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UNITED STATES DISTRICT COURTMIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
HAL BLOOMBERG TRUST, GERALD J . O'REGAN,HAROLD J. MOYER, W. L. GOLDEN, DAN ROURKE,JOSEPH SCHMIDT, TIMOTHY CUNNINGHAM,RUTH HERSHMAN, ROBERT GENCO, SHIRLEY R .STEEHLER, MIKE DITTMER AND DITTMEREQUIPMENT COMPANY, BIPIN SOLANKI, GEORGEROSS, MICHAEL REYNOLDS, FRED THOOHO,DAVID CALIGARIS, RICHARD WILLIAMS andJAMES GRAY, on behalf of themselves and all otherssimilarly situated,
Plaintiffs ,
VS .
GENCOR INDUSTRIES, INC ., E. J. ELLIOTT, JOHNELLIOTT, and RUSSELL R . LEE, III ,
Defendants .
MIKE DITTMER AND DITTMER EQUIPMENTCOMPANY, FRED THOOHO, DAVID CALIGARIS,RICHARD WILLIAMS, DAN ROURKE, and JAMESGRAY, on behalf of themselves and all others similarlysituated,
Plaintiffs ,
vs .
DELOITTE & TOUCHE, LLP,
Defendants .
!~ .E4 - 1 4 PM 4 : C 8
~`! . . '. CISTKICT U Fj ri-d i)U . Ft (,?•t :.
Case No . 99-106-Civ-Orl-19BConsolidated with
99-165-Civ -Orl-18 B99-194-Civ-Orl- 1 8B99-236-Civ -Orl-22 B99-253-Civ -Orl-19B99-266-Civ-Orl-18 B99-279-Civ-Orl-18 B99-364 -Civ-Orl-22B99-410-Civ -Orl-22 B
pf C • LJ
ho c
y ►
Case No . 6 :00-CV- 13 1 -ORL-22 C
STIPULATION OF SETTLEMENT
This Stipulation of Settlement (the "Stipulation"), dated Tom Lf , 2001, entered
into by the Plaintiffs and the Defendants (the "Parties") in the above-captioned actions, by and
through their attorneys . The consolidated action entitled Hal Bloomberg Trust, et al . v. Gencor
Indust ries , Inc., et al . , is hereinafter referred to as the "Gencor Action," and the action entitled
7
1 ,p\
IV,
Mike Dittmer, et al . v. Deloitte & Touche, LLP, is hereinafter referred to as the "Deloitte
Action." The Gencor Action and the Deloitte Action are hereinafter collectively referred to a s
the "Actions" and/or the "Litigation ." The Deloitte Action was consolidated with the Gencor
Action for purposes of these se ttlement proceedings only by order of this court dated October
25, 2001 . Although the Gencor Action and the Deloitte Action have been consolidated for the
purposes of settlement of the respective actions and the parties believe that consolidation fo r
such purposes is appropriate in order to promote judicial economy and to ensure that th e
settlement consideration in each of the Gencor Action and the Deloitte Action is preserved an d
maximized for the benefit of Plaintiffs and the classes they represent, nothing contained in thi s
Stipulation shall affect the respective rights of Gencor and Deloitte with respect to one another
(including, but not limited to any rights or liabilities either has or may have in the context of th e
pending or any future litigation) .
WHEREAS
1 . The Gencor Action
The Gencor Action was commenced with the filing on or about January 29, 1999, of the
action entitled Hal Bloomberg Trust, et al ., v. Gencor Industries, Inc., et al . , Case No. 99-106-
CIV-ORL- 19C. 1 On May 13, 1999 , the Court appointed Mike Dittmer and Dittmer Equipment
Company, Bipin Solanki , George Ross , Michael Reynolds, Fred Thooho, Harold Moyer, Davi d
Caligaris, Dan Rourke, Richard Williams , and James Gray as Lead Plaintiffs in the Gencor
Action (the "Plaintiffs"), and Abbey, Gardy & Squitieri, LLP (now known as Abbey Gardy ,
LLP), and the Law Offices of James V. Bashian, P .C., as Plaintiffs' Executive Committee Co-
Chairs in the Gencor Action . On June 12, 2000, the Court entered an order administrativel y
` Thereafter the following seven cases were filed and conso lidated to form the consolidated Gencor Action :O'Regan v . Gencor Indus . Inc ., 6 :99-CV-165-ORL- 19B ; Golden v . Gencor Indus . Inc ., 6 :99-CV-194-ORL-19B ;Rourke v . Gencor Indus. Inc., 6 :99-CV-236-ORL-22C; Schmidt v. Gencor Industries , Inc ., 99-253-CV-ORL ;
2
closing the Gencor Action pending a resolution of certain bankruptcy proceedings in which
Gencor Industries, Inc . ("Gencor"), is the debtor. On August 11, 2000, the Court granted th e
Lead Plaintiffs' motion to permit the Gencor Action to proceed against E. J. Elliott, John Elliott,
and Russell R. Lee, III (the "Gencor Individual Defendants"). On September 29, 2000, Plaintiffs
filed their Amended Consolidated Class Action Complaint ("the Gencor Amended Complaint")
In the Gencor Amended Complaint, Plaintiffs alleged that the Gencor Individual Defendant s
violated Section 10(b) of the Securities Exchange Act of 1934 (the "Exch ange Act"), 15 U .S.C. §
78j(b), and Securities Exchange Commission Rule 1Ob-5, 17 C . F.R. § 240 .1Ob-5 , by issuing false
and misleading financial statements and other materially false statements about Gencor' s
earnings . Plaintiffs also alleged that the Gencor Individual Defendants violated Section 20(a) of
the Exchange Act, 15 U.S.C. § 78t(a), by acting as control persons within the meaning of the
Exchange Act, who had the power and ability to control the actions of Gencor. The Gencor
Action was brought on behalf of a class consisting of certain persons who purchased Gencor
common stock during the period between February 5, 1998, and February 19, 1999, inclusive ,
and who sustained damage as a result of those transactions. Gencor and the Individual
Defendants have denied and continue to deny the material allegation of the Gencor Amended
Complaint and have denied and continue to deny any liability to the plaintiff of any othe r
members of the Gencor class .
On November 6, 2000, the Gencor Individual Defendants filed a Motion to Dismiss the
Gencor Amended Complaint . The Court denied the Gencor Individual Defendants' Motion to
Dismiss the Gencor Amended Complaint on August 29, 2001 .
2. The Deloitte Action
Cunningham v . Gencor Indus . Inc ., 6 :99-CV-266-ORL- 19B ; Hershman v . Gencor Indus . Inc ., 6 :99-CV-279-ORL-18B ; Genco v . Gencor Indus. Inc ., 6 :99-CV-364-ORL -22C ; Steehler v. Gencor Indus . Inc ., 99-410-CIV-ORL-22A .
3
On January 28, 2000, certain of the Plaintiffs filed the Deloitte Action and on August 16 ,
2000, filed an Amended Class Action Complaint (the "Deloitte Amended Complaint") on behal f
of a class consisting of certain persons who purchased Gencor common stock during the perio d
between December 16, 1998, and February 19, 1999, inclusive, and who sustained damage as a
result of those transactions . The Deloitte Amended Complaint alleges that Deloitte & Touche,
LLP ("Deloitte"), individually and in concert with the defendants in the Gencor Action, engage d
and participated in a continuous course of conduct to misrepresent the results of Gencor' s
operations and to conceal adverse material information regarding the finances, financia l
condition, and results of Gencor's operations, as audited by Deloitte and as reported in Gencor' s
Annual Report for the year 1998 filed with the Securities and Exchange Commission on For m
10-K on or about December 16, 1998 . Deloitte has denied and continues to deny the materia l
allegations of the Amended Complaint and has denied and continues to deny any liability to
Plaintiffs or any other members of the Deloitte Settlement Class (as de fined below) .
On October 5, 2000, Deloi tte filed a Motion to Dismiss the Deloitte Amended Complaint .
The Court granted Deloitte's motion on September 7, 2001, and granted Plaintiffs leave to file a
second amended complaint .
3. The Settlement Discussions
Plaintiffs, by their counsel, have conducted discussions and arms' length negotiations
with counsel for Defendants with respect to a compromise in settlement of the Litigation with a
view to settling the issues in dispute and achieving the best relief possible consistent with th e
interests of the Settlement Class (defined below) . Based upon their investigations, counsel for
the Plaintiffs have concluded that the terms and conditions of this Stipulation are fair, reasonable ,
and adequate to Plaintiffs and the Settlement Class, and in their best interests, and Plaintiffs hav e
agreed to settle the claims raised in the Litigation pursuant to the terms and provisions of thi s
4
Stipulation, after considering (a) the benefits that Plaintiffs and the members of the Settlement
Class will receive from settlement of the Litigation, (b) the attendant risks of litigation, and (c )
the desirability of permitting the Se tt lement to be consummated as provided by the terms of thi s
Stipulation . Although counsel for Plaintiffs and the Sett lement Class believe that Plaintiffs '
claims have meri t, they believe this Settlement is in the best interests of the Plaintiffs and the
Settlement Class .
The parties in the Deloitte Action filed a Joint Notice of Settlement on September 7 ,
2001, notifying the Court that the parties in the Deloitte Action had entered a Memorandum o f
Understanding containing the principal terms of settlement . Thereafter, on September 12, 2001 ,
the parties in the Gencor Action filed a Joint Notice of Settlement notifying the Court that the
parties in the Gencor Action had entered a Memorandum of Understanding containing th e
principal terms of settlement. The Court entered Orders on September 10, 2001, and September
13, 2001, staying the Deloi tte Action and the Gencor Action pending presentation of Stipulation
of Settlement by the Parties .
The Defendants in the Actions have denied and continue to deny any liability whatsoeve r
to the Plaintiffs or the Settlement Class and have denied and continue to deny each of Plaintiffs '
claims and continue to assert defenses thereto. Defendants do not, by entering into thi s
Stipulation, admit or concede any liability with regard to the merits of Plaintiffs' claims .
Defendants have concluded that, based upon their consideration of a number of factors, includin g
the risks inherent in any litigation, especially in complex actions such as this Litigation, it i s
desirable that the Litigation be settled upon the terms set forth herein in order to avoid th e
expense, inconvenience, and distraction of further legal proceedings and to put to rest the Settled
Claims (defined below) asserted on behalf of the Settlement Class .
On or about October, 25, 2001, the Court consolidated the Deloitte Action and th e
5
Gencor Action .
THE TERMS OF THE SETTLEMENT
The parties, by and through their respective attorneys, subject to the approval of thi s
Court, settle the Litigation on the following terms :
4. Definitions
In addition to the terms defined elsewhere in this agreement, the following terms used i n
this Stipulation shall have the meanings set forth below :
4.1 . Definitions Applicable to Gencor Action
4.1 .1 . "Authorized Gencor Claimant" means a member of the Gencor Settlement
Class whose claim has been allowed by the Claims Administrator .
4.1 .2. "Gencor Class Member(s)," "Gencor Settlement Class Member(s)," o r
"Gencor Class" means all members of the Gencor Settlement Class, except individuals or entitie s
that file valid and timely requests for exclusion .
4 .1 .3 . "Gencor Class Period" means the period of February 5, 1998, through
February 19, 1999, inclusive .
4.1 .4. "Gencor Defendants" means Gencor Industries, Inc ., E. J. Elliott, John
Elliott, and Russell R . Lee, III and their predecessors, executors, successors, administrators ,
assigns, subsidiaries, affiliates , insurers , attorneys, and any entity in which any Genco r
Defendant has a controlling interest, together with any of their past, present or future directors ,
officers and employees .
4.1 .5 . The "Individual Defendants" means E.J. Elliott, John Elliott and Russell
R. Lee, III and their predecessors , executors , successors, administrators , assigns, subsidiaries ,
affiliates, insurers, attorneys, and any entity in which any Defendant has a controlling interest ,
together with any of their past, present or future directors, officers and employees .
6
.!s
4.1 .6. "Gencor Defendants' Settlement Counsel" shall mean Greenberg Traurig ,
P.A., and Morlan & Stovash, P .A .
4.1 .7. "Gencor Plaintiffs' Counsel's Fees and Expenses" means the portion of
the Gencor Settlement Fund approved by the Court for payment to Plaintiffs' Counsel, includin g
Plaintiffs' Counsel's fees, costs, litigation expenses, fees and expenses of experts, as well as an y
interest earned on such counsels' fees, costs, and expenses .
4 .1 .8. "Gencor Settled Claims" means, collectively, any and all claims, demands ,
rights, liabilities , and causes of action of every nature and desc ription whatsoever, in law or
equity, that have been, could have been, may be, or could be asserted by Plaintiffs or any
member of the Gencor Settlement Class, now or in the future, against the Gencor Defendants, or
any other past, present or future director, officer or employee of Gencor, which are based upon,
arise out of, or are in any way related to the purchase or sale of Gencor stock during the Genco r
Class Period, regardless of whether they are foreseen or unforeseen, known or unknown ,
suspected or unsuspected, or fixed or contingent at the time of settlement .
4.1 .9. "Gencor Settlement Class" is defined in Paragraph 5 .1 below .
4.1 .10. "Gencor Settlement Fund" is defined in Paragraph 6 .1 below .
4.1 .11 . "Gross Gencor Settlement Fund" means the Gencor Settlement Fund (a s
defined below) plus all interest earned thereon from the date of deposit of the Gencor Settlemen t
Fund into the Escrow Account .
4 .1 .12. "Net Gencor Settlement Fund" means the Gross Gencor Settlement Fund ,
less (i) the Gencor Plaintiffs' Counsels' Fees and Expenses ; (ii) Gencor Notice an d
Administrative Expenses (defined in Paragraph 6.7.2 below); (iii) taxes ; and (iv) any other fees
and expenses authorized by the Court .
4.2. Definitions Applicable to Deloitte Action
7
4.2.1 . "Authorized Deloitte Claimant" means a member of the Deloitte
Settlement Class whose claim has been allowed by the Claims Administrator. (An Authorized
Deloitte Claimant is also an Authorized Gencor Claimant . )
4.2 .2. "Deloitte Class Member(s)," "Deloitte Settlement Class Member" o r
"Deloitte Class" means all members of the Deloitte Settlement Class, except individuals o r
entities that file valid and timely requests for exclusion .
4.2 .3 . "Deloitte Class Period" means the period of December 16, 1998, through
February 19, 1999, inclusive .
4 .2 .4. "Deloi tte Defendants" means Deloitte & Touche LLP or Deloitte .
4.2 .5 . "Deloitte Released Parties" means Deloitte & Touche LLP, Deloitte &
Touche USA LLP, Deloi tte & Touche , Deloitte Touche Tohmatsu Inte rnational, and their past ,
present, and future parent companies, subsidiaries, divisions, affiliates, predecessors an d
successors, partners, principals, members, directors, officers, employees, stockholders, owners ,
agents, subrogees, insurers, agents, and attorneys, and their respective representatives, heirs ,
executors, personal representatives, administrators, transferees, and assigns, and any and al l
persons natural or corporate in privity with them or acting in concert with any of them .
4.2.6. "Deloitte's Sett lement Counsel" means Sidley Austin Brown & Wood .
4.2 .7. 'Deloitte Plaintiffs ' Counsel's Fees and Expenses" means the portion of
the Deloitte Settlement Fund approved by the Court for payment to Plaintiffs' Counsel, including
Plaintiffs' Counsel's fees, costs, litigation expenses, fees and expenses of experts, as well as an y
interest earned on such counsels' fees, costs , and expenses .
4.2 .8. "Deloitte Settled Claims" means, collectively, any and all claims ,
demands, rights, liabilities, and causes of action of every nature and description whatsoever, in
law or equity, that have been, could have been, may be, or could be asserted by Plaintiffs or any
8
member of the Deloitte Settlement Class against the Deloitte Released Parties, now or in th e
future, which are based upon, arise out of, or are in any way related to the purchase or sale o f
Gencor stock during the Deloitte Class Period or to professional services that Deloitte or it s
predecessors or present or future affiliates performed or were engaged to perform with respect to
Gencor or its present or former parent companies, subsidiaries, affiliates, divisions, o r
predecessors, regardless of whether they are foreseen or unforeseen, suspected or unsuspected, o r
fixed or contingent at the time of settlement .
4.2 .9. "Deloitte Settlement Class" is defined in Paragraph 5 .2 below .
4.2 .10. "Deloitte Settlement Fund" is defined in Paragraph 6.1 .2 below.
4.2 .11 . "Gross Deloi tte Settlement Fund" means the Deloitte Settlement Fund (as
defined in paragraph 6 .1 .2 below) plus all interest earned thereon from the date of deposit of the
Deloitte Settlement Fund into the Escrow Account .
4.2 .12. "Net Deloitte Settlement Fund" means the Gross Deloitte Settlemen t
Fund, less (i) the Deloitte Plaintiffs' Counsel's Fees and Expenses; (ii) Deloitte Notice and
Administrative Expenses; (iii) taxes ; and (iv) any other fees and expenses authorized by the
Court .
4.3 . Definitions Applicable to Both Action s
4.3 .1 . "Authorized Claimants" means Authorized Gencor Claimants an d
Authorized Deloitte Claimants .
4.3.2. "Claims Administrator" means David Berdon & Co., LLP, an independent
firm to be retained by Plaintiffs' Executive Committee Co-Chairs to process proofs of claim and
to process payments .
4.3 .3 . "Class Members" means Gencor Class Members and Deloitte Clas s
Members .
9
4.3.4. "Court" means the United States District Court for the Middle District o f
Florida, Orlando Division .
4 .3 .5. "Defendants ' Counsel" means the Gencor Defendants' Settlement Counsel
and Deloitte's Settlement Counsel .
4 .3 .6. "Effective Date of Settlement" or "Effective Date" means the date upon
which the Settlement contemplated by this Stipulation shall become effective, as set forth i n
Paragraph 6.4.2 below .
4.3 .7 . "Escrow Account" means the interest-bearing account to be established at
J .P. Morgan, as to which Plaintiffs' Executive Commi ttee Co-Chairs, Abbey Gardy, LLP, an d
the Law Offices of James V . Bashian, P.C., are Escrow Agents for the purpose of holding al l
monies paid in this settlement. At all times, the Escrow Account shall be held in custodia legis ,
subject to the approval of the Court .
4.3 .8. "Escrow Agent" shall mean Plaintiffs ' Executive Committee Co-Chairs,
Abbey Gardy, LLP, and the Law Offices of James V. Bashian, P.C.
4.3 .9. "Gross Settlement Fund" means the Gross Gencor Settlement Fund an d
the Gross Deloitte Settlement Fund .
4.3.10. "Person" means an individual , corporation , partnership, limite d
partnership, association, joint stock company, estate, legal representative, trust, unincorporate d
organization, and any other type of legal entity, and his, her or its heirs, predecessors, successors ,
representatives, and assigns .
4.3 .11 . "Plaintiffs" mean Mike Dittmer and Dittmer Equipment Company, Bipi n
Solanki, George Ross, Michael Reynolds, Fred Thooho, Harold Moyer, David Caligaris, Da n
Rourke, Richard Williams, and James Gray, individually and as representatives of the Genco r
Settlement Class and/or the Deloitte Settlement Class .
10
~..s
4.3.12. "Plaintiffs' Counsel" means Plaintiffs' Settlement Counsel and all of th e
other attorneys representing Plaintiffs listed at the end of this Stipulation .
4.3 .13 . "Plaintiffs' Settlement Counsel" means Plaintiffs' Executive Committee
Co-Chair, Abbey Gardy, LLP, 212 East 39t' Street, New York, New York 10016, and the Law
Offices of James V . Bashian, P .C., 500 Fifth Avenue, Suite 2700, New York, New York 10110 .
4.3 .14. "Proof of Claim" means the proposed Proof of Claim and Release
substantially in the form attached as Exhibit B .
4.3 .15 . "Publication Notice" means the summary notice of proposed sett lement
and hearing to be published substantially in the form attached as Exhibit C .
4.3 .16. "Released Parties" or "Released Party" means the Gencor Defendants and
their predecessors, executors, successors, administrators, assigns, subsidiaries, affiliates, insurers ,
attorneys, and any entity in which any Defendant has a controlling interest, together with any of
their past, present or future directors, officers and employees .
4.3 .17. "Gencor Defendants" means Gencor Industries , Inc., E. J. Elliott, John
Elliott, and Russell R . Lee, III and their predecessors, executors, successors, administrators ,
assigns, subsidiaries , affiliates , insurers , attorneys, and any entity in which any Defendant has a
controlling interest, together with any of their past, present or future directors, officers and
employees (see also §4 .1 .4) .
4 .3 .18 . The "Individual Defendants" means E.J. Elliott, John Elliott and Russell
R. Lee, III and their predecessors, executors , successors, administrators, assigns, subsidia ries,
affiliates, insurers, attorneys, and any entity in which any Defendant has a controlling interest ,
together with any of their past , present or future directors , officers and employees (see also
§4.1 .5)
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1 ~
4 .3 .19. "Settled Claims" means the Gencor Settled Claims and the Deloitte Settled
Claims .
4 .3 .20 . "Settlement" means the settlement of the Gencor Action and the Deloi tte
Action contemplated by the Stipulation .
4.3 .21 . "Settlement Class" means the Gencor Settlement Class and the Deloitt e
Settlement Class .
4.3 .22. "Settlement Fund" means the Gencor Settlement Fund and the Deloitt e
Settlement Fund .
5. Certification of the Settlement Class for Settlement Purposes Only
5.1 . The Gencor Settlement Clas s
The parties in the Gencor Action hereby agree and stipulate, subject to th e
approval of the Court pursuant to Rule 23(e) of the Federal Rules of Civil Procedure, that th e
following class (the "Gencor Settlement Class") shall be certified conditionally for purposes o f
settlement only under Rules 23(a) and 23(b)(3) of the Federal Rules of Civil Procedure :
All persons who purchased or otherwise acquired Gencor commonstock from February 5, 1998 through February 19, 1999, inclusive .Excluded from the Gencor Settlement Class are Gencor, itssubsidiaries, affiliates, current and former officers and directors ofGencor and its subsidiaries, the Individual Defendants, members ofthe immediate families of the Individual Defendants, (parents,spouses, siblings, and children), any entities in which any of theGencor Defendants has a controlling interest, and the legalrepresentatives, heirs, successors, predecessors in interest, affiliatesor assigns of any of the Individual Defendants or other excludedparty .
Plaintiffs Mike Dittmer and Dittmer Equipment Company, Bipin Solanki , George
Ross, Michael Reynolds, Fred Thooho, Harold Mayer, David Caligaris, Dan Rourke, Richar d
Williams, and James Gray shall be certified as the class representatives for settlement purpose s
only in the Gencor Action.
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5.2. The Deloitte Settlement Class
The parties in the Deloitte Action hereby agree and stipulate, subject to th e
approval of the Court pursuant to Rule 23(e) of the Federal Rules of Civil Procedure, that th e
following class (the "Deloitte Settlement Class") shall be certified conditionally for purposes o f
sett lement only under Rules 23(a) and 23(b)(3) of the Federal Rules of Civil Procedure :
All persons who purchased or otherwise acquired Gencor commonstock from December 16, 1998 through February 19, 1999,inclusive. Excluded from the Deloitte Settlement Class areDeloitte & Touche LLP, and Gencor Industries, Inc ., theirsubsidiaries and affiliates, current and former officers, directors,and partners of Deloitte &Touche LLP and Gencor Industries, Inc,and their subsidiaries, members of their immediate families(parents, spouses, siblings, and children), and any entities in whichany of them has a controlling interest, as well as each suchexcluded party's legal representative, heirs, successors,predecessors in interest, affiliates, or assigns .
Plaintiffs Mike Dittmer and Dittmer Equipment Company, Fred Thooho, Davi d
Caligaris, Dan Rourke, Richard Williams, and James Gray shall be certified as the clas s
representatives for settlement purposes only in the Deloitte Action subject to approval of th e
Court.
5 .3 . Plaintiffs and the other Deloitte Settlement Class members may exclude
themselves from the Deloitte Settlement Class by validly and effectively requesting exclusion
from the Deloitte Settlement Class in accordance with the terms of the notice provided pursuan t
to Paragraph 6 .2 below ("Mailed Notice") . The last date for requesting exclusion from the
Deloitte Settlement Class shall be at least fourteen (14) days prior to the Hearing .
6. The Settlement Consideration
6.1 . Amount of Consideratio n
6 .1 .1 . The Gencor Defendants shall deliver to the Escrow Agent for the benefi t
of the Gencor Settlement Class in sett lement of the Gencor Settled Claims the sum o f
13
$2,050,000.00 (the "Gencor Settlement Fund") .
6.1 .2. Deloitte shall deliver to the Escrow Agent for the benefit of the Deloitte
Settlement Class in settlement of the Deloitte Settled Claims the sum of $575,000 .00 (the
"Deloitte Settlement Fund") .
6 .1 .3 . Except as provided in Paragraph 6 .5, no part of the Gencor Settlement
Fund shall be returned to the Gencor Individual Defendants or to Gencor.
6 .1 .4. Except as provided in Paragraph 6 .5, no part of the Deloitte Settlement
Fund shall be returned to Deloitte .
6.2. The Order of Preliminary Approval of Settlement With Notice ofSettlement to the Classes
Promptly after execution of this Stipulation, the Parties hereto shall apply to th e
Court for an order (the "Preliminary Approval Order"), substantially in the form of Exhibit A
hereto, preliminarily approving the Settlement and providing for notice to the Settlement Class o f
a hearing regarding the Settlement and related matters (the "Hearing") .
6.3 . Terms of Order and Final Judgmen t
If the Settlement contemplated by this Stipulation is approved by the Court ,
counsel for the Parties shall request that the Court enter an Order and Final Judgment
substantially in the form annexed hereto as Exhibit D1-2 .
6.4. Effective Date of Settlemen t
6.4 .1 . The Effective Date of Settlement for the Gencor Action shall be the dat e
when all the following shall have occurred :
6.4 .1 .1 . entry of the Preliminary Approval Order, or those provision s
thereof, in all mate rial respects in the form annexed hereto as Exhibit A which pertain to th e
Gencor Action; and
6.4 .1 .2. approval by the Court of the Settlement or those provisions
14
thereof wh;ch relate to the Gencor Action, following notice to the Gencor Se tt lement Class and a
hearing, as prescribed by Rule 23 of the Federal Rules of Civil Procedure ; and
6.4 .1 .3 . entry by the Court of an Order and Final Judgment, in al l
material respects in the form set forth in Exhibit D-1 annexed hereto, which pertain to the
Gencor Action and the expiration of any time for appeal or review of such Order and Fina l
Judgment, or, if any appeal is filed and not dismissed, after such Order and Final Judgment i s
upheld on appeal in all material respects and is no longer subject to review upon appeal or
review by writ of certiorari, or, in the event that the Court enters an Order and Final Judgment in
form other than that provided above ("Alternative Judgment") and none of the parties to the
Gencor Action hereto elects to terminate this Settlement, as it pertains to the Gencor Action, the
date that such Alternative Judgment becomes final and no longer subject to appeal or review .
6.4 .2. The Effective Date of Settlement for the Deloitte Action shall be the dat e
when all the following shall have occurred:
6.4 .2 .1 . entry of the Preliminary Order for Notice and Hearing, or thos e
provisions thereof, in all material respects in the form annexed hereto as Exhibit A which pertain
to the Deloitte Action; and
6 .4 .2 .2. approval by the Court of the Settlement or those provision s
thereof, which relate to the Deloitte Action, following notice to the Deloitte Settlement Class an d
a hearing, as prescribed by Rule 23 of the Federal Rules of Civil Procedure; and
6.4.2 .3. entry by the Court of an Order and Final Judgment, in all
material respects in the form set forth in Exhibit D-2 annexed hereto, which pertain to the
Deloitte Action and the expiration of any time for appeal or review of such Order and Fina l
Judgment, or, if any appeal is filed and not dismissed, after such Order and Final Judgment i s
upheld on appeal in all material respects and is no longer subject to review upon appeal or
15
review by writ of certiorari, or, in the event that the Court enters an Order and Final Judgment i n
form other than that provided above ("Alternative Judgment") and none of the parties to th e
Deloitte Action hereto elects to terminate this Settlement , as it pertains to the Deloitte Action, th e
date that such Alternative Judgment becomes final and no longer subject to appeal or review .
6.5. Waiver or Termination
6.5 .1 . The Gencor Defendants' Counsel or Plaintiffs' Settlement Counsel shal l
have the right to terminate the Settlement and this Stipulation, only as it relates to the settlemen t
of the Gencor Action by providing written notice of their election to do so ("Terminatio n
Notice") to the parties in the Gencor Action within thirty (30) calendar days of: (a) the Court' s
declining to enter the Preliminary Approval Order in any material respect with respect to th e
Gencor Action ; (b) the Court 's refusal to approve this Stipulation or any material part of it with
respect to the Gencor Action ; (c) the Court's declining to enter the Order and Final Judgment i n
any material respect with respect to the Gencor Action, other than with respect to the Plan o f
Allocation or award of attorneys' fees and expenses to Plaintiffs' Counsel ; (d) the date upon
which the Order and Final Judgment is modified or reversed in any material respect with respec t
to the Gencor Action by the appropriate Court of Appeals or the Supreme Court ; or (e) the date
upon which an Alternative Judgment is modified or reversed in any material respect with respec t
to the Gencor Action by the appropriate Court of Appeals or the Supreme Court .
6 .5 .2 . Except as otherwise provided herein, in the event the Settlement is
terminated or fails to become effective for any reason with respect to the Gencor Action, then (a )
the Settlement as it relates to the Gencor Action shall be without force and effect upon the right s
of the Gencor Defendants, the Plaintiffs, and the Gencor Settlement Class, and none of its terms
shall be effective or enforceable upon the rights of the Gencor Defendants, the Plaintiffs, and the
Gencor Settlement Class, except to the extent costs of notice and administration have bee n
16
N ` t
ii .t, :ured or expended pursuant to the provisions herein; (b) the balance remaining in the Gencor
Settlement Fund, together with any amounts of any fees and expenses previously awarded to
Plaintiffs' Counsel and paid out of the Gencor Settlement Fund, with interest, less any notice o r
administration expenses incurred prior to such termination, up to $50,000 .00, and less any taxes
payable on the income of the Gencor Settlement Fund, shall be returned to the Gencor Individua l
Defendants; and (c) the Gencor Defendants, the Plaintiffs, and the Gencor Settlement Class shal l
revert to their litigation position immediately prior to the execution of this Stipulation and shall
proceed in all respects as if this Stipulation had not been executed and the related orders an d
judgments had not been entered, preserving in that event all of their respective claims and
defenses in the Litigation .
6.5 .3. Deloitte's Counsel or Plaintiffs' Settlement Counsel shall have the right t o
terminate the Settlement and this Stipulation, only as it relates to the settlement of the Deloitt e
Action by providing written notice of their election to do so ("Termination Notice") to the parties
in the Deloitte Action within thirty (30) calendar days of (a) the Court's declining to enter the
Order for Notice and Hearing in any material respect with respect to the Deloitte Action ; (b) the
Court's refusal to approve this Stipulation or any material part of it with respect to the Deloitte ;
Action; (c) the Court's declining to enter the Order and Final Judgment in any material respect
with respect to Deloitte Action, other than with respect to the Plan of Allocation or award o f
attorneys' fees and expenses to Plaintiffs' Counsel ; (d) the date upon which the Order and Fina l
Judgment is modified or reversed in any material respect with respect to the Deloitte Action by
the appropriate court of appeals or the Supreme Court ; or (e) the date upon which an Alternative
Judgment is modified or reversed in any material respect with respect to the Deloitte Action by
the Court of Appeals or the Supreme Court .
6.5 .4. Deloitte may, in its sole discretion, prior to the Hearing, cancel and
17
I
terminate the Settlement and the Stipulation, only as it relates to the Settlement of the Deloitte
Action, if the beneficial owners of greater th an a specified number of shares of Gencor commo n
stock purchased during the Deloitte Class Period validly request exclusion from the Deloitt e
Settlement Class in accordance with the terms of the Mailed Notice . Such number of shares of
Gencor common stock shall be specified in a letter between Deloitte's Settlement Counsel and
Plaintiffs' Settlement counsel dated as of the date of this Stipulation (the "Auxiliary
Agreement"). The Auxiliary Agreement will not be filed with the Court unless and until a
dispute among the parties concerning its interpretation or application arises, and in that event i t
shall be filed and maintained with the Court under seal . Copies of all requests for exclusion from
the Deloitte Settlement Class, together with copies of all written revocations of such requests fo r
exclusion, shall be faxed or hand delivered by Plaintiffs' Settlement Counsel to Deloitte' s
Settlement Counsel no later than seven (7) days prior to the Hearing . In the event that this
Stipulation is canceled or terminated as to the Deloi tte Action only, pursuant to the Auxiliary
Agreement, this Stipulation shall become null and void and of no further force and effect, as it
relates to the Deloitte Action, and the provisions of Paragraph 6 .5.5 shall apply.
6 .5 .5. Except as otherwise provided herein, in the event the Settlement i s
terminated or fails to become effective for any reason with respect to the Deloitte Action, then
(a) the Settlement shall be without force and effect upon the rights of Deloitte, the Plaintiffs, and
the Deloitte Settlement Class, and none of its terms shall be effective or enforceable upon th e
rights of Deloitte, the Plaintiffs, and the Deloitte Settlement Class, except to the extent costs o f
notice and administration have been incurred or expended pursuant to the provisions herein ; (b )
the balance remaining in the Deloitte Settlement Fund, including any amounts of any fee s
previously awarded to Plaintiffs' Counsel and paid out of the Deloitte Settlement Fund, less an y
notice or administration expenses incurred prior to such termination and less any taxes payabl e
18
on the income of the Deloitte Settlement Fund, shall be returned to Deloitte within thirty (30 )
days of receipt of the Termination Notice; and (c) Deloitte, the Plaintiffs, and the Deloitt e
Settlement Class shall revert to their litigation position immediately prior to the execution of thi s
Stipulation and shall proceed in all respects as if this Stipulation had not been executed and the
related orders and judgments had not been entered, preserving in that event all of their respective
claims and defenses in the Litigation.
6 .6. Release Terms
6 .6 .1 . As of the Effective Date for the Gencor Action, the Gencor Settlement
Class Members, and their respective heirs, executors, administrators, successors, assigns ,
guardians, and representatives , hereby release and forever discharge the Gencor Defendants from
all Gencor Settled Claims .
6 .6 .2. Plaintiffs, on their own behalf and on behalf of all members of the Genco r
Settlement Class, and their respective heirs, executors, administrators, successors, assigns ,
guardians, and representatives, acknowledge in this connection that they may have sustaine d
damage, loss, injury, costs, or expenses that are presently unknown and unsuspected and that
such damage, loss, injury, costs, or expenses may give rise to additional claims for damage, loss ,
injury, costs, or expenses in the future . Nevertheless, Plaintiffs, on their own behalf and on
behalf of all members of the Gencor Settlement Class, acknowledge these contingencies, agree t o
the release hereunder, and expressly waive any and all rights which they may have under an y
state or federal statute or common law principle concerning the waiver or release of unknow n
claims or unascertained damage, injury or loss .
6 .6 .3. Upon the Effective Date, Plaintiffs and each member of the Genco r
Settlement Class, and their respective heirs, executors, administrators, successors, assigns ,
guardians, and representatives, will be forever barred and enjoined from commencing ,
19
instituting, or prosecuting the Gencor Settled Claims or any action or other proceeding agains t
any of the Gencor Defendants with respect to , based on, arising from, or for the Gencor Settled
Claims .
6.6 .4. Upon the Effective Date for the Gencor Action, each of the Genco r
Defendants forever releases and discharges the Gencor Settlement Class, Plaintiffs, an d
Plaintiffs' Counsel, as well as all of the law firms, lawyers, and other personnel associated or
employed in connection therewith, from any claims that could be based upon or arise out of th e
institution, prosecution , or assertion of the Gencor Action or the Gencor Settled Claims .
6.6 .5. As of the Effective Date for the Deloi tte Action , the Deloitte Settlement
Class Members, and their respective heirs, executors, administrators, successors, assigns ,
guardians, and representatives, hereby release and forever discharge the Deloitte Released
Parties from all Deloitte Settled Claims .
6.6 .6. Plaintiffs, on their own behalf and on behalf of all members of the Deloitt e
Settlement Class, expressly waive and relinquish, to the fullest extent permitted by law, the
provisions, rights, and benefits conferred by any law of any state or territory of the United States ,
or principle of common law, or international or foreign law, which is similar, comparable o r
equivalent to Section 1542 of the California Civil Code, which provides :
A general release does not extend to claims which the creditor does not know orsuspect to exist in his favor at the time of executing the release, which if knownby him must have materially affected his settlement with the debtor .
Plaintiffs, on their own behalf and on behalf of all members of the Deloitte Settlement Class ,
acknowledge that they or any of them may hereafter discover facts in addition to or different
from those which they now know to be true with respect to the subject matter of the Deloitt e
Released Claims, but hereby stipulate and agree that they have fully, finally and forever settled
and released any and all such claims, known or unknown, suspected or unsuspected, contingen t
20
or non-contingent, whether or not concealed or hidden, which now exist or heretofore existe d
under any theory of law or equity now existing or coming into existence in the future , without
regard to the discovery or existence of such different or additional facts .
6 .6 .7. Upon the Effective Date, Plaintiffs and each member of the Deloitte
Settlement Class, and their respective heirs, executors, administrators, successors, assigns ,
guardians, and representatives, will be forever barred and enjoined from commencing ,
instituting, or prosecuting the Deloitte Settled Claims or any action or other proceeding agains t
any of the Deloitte Released Parties with respect to, based on, arising from, or for the Deloitt e
Settled Claims .
6 .6 .8. Upon the Effective Date for Deloitte Action, each of the Deloitte
Defendants forever releases and discharges the Deloitte Settlement Class, Plaintiffs, an d
Plaintiffs' Counsel, as well as all of the law firms, lawyers, and other personnel associated or
employed in connection therewith, from any claims that could be based upon or arise out of th e
institution, prosecution, or assertion of the Deloitte Action or the Deloitte Settled Claims .
6.7. Escrow Agen t
6 .7 .1 . The Gencor Individual Defendants shall deposit the Gencor Settlement
Fund into the Escrow Account within thirty (30) days after the date the Court enters an order o f
preliminary approval of the Settlement . Deloitte shall deposit the Deloitte Settlement Fund into
the Escrow Account within five (5) business days after counsel for Deloitte and Plaintiffs '
Counsel sign this Stipulation . The Escrow Agent shall invest the funds deposited in the Escro w
Account solely in obligations backed by the United States Government or in a money marke t
account backed by such obligations which funds shall be deemed in custodia legis of the Court
and shall remain subject to the ju risdiction of the Court .
21
6.7 .2. Within three (3) days of receipt from the Gencor Individual Defendants o f
the deposits to the Settlement Fund, the Escrow Agent(s) shall withdraw the sum of $50,000 .00
from the Gencor Settlement Fund deposited in the Escrow Account and deposit said amount into
a separate interest-bearing account, to be known as the "Gencor Notice and Administration
Account ." The Gencor Notice and Administration Account shall be established an d
administered by the Claims Administrator . The Gencor Notice and Administration Account may
be drawn upon by The Claims Administrator for all expenses incurred in connection with th e
preparation, printing, mailing, and publication of the notice to the Settlement Class of th e
proposed Settlement and administrative expenses attributable to the processing of the Genco r
Authorized Claims (collectively the "Gencor Notice and Administrative Expenses") . Those
expenses attributable to the processing of the Deloitte Authorized Claims (the "Deloitt e
Administrative Expenses"), which expenses shall be identified by the Claims Administrator, t o
the extent practicable, shall be paid from the Deloitte Settlement Fund. In the event the Gencor
Notice and Administration Account is not sufficient to cover the cost of the Gencor Notice and
Administrative Expenses, then any such expenses remaining shall be paid from the Genco r
Settlement Fund. In the event there shall be any excess remaining in the Gencor Notice and
Administration Account after the Se tt lement is fully adminis trated , then such excess shall b e
returned to the Gencor Settlement Fund and be available for distribution to the Authorized
Gencor Claimants . Up to and until the Effective Date, counsel for the Plaintiffs and th e
Defendants shall have access to all records relating to the Gencor Notice and Administration
Account .
6 .7 .3. Plaintiffs ' Counsel shall have access to all records of the Escrow Account
and shall receive copies of all records of disbursements, deposits, and statements of account .
6 .7 .4. Within twenty (20) days of the execution of this Stipulation, Gencor
22
Defendants' Settlement Counsel shall provide the Claims Administrator with such information as
may be reasonably requested by the Claims Administrator to enable the Claims Administrator t o
administer the Settlement, including the names and addresses of the Gencor shareholders o f
record during the period from February 5, 1998, through February 19, 1999, either in electroni c
form on computer disk and /or as mailing labels .
6.7 .5 . The Claims Administrator shall administer and calculate the claims
submitted by members of the Settlement Class, determine the extent to which claims shall b e
allowed, and oversee distribution of the Net Gencor Settlement Fund and the Net Deloitte
Settlement Fund, under the supervision of Plaintiffs' Counsel, and subject to appeal to the Court .
6 .8. Proposed Plan of Allocation
Subject to the approval and further order(s) of the Court, the Net Gencor Settlement Fun d
and the Net Deloitte Settlement Fund shall be allocated to Authorized Claimants as follows (the
"Plan of Allocation") :
6 .8 .1 . Gencor Se tt lement Fund
6.8 .1 .1 . The Net Gencor Settlement Fund shall be distributed to
Authorized Gencor Claimants .
6 .8 .1 .2. The Claims Administrator shall determine each Authorize d
Gencor Claimant's pro rata share of the Net Gencor Settlement Fund based upon eac h
Authorized Gencor Claimant's "Recognized Gencor Claim."
6.8 .1 .3. An Authorized Gencor Claimant's "Recognized Gencor Claim "
shall mean the difference, if any, between the amount paid for Gencor common stock during th e
Gencor Class Period (including brokerage commissions and transaction charges) and the sum fo r
which said shares were sold at a loss (net of brokerage commissions and transaction charges) on
or before February 19, 1999 . As to those shares which an Authorized Gencor Claimant
23
continued to hold as of the close of trading on February 19, 1999, Recognized Gencor Claim
shall mean the difference, if any, between the amount paid for each such share purchased durin g
the Gencor Class Period and $6 .313, the closing price on February 19, 1999 . Purchases during
the Gencor Class Period will be matched against sales during the Gencor Class Period on a First-
In, First-Out bas is . Transactions resulting in a gain shall not be included .
6.8 .1 .4. Each Authorized Gencor Claimant shall be allocated a pro rata
share of the Net Gencor Settlement Fund (increased by any balance remaining in the Genco r
Notice and Administration Account) based on his, her, or its Recognized Gencor Claim a s
compared to the total Recognized Gencor Claims of all Authorized Gencor Claimants . The date
of purchase or sale is the contract or "trade" date as distinguished from the "settlement" date .
6.8 .2. Deloitte Settlement Fund
6 .8 .2 .1 . The Net Deloitte Settlement Fund shall be distributed t o
Authorized Deloi tte Claimants .
6.8 .2 .2 . The Claims Administrator shall determine each Authorize d
Deloitte Claimant's pro rata share of the Net Deloitte Settlement Fund based upon each
Authorized Deloitte Claimant's "Recognized Deloitte Claim . "
6.8 .2 .3 . An Authorized Deloitte Claimant's "Recognized Deloitte Claim"
shall mean the difference, if any, between the amount paid for Gencor common stock during th e
Deloitte Class Period (including brokerage commissions and transaction charges) and the su m
for which said shares were sold at a loss (net of brokerage commissions and transaction charges )
on or before February 19, 1999 . As to those shares which an Authorized Deloitte Claiman t
continued to hold as of the close of trading on February 19, 1999, Recognized Deloitte Claim
shall mean the difference, if any, between the amount paid for each such share purchased durin g
the Deloitte Class Period and $6 .313, the closing price on February 19, 1999 . Purchases durin g
24
the Deloitte Class Period will be matched against sales during the Deloitte Class Period on a
First-In, First-Out basis . Transactions resulting in a gain shall not be included . The date o f
purchase or sale is the contract or "trade" date as distinguished from the "settlement" date .
6.8 .2 .4. Each Authorized Deloitte Claimant shall be allocated a pro rata
share of the Net Deloitte Settlement Fund based on his, her, or its Recognized Deloitte Claim a s
compared to the total Recognized Deloitte Claims of all Authorized Deloitte Claimants .
6 .9. Terms Applicable to Both Settlement Fund s
6.9 .1 . Payment in the manner set forth above shall be deemed conclusive o f
compliance by Plaintiffs' Counsel and the Claims Administrator with this Stipulation .
Settlement Class members who do not submit acceptable Proofs of Claim will not share in th e
settlement proceeds . Settlement Class members who either do not submit a request for exclusio n
or do not submit an acceptable Proof of Claim will nevertheless be bound by the Settlement and
the Order and Final Judgment of the Court dismissing this Action .
6.9 .2. The Court reserves the right to alter the Plan of Allocation following th e
Hearing. Any decision by the Court concerning the Plan of Allocation shall not affect th e
validity or finality of the proposed Settlement .
6.9 .3. Checks will be distributed to Authorized Claimants after all claims hav e
been processed and after the Court has finally approved the Settlement . If any funds remain in
the Escrow Account by reason of uncashed checks or otherwise, then, after the Claim s
Administrator has made reasonable and diligent efforts to have Settlement Class members wh o
are entitled to participate in the distribution hereunder cash their distribution checks, any balanc e
remaining in the Escrow Account one (1) year after the initial distribution of such funds shall b e
redistributed to Class members who have cashed their checks and who would receive at leas t
$10.00 from such re-distribution . If after six (6) months after such re-distribution any funds shal l
25
remain in the Escrow Account, then such balance shall be contributed to non-sectarian, not-for-
profit, 501 (c)(3) organization(s) designated by Plaintiffs' Settlement Counsel .
6.9 .4. The Gencor Defendants shall have no involvement, obligation or liability
in the review of Proofs of Claim, or any involvement, obligation or liability in the administration
process itself (other than providing transfer records indicating names and addresses of members
of the Settlement Class or other authorization letters), which will be conducted by the Claim s
Administrator in accordance with this Stipulation and the Final Judgment to be entered by th e
Court .
6.9 .5 . The Deloitte Defendants shall have no involvement in the review of
Proofs of Claim, and no involvement in the administration process itself, which will b e
conducted by the Claims Administrator in accordance with this Stipulation and the Fina l
Judgment to be entered by the Court .
6.9 .6. No Authorized Claimant shall have any claim against Plaintiffs' Counsel ,
Defendants' Counsel, or the Claims Administrator based on or in any way relating t o
distributions hereunder that have been made substantially in accordance with this Stipulation an d
any applicable orders of the Court .
6 .9 .7. Each Settlement Class Member wishing to participate in the Settlement
shall be required to submit a Proof of Claim (in substantially the form set forth in Exhibit B )
signed under penalty of perjury by the beneficial owner(s) of the stock which is the subject of th e
proof of claim or by someone with documented authority to sign for the beneficial owners and
supported by such documents as specified in the instructions accompanying the Proof of Claim .
6.9 .8 . All Proofs of Claim must be postmarked or received within the tim e
prescribed in the Order of Preliminary Approval of Settlement unless otherwise ordered by th e
Court . Any member of the Settlement Class who fails to submit a properly completed Proof of
26
Claim within such period authorized by the Court shall be forever barred from receiving any
payments pursuant to this Stipulation, but will in all other respects be subject to the provisions o f
this Stipulation and the Final Judgment, including, without limitation, the release of the Settled
Claims and the dismissal of the Litigation.
6 .9 .9. Each Proof of Claim shall be submitted to the Claims Administrator wh o
shall determine under the supervision of Plaintiffs' Settlement Counsel, in accordance with thi s
Stipulation and Order of the Court, the extent, if any, to which each claim shall be allowed,
subject to appeal to the Court .
6.10. Tax Treatment
6.10.1 . The Parties agree to treat the Gross Settlement Fund as being at all times a
"qualified settlement fund" within the meaning of Treas. Reg. Section 1 .468B-1 and Section
468B of the Internal Revenue Code . In addition, Plaintiffs' Settlement Counsel and, as required,
the Defendants, shall jointly and timely make such elections as necessary or advisable to carry
out the provisions of this paragraph, including the "relation-back election" (as defined in Treas .
Reg. Section 1 .468(B-10)(2)) back to the earliest permitted date. Such elections shall be made i n
compliance with the procedures and requirements contained in such regulations . It shall be the
responsibility of Plaintiffs' Counsel to timely and properly prepare and deliver the necessar y
documentation for signature by all necessary parties, and thereafter to cause the appropriat e
filing to occur. Defendants shall have no obligation or liability concerning any taxes which ma y
be owed as a result of the Gross Settlement Fund.
6 .10 .2 . For the purpose of Section 468B of the Internal Revenue Code of 1986, a s
amended, and the regulations promulgated thereunder, the "administrator" shall be The Claim s
Administrator . The Claims Administrator shall timely and properly file all tax returns necessar y
with respect to the Gross Settlement Fund (including without limitation the returns described in
27
Treas. Reg. Sections 1 .468(B)-2(k) and 1 .468B-2(1)) . Such returns shall be consistent with thi s
paragraph and reflect that all taxes (including any interest or penalties) on the income earned by
the Gross Settlement Fund shall be paid out of the Gross Settlement Fund .
6 .10 .3 . All (a) taxes (including any interest or penalties) arising with respect to th e
income earned by the Gross Settlement Fund, including any taxes or tax detriments that may b e
imposed upon the Defendants, until the distribution of funds to claimants, with respect to an y
income earned by the Gross Settlement Fund for any period during which the Gross Settlement
Fund does not qualify as a "qualified settlement fund" for federal or state income tax purposes
("Taxes") ; and (b) expenses and costs incurred in connection with the operation an d
implementation of this paragraph, including, without limitation, expenses of a tax accountan t
and/or attorney or consultant and mailing and distribution costs and expenses relating to filing or
failing to file the returns described in this paragraph ("Tax Expenses"), shall be paid out of th e
Gross Settlement Fund and, to the extent practicable, allocated as between the Gencor Settlemen t
Fund and the Deloitte Settlement Fund in proportion to the amount of interest earned on eac h
such fund. Taxes and Tax Expenses shall be treated as, and considered to be, a cost of
administration of the Settlement and shall be timely paid by The Claims Administrator out of the
Gross Settlement Fund without prior order from the Court, and The Claims Administrator shal l
be obligated (notwithstanding anything herein to the contrary) to withhold from distribution to
members of the Settlement Class any funds necessary to pay such amounts, including the
establishment of adequate reserves for any Taxes and Tax Expenses (as well as any amounts tha t
may be required to be withheld under Treas . Reg. Section 1 .468(B)-2(1)(2)) . The parties hereto
agree to cooperate with the Escrow Agent, each other, and their tax attorneys and accountants t o
the extent reasonably necessary to carry out the provisions of this paragraph.
6 .11 . Obligations and Limitations of Liability of Escrow Agents
28
The Escrow Agents shall not be responsible for the payment of any sums due except t o
the extent of maintaining account of and appropriately paying sums as required by thi s
Stipulation, but only to the limited extent such sums are delivered into the Escrow Account o r
Gencor Notice and Administration Account . The Escrow Agents shall be liable only for acts of
gross negligence or willful misconduct . The assumption of duties as Escrow Agent shall no t
preclude the Escrow Agents from continuing to represent , as the case may be, the Plaintiffs or
members of the Settlement Class or the Defendants . The Escrow Agents may relieve themselve s
of the duties provided herein absent agreement of the Parties by interpleading the sums then held
by them .
7. Plaintiffs' Counsel's Request for an Award of Attorneys' Fees and Expenses
7.1 . The Plaintiffs ' Counsel shall submit an application for the payment of the Gencor
Plaintiffs' Counsel's Fees and Expenses including : (i) an award of Counsel's Fees in an amount
not to exceed 33 .33 percent of the Gross Gencor Settlement Fund ; (ii) reimbursement of costs
and expenses, including fees and expenses of experts and bankruptcy counsel, incurred in
connection with the prosecution of the Gencor Action and this Settlement; and (iii) interest on
such attorneys' fees, costs, and expenses at the same rate and for the same period as earned b y
the Gross Gencor Settlement Fund . All such amounts shall be paid from the Gross Gencor
Settlement Fund .
7 .2. The Plaintiffs ' Counsel shall submit an application for the payment of the Deloitte
Plaintiffs' Counsel's Fees and Expenses including : (i) an award of Counsel's Fees in an amount
not to exceed 33 .33 percent of the Gross Deloitte Settlement Fund ; (ii) reimbursement of cost s
and expenses, including fees and expenses of experts and bankruptcy counsel, incurred in
connection with the prosecution of the Deloitte Action and this Settlement ; and (iii) interest on
such attorneys' fees, costs, and expenses at the same rate and for the same period as earned b y
29
the Gross Deloitte Settlement Fund . All such amounts shall be paid from the Gross Deloitt e
Settlement Fund .
7 .3 . Such fees and costs, expenses, and the interest earned thereon, including the fees
of expert consultants and bankruptcy counsel , shall be paid to Plaintiffs ' Sett lement Counse l
within three (3) business days after the Court enters an order awarding such fees and expenses .
In the event that the Order making the fee and expense award is reversed or modified on appeal,
or in the event that the Effective Date of the Settlement fails to occur or this Settlement i s
terminated pursuant to Section 6 .5, and in the event that the fee and expense award has been pai d
to any extent, then Plaintiffs' Settlement Counsel shall promptly refund the fees to the Gros s
Settlement Fund, or to the Defendants, as the case may be, plus any interest actually pai d
consistent with the reversal or modification. The obligations of Plaintiffs' Settlement Counsel to
disgorge and return any fees and expenses under this paragraph shall be joint and several, and
shall apply regardless or whether Plaintiffs ' Sett lement Counsel has forwarded any such fees and
expenses to any of the Plaintiffs' Counsel.
7.4 . It is agreed that the procedure for and the allowance or disallowance by the Court
of any applications by any of the counsel to the named Plaintiffs for a ttorneys' fees, costs ,
expenses, and interest, including the fees of experts and consultants to be paid out of th e
Settlement Fund, are not part of this Stipulation, and any order or proceeding relating theret o
shall not operate to terminate or cancel this Stipulation or to affect its finality .
8. MISCELLANEOUS PROVISIONS
8 .1 . The Parties hereto: ( i) acknowledge they intend to consummate the Settlement
contemplated by this Stipulation ; (ii) agree to cooperate to the extent necessary to effectuate and
implement all terms and conditions of this Stipulation ; and (iii) agree to exercise their bes t
efforts and to act in good faith to accomplish the foregoing terms and conditions of the
30
Stipulation .
8 .2 . All of the exhibits attached hereto are hereby incorporated by reference as thoug h
fully set forth herein .
8 .3 . This Stipulation may not be amended or modified, nor may any of its provisions
be waived, except by a written instrument signed by counsel for the Defendants and b y
Plaintiffs' Settlement Counsel .
8 .4. The waiver by one party of any breach of this Stipulation shall not be deemed a
waiver of any prior or subsequent breach of this Stipulation .
8 .5 . Counsel for Defendants and the Plaintiffs' Settlement Counsel represent that the y
are authorized to sign this Stipulation on behalf of their respective clients .
8 .6. This Stipulation may be executed in one or more original, photocopied, o r
facsimile counterparts. All executed counterparts and each of them shall be deemed to be on e
and the same instrument .
8 .7. No press release or other similar public statement shall be issued or made
concerning the settlement of the Deloitte Action by any Plaintiff, Plaintiffs' Counsel, Deloitte, or
counsel for Deloitte, except as may be agreed to by Plaintiffs' Settlement Counsel and Deloitte' s
Settlement Counsel .
8 .8 . This Stipulation shall be binding upon, and inure to the benefit of, the successors ,
assigns, heirs, or any entity that may acquire or merge with Gencor, Deloitte, or any of the
Parties hereto . No assignment shall relieve any Party hereto of obligations hereunder .
8 .9. All terms of this Stipulation and the exhibits hereto shall be governed by an d
interpreted in accordance with the laws of the State of Florida without regard to choice of la w
principles and in accordance with the laws of the United States .
8 .10. All Parties hereto submit to the jurisdiction of the Court for the purpose o f
31
implementing the settlement embodied in this Stipulation .
8 .11 . Each Defendant warrants as to himself, herself, or itself that, as to the payment s
made by or on behalf of him, her, or it, at the time of such payment that the Defendant made or
caused to be made pursuant to the Settlement, he, she, or it was not insolvent nor did nor will th e
payment required to be made by or on behalf of him, her, or it render such Defendant insolven t
within the meaning of and/or for the purposes of the United States Bankruptcy Code, includin g
§§ 101 and 547 thereof. This warranty is made by each such Defendant and not by such
Defendant' s counsel .
8.12. If a case is commenced in respect of any Gencor Individual Defendants unde r
Title 11 of the United States Code (Bankruptcy), or a trustee , receiver, or conservator i s
appointed under any similar law, and in the event of the entry of a final order of a court o f
competent jurisdiction determining the transfer of money to the Gencor Settlement Fund or an y
portion thereof by or on behalf of such Defendant to be a preference, voidable transfer ,
fraudulent transfer, or similar transaction and any portion thereof is required to be returned, an d
such amount is not promptly deposited into the Gencor Settlement Fund by other Genco r
Defendants, then, at the election of Plaintiffs' Settlement Counsel, the parties shall jointly mov e
the Court to vacate and set aside the releases given and Judgment entered in favor of the Genco r
Defendants pursuant to this Stipulation of Settlement, and such Judgment shall be null and void,
and the Plaintiffs and the Gencor Defendants shall be restored to their respective positions in th e
litigation as of the date a day prior to the date of this Stipulation of Settlement and any cas h
amounts in the Gencor Settlement Fund shall be returned as provided above .
8 .13. If a case is commenced in respect of Deloitte under Title 11 of the United State s
Code (Bankruptcy ), or a trustee, receiver, or conservator is appointed under any similar law, and
in the event of the entry of a final order of a court of competent jurisdiction determining the
32
I
- transfer of money to the Deloitte Settlement Fund or any portion thereof by or on behalf o f
Deloitte to be a preference, voidable transfer, fraudulent transfer, or similar transaction and an y
portion thereof is required to be returned, and such amount is not promptly deposited into th e
Deloitte Settlement Fund by Deloitte, then, at the election of Plaintiffs' Settlement Counsel, the
parties shall jointly move the Court to vacate and set as ide the releases given and Judgment
entered in favor of Deloitte pursu ant to this Stipulation of Se tt lement, and such Judgment shal l
be null and void, and the Plaintiffs and Deloitte shall be restored to their respective positions i n
the Litigation as of the date a day prior to the date of this Stipulation of Settlement and any cas h
amounts in the Deloitte Settlement Fund shall be returned as provided above .
8 .14. The Parties to this Stipulation intend the Settlement to be a final and complet e
resolution of all disputes asserted or which could be asserted by the Settlement Class Member s
against the Released Parties with respect to the Settled Claims . Accordingly, the Defendants
agree not to assert in any forum that the Litigation was brought in bad faith or without a
reasonable basis . The Parties are expressly releasing each other Party and each other Party' s
counsel from any claim that the Litigation or the prosecution or defense thereof was not brough t
or conducted in good faith or in compliance with all applicable legal or ethical standards . The
Parties agree that the amount paid and the other terms of the Settlements 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 .
8 .15 . No oral representations or agreements that are not expressly included in thi s
written Stipulation of Settlement have been made to, or relied upon by, any Party relating to thi s
matter. This Stipulation of Settlement supersedes any and all other representations, discussions ,
negotiations, and agreements, either oral or in writing, formal or informal, between and amon g
the Parties and constitutes the complete expression and entire agreement of the Parties on th e
33
01/04/02 14:35 GREENBERG TRAURIG 4 407 926 7720 NO.214 P0201/04/02 12 :01 $407 7720 f~0OJ/O01
subject matter hereof.
8 .16. Neither this Stipulation of Settlement not the fact of the settlement is an
admission or concession by any Defendant of any liability or wrongdoing whatsoever . This
Stipulation of Settlement is not a finding of the validity or invalidity of any claims in the
Litigation or of any wrongdoing by any of the Defendants named therein. Neither this
Stipulation of Settlement, nor the fact of settlement, nor the settlement proceedings, nor the
settlement negotiations, nor any related documents shall be used or construed as an Admission of
any fault, liability, or wrongdoing by any person. Neither this Stipulation of Settlement, nor the
fact of settlement, nor the settlement proceedings . not the settlement negotiations, nor any related
doc is shall be offered or received in evidence as an admission, concession, presumption, or
inference against any party in any proceeding other than such proceedings as may be necessary
to consummate or enforce this Stipulation of Settlement .
IN WITNESS WHEREOF, the Parties o have caused this Stipulation of Settlement
to be executed by their duly authorized attorneys, as of the day and year first above written.
Dated: January 4, 2002 .
ON BEHALF OF DEFENDANTS GENCORINDUSTRIES, INC.
GREENBERG TRAURIG, P.A.
By:
Fi 8 No. o'(p C)1221 1 Avenue1wGomi. Florida 33131Telephone: (305) 379.0850
34
ON BEHALF OF THE OENCOR INDIVIDUALDEFENDANTS
MORLAN & STOVASA, P.A.
By :Harold E. Morlan, IIFlorida BarNo. 211656SS East Pine StintOrlando, FL 32801Telephone: (407) 316-003 1
ON BEHALF OF DELOITTE & TOUCHE, LLP
HOLL IGHT, LLP
By.
William WilsonFlorida Bar No. 0404$200 South Orange Avenue, Suite 2600Orlando, FL 32801Telephone : (407) 425-8500
SIDLEY AUSTIN BROWN & WOOD
William F. LloydBank One Plaza10 South Dearborn StreetChicago, Illinois 60603Telephone : (312) 853-7000
ON BEHALF OF PLAINTIP"FS
BETJSSE, BROWNLEE, BOWDOIN& WOLTER, P.A.
ell
35
Z£ d 69LZ£9t109'ON/9Z :ZI'1S/6ti ;Zl 1002 9Z Zl(039) 6tiZtr lZ6 ZlZ WOad
ON BEHALF OF THE GENCOR INDIVIDUALDEFENDANTS
MORLAN & STOVASH, P .A .
B Y - 7 7Hai+old II orlan. IIFlorida Bar No. 21165655 East Pine StreetOrlando , FL 32801Telephone : (407) 316-003 1
ON BEHALF OF DBLOITTE & T OUCHE, LLP
HOLL IGHT, LLP
BYWilliam if. WilsonFlorida BarNo. 0904 8200 South Orange Avenue , Suite 2600Orlando, FL 32801Telephone: (407) 425-8500
SIDLI3Y AUSTIN BROWN & WOOD
By:William F. LloydBank One Plaza10 South Dearborn StreetChicago, I1linais 60603Telephone : (312) 853-7000
ON BEHALF OF PLAINTIFFS
BEUSSE, BROWNLEE, BOWDOIN& WOLTER, P .A.
Y: C/-, /~Z"- - -
35
1E d 69ZZ69 UO9 '0N/9Z : 61 '1S/6ti : Z l 1ODZ 9Z W 03M ) (03M) 6ti3tr lZ6 Z l ? WOaJ
Douglas BowdoinFlorida Bar No . 310360390 North Orange Avenue , Suite 2500Orlando , Florida 3280 1Telephone : (407) 926-7700
Plaintiffs' Liaison Counsel
LAW OFFICES OF JAMES V . BASHIAN, P.C.
By:James V . Bashian500 Fifth Avenue, Suite 2700New York, New York 10110Telephone : (212) 921-411 0
ABBEY GARDY, L P
By :Mark C. Gar y212 East 39th StreetNew York, New Yor 10016Telephone : (212) 88 -3700
Plaintiffs ' Executive Committee Co-Chai r
MILBERG WEISS BERSIIAD HYNES& LERACH, LLP
Kenneth VianaleAbraham Rappaport5355 Town Center Road , Suite 900Boca Raton, Florida 33486Telephone : (561) 351-5000
POMERANTZ HAUDEK BLOCKGROSSMAN & GROSS LLP
Linda P. Nussbaum100 Park Avenue26th FloorNew York, New York 10017Telephone: (212) 661-1100
36
8£ c 69LZ£9l 1, Gy '(jN/97, : Z l '1S/ 8£ : z L 1002 9Z Z I (U M) 6VZt lH Z lZ Aod~
Plaintiffs' Liaison Counsel
LAW FFICES OF J ZV . ASHIAN, P .C .
By: --,J es V. Bas an50 Fifth Avenue, Suite 2700
ew York, New York 10110Telephone : (212) 921-411 0
ABBEY GARDY, LLP
By :Mark C. Gardy212 East 39`h StreetNew York, New York 10016Telephone : (212) 889-370 0
Plaintiffs ' Executive Committee Co-Chair
MILBERG WEISS BERSHAD HYNES& LERACH, LLP
Kenneth VianaleAbraham Rappaport5355 Town Center Road, Suite 900Boca Raton, Florida 33486Telephone: (561) 351-5000
POMERANTZ HAUDEK BLOCKGROSSMAN & GROSS LLP
Linda P . Nussbaum100 Park Avenue26th FloorNew York, New York 10017Telephone: (212) 661-1100
STULL, STULL & BRODYJules BrodyAaron L. Brody6 East 45th StreetNew York, New York 10017Telephone : (212) 687-7230
36
Plaintiffs' Executive Committe e
BRUCE G. MURPHY, ESQ.265 Llwyd's LaneVero Beach, Florida 32963Telephone: (561) 231-4202
WEISS & YOURMANJoseph H. Weiss551 Fifth AvenueSuite 1600New York, New York 10176Telephone : (212) 682-3025
BURT & PUCILLOMichael J . Pucillo222 Lakeview AvenueSuite 300 Eas tWest Palm Beach, Florida 33401Telephone: (561) 835-940 0
SCHUBERT & REED, LLPRobert C. SchubertTwo Embarcadero Center, Suite 1660San Francisco, CA 9411 1Telephone (415) 788-422 0
RABIN & PECKEL, LLPBrian Murray275 Madison AvenueNew York, New York 10016Telephone : (212) 682-181 8
SNYDERBURN, RISHOI & SWANNWilliam M . Rishoi280 West C anton AvenueWinter Park, Flo rida 32789
LAW OFFICES OF LEO DESMONDLeo Desmond2161 Palm Beach Lake BoulevardSuite 204West Palm Beach, Florida 33409Telephone : (561) 712-8000
SCHOENGOLD & SPORN, P .C .
37
Christopher Lometti233 BroadwayNew York, New York 10279Telephone: (212) 964-0046
LIEFF, CABRASER, HEIMANN &BERSTEIN, LLPSteven E . Fineman10 Rockefeller Plaza, 12th FloorNew York, New York 10020Telephone : (212) 218-6600
BERNSTEIN LIEBHARD & LIFSHITZ, LLPMel E. Lifshitz10 East 40th Stree tNew York, New York 10016Telephone : (212) 779-141 4
GOODKIND LABATON RUDOFF &SUCHAROW LLPPeter H. RachmanFlorida Bar No. 9777562455 East Sunrise BoulevardSuite 81 3Fort Lauderdale, Florida 33304Telephone: (954) 630-1000
BERMAN, DEVALERIO & PEASEJeffrey BlockOne Liberty SquareBoston, MA 02109Telephone : (617) 542-8300
WOLF POPPER, LLPPaul Paradis845 Third AvenueNew York, New York 10022Telephone : (212) 759-4600
KOHN, SWIFT & GRAF, P .C.Michael J . Boni1101 Market Street, Suite 2400Philadelphia, PA 19107Telephone : (215) 238-1700
ROBERT C. SUSSER, P .C.Robert C . Susser6 East 43rd Stree t
38
New York, New York 10017-4609Telephone : (212) 808-029 8
RICHARD VITA, ESQ .77 Franklin Street#300Boston, Massachusetts 02110Telephone : (617) 426-656 6
Counsel for Plaintiffs
39
ADD ITIONAL
ATTACHMENTS
NOT
SCANNE D
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**REFER TO COURT FILE * *
Revised 09/15/99
