r ^.,.., , sy^ me AW fw
If you remain a meniber of the Settlement Class a bdo thet Courtregarding
rself yo
the w ill be
albound by all orders, judgments and releases entered ySettlement. if the Partial Settlement is approved, you will not be able to sue, continue to sue, orbe part of any other lawsuit involving any claims released in the Partial Settlement; provided,
however, that the Partial Settlement doesyournot
ability to receive a share of the monies paid toRefco's bankruptcy proceedings,Refco's bankruptcy estate by BAWAG. You will be bound by the releases whether
or pot you
submit a proof of claim and/or receive a payment under the Partial Settlement.
10
Case 1:05-cv-08626-GEL Document 357-4 Filed 02/22/2007 Page 12 of 16
EXCLUDING XUURSELF ]FROM. THE SETTLEMENT
wsi k - a p r r°x YS tv ^ ^ 1 ,a3 ^ € r
i i^r 5 f^ 'i W
" r ^ y}^^fitm^
,t. r y a +t... c dm^..sv
? ! ,^ 7 r7 v 3c5 7Y^ .r 3001Aw...,^rs u^'v -y;.Yem '
Yes, if you remain in the Settlement Class and receive a settlement payment from the
Martial Settlement, you can still recover as a creditor or interest holder of R efco from funds paid
by BAWAG to Refco's bankruptcy estate in connection with Refco's bankruptcy proceedings,provided that you establish your entitlement to such a recovery in accordance with theprocedures established by the bankruptcy court. Likewise, your recovery as a creditor in Refco's
bankruptcy proceedings will not prevent you from receiving a payment from the Partial
Settlementrumt o s; ' Sr
WAr, ^ [cs4a Naps y^k.
i z a a^ j w s a urn +rf ti w 4 rlcN?,..rr;<S.;tu ..^:.. ..au r..,.t pp
,v.euv,.v.r F ..z
To exclude yourself from the Partial Settlement, you must send a letter by snail to the
Clain3s Administrator saying that you want to be excluded from In re p e° Social Security -'
Litigation. Be sure to include your name, address, telephone number, y
Number or Taxpayer identification plumber; a list stating the par amount of Refco bonds and the
number of shares of Refca common stock purchased and sold between August 5, 2001 andOctober 17, 2005, and the dates of each purchase and sale; as well as your signature. Mail your
'
exclusion request postmarked no later than ) W 007, to:
In re Refca Inc. Securities Litigationc/o The Garden City Group, lnc.Claims AdministratorP.O. Box 9088Merrick, NY 11566
If you request exclusion on behalf of any person or entity other than yourself (such as, forexample, a trust, a minor, or a pension fund), you also must state the basis of your legal authorityto make a request for exclusion on behalf of that person or entity.
You cannot exclude yourself on the phone or by e-mail, if you do not fallow the aboveprocedures — including meeting the postmark deadline —you will not be excluded from theSettlement Class, and you will be bound by all of the orders and judgments entered by the Court
regarding the Partial Settlement.'^o1eY Itelea see based on the claims be ng released have a pending
against BAWAG of y
if you ask to be excluded, you will not get any payment from the Partial Settlement, youcanzrot object to the Partial Settlement, and you will not be legally bound by anythin
g that
happens in this lawsuit. You might be able to sue BAWAG or other Releasees in the fixture.
:qs; t,,,+' T ,-s" * t,..`.sa7M-,#wi' '.rC,M`) n^v"; J`' LR
aSi,4.'2`f-^E,z`,'P`'"r1""t,,^K,t a sa ^, T-Y'' ^r
41 s"S' r xa,a Y4Y .y9 a>{Y^''''` y^r ^ :^ ^ ^ 3' } 1 Y ° S '^ $ E ; k .
t a 1 . h r..^ .r! x'2z s FSw..a?h s R. 5 ...., x,:rx..,3,. 1 .i.a..,.., r
N., ,......n: s, ,3,.xs
No. Unless you exclude yourself, you give up any right to sue BAWAG for the claimsthat the Partial Settlement resolves. If you have a pending lawsuit, speak to your lawyer in that
I
Case 1:05-cv-08626-GEL Document 357-4 Filed 02/22/2007 Page 13 of 16
case immediately. you must exclude yourself from this Settlement Class to continue your own
lawsuit.
• r xry `+ 5 ;" ' , 3. a„ s'r `fie '
V"A 9
^',,..'. ».t, .4 ,rq. ^u,.F^•. a ..a;
Slk^,:k^„^r:,.,: °,,b:^::aes.»swti..^e
No. Only Settlement Class members who do not exclude themselves will be eligible to
recover money in the Partial Settlement,
TIE LAWYERS REI'RISSENTI NG YOU
A i r as..,.w.
an ULP
The Court has appointed the law firms of Berns inLioLead rgaint& ossm l other er
and Grant & Eisenhofer P.A. as Co-Lead Counsel torepresent
Settlement Class members in the Action. if you have any questions about the proposed PartialSettlement, you May contact Co-Lead Counsel as follows: Megan O. McIntyre, l:w., Grant &l]eiaware 19501,Eisenhofer P.A., Chase Manhattan Centre, 1201 N, Market St., Wilmington,
LLP 1285
? ??_7QQQ' or John p . Coffey, Esq., Bernstein Litowitz Berger & Grossmann,ji
(302) 62 551-1 X100. ^&Avenue of the Americas, New York, New York 1001 9,(212)
if you want to be represented by your own lawyer, you may hire one at your own
expense
< a =' ;?a ^r^r^a r+t ^vr^ ^_^ i^^^y . ^*.rrr?^;^Y?w ^,z^:k^^^^{^ v..^,. ;? - ,. p ? ..9x^ :^s.•:s..,^,^ ..
^^rct1?•v..ti.;:=c.3r.n. «^i
You will be not charged directly for t1^^ fees °rexpenses rt far pl aymellt of fees and
appointed by the Court, instead, those lawyers y apply t
expenses out of the proceeds of any recoveries achieved in the Action.Co-Lead Counsel
When this case began, Lead plaintiffs fees UP
negotiatedto 1 &% of any recovery achieved by the
which permits Co-Lead Counsel to apply f 5 ofClass plus out of pocket expenses. Gi en tile
re in apply it a fee from tale settlement of ^%BAWAG, however, co-Lead Counsel h g the facts,
negoof the Non-Contingent tin the Partial Settlement.eCo-Lead Counse l retain tile right tolitigating the case, and negoti grequest the full 18% fee plus expenses from any future recoveries from other defendants.
OBJECTING TO TIDE SETTLEMENT OR THE ATTORNEYS' FEES
4
4
js ^ n.,4
IBM
,^`F§TJ
F "^T4'£a s o-^zi^e^ Fa cy txrt
4 t" a[ ,G^ a¢g €es,...:cvr'..2t.^zvrtxuxrn..
Kr..^;^a'^.4.„r.^.`^'F?xz ,• ,5x^ .a.k^?f;'^sa.....^:^,..^c.r^ .;1 ..5'h k,>^ w,^
1^^.^rr
_., ,^F..rar-.,s. ,^•
if you area Settlement Class member and you do not exclude yourself, you can object to
the Partial SeCtlennent or any part of it, including Co-Lead Counsel's application for attorneys'
fees, and give reasons why you think the Court should not approve it. To object, you must send
12
Case 1:05-cv-08626-GEL Document 357-4 Filed 02/22/2007 Page 14 of 16
a letter or ether filing saying
lia ^e Reco,f t
hat you object
Securities
proposed
^;^ ^arP^rti Case
Cdlo8^2t^
attorneys' fee application in(GEL). Be sure to include your ob e tivndneust be
telephonesent to the fvllow^ingrcou^sel
theand
reasonsust
for
beyour objection, Your written ^
X007:received by them no later than
Counsel for BAWAG:
Andrew L.evander, EsquireDECHERT LLP30 Rockefeller PlazaNew York, NY 10112-2200
Co-Lead Counsel:
Megan D. McIntyre, EsquireGRANT & EISENHOFER P.A.Chase Manhattan Centre1201 N. Market StreetWilmington, DE 19501
and
John P. Coffey, EsquireBERNSTEIN LITOWITZ BERGER & GROSSMANN, LLP1285 Avenue of the AmericasNew York, NY 10019
You must also file your objection with the clerk of the United States District Court for
the Southern District of New York, so it is received no later than
The address is:
Clerk of the U.S. District Court for the Southern District of New York,Daniel Patrick Moynihan United States Courthouse
500 Pearl StreetNew York, NY 10007-1312
Once an objection to the proposed Partial Settlement is made, it cannot be withdrawnwithout the Court's approval. Any member of the Settlement Class who does not object in themanner provided above will be deeYned to have waived all objections to the Partial Settlement
and to Co-Lead Counsel's application for attorneys' fees
r is r
t i.,.d ^fi' .y,45+> r°,'a Aga^' ' k..l:
^^^+- xsa e> ^v ire":' ^o +^.".br^" 1 1a;^k^a 7. y v
n„ r
ref” 2 a y;. f^' F F Y f ^{ 3 § ,r:.w.^^ix^tkw.sv3n;..
N ^^. C3 yl
JAY}
y „Sas't+:43. J r f 6 t ' 4 Y., r "J..r„ Z ^,^w^i ^. .,^.Y:3. i' ^^ l T '''..v Sw v.'^t.Ahr .SS. Cr...!- "' E'
Objecting is simply telling; the Court that you do not like something about the PartialSettlement. You can object only if you are a Settlement Class member,
13
Case 1:05-cv-08626-GEL Document 357-4 Filed 02/22/2007 Page 15 of 16
Excluding yourself is telling the Court that you do not want to be part of the SettlementClass. If you exclude yourself, you have no basis to object, because the case no longer affects
you. If you do not exclude your self,regardingthe Partial Settlement,l egardesstof whether the
and judgments entered by the CCourt accepts or denies your objection
gsr r a3L cF r t a # r 5^ grDxiS
,^ d '"-'s',;•;`^5.z'..? ^j.5''`<'.r-,^arz,^yzfa wa[ ^^•` fr iY £F,^5 3
SSA .r 't .ytrr*f^x. w^'`
aRs^vc.man..skFr . ,. ..r,^.axx4n^, ..^.
The Court has scheduled a hearing on the proposed Partial Settlement for
2007 at, before the Honorable Gerard E. Lynch in the U.S. District
, 500 PearlCourt for the Southern District of New York, United States
Courthousel Partal Settlemtettis fair,
York, NY, 10007. At this hearing, the Court will consider whether thereasonable, and adequate, and will consider Co-Lead Counsel's application for attorneys' fees,if there are objections, the Court will consider them. At or after the hearing, tite Court will
decide whether to approve the Partial Settlement.
Please note that the date of the Court hearing is subject to change without further notice.If you plan to attend the hearing, you should check with the Court to be sure no change to the
P,
date and time of the bearing has been made.
„;r., ,. ,^+ r^ '^: K, ya. ^^ ^^"° ^dde+`^.Le• 3"r>= *r ^L^ ,;^ ^^tr^ w ^^ ^t ^'¢^',a•^{s ,,^^., ^^^L.^^ r$2•^Fx.^^o
7"^r "`xt s < r 3 '^, ^, i r^c'^„E,, 'iyr 'ck'.-,5ti ,_t•-C'Y- , .' E. -i+: 'r
a'"I [' f Y.J. • 4 e Sf' r'`^ t ,S S„ '.^I 'RC.. •^'.^h" -+nv -
<.,..z:<,.^v^.r^^,^'rx^s^sF^:r ^,s-;z..-F: v.e.^,fi^ry§-f.:, .i'. Vim. •.4..A'r^?r.;%._, e> 3 .._.,er^,k";
ki areNo. Co-Lead Counsel will answer any questions the Court
I light have to oto thewelcome to cone at your own expense. If you send an objection, Y
by the
Court t talk about As long youwh n the Court
writtenconsidersewhether w
as
the Partialdeadline ,, it will be before the CourtSettlement. You may also pay your own lawyer to attend the hearing, but attendance is not
necessary.
^..;-c:.wyr.:; N''^',.'s ^;%.s•.vrym,•.t h f'„ 3aM 1 x^ ^ '` i ^z' ^ F^+
r^. o, xz,, r .^ 3. err 7 r x 4, 'x r r z^ ^F r z,
if you are a settlement Class member who has not asked to heat g l de orom yoreSettlement Class, you may ask tite Court for permission to speak at
the
must send a letter or other paper called a "Notice of Intention to Appear
addressFairness
telephonenumber,re Refca, Inc. See^tf ities Litigation,"
Be sure to include your name,st be filed
and your signature, Your Notice otri anti answer to ar rnon #?3 so it lis received by the Courtand sent to the counsel listed above X007. You cannot speak at the hearing if you haveand counsel no later than ,asked to be excluded from the Settlement Class.
14
Case 1:05-cv-08626-GEL Document 357-4 Filed 02/22/2007 Page 16 of 16
IF YOU ISO NOTHING
,:x ^'',.^•nm^,,.n„ays7b ..:^.L,. ..5 ^ic.es. xy .:^,-Y.e:l^i€^.,—f,':a_. wexsl. ^,k,'M... .2a,^,n^^.r.N^ tis4,n ry;. 'rsa a4:M.r:^^,;&u'....l^k$ks..c.ak..+
If you do nothing in response to this Notice, you will remain a member of the SettlementClass and will be bound by the Partial Settlement, You will not be able to start, continue, or bepart of any other lawsuit or arbitration against BAWAG or other Releasees based on the claimsin the Action. To receive a payment from the Partial Settlement, you will have to submit a proofof claim and supporting documentation at a future date, in accordance with instructions to beprovided in a future notice.
GETTING MORE INFORMATION
E ' r,,s r r:„ d^r""n ,sue' M±ti^,t ^^'^y^k^'^cia^„^fi^^^^^^i t^¢^^>>-?-F,^rrs'x-^”' A^:a^t''^e^S^'ar^^^Fk^y^,^ai3^ ^^y-r 'Gh^ i
^.9.. sT ^,,"^> M s.,_x+' u,° n^.* y! i. a. `..?G .:v,,,i .., .^:' .Ta y . !.:hn» ala,_..r^w. A.n !"r.'i .`3 icsii^^',': ",a+,s-v'.u`I'.w.. -^ J CNmk"r#""s'asav'a,.^i"o,.'^i
This Notice contains only a summary of the proposed Partial Settlement. The completePartial Settlement is set out in a Stipulation and Agreement of Settlement dated September 7,2006. You may request a copy of the Stipulation in writing to Refco Inc. Securities Litigation,c/o The Garden City Group, Inc., Claims Administrator, P.O. Box 9087, Merrick, NY 11566.There may be a charge for copying and mailing the Stipulation, Copies of the Stipulation may be
obtained for free at €-efcosecuritieslitigation.cant.
„w
h r i` 5 3f^" Y ' ' s'Ex F L V, t 4 ?, »",t?.5..,.x o'^ vu? w<r.'„MS,^,,.. ^. ti.F •^,z,'"'5 S s1"^'..Yrn ea"a: "`:uu7'e§,^,fi;rat 3!3
^3 .t^.(`^Y?,.r.,,.;
You can also call the Claims Administrator toll free at (888) 212-5574, write to theClaims Administrator at the above address, or visit the website at re fcosecuritieslitiaadon.cont,where you will find a copy of the Stipulation, the Complaint, and certain other documentsrelating to the Action and the Partial Settlement, Anyone interested in more detail regarding theAction is invited to visit the office of the Cleric of the United States District Court for theSouthern District of New York at the United States Courthouse, 500 Pearl Street, New York.,NY, 10007, during regular business hours, to inspect the Stipulation, the pleadings, and the otherpapers maintained there in Case No. 05 Civ. 8626 (GEL).
Dated: 2007 BY ORDER OF THE COURT
Hon. Gerard E. LynchUNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK
15
Case 1:05-cv-08626-GEL Document 357-5 Filed 02/22/2007 Page 1 of 4
f
EXHIBIT 2
Case 1:05-cv-08626-GEL Document 357-5 Filed 02/22/2007 Page 2 of 4
UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW Y ORK x
05 Civ. 8626 (GEL)
in re REFCO, INC. SECURITIES LITIGATION
x
SUMMARY NOTICE OF PENDENC Y ANDCLASS ACTIONPROPOSED PARTIAL SETTLEMENT OF
AND HEARNG N PROPOSED SETTLEMENTWITH RAWA.G P.S.I
TO: ALL PERSONS OR ENTITIES WHO E NCH ASEDOOR
IOC ACQUBORDIUIRED
G ROUP LTD., LLC/ REFCO FINANCNOTES DUE 2012 (CUSIPNOS. CUSIP Ala 75866G1009)7ETWEEN AUGUSTREFCO INC. COMMON ST (
5, 2004 AND OCTOBER 17, 2005, INCLUSIVE (THE "CLASS PERIOD"), AND
WHO WERE DAMAGED THEREBY (THE "CLASS")w
YOU ARE HEREBY NOTIFIED that the Lead Plaintiffs in the above-captioned class
action (the "Action") have proposed a Partial Settlement with defendant BAWAG P.S.K. Bank
f€ir Arbeit and Wirtschaft and Osterreichische postsparkasse Aktiengesellschaft ("BAWAG")
whereby BAWAG will pay a settlement amount to the Class of at least ONE HUNDRED AND
EIGHT MILLION DOLLARS ($108,000,000) and the Class Members will dismiss and release
their claims against BAWAG arising; out of or related to the subject matter of the Action or any
transactions in the above-referenced securities of Refco Inc. and its predecessors during the Class
Period. in addition, if BAWAG is sold for a price exceeding E1.8 billion (euros) Within two
years after entry of an order approving BAWAG's separate settlement with Refco's Official
Corninittee of Unsecured Creditors, then BAWAG shall pay the Class an additional sum of 5%
of the amount by which the sale price of BAWAG exceeds E1.8 billion (euros), up to a
maximum additional payment of $32,000,000 (dollars).
This proposed Partial Settlement is the first proposed settlement in this multi-defendant
Action. The litigation is continuing against numerous other named defendants.
Case 1:05-cv-08626-GEL Document 357-5 Filed 02/22/2007 Page 3 of 4
A bearing will be held an ., 2007 at _ _...., before the honorable
Gerard E. Lynch in the U.S. District Court for the Southern District of New York, United States
Courthouse, 500 Pearl Street, New York, NY, 10007, to determine (1) whether the Partial
Settlement should be approved as fair, just and reasonable; (2) whether the Action should be
dismissed with prejudice against BAWAG and all claims against BAWAG released; and (3) i
whether the plaintiffs' attorneys' application for attorneys' fees should be granted.
IF YOU ARE A MEMBER OF THE CLASS DESCRIBED ABOVE, YOUR RIGHTS
WILL BE AFFECTED AND YOU MAY BE ENTITLED TO SNARE IN THE SETTLEMENT
FUNDS. If you have not yet received the full printed Notice of 0) Pendency and ProposedM1y
Partial Settlement of Class Action With BAWAG, and (ii) Hearing on Proposed Partial .,M
Settlement, you may obtain one by contacting the Claims Administrator at:
In re Refco Inc. Securities Litigation
c/o The Garden City Group, Inc.Claims AdministratorP.O. Box 9087Merrick, NY 11566
To participate in the Partial Settlement, you will be required to submit a Proof of Claire,
using a form to be disseminated to members of the Class at a future date. To ensure that you
receive a Proof of Claim form and any future notices in this Action, please contact the Claims
Administrator at the address above to request that you be added to their mailing list for the Refco
Securities Litigation.
Inquiries, other than requests for copies of the Notice or for inclusion on the mailing list
for future notices, may be directed to Plaintiffs' Co-Lead Counsel:
John P. Coffey, EsquireBERNSTEIN LITOWITZ BERGER & GROSSMANN, LLP
1285 Avenue of the AmericasNew York, NY 10019
2
Case 1:05-cv-08626-GEL Document 357-5 Filed 02/22/2007 Page 4 of 4
Megan D. McIntyre, EsquireGRANT & EISENHOFER P.A.Chase Manl3attan Centre
1201 N. Market StreetWilmington, DE 19801
Dated: , 2007BY ORDER OF THE COURT
3
Case 1:05-cv-08626-GEL Document 357-6 Filed 02/22/2007 Page 1 of 11
K
EXHIBIT B N
Case 1:05-cv-08626-GEL Document 357-6 Filed 02/22/2007 Page 2 of 11
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK
05 Civ. 8626 (GEL)
In re REFCO, INC. SECURITIES LITIGATION
x
,IUIIGIVIENT APPROVIN G CLASS ACTION SETTLEMENT WITH BAWAG
WHEREAS, Lead Plaintiffs and Defendant BAWAG P.S.K. Bank h.ir Arbeit tend
Wirtschaft and Osterreichische Postsparkasse Aktiengesellschaft ("BAWAG") entered into a
Stipulation and Agreement of Settlement dated February 2007 (tile ,Stipulation"), wllleh
provides for a settlement of this action as against BAWAG only (tile "Partial Settlement"); and6'
WHEREASunless otherwise defined in this Judgment, the capitalized terms in this
;,
Judgment shall have the same meaning as they Have in the Stipulation; and
WHEREAS, the Court entered an Order dated ,_._,,._._._..- ,2007 (tile "Prelii111tiary
Approval Order") preliminarily certifying, for settlement purposes only, an opt-out Settlement
Class pursuant to Fed. R. Civ, P. 23(a) and (b)(3); and
WHEREAS, the preliminary Approval Order also (i) ordered that notice be provided to
potential members of the Settlement Class; (ii) scheduled a Settlement Hearing; and (iii)
provided those persons and entities identified as members of the putative Settlement Class With
an opportunity either to exclude themselves from the proposed Partial Settlement or to object to
the proposed Partial Settlement; and
Case 1:05-cv-08626-GEL Document 357-6 Filed 02/22/2007 Page 3 of 11
WHEREAS, the Court held a settlement Hearing on 2007 to determine,
among other things, (i) whether the terms and conditions of the Partial Settlement are fair,
reasonable and adequate and should therefore be approved; (ii) whether judgment should be
entered dismissing the Complaint on the merits and with prejudice as against BAWAG; and sit
whether and in what amount to award attorneys' fees to Co-Lead Counsel; and
NOW, THEREFORE, based on the submissions of the parties, and on the arguments of
counsel at the Settlement Hearing, it is hereby ORDERED, ADJUDGED AND DECREED as
follows:
L Incorporation of Settlement Documents. This Judgment Approving Class
Action Settlement With BAWAG incorporates and makes a part hereof: '
(a) the Stipulation filed with this Court; and
(b) the Notice and the Publication Notice, both of which were filed with theCourt on February —, 2007.
2, Jurisdiction.. The Court has personal jurisdiction over all Settlement Class
members and has subject matter jurisdiction over the Action, including, without limitation,
jurisdiction to approve the proposed Partial Settlement, grant final certification of the Settlement
Class, and dismiss the Action as against BAWAG on the merits and with prejudice. The Court
has personal jurisdiction over BAWAG for purposes of enforcing the Partial Settlement.
Case 1:05-cv-08626-GEL Document 357-6 Filed 02/22/2007 Page 4 of 11
. Final Settlement Class Certification. The Court finds that the Settlement Class
preliminarily certified in tlae preliminary Approval Order meets all of the requirements of
Federal Rule of Civil Procedure 23(a) and (b)(3) for the reasons set out in the Preliminary
Approval Order. The Court therefore finally certifies the Settlement Class for settlement
purposes consisting of all persons and entities that purchased or otherwise acquired Refco Group F
Ltd., LLC/Refco Finance Inc. 9% Senior Subordinated Notes due 2012 (CUSIP Nos.
75866HAA5 and/or 75866HACI) and/or common stock of Refco (CUSIP No. 75866G109)
during the period August 5, 2004 through and including October 17, 2005, and who were
damaged thereby. Excluded from the Settlement Class are: (i) Refco; (ii) the Defendants; (iii) x
r
any person or entity who was a partner, executive officer, director, controlling person, 'ti4
subsidiary, or affiliate of Refco or any Defendant during the Class Period; (iv) members of the
Defendants' immediate families; (v) entities in which Refco or any Defendant has a controlling
interest; and (vi) the legal representatives, heirs, predecessors, successors of assigns of any of the
foregoing excluded persons or entities. Also excluded from the Class is any person or entity who
or which properly excludes himself, herself or itself by filing a valid and timely request for
exclusion in accordance with the requirements set forth in the Notice.
4. Adequacy of Representation. The Co-Lead Counsel and Lead Plaintiffs
adequately represented the Settlement Class for purposes of entering into and implementing the
Partial Settlement and have fully and adequately represented the Settlement Class for purposes of
entering into and implementin g the Partial Settlement and have satisfied the requiremen ts of
Federal Rule of Civil Procedure 23(x)(4).
5. Notice. The Court finds that the distribution of the Notice, the publication of the
Publication Notice, and the notice methodolo gy : (i) were all implemented in accordance with
Case 1:05-cv-08626-GEL Document 357-6 Filed 02/22/2007 Page 5 of 11
the Preliminary Approval Order; (ii) constituted the best practicable notice; (iii) constituted
notice that was reasonably calculated, under the circumstances, to apprise Settlement Class
members of the pendency of the Action, of the effect of the Partial Settlement including the
releases, of their right to object to the proposed Partial Settlement, of their right to exclude
themselves from the Settlement Class, and of their right to appear at the Settlement Hearing; (iv) .F
were reasonable and constituted due, adequate, and sufficient notice to all persons or entities
entitled to receive notice; and (v) met all applicable requirements of the Federal Rules of Civil
Procedure, the United states Constitution, (including the Due Process Clause), the Private
Securities Litigation Reform Act of 1995 (15 U.S.C. 78u-4, et such.) (the "PSLR.A"), the Rules of^ry
the Court, and any other applicable law. (,
6 .Binding Effect. The terms of the Stipulation and of this Judgment shall be
forever binding oil Plaintiffs and all members of the Settlement Class, as well as all of their
heirs, executors and administrators, predecessors, successors, affiliates (as defined in 17 C.F.R.
Part 210.1-02.b) and assigns.
7, Final Settlement Approval. The Partial Settlement is hereby fully and finally
approved as fair, reasonable and adequate, and Lead Plaintiffs and BAWAG are directed to
implement and consummate the Partial Settlement in accordance with the terms and provisions
of the Stipulation. The Court approves the documents submitted to the Court in connection with
the implementation of the Partial Settlement.
S.Releases. The releases as set forth in paragraphs 2 through 4 of the Stipulation
(the "Release"), together with the definitions of Settled Claims, Settling Defendants' Claims,
Settling Defendants, and Released Plaintiff Parties are expressly incorporated herein in all
respects. The Release is effective as of the Effective Date and forever discharges, among other
Case 1:05-cv-08626-GEL Document 357-6 Filed 02/22/2007 Page 6 of 11
things, the Settling Defendants from any claims of liability arising from or related to the Settled
Claims, and the Released Plaintiff Parties from any claims of liability arising from or related to
the Settling Defendants' Claims. The Settled Claims are hereby compromised, settled, released,
discharged and dismissed as against the Settling Defendants on the merits and with prejudice by
virtue of the proceedings herein and this Judgment. The Settling Defendants' Claims are hereby
compromised, settled, released, discharged and dismissed as against the Lead Plaintiffs and the
members of the Settlement Gass on the merits and with prejudice by virtue of the proceedings
herein and this Judgment.A
9 ,No Other Releases. Notwithstanding any release or other language that may be 7
contained in the Stipulation and order of Settlement that may be entered by the Bankruptcy y,p
Court or in any other document (including, but not limited to, any order issued by the
Bankruptcy Court for the Southern District of New York in connection with the separate
settlement reached between BAWAG and the Creditors' Committee) which purports to release or
otherwise extinguish or limit any claims that Lead Plaintiffs and/or members of the Settlement
Class have asserted or could assert against BAWAG (collectively, the "Bankruptcy Releases"),
the parties have agreed and this Court hereby orders that: (i) the Bankruptcy Releases shall be
fully effective on their terms, provided however, the Bankruptcy Releases shall not release the
claims of Lead Plaintiffs and/or mernbers of the Class in this Action, which claims shall be
released only through this Judgment, and (ii) nothing shall preclude members of the Settlement
Class from receiving distributions from the Settlement or any future settlement in this Action and
receiving distributions from settlements reached between BAWAG and others in the Bankruptcy
Court, to the extent that those Settlement Class members have allowed claims as creditors or
interest holders of Refco•
Case 1:05-cv-08626-GEL Document 357-6 Filed 02/22/2007 Page 7 of 11
10. Permanent Injunction, The Court permanently bars and enjoins (i) all
Settlement Class Members (and their heirs, executors and administrators, predecessors,
successors, affiliates (as defined in 17 C.F.R. Part 210.1-02,b) and assigns) from ding,
commencing, prosecuting, intervening in, participating in (as class members or otherwise), or
receiving any benefits or other relief from, any other lawsuit, arbitration or other proceeding or A^
order in any jurisdiction that is based upon, arises out of or relates to any Settled Claims; and (ii)
BAWAC and the Settling Defendants from filing, commencing, prosecuting, intervening in,
participating in (as class inembers or otherwise), or receiving any benefits or other relief froth,
any other lawsuit, arbitration or other proceeding or order in any jurisdiction that is based upon,
arises out of or relates to any Settling Defendants' Claims. ;h
11. Contribution Bar Order. The Court hereby bars all claims (a) by any person or
entity against the Settling Defendants for contribution arising out of the Action, and (b) by the
Settling Defendants against any Person or entity for Contribution arising out of the Action, other
than a person whose liability has been extinguished by the Partial Settlement, each to the fullest
extent permitted by 15 U.S.C. § 79u-4(f)(7) and any other applicable law or regulation. Nothing
herein is intended to broaden the language of the Private Securities Litigation Reform Act of
1995.
11.5. Complete Contribution Bar Order. The Court hereby bars all claims (a) by any
person or entity against the Settling Defendants for contribution or indemnity arising out of or
related to the claims or allegations asserted by the Lead Plaintiffs in the Action (or any other
claim against the Settling Defendants where the injury to the Non-Settling Defendant is the Non-
Settling Defendant's actual or threatened liability to the Lead Plaintiffs and other Class
Members), and (b) by the Settling Defendants against any person or entity for contribution or
Case 1:05-cv-08626-GEL Document 357-6 Filed 02/22/2007 Page 8 of 11
indemnity arising out of or related to the claims or allegations asserted by the Lead Plaintiffs in
the Action, whether such claims, as to (a) and (b) above, arise under state, federal or foreign law
as claims, cross-claims, counterclaims, or third-party claims, whether asserted in the Action, in
this Court, in any federal or state court, or in any other court, arbitration proceeding,
administrative agency or other forum in the United States or elsewhere. In any lawsuit brought ph
by a putative member of the Class in the Action who has properly opted out of the Settlement (an
"Opt Out Action"), BAWAG will not contend that the bar orders provided in the Stipulation and
Judgment shall bar a claim over in the Opt Out Action by a Non-Settling Defendant. The
foregoing sentence pertains solely to the bar orders in the Stipulation and Judgment and has no
effect whatsoever on any release or bar order in any other proceeding or settlement agreement orY
on any other defense or claim of the Settling Defendants.
11.6 Judgment Reduction. Any final verdict or judgment that may be obtained by or
on behalf of the Class or a Class Member against a Non-Settling Defendant or Non-Settling
Defendants shall be reduced by the greater of: (i) an amount that corresponds to tyre percentage
of responsibility of the Settling Defendants for common damages; or (ii) the amount paid by or
on behalf of the Settling Defendants to the Class for common damages.
12. No Admissions. Neither this Judgment, the Stipulation, nor any of their terms
and provisions, nor any of the negotiations or proceedings connected therewith, nor any of the
documents or statement referred to therein shall be:
(a) admissible in any action or proceeding for any reason, other than an action
to enforce the terms of the Settlement or this Judgment;
(b) described as, construed as, offered or received against the Settling
Defendants as evidence of and/or deemed to be evidence of any presumption, concession, or
Case 1:05-cv-08626-GEL Document 357-6 Filed 02/22/2007 Page 9 of 11
admission by the Settling Defendants of: the truth of any fact alleged by Lead Plaintiffs; the
validity of any claim that has been or could have been asserted in the Action or in any litigation;
the deficiency of any defense that has been or could have been asserted in the Action or in any
litigation; or any liability, negligence, fault, or wrongdoing of the Settling Defendants;
(c) described as, construed as, offered or received against Lead Plaintiffs or
any Settlement Class members as evidence of any infirmity in the claims of said Lead Plaintiffs
and the Settlement Class or that damages recoverable under the Amended Complaint would not
have exceeded the Settlement Amount;
(d) described as, construed as, offered or received against any of the parties to
this Stipulation, in any other civil, criminal or administrative action or proceeding, provided,
however, that (i) if it is necessary to refer to this Stipulation to effectuate the provisions of this
Stipulation, it may be referred to in such proceedings, and (ii) if this Stipulation is approved by
the Count, the Settling Defendants may refer to it to effectuate the liability protection granted
them hereunder; or
(e) described as or construed against the Settling Defendants or the Lead
Plaintiffs or any Settlement Class members as an admission or concession that the consideration
to be given hereunder represents the amount which could be or would have been awarded to said
Lead Plaintiffs or Settlement Class members after trial.
13. Enforcement of Settlement. Nothing in this Judgment shall preclude any action
to enforce the terms of the Stipulation.
14. Claims Administrator's Fees and Expenses. The Court retains jurisdiction to
consider an application by or on behalf of the Claims Administrator for an award of fees and
Case 1:05-cv-08626-GEL Document 357-6 Filed 02/22/2007 Page 10 of 11
reimbursement of expenses relating to its implementation of the terms of the Stipulation and/or
any orders of this Court.
15, Attorneys' Fees. Co-Lead Counsel are hereby awarded attorneys' fees equal to
$ , which the Court Finds to be fair and reasonable. Co-Lead Counsel are not
seeking reimbursement of out-of-pocket expenses in connection with this Settlement.
16. Rule 11 Findings, The Court finds that all parties to the Stipulation and their
counsel have complied with each requirement of Rule 11 of the Federal Rules of Civil Procedure
as to all proceedings herein.
17. Modification of Settlement Agreement. Without further approval from the
Court Lead Plaintiffs and BAWAG are hereby authorized to agree to and adopt such `
amendments, modifications and expansions of the Stipulation or any exhibits attached to the
Stipulation as: (i) are not materially inconsistent with this Judgment; and (ii) do not materially
limit the rights of Settlement Class members under the Stipulation.
18, Extensions of Time. Without further order of the Court, Lead Plaintiffs and
BAWAG may agree to reasonable extensions of time to carry out any provisions of the
Stipulation.
19. Retention of Jurisdiction. The Court has jurisdiction to enter this Judgment.
Without in any way affecting the finality of this Judgment, the Court expressly retains continuing
and exclusive jurisdiction over BAWAG and the Settlement Class members for purposes of the
administration, interpretation, and enforcement of the Stipulation and of this Jud gment. The
Court further expressly retains continuing and exclusive jurisdiction over the Settlement Class
members for all matters relating to the Action.
Case 1:05-cv-08626-GEL Document 357-6 Filed 02/22/2007 Page 11 of 11
20, Dismissal of Action. The Action, which the Court finds was filed on a good faith
basis against BAWAG in accordance with the PSLRA and Rule l l of the Federal Rules of Civil
Procedure based upon all publicly available information, is hereby dismissed as against BAWAG
only, oil the merits and with prejudice as of the Effective Date, without fees or costs except as
a:otherwise provided in this Judgment.
21. Entry of Final Judgment. Because the Partial Settlement resolves all clairris as
to BAWAG in the Action, the Court finds that there is no just reason to delay the entry of this
Judgment as a final judgment as against BAWAG. Accordingly, the Court expressly directs the
immediate entry of final judgment by the Clerk of Court, as against BAWAG only, pursuant to ti7
Federal Rule of Civil Procedure 54(b).
SO ORDERED this day of , 2007.
THE HONORABLE GERARD E. LYNCHUnited States District Judge
Case 1:05-cv-08626-GEL Document 357-7 Filed 02/22/2007 Page 1 of 1
UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK x
:: 05 Civ. 8626 (GEL)
In re REFCO, INC. SECURITIES LITIGATION :::
x
CERTIFICATE OF SERVICE
I hereby certify that on February 22, 2007, copies of Lead Plaintiffs’ Notice of Motion
For (I) Preliminary Approval of Partial Settlement With Defendant BAWAG, (II)
Preliminary Certification of Class For Purposes of Settlement, (III) Preliminary Approval
of Form and Manner of Notice, and (IV) Scheduling of a Final Approval Hearing and the
Stipulation and Agreement of Settlement dated February 13, 2007 were filed electronically.
Notice of these filings will be electronically mailed to all parties registered with the Court’s
electronic filing system.
/s/ Megan D. McIntyre Megan D. McIntyre