grand lodge of pennsylvania, et. al. v. peters, et. al. 07...
TRANSCRIPT
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UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
GRAND LODGE OF PENNSYLVANIA, and All Others Similarly Situated,
Plaintiff,
VS.
BRIAN P. PETERS, BRIAN F. GRIMES, JUSTIN D. LOCKE, ANNE V. LEE, and COAST FINANCIAL HOLDINGS, INC.,
Defendants.
No. 8:07-cv-479-T-26EAJ (Consolidated)
CLASS ACTION
STIPULATION OF SETTLEMENT
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This Stipulation of Settlement dated below (the "Stipulation"), is made and entered
into by and among: (i) Troy Ratlciff, Daniel Altenburg, and St. Denis J. Villere & Co., LLC
(collectively, "Lead Plaintiffs"), on behalf of themselves and the Class (as defined herein),
by and through their respective counsel of record in the Litigation ("Lead Counsel"); and (ii)
Coast Financial Holdings, Inc. ("Coast" or the "Company"), Brian P. Peters, Brian F.
Grimes, James K. Toomey, Joseph Gigliotti, Kennedy Legler III, Paul G. Nobbs, Thomas M.
O'Brien, John R. Reinemeyer, Michael T. Ruffino, and M. Alex White (collectively, the
"Individual Defendants"), Sandler O'Neill & Partners, L.P. and Sterne, Agee & Leach, Inc.
(collectively, the "Underwriter Defendants"), and Hacker, Johnson & Smith, P.A. ("Hacker
Johnson"), by and through their counsel of record in the Litigation (as defined herein).
Coast, the Individual Defendants, the Underwriter Defendants, and Hacker Johnson are
collectively referred to as the "Settling Defendants." Lead Plaintiffs and the Settling
Defendants are collectively referred to as the "Parties" or the "Settling Parties." The
Stipulation is intended by the Settling Parties to fully, finally and forever resolve, discharge
and settle the Litigation and all Released Claims against all Released Persons (as defined
herein), upon and subject to the terms and conditions in this Stipulation.
I. TI-IE LITIGATION
On and after March 20, 2007, three proposed securities class actions were filed in the
United States District Court for the Middle District of Florida, Tampa Division (the "Court")
on behalf of a putative class of purchasers of the common stock of Coast alleging claims
against Coast and certain of its former officers under Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 promulgated
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thereunder. On June 22, 2007 following the publication of notice in accord with the
provisions of the Private Securities Litigation Reform Act of 1995 (the "PSLRA") the
Court entered an Order consolidating all three of these cases under the caption Grand Lodge
ofPenns•'lvania v. Brian P. Peters, et al., Case No. 8:07-cv-479-T-26EAJ (Consolidated) (the
"Litigation").l Pursuant to the applicable provisions of the PSLRA, the June 22, 2007 Order
also appointed R. Daniel Altenburg and Troy Ratcliff as lead plaintiffs and approved their
selection ofCoughlin Stoia Geller Rudman & Robbins LLP and Saxena White P.A. as Lead
Counsel.
On August 24, 2007, Lead Plaintiffs AltenbUrg and Ratcliff filed a Consolidated
Class Action Complaint (the "Original Complaint"). This pleading named Coast, the
Individual Defendants, the Underwriter Defendants, and Hacker Johnson, Coast's former
external auditor, and asserted the following claims: (i) one claim under Section 11 of the
Securities Act of 1933 (the "Securities Act") against Coast, the Individual Defendants, and
the Underwriter Defendants, (ii) one claim under Section 15 of the Securities Act against the
Individual Defendants, (iii) one claim under Section 10(b) of the Exchange Act and Rule
10b-5 promulgated thereunder against Coast, Individual Defendants Peters and Grimes, and
The three cases comprising the Litigation are Grand Lodge of Pennslyvania v. Brian P. Peters, et al., Case No. 8:07-cv-478-T-26EAJ; Troy Ratcliffv. Coast Financial Holdings, Inc., Case No. 8:07-cv-504-T-26MAP; and Daniel Altenburg v. Coast Financial Holdings Incorporated, et al., Case No. 8:07-cv-642-T-26TGW. Among other former Coast officers, these initial complaints named as defendants Anne V. Lee, formerly Coast's Chief Operating Officer, and Justin D. Locke, formerly Coast's Chief Financial Officer. On August 30, 2007, the Lead Plaintiffs filed a stipulation voluntarily dismissing Ms. Lee and Ms. Locke from the Litigation without prejudice.
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Hacker Johnson, and (iv) one claim under Section 20(a) of the Exchange Act against
Individual Defendants Peters and Grimes.
All defendants moved to dismiss the claims against them asserted by the Original
Complaint. By order dated March 13, 2008, the Court granted these motions in whole or in
part and denied some of them in part. The Court denied the motions insofar as they sought
dismissal of the Exchange Act claims against Coast, Peters, and Grimes. The Court granted
the motions insofar as they sought dismissal of the Exchange Act claim against Hacker
Johnson, and thus dismissed Hacker Johnson outfight. The Court also granted the motions
insofar as they sought the dismissal of the Securities Act claims, and thus dismissed the
Underwriter Defendants and most of the Individual Defendants outfight.
On April 2, 2008, Lead Plaintiffs filed an Amended Consolidated Class Action
Complaint (the "Complaint"), which is the operative complaint in the Litigation. The
Complaint named St. Denis J. Villere & Company LLC as a new plaintiff. The Complaint
asserts the following claims: (i) one claim under Section 11 of the Securities Act of 1933 (the
"Securities Act") against Coast, the Individual Defendants, and the Underwriter Defendants,
(ii) one claim under Section 15 of the Securities Act against the Individual Defendants, (iii)
one claim under Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder
against Coast and Individual Defendants Peters and Grimes, and (iv) one claim under Section
20(a) of the Exchange Act against Peters and Grimes. The Complaint did not amend the
allegations or assert a claim against Hacker Johnson, and Hacker Johnson subsequently
moved the Court for entry of a final judgment on the claim against it.
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In the Complaint, Lead Plaintiffs, on behalf of purchasers of the common stock of
Coast during the period January 21,2005 to January 22, 2007, inclusive (the "Class Period"),
allege that Defendants violated the Securities Act in connection with Coast's October 5,
2005 secondary public offering of common stock and that Coast, Peters, and Grimes violated
the Exchange Act in connection with Coast's public statements and filings about its business.
With respect to both the Securities Act and Exchange Act claims, the Complaint alleges that
Defendants misrepresented and failed to disclose that Coast had developed a material
concentration of residential construction-to-permanent loans to borrowers who had
contracted with a builder named Construction Compliance, Inc. ("CCI") to build homes in
and around North Port, Florida. The Complaint asserts that Coast reached an arrangement
with CCI and a mortgage broker named American Mortgage Link ("AML") whereby (i)
AML would provide qualified buyers for CCI homes, (ii) CCI would provide lots and
construct homes, and (iii) Coast would provide loans to the buyers. According to the
Complaint, the purchasers of the homes were investors, who intended to profit from
appreciation in the real estate market by "flipping" the homes upon completion of
construction. Lead Plaintiffs assert that the CCI loans were speculative and risky because,
among other things, the loans were made to investors, not borrowers who intended to occupy
the properties, and because Coast had not performed due diligence on CCI, which was in
poor financial condition. The Complaint alleges that these and other facts rendered Coast's
statements in its SEC filings and other public statements about the strength of its loan
portfolio and underwriting standards materially false and misleading and, relatedly, that
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Coast's accounting for the CCI loans violated Generally Accepted Accounting Principles and
rendered its financial statements materially false and misleading.
The Complaint alleges that CCI began to experience severe financial difficulty in
2006 and that, by the end of 2006, CCI had failed entirely. After the close of trading on
January 18, 2007, Coast announced that a local builder, later described as CCI, had informed
it that it was financially unable to complete construction; that Coast had made residential
construction-to-permanent loans to 482 borrowers who had contracted for homes with CCI;
and that these developments were expected to have a material adverse effect on Coast's
residential construction-to-permanent loan portfolio. Coast provided further information
regarding these matters in an announcement on January 22, 2007. According to Lead
Plaintiffs, these announcements caused a decline in the value of Coast's common stock.
Coast was subsequently sold to First Banks, Inc. in a merger transaction.
Coast, the Individual Defendants, and the Underwriter Defendants filed motions to
dismiss the Securities Act claims in the Complaint. On June 6, 2008, the Court entered an
order denying those motions. Coast, the Individual Defendants, and the Underwriter
Defendants filed answers to the Complaint on June 26, 2006. These defendants also filed a
motion requesting that the Court certify its order denying the motions to dismiss the
Complaint for immediate appellate review, which the Court denied.
On August 15, 2008, the Court convened a preliminary pretrial conference at which
Lead Plaintiffs, Coast, the Individual Defendants, and the Underwriter Defendants were
represented. After the conference, the Court entered an order establishing a schedule for the
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filing of Lead Plaintiffs' anticipated motion for class certification and for discovery and
briefing related to that motion.
Beginning in the spring of 2008, Lead Counsel and Counsel for Coast and the
Individual Defendants began having discussions about a possible settlement of the Litigation.
Following extensive, arm's-length discussions, they agreed to a mediation before the
Honorable Layn R. Phillips, a retired United States District Judge and a highly respected
mediator of securities litigation matters. Counsel for Lead Plaintiffs, Coast, the Individual
Defendants, and Coast's insurer engaged in a day of arm's-length mediation before Judge
Phillips on September 22, 2008. The case did not settle, and further negotiations, facilitated
by Judge Phillips, continued throughout the week of September 22, 2008. On September 26,
2008, Lead Plaintiffs, Coast, and the Individual Defendants reached an agreement-in-
principle to settle the Litigation as to Coast, the Individual Defendants, and the Underwriter
Defendants for the sum of $6,250,000.
On October 8, 2008, the Court entered a final judgment under Fed. R. Civ. P. 54(b)
based on its dismissal of the claim against Hacker Johnson. On October 22, 2008, Lead
Plaintiffs timely filed a Notice of Appeal to the United States Court of Appeals for the
Eleventh Circuit concerning the Court's order dated March 13, 2008, granting Hacker
Johnson's motion to dismiss. Lead Plaintiffs' appeal was docketed as Grand Lodge of
Pennsylvania v. Brian P. Peters, et al., Appeal No. 08-16075-F (11 th Cir.) (the "Appeal").
Following the filing of Lead Plaintiffs' initial appellate brief on December 15, 2008, counsel
for Lead Plaintiffs and Hacker Johnson participated in several conferences with the Eleventh
Circuit mediator, Catherine Novack, which culminated in an agreement-in-principle to settle
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the Litigation and the Appeal as to Hacker Johnson for $99,000 in cash. As a result of that
agreement-in-principle, on January 23, 2009, Lead Plaintiffs and Hacker Johnson filed a
Joint Motion for Limited Remand and to Stay Appeal for purposes of obtaining approval of
the settlement by the Court.
The settlement provided for in this Stipulation will finally and forever terminate the
Litigation as against all of the Settling Defendants and the Appeal against Hacker Johnson.
II. THE SETTLING DEFENDANTS' DENIALS OF WRONGDOING AND LIABILITY
The Settling Defendants have denied and continue to deny all charges of wrongdoing
or liability against them arising out of any of the conduct, statements, acts or omissions
alleged, or that could have been alleged, in the Litigation; continue to believe the claims
asserted against them in the Litigation are without merit; and have agreed to enter into the
settlement solely to avoid the expense, distraction, time, and uncertainty associated with
continuing the Litigation and, with respect to Hacker Johnson, also the Appeal.
The Settling Defendants have concluded that further conduct of the Litigation (and,
with respect to Hacker Johnson, also the Appeal) would be protracted and expensive and that
it is desirable that the Litigation (and, with respect to Hacker Johnson, also the Appeal) be
fully and finally settled in the manner and upon the terms and conditions set forth in this
Stipulation. They also have taken into account the uncertainty and risks inherent in any
litigation, especially in complex cases such as this Litigation and have, therefore, determined
that it is desirable and beneficial to them that the Litigation (and, with respect to Hacker
Johnson, also the Appeal) be settled in the manner and upon the terms and conditions set
forth in this Stipulation.
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The Settling Defendants have voluntarily agreed to settle the Litigation (and, with
respect to Hacker Johnson, also the Appeal) after consultation with competent legal counsel.
This Stipulation shall not be construed or deemed to be a concession by any or all of the
Settling Defendants of any fault, liability or damage to Lead Plaintiffs, the Class, or any
other person or entity, or any infirmity in any defense any or all Settling Defendants asserted
or could have asserted in the Litigation.
III. CLAIMS OF THE LEAD PLAINTIFFS AND BENEFITS OF SETTLEMENT
Lead Counsel have conducted an extensive investigation relating to the claims,
events, and transactions alleged in the Litigation and have researched the applicable law with
respect to the claims against the Settling Defendants and the Settling Defendants' defenses to
those claims. Lead Counsel's investigation included numerous interviews with former
employees of Coast, AML, and CCI and reviewing and analyzing documents relevant to the
claims against the Settling Defendants. Lead Plaintiffs and Lead Counsel believe that the
claims asserted in the Litigation have merit and that the evidence developed to date supports
those claims. However, Lead Plaintiffs and Lead Counsel recognize and acknowledge the
expense and length of continued proceedings necessary to prosecute the Litigation against
the Settling Defendants through trial and through appeals. Lead Plaintiffs and Lead Counsel
also have taken into account the uncertain outcome and the risk of any litigation, especially
in complex actions such as this Litigation, as well as the difficulties and delays inherent in
such litigation. Lead Plaintiffs and Lead Counsel are also mindful of the inherent difficulties
of proof under and possible defenses to the securities law violations asserted in the
Litigation. Lead Plaintiffs and Lead Counsel believe that the settlement set forth in the
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Stipulation confers substantial benefits upon the Class. Based on their evaluation, Lead
Plaintiffs and Lead Counsel have determined that the settlement set forth in this Stipulation
is in the best interests of Lead Plaintiffs and the Class.
Lead Plaintiffs have voluntarily agreed to settle the Litigation and the Appeal after
consultation with competent legal counsel. This Stipulation shall not be construed or
deemed to be a concession by Lead Plaintiffs of any infirmity in the claims asserted in the
Litigation.
IV. TERMS OF STIPULATION AND AGREEMENT OF SETTLEMENT
IT IS AGREED by and among Lead Plaintiffs (for and on behalf of themselves and
each of the respective Class Members) and the Settling Defendants, by and through their
respective counsel or attorneys of record, that, subject to the approval of the Court, the
Litigation and the Released Claims shall be finally and fully compromised, settled and
released, and the Litigation shall be dismissed with prejudice, as to all Settling Parties, upon
and subject to the terms and conditions of the Stipulation, as follows.
1. Definitions
As used in the Stipulation the following terms have the meanings specified below:
1.1 "Authorized Claimant" means any Class Member whose claim for recovery
has been allowed pursuant to the terms of this Stipulation.
1.2 "Claims Administrator" means the firm of RSM McGladrey, Inc.
1.3 "Class" means all Persons who purchased Coast common stock between
January 21,2005 and January 22, 2007, inclusive ("Class Period"). Excluded from the Class
are the Settling Defendants, members of the immediate families of the Settling Defendants,
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the former and current directors, officers, subsidiaries and affiliates of Coast, as well as any
person, firm, trust, corporation, officer, director or other individual or entity in which any
Settling Defendant has a controlling interest and the legal representatives, affiliates, heirs,
successors-in-interest, or assigns of any such excluded party. Also excluded from the Class
are those Persons who timely and validly request exclusion from the Class pursuant to the
terms of this Stipulation and the Notice, as that term is defined in ¶ 1.13 below.
1.4 "Class Member" or "Class Members" mean any Person who falls within the
definition of the Class as set forth in ¶1.3 of the Stipulation.
1.5 "Coast" means Coast Financial Holdings, Inc. and its parents, subsidiaries,
divisions, affiliates, predecessors, and successors.
1.6 "Effective Date" means the first date by which all of the events and
conditions specified in ¶7.1 of the Stipulation have been met and have occurred.
1.7 "Escrow Agent" means Saxena White P.A. or its successor(s).
1.8 "Final" means when the last of the following with respect to the Judgment
approving the Stipulation, substantially in the form of Exhibit B attached hereto, shall occur:
(i) the expiration of three (3) business days after the time to file a motion to alter or amend
the Judgment under Federal Rule of Civil Procedure 59(e) has passed without any such
motion having been filed; (ii) the expiration of three (3) business days after the time in which
to appeal the Judgment has passed without any appeal having been taken (which date shall
be deemed to be thirty-three (33) days following the entry of the Judgment, unless the date to
take such an appeal shall have been extended by Court order or otherwise, or unless the
thirty-third (33rd) day falls on a weekend or a Court holiday, in which case the date for
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purposes of this Stipulation shall be deemed to be the next business day after such thirty-
third (33rd) day); and (iii) if such motion to alter or amend is filed or if an appeal is taken,
three (3) business days after the determination of that motion or appeal (including any
petition for writ of certiorari) in such a manner as to permit the consummation of the
Settlement substantially in accordance with the terms and conditions of this Stipulation. For
purposes of this paragraph, an "appeal" shall not include any appeal that concerns only the
issue of attorneys' fees and reimbursement of expenses or the Plan of Allocation of the
Settlement Fund. Any proceeding or order, or any appeal or petition for a writ of certiorari
pertaining solely to any Plan of Allocation and/or application for attorneys' fees, costs or
expenses, shall not in any way delay or preclude the Judgment from becoming Final.
1.9 "Insurer" means St. Paul Mercury Insurance Company.
1.10 "Judgment" means an order and final judgment to be entered by the Court
approving the Settlement, dismissing the Litigation with prejudice, and effectuating the
releases contained in this Stipulation with substantially the same terms as the proposed
Judgment attached to this Stipulation as Exhibit B.
1.11 "Lead Counsel" means Coughlin Stoia Geller Rudman & Robbins LLP and
Saxena White P.A.
1.12 "Lead Plaintiff' or "Lead Plaintiffs" means court appointed lead plaintiffs
Troy Ratcliff and Daniel Altenburg and named plaintiff St. Denis J. Villere & Co. LLC.
1.13 "Notice" means the Notice of Pendency and Proposed Settlement of Class
Action, to be sent to Class Members in substantially the same form attached to this
Stipulation as Exhibit A-1.
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1.14 "Notice Order" means an order, to be entered by the Court, certifying the
Class solely for purposes of the Settlement, preliminarily approving the Settlement, and
directing notice to the Class with substantially the same terms as the proposed order attached
to this Stipulation as Exhibit A.
1.15 "Person" means an individual, corporation, partnership, limited partnership,
limited liability company, association, joint stock company, estate, legal representative, trust,
unincorporated association, government or any political subdivision or agency thereof, and
any business or legal entity and their spouses, heirs, predecessors, successors,
representatives, or assignees.
1.16 "Plaintiffs' Counsel" means any counsel who has appeared for any plaintiffin
the Litigation.
1.17 "Plan of Allocation" means a plan or formula of allocation of the Settlement
Fund whereby the Settlement Fund shall be distributed to Authorized Claimants after
payment of expenses of notice and administration of the settlement, Taxes and Tax
Expenses, and such attorneys' fees, costs, expenses and interest as may be awarded by the
Court. Any Plan of Allocation is not part of the Stipulation and shall not constitute grounds
for the termination or cancellation of this Stipulation, and Settling Defendants and their
Related Parties shall have no responsibility therefor or liability with respect thereto.
1.18 "Proof of Claim" means a Proof of Claim and Release form in substantially
the same form as Exhibit A-2 to this Stipulation.
1.19 "Publication Notice" means the summary notice of the Litigation and
Settlement in substantially the form as Exhibit A-3 to this Stipulation.
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1.20 "Related Parties" means (i) each of the Settling Defendants' present or former
immediate family members, heirs, executors, administrators, successors, assigns, employees,
officers (including, but not limited to, former Coast officers Justin D. Locke and Anne V.
Lee), directors, attorneys, legal representatives, insurers (including the Insurer), reinsurers,
accountants or auditors, banks, investment banks, underwriters, consultants, and agents, (ii)
any Person or entity which is or has been related to or affiliated with any Settling Defendant,
including, but not limited to, any direct or indirect predecessor, successor, parent, subsidiary,
or sister corporation or business organization of any Settling Defendant (including, but not
limited to, Coast Bank of Florida, First Banks, Inc. and First Bank), and (iii) any Person or
entity in which any Settling Defendant has or had a controlling interest and the present and
former parents, subsidiaries, divisions, affiliates, predecessors, successors, employees,
officers, directors, attorneys, assigns, legal representatives, insurers, reinsurers, accountants
or auditors, banks, investment banks, underwriters, consultants, and agents of any such
Person or entity.
1.21 "Released Claims" means any and all claims, fights, demands, obligations,
controversies, debts, damages, losses, actions, causes of action, and liabilities of any kind or
nature whatsoever (collectively, "Claims") whether in law or equity, whether based on
federal, state, local, statutory, or common law or any other law, whether accrued or
unaccrued, fixed or contingent, or matured or unmatured, including both known and
Unknown Claims, that have been or could have been asserted by the Lead Plaintiffs or the
Class Members, or any of them, or the heirs, executors, successors, or assigns of any of
them, directly, derivatively, or in any representative or other capacity, in the Litigation or
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any other forum at any point from the beginning of time to the date of this Stipulation's
execution arising out of, based upon, or in any way related to the purchase of Coast common
stock during the Class Period (including the sale or holding of any shares purchased during
the Class Period) and the allegations, transactions, facts, events, matters, occurrences, acts,
representations, or omissions involved in, set forth in, or referred to in the Complaint or that
could have been asserted in the Complaint, including, without limitation, Claims for
negligence, gross negligence, breach of fiduciary duty, breach of the duty of care, breach of
the duty of loyalty, breach of the duty of candor, fraud, fraud in the inducement, negligent
misrepresentation, or violations of any state or federal securities laws.
1.22 "Released Persons" means each and all of the Settling Defendants and each
and all of the Related Parties.
1.23 "Settlement" means the settlement described in this Stipulation.
1.24 "Settlement Fund" means the principal amount of Six Million Three Hundred
and Forty-Nine Thousand Dollars ($6,349,000.00), to be paid pursuant to ¶2.1 of this
Stipulation, plus all interest earned thereon.
1.25 "Settling Defendants" means Coast, Brian P. Peters, Brian F. Grimes, James
K. Toomey, Joseph Gigliotti, Kennedy Legler III, Paul G. Nobbs, Thomas M. O'Brien, John
R. Reinemeyer, Michael T. Ruffino, M. Alex White, Sandler O'Neill & Partners, L.P.,
Sterne, Agee & Leach, Inc., and Hacker Johnson.
1.26 "Settling Parties" means, collectively, each of the Lead Plaintiffs, on behalf of
themselves and each of the Class Members, and each of the Settling Defendants.
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1.27 "Unknown Claims" means any and all Released Claims that any Plaintiff or
Class Member does not know or suspect to exist in his, her or its favor at the time of the
release of the Released Persons from the Released Claims which, if known by him, her or it,
might have affected his, her or its decisions with respect to the settlement with and release of
the Released Persons, or might have affected his, her or its decision not to object to this
settlement. With respect to any and all Released Claims, the Settling Parties stipulate and
agree that, upon the Effective Date, Lead Plaintiffs shall expressly waive, and each of the
Class Members shall be deemed to have expressly waived, and by operation of the Judgment
shall have expressly waived, the provisions, fights and benefits of California Civil Code
§ 1542, which provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
Upon the Effective Date, Lead Plaintiffs shall expressly waive, and each of the Class
Members shall be deemed to have waived, and by operation of the Judgment shall have
waived, any and all provisions, rights and benefits conferred by any law of any state or
territory of the United States, or principle of common law, which is similar, comparable or
equivalent to California Civil Code §1542. Lead Plaintiffs and Class Members may
hereafter discover facts in addition to or different from those which they now know or
believe to be true with respect to the subject matter of the Released Claims, but Lead
Plaintiffs shall expressly fully, finally and forever settle and release, and each Class Member,
upon the Effective Date, shall be deemed to have, and by operation of the Judgment shall
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have, fully, finally, and forever settled and released, any and all Released Claims, known or
unknown, suspected or unsuspected, contingent or non-contingent, whether or not concealed
or hidden, which now exist, or heretofore have existed, upon any theory of law or equity now
existing or coming into existence in the future, including, but not limited to, conduct which is
negligent, intentional, with or without malice, or a breach of any duty, law or rule, without
regard to the subsequent discovery or existence of such different or additional facts. The
Parties acknowledge, and the Class Members shall be deemed by operation of the Judgment
to have acknowledged, that the foregoing waiver and inclusion of Unknown Claims in the
definition of Released Claims was separately bargained for and a key element of the
Settlement of which this release is a part.
2. The Settlement
a. The Settlement Fund
2.1 By no later than fourteen (14) business days after both (i) the entry of the
Notice Order by the Court and (ii) the provision by Lead Counsel to Coast's and Hacker
Johnson's respective counsel of payment information, such information to include payee
name, tax identification number, mailing instructions, and wire transfer instructions, Coast
will pay the sum of $750,000, the Insurer will pay the sum of $5,500,000.00, and Hacker
Johnson's insurer will pay the sum of $99,000 (in total, the "Settlement Amount") into an
interest-bearing escrow account entitled "Coast Financial Securities Litigation Settlement
Fund," which shall be held on behalf of Lead Plaintiffs and the Class in a separate account at
a neutral, well-capitalized financial institution designated by the Escrow Agent with the
approval of Coast and the Insurer (the "Escrow Account"). No other defendant shall have
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any obligations hereunder with respect to the payment of the Cash Settlement Amount. The
Cash Settlement Amount and any interest earned thereon shall constitute the Settlement
Fund. If the Cash Settlement Amount is not delivered to the Escrow Agent as set forth
herein, the Cash Settlement Amount shall bear interest at the rate of five percent per annum
until paid.
b. The Escrow Agent
2.2 The Escrow Agent shall invest the Settlement Fund in instruments backed by
the full faith and credit of the United States Government or fully insured by the United States
Government or an agency thereof and shall reinvest the proceeds of these instruments as they
mature in similar instruments at their then-current market rates. The Settlement Fund shall
bear all risks related to investment of the Settlement Fund. In no event shall any Settling
Defendant be deemed to be responsible or liable to Lead Plainitffs or any Class Member for
any matters arising out of or in any way related to the investment of or failure to invest the
Settlement Fund as described in this paragraph.
2.3 Subject to further order and/or direction as may be made by the Court, the
Escrow Agent is authorized to execute such transactions on behalf of the Class as are
consistent with the terms of the Stipulation.
2.4 All funds held by the Escrow Agent shall be deemed and considered to be in
custodia legis of the Court, and shall remain subject to the jurisdiction of the Court, until
such time as such funds shall be distributed pursuant to the Stipulation and/or further order(s)
of the Court.
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2.5 Within five (5) days after payment of the Settlement Fund to the Escrow
Agent pursuant to ¶2.1 hereof, the Escrow Agent may establish a"Notice and Administration
Fund," and may deposit up to $200,000 from the Settlement Fund in it. The Notice and
Administration Fund may be used by the Escrow Agent without further consent of the
Settling Defendants or order of the Court to pay costs and expenses reasonably and actually
incurred in connection with providing notice to the Class, locating Class Members, soliciting
claims, assisting with the filing of claims, administering and distributing the Settlement Fund
to Authorized Claimants, processing Proof of Claim and Release forms, and paying escrow
fees and costs, if any. The Notice and Administration Fund may also be invested and earn
interest as provided for in ¶2.2 of this Stipulation.
c. Taxes
2.6 (a) The Settling Parties and the Escrow Agent agree to treat the
Settlement Fund as being at all times a "qualified settlement fund" within the meaning of
Treas. Reg. § 1.468B- 1. In addition, the Escrow Agent shall timely make such elections as
necessary or advisable to carry out the provisions of this ¶2.6, including, if necessary, the
"relation-back election" (as defined in Treas. Reg. §l.468B-l(j)(2)) back to the earliest
permitted date. Such elections shall be made in compliance with the procedures and
requirements contained in such Treasury regulations promulgated under § 1.468B of the
Internal Revenue Code of 1986, as amended (the "Code"). It shall be the responsibility of
the Escrow Agent to timely and properly prepare and deliver the necessary documentation
for signature by all necessary parties, and thereafter to cause the appropriate filing to occur.
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(b) For the purpose of § 1.468B of the Code and the Treasury regulations
thereunder, the Escrow Agent shall be designated as the "administrator" of the Settlement
Fund. The Escrow Agent shall timely and properly file all informational and other tax
returns necessary or advisable with respect to the Settlement Fund (including, without
limitation, the returns described in Treas. Reg. § 1.468B-2(k)). Such returns (as well as the
election described in ¶2.6(a) hereof) shall be consistent with this ¶2.6 and in all events shall
reflect that all Taxes (including any estimated Taxes, interest or penalties) on the income
earned by the Settlement Fund shall be paid out of the Settlement Fund as provided in
¶2.6(c) hereof.
(c) All: (a) Taxes (including any estimated Taxes, interest or penalties)
arising with respect to the income earned by the Settlement Fund, including any Taxes or tax
detriments that may be imposed upon Settling Defendants or their Related Parties with
respect to any income earned by the Settlement Fund for any period during which the
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
and implementation of this ¶2.6 (including, without limitation, expenses of tax attorneys
and/or accountants and mailing and distribution costs and expenses relating to filing (or
failing to file) the returns described in this ¶2.6) ("Tax Expenses"), shall be paid out of the
Settlement Fund. In no event shall Settling Defendants or their Related Parties have any
responsibility of any kind for or liability of any kind with respect to Taxes or Tax Expenses.
The Escrow Agent shall indemnify and hold each of the Settling Defendants and their
Related Parties harmless for Taxes and Tax Expenses (including, without limitation, Taxes
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payable by reason of any such indemnification). Further, Taxes and Tax Expenses shall be
treated as, and considered to be, a cost of administration of the Settlement Fund and shall be
timely paid by the Escrow Agent out of the Settlement Fund without further consent of the
Settling Defendants, or prior order from the Court, and the Escrow Agent shall be obligated
(notwithstanding anything herein to the contrary) to withhold from distribution to Authorized
Claimants any funds necessary to pay such amount, including the establishment of adequate
reserves for any Taxes and Tax Expenses (as well as any amounts that may be required to be
withheld under Treas. Reg. § 1.468B-2(1)(2)); neither Settling Defendants nor their Related
Parties are responsible therefor nor shall they have any liability with respect thereto. The
parties hereto agree to cooperate with the Escrow Agent, each other, and their tax attorneys
and accountants to the extent reasonably necessary to carry out the provisions of this ¶2.6.
(d) For the purpose of this ¶2.6, references to the Settlement Fund shall
include both the Settlement Fund and the Notice and Administration Fund and shall also
include any earnings thereon.
d. Termination of Settlement
2.7 In the event that the Stipulation is not approved, or is terminated, cancelled, or
fails to become effective for any reason, the Settlement Fund (including accrued interest),
plus any amount then remaining in the Notice and Administration Fund (including accrued
interest), less expenses and Taxes and Tax Expenses incurred or due and owing in
connection with the Settlement provided for herein, shall be refunded on a pro rata basis in
proportion to the amount paid by each pursuant to ¶2.1 hereof to counsel for Coast (with
respect to amounts paid by Coast and the Insurer pursuant to ¶2.1 hereof) and to counsel for
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Hacker Johnson (with respect to the amount paid by Hacker Johnson's insurer pursuant to
¶2.1 hereot). With respect to any amount paid to Coast pursuant to this paragraph, it is
understood that Coast and the Insurer shall make arrangements for the allocation of any such
amount between them.
3. Notice Order and Settlement Hearing
3.1 As soon as practicable after execution of the Stipulation, Lead Plaintiffs shall
submit the Stipulation together with its exhibits to the Court and shall apply for entry of the
Notice Order, requesting, among other things, (a) the preliminary approval of the Settlement
set forth in the Stipulation, (b) certification of the Class solely for purposes of this
Settlement, (c) approval for mailing the Notice, and (d) approval for the publication of the
Publication Notice. The Notice shall include the general terms of the Settlement set forth in
the Stipulation and the date of the Settlement Hearing.
3.2 Lead Counsel shall request that after notice is given to the Class, the Court (a)
hold a heating (the "Settlement Hearing"), (b) finally approve the Settlement of the
Litigation as set forth herein, and (c) enter the Judgment. At or after the Settlement Heating,
Lead Counsel also will request that the Court approve the proposed Plan of Allocation and
the Fee and Expense Application.
4. Releases, Judgment Credit and Covenant Not to Sue
4.1 The obligations incurred pursuant to this Stipulation shall be a full and final
disposition of the Litigation, the Appeal, and any and all Released Claims against any and all
Released Persons.
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4.2 Upon the entry of the Judgment, the Litigation and all of its claims and causes
of action shall be dismissed with prejudice on the merits.
4.3 Upon the Effective Date, Lead Plaintiffs and the Class Members shall be
deemed to have, and by operation of the Judgment shall have, fully, finally, and forever
released, relinquished, and discharged any and all Released Claims against any and all of the
Released Persons. Lead Plaintiffs and the Class Members shall forever be enjoined from
prosecuting any and all Released Claims against any and all of the Released Persons. The
foregoing releases and injunctions against suit shall apply fully to Lead Plaintiffs and all
Class Members, regardless of whether the Lead Plaintiffor Class Member submits a Proof of
Claim. Without limiting in any way the foregoing, delivery of a Proof of Claim executed by
a Class Member shall constitute a release by such person of any and all Released Claims
against any and all of the Released Persons.
4.4 Upon the Effective Date, each of the Settling Defendants, on behalf of
themselves and their respective successors and assigns, shall be deemed to have, and by
operation of the Judgment shall have, fully, finally, and forever released, relinquished, and
discharged the Lead Plaintiffs, each and all of the Class Members, and Plaintiffs' Counsel
from all claims (including Unknown Claims) arising out of, relating to, or in connection with
the institution, prosecution, assertion, settlement or resolution of the Litigation or the
Released Claims.
4.5 Within ten (10) calendar days of the Effective Date, Lead Plaintiffs shall file
with the United States Court of Appeals for the Eleventh Circuit a motion to dismiss with
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prejudice the Appeal. Each party to the Appeal shall bear its own fees and costs incurred in
connection with the Appeal.
5. Administration and Calculation of Claims, Final Awards and Supervision and Distribution of Settlement Fund
5.1 Under the supervision of Lead Counsel, acting on behalf of the Class, and
subject to such supervision and direction of the Court as may be necessary or as
circumstances may require, the Claims Administrator shall administer and calculate the
claims submitted by Class Members and shall oversee the distribution of the Settlement
Fund.
5.2 The Settlement Fund shall be applied as follows:
(a) to pay the Taxes and Tax Expenses described in ¶2.6 hereof;
(b) to pay all the costs and expenses reasonably and actually incurred in
connection with providing notice, locating Class Members, soliciting Class claims, assisting
with the filing of claims, administering and distributing the Net Settlement Fund to
Authorized Claimants, processing Proof of Claim and Release forms, and paying escrow fees
and costs, if any;
(c) to pay Lead Counsel's attorneys' fees and expenses with interest
thereon (the "Fee and Expense Award"), and Lead Plaintiffs' expenses when, if and to the
extent allowed by the Court;
(d) to distribute the balance of the Settlement Fund remaining after the
payment of the items described in ¶¶5.2(a) through (c) (the "Net Settlement Fund") to
Authorized Claimants as allowed by the Stipulation, the Plan of Allocation, or the Court.
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5.3 Upon the Effective Date and thereafter, and in accordance with the terms of
the Stipulation, the Plan of Allocation, or such further approval and further order(s) of the
Court as may be necessary or as circumstances may require, the Net Settlement Fund shall be
distributed to Authorized Claimants, subject to and in accordance with the terms of this
Section 5.
5.4 Any person falling within the definition of the Class may be excluded from
the Class by submitting to the Claims Administrator a request for exclusion ("Request for
Exclusion"), which complies with the requirements set forth in the Notice Order and is
timely postmarked pursuant to the terms of the Notice Order. All persons who submit valid
and timely Requests for Exclusion shall have no fights under the Stipulation, shall not share
in the distribution of the Settlement Fund, and shall not be bound by the Stipulation or the
Judgment. However, a Class Member may submit a written revocation of a Request for
Exclusion up to and until the date for submitting a Proof of Claim as provided in the Notice
Order and receive a payment pursuant to this Stipulation provided that the Class Member
also submits a valid Proof of Claim as set forth in ¶ 5.5 below. A Class Member who
submits a timely and valid revocation of a Request for Exclusion, but who fails to submit a
timely and valid Proof of Claim, shall nonetheless be bound by the terms of this Stipulation
and the Judgment.
5.5 Within ninety (90) days after such time as set by the Court to mail notice to
the Class, each Person claiming to be an Authorized Claimant shall be required to submit to
the Claims Administrator a completed Proof of Claim, substantially in the form of Exhibit A-
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2 attached hereto, signed under penalty of perjury and supported by such documents as are
specified in the Proof of Claim and as are reasonably available to the Authorized Claimant.
5.6 Except as otherwise ordered by the Court, all Class Members who fail to
timely submit a Proof of Claim within such period, or such other period as may be ordered
by the Court, or otherwise allowed, shall be forever barred from receiving any payments
pursuant to the Stipulation and the settlement set forth herein, but will in all other respects be
subject to and bound by the provisions of the Stipulation, the releases contained herein, and
the Judgment. Notwithstanding the foregoing, Lead Counsel may, in their discretion, accept
for processing late submitted claims so long as the distribution of the Net Settlement Fund to
Authorized Claimants is not materially delayed.
5.7 The Net Settlement Fund shall be distributed to the Authorized Claimants
substantially in accordance with a Plan of Allocation to be described in the Notice and
approved by the Court. If there is any balance remaining in the Net Settlement Fund after six
(6) months from the date of distribution of the Net Settlement Fund (whether by reason of
tax refunds, uncashed checks or otherwise), Lead Counsel shall, if economically feasible,
reallocate such balance among Authorized Claimants who deposited the checks sent in the
initial distribution in an equitable and economic fashion. Thereafter, any balance which still
remains in the Net Settlement Fund shall be donated to Legal Services of Greater Miami,
Inc.
5.8 This is not a claims-made settlement. Accordingly, once all conditions of the
Stipulation are satisfied and the settlement becomes Final, no portion of the Settlement Fund
will be returned to Coast, the Insurer, or Hacker Johnson's insurer.
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5.9 No Person shall have any claim against Lead Plaintiffs, the Escrow Agent,
Plaintiffs' Counsel, the Settling Defendants, the Claims Administrator or other entity
designated by Lead Counsel based on distributions made substantially in accordance with the
Stipulation and the Settlement contained herein, a Court-approved Plan of Allocation, or
further order(s) of the Court.
5.10 It is understood and agreed by the Settling Parties that any proposed Plan of
Allocation of the Net Settlement Fund including, but not limited to, any adjustments to an
Authorized Claimant's claim set forth therein, is not a part of the Stipulation and is to be
considered by the Court separately from the Court's consideration of the fairness,
reasonableness and adequacy of the Settlement set forth in the Stipulation, and any order or
proceeding relating to the Plan of Allocation shall not operate to terminate or cancel the
Stipulation or affect the finality of the Court's Judgment approving the Stipulation and the
settlement set forth therein, or any other orders entered pursuant to the Stipulation.
5.11 The Settling Defendants and their Related Parties shall have no responsibility
for, interest in, or liability whatsoever with respect to the investment or distribution of the
Settlement Fund, the Plan of Allocation, the determination, administration, or calculation of
claims, the payment or withholding of Taxes or Tax Expenses, or any losses incurred in
connection therewith.
6. Plaintiffs' Counsel's Attorneys' Fees and Reimbursement of Expenses
6.1 Lead Counsel may submit an application or applications (the "Fee and
Expense Application") for distributions to them from the Settlement Fund for: (a) an award
of reasonable attorneys' fees not to exceed 33% of the Settlement Fund; (b) payment of
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expenses, including the fees of any experts or consultants, incurred in connection with
prosecuting the Litigation, not to exceed $100,000; (c) any interest on such attorneys' fees
and expenses at the same rate and for the same periods as earned by the Settlement Fund
(until paid); and (d) reimbursement for the expenses of Lead Plaintiffs pursuant to §78u-
4(a)(4) not to exceed $25,000 for each Lead Plaintiff. Lead Counsel reserve the right to
make additional applications for fees, expenses, or interest incurred.
6.2 Notwithstanding the existence of any timely-filed objections, or potential
appeal therefrom, or collateral attack on the Settlement or any part thereof, the fees,
expenses, and interest provided in ¶ 6.1, as awarded by the Court, shall be paid to Lead
Counsel exclusively from the Settlement Fund immediately after (i) the Court enters the
Judgment (as defined ¶ 1.10) or an Alternative Judgment (as defined in ¶ 7.1 (e)) and (ii) the
Court executes an order awarding such fees and expenses. Lead Counsel shall thereafter
allocate the attorneys' fees in a manner which they in good faith believe reflects the
contributions of Plaintiffs' Counsel to the prosecution and settlement of the Litigation. In
the event that the Effective Date does not occur, or the Judgment, Alternative Judgment, or
the order making the Fee and Expense Award is reversed or modified, or the Stipulation is
canceled or terminated for any other reason, and in the event that the Fee and Expense
Award has been paid to any extent, then Plaintiffs' Counsel shall within five (5) business
days from receiving notice from Settling Defendants' counsel or from a court of appropriate
jurisdiction, refund to the Settlement Fund the fees and expenses previously paid to them
from the Settlement Fund plus interest thereon in an amount consistent with such reversal or
modification. Each of Plaintiffs' Counsel shall be jointly and severally liable for the refund
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of the total amount of the fees and expenses paid. Each such Plaintiffs' Counsel's law firm
(including each of the respective firm's individual partners and shareholders), as a condition
of receiving such fees and expenses, agrees that the law firm and its partners and/or
shareholders are subject to the jurisdiction of this Court for the purpose of enforcing the
provisions of this paragraph.
6.3 The procedure for and the allowance or disallowance in any respect by the
Court of any applications for Lead Counsel's attorneys' fees and expenses, including the fees
of experts and consultants, any interest thereon, and the expenses of Lead Plaintiffs to be
paid out of the Settlement Fund, are not part of the settlement set forth in the Stipulation, and
are to be considered by the Court separately from the Court's consideration of the fairness,
reasonableness, and adequacy of the settlement set forth in the Stipulation, and any order or
proceeding relating to the Fee and Expense Application, or any appeal from any order
relating thereto or reversal or modification thereof, shall not operate to terminate or cancel
the Stipulation, or affect or delay the finality of the Judgment approving the Stipulation and
the settlement of the Litigation set forth therein.
6.4 Settling Defendants and their Related Parties shall have no responsibility for
or liability with respect to any payment of attorneys' fees and expenses to Plaintiffs' Counsel
over and above payment from the Settlement Fund.
6.5 Settling Defendants and their Related Parties shall have no responsibility for
or liability with respect to the allocation among Plaintiffs' Counsel, and/or any other Person
who may assert some claim thereto, of any Fee and Expense Award that the Court may make
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in the Litigation, and Settling Defendants and their respective Related Parties take no
position with respect to such matters.
7. Conditions of Settlement, Effect of Disapproval, Cancellation or Termination
7.1 The Effective Date of the Stipulation shall be conditioned on the occurrence
of all of the following events:
(a) the contribution to the Settlement Fund by Coast, the Insurer, and
Hacker Johnson's insurer as required by ¶2.1 hereof;
(b) the entry of the Notice Order, as required by ¶3.1 hereof, by the Court;
(c) the failure of Coast to exercise its option to terminate the Stipulation
pursuant to ¶7.7 hereof;
(d) the approval of the Settlement by the Court, following notice to the
Class and a heating, as provided in Rule 23 of the Federal Rules of Civil Procedure, and the
entry of the Judgment, as defined in ¶ 1.10, which judgment must contain a bar order
consistent with the PSLRA barring contribution claims against the Settling Defendants by
any person or entity; and
(e) the Judgment having become Final, as defined in ¶1.8 hereof, or, in
the event that the Court enters a judgment in a form other than that provided above (the
"Alternative Judgment") and which has the consent of the Settling Parties, such Alternative
Judgment having become Final.
7.2 Upon the occurrence of all of the events referenced in ¶7.1 hereof, any and all
remaining interest or fight of Settling Defendants in or to the Settlement Fund, if any, shall
be absolutely and forever extinguished.
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7.3 If some or all of the conditions specified in ¶7.1 hereof are not met, or in the
event that this Stipulation is not approved by the Court, or the Settlement set forth in this
Stipulation is terminated or fails to become effective in accord with its terms, then this
Stipulation shall be canceled and terminated subject to ¶7.6 hereof unless Lead Counsel and
counsel for Settling Defendants mutually agree in writing to proceed with the Stipulation.
None of the Settling Parties, or any of them, shall have any obligation whatsoever to proceed
under any terms other than those provided for and agreed upon herein. If any Settling Party
commits a material breach of the terms of this Stipulation, any other party, provided that it is
in substantial compliance with the terms of this Stipulation, may, at its option, seek to have
the Court enforce the terms of the Stipulation or terminate the Stipulation on notice to all of
the Settling Parties.
7.4 Unless otherwise ordered by the Court, in the event the Stipulation shall
terminate, or be canceled, or shall not become effective for any reason, within five (5)
business days after written notification of such event is sent by counsel for Settling
Defendants or Lead Counsel to the Escrow Agent, subject to the terms of¶2.7 hereof, the
Settlement Fund (including accrued interest) plus any amount then remaining in the Notice
and Administration Fund (including accrued interest), less any expenses and any costs which
have either been disbursed pursuant to ¶2.5 hereof or are determined to be chargeable to the
Notice and Administration Fund, including Taxes and Tax Expenses, shall be refunded by
the Escrow Agent on a pro rata basis in proportion to the amount paid by each pursuant to
¶2.1 hereof to Counsel for Coast (with respect to amounts paid by Coast and the Insurer
pursuant to ¶2.1 hereof) and counsel for Hacker Johnson (with respect to the amount paid by
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Hacker Johnson's insurer pursuant to ¶2.1 hereof). At the request of counsel for the Settling
Defendants, the Escrow Agent or its designee shall apply for any tax refund owed on the
Settlement Fund and pay the proceeds, after deduction of any fees or expenses incurred in
connection with such application(s) for refund, on a pro rata basis in proportion to the
amount paid by each pursuant to ¶2.1 hereof to counsel for Coast (with respect to amounts
paid by Coast and the Insurer pursuant to ¶2.1 hereof) and counsel for Hacker Johnson (with
respect to the amount paid by Hacker Johnson's insurer pursuant to ¶2.1 hereof). With
respect to any amounts paid to Coast pursuant to this paragraph, it is understood that Coast
and the Insurer shall make arrangements for the allocation of any such amounts between
them.
7.5 In the event that the Stipulation is not approved by the Court or the settlement
set forth in the Stipulation is terminated or fails to become effective in accordance with its
terms, the Settling Parties shall be restored to their respective positions in the Litigation as of
September 25, 2008, except with respect to Hacker Johnson, whereby Lead Plaintiffs and
Hacker Johnson shall be restored to their respective positions in the Litigation and the
Appeal as of January 9, 2009. In such event, the terms and provisions of the Stipulation,
with the exception of¶¶ 2.6, 2.7, 5.11, 6.2, 6.5, 7.3-7.7, and 8 hereof, shall have no further
force and effect with respect to the Settling Parties and shall not be used in the Litigation, in
the Appeal, or in any other proceeding for any purpose, and any judgment or order entered
by the Court in accordance with the terms of the Stipulation shall be treated as vacated, nunc
pro tunc. No order of the Court or modification or reversal on appeal of any order of the
Court concerning the Plan of Allocation or the amount of any attorneys' fees, costs, expenses
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and interest awarded by the Court to Lead Plaintiffs or Lead Counsel shall constitute grounds
for cancellation or termination of the Stipulation.
7.6 If the Effective Date does not occur, or if the Stipulation is terminated
pursuant to its terms, neither the Lead Plaintiffs nor Plaintiffs' Counsel shall have any
obligation to repay any amounts actually and properly disbursed from the Notice and
Administration Fund for which proof is shown that such amounts have already been properly
incurred as expenses, provided that such amounts (exclusive of Taxes or Tax Expenses) do
not exceed $200,000 in the aggregate. In addition, any expenses already incurred and
properly chargeable to the Notice and Administration Fund pursuant to ¶2.5 hereof at the
time of such termination or cancellation, but which have not been paid, shall be paid by the
Escrow Agent in accordance with the terms of the Stipulation prior to the balance being
refunded in accordance with ¶¶2.7 and 7.4 hereof, provided that such amounts (exclusive of
Taxes or Tax Expenses) do not exceed $200,000 in the aggregate.
7.7 If prior to the Settlement Heating, the aggregate number of shares of Coast
common stock purchased or acquired by Persons who would otherwise be members of the
Class, but who request exclusion from that Class, exceeds the sum specified in a separate
supplemental agreement between the Lead Plaintiffs and Coast (the "Supplemental
Agreement"), Coast shall have, in its sole and absolute discretion, the option to terminate
this Stipulation in accordance with the procedures set forth in the Supplemental Agreement.
The Supplemental Agreement will not be filed with the Court unless required by the Court or
unless and until a dispute as between the Lead Plaintiffs and a Settling Defendant concerning
its interpretation or application arises.
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8. No Admission of Wrongdoing
8.1 This Stipulation, whether or not consummated, any act performed or
document executed pursuant to or in furtherance of this Stipulation or the Settlement, and
any negotiations, discussions or proceedings in connection with this Stipulation or the
Settlement:
(a)
Related Persons
shall not be offered or received against any Settling Defendant or their
as evidence of or construed as or deemed to be evidence of any
presumption, concession, or admission by any Settling Defendant or its Related Persons of
the truth of any fact alleged by the Lead Plaintiffs or the validity of any claim that has been
or could have been asserted in the Litigation or any other litigation, or the deficiency of any
defense that has been or could have been asserted in the Litigation or in any other litigation,
or of any liability, negligence, fault, or wrongdoing of the Settling Defendants and their
Related Persons;
(b) shall not be offered or received against any Settling Defendant or its
Related Persons as evidence of or construed or deemed to be evidence of a presumption,
concession, admission of any fault, misrepresentation or omission with respect to any
statement or written document approved or made by any Settling Defendant or its Related
Persons, or against the Lead Plaintiffs or any Class Member as evidence of any infirmity in
the claims of the Lead Plaintiffs and the Class;
(c) shall not be offered or received against any Settling Defendant as
evidence or construed or deemed to be evidence of a presumption, concession, or admission
of any liability, negligence, fault or wrongdoing, or in any way referred to for any other
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reason as against any of the parties to this Stipulation, in any other civil, criminal or
administrative action or proceeding, other than such proceedings as may be necessary to
effectuate the provisions of this Stipulation; provided, however, that if this Stipulation is
approved by the Court, Settling Defendants and their Related Parties may refer to it to
effectuate the dismissals, releases, and liability protections granted them hereunder;
(d) shall not be offered, received, or construed against any Settling
Defendant or its Related Persons as evidence or construed or deemed to be evidence against
Settling Defendants, Lead Plaintiffs or the Class as an admission or concession that the
consideration to be given hereunder represents the amount which could be or would have
been recovered after trial; and
(e) shall not be offered, construed, or received in evidence as an
admission, concession, or presumption against any Settling Defendant or its Related Persons
that class certification would be proper for any purpose other than this Settlement.
9. Miscellaneous Provisions
9.1 The Settling Parties (a) acknowledge that it is their intent to consummate this
agreement; and (b) agree, subject to their fiduciary and other legal obligations, to cooperate
to the extent reasonably necessary to effectuate and implement all terms and conditions of
the Stipulation and to exercise their reasonable best efforts to accomplish the foregoing terms
and conditions of the Stipulation. Lead Counsel and Settling Defendants' Counsel agree to
cooperate with one another in seeking Court approval of the Stipulation, the Notice Order,
and the Settlement, and to promptly agree upon and execute all other such documentation as
may be required to obtain final approval of the Settlement.
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9.2 This Stipulation, the exhibits attached hereto and the Supplemental
Agreement constitute the entire agreement between the Settling Parties as to the subject
matter hereof and supersede any prior or contemporaneous written or oral agreements or
understandings between the Settling Parties.
9.3 No modification or amendment of this Stipulation shall be valid unless made
in writing and signed by or on behalf of each party hereto. No representations, warranties or
inducements have been made to any party concerning the Stipulation, its exhibits or the
Supplemental Agreement other than the representations, warranties and covenants contained
and memorialized in such documents. Except as otherwise provided for herein, each party
shall bear his, her or its own costs.
9.4 The Settlement compromises claims that are contested and shall not be
deemed an admission by any Settling Party as to the merits of any claim or defense. The
Judgment will contain a statement that during the course of the Litigation, the Settling
Parties and their respective counsel at all times complied with the requirements of Federal
Rule of Civil Procedure 11. The Settling Parties agree that the amount paid to the Settlement
Fund and the other terms of the settlement were negotiated in good faith by the Settling
Parties and reflect a settlement that was reached voluntarily after consultation with
competent legal counsel. The Settling Parties reserve their fight to rebut, in a manner that
such party determines to be appropriate, any contention made in any public forum that the
Litigation was brought or defended in bad faith or without a reasonable basis.
9.5 Settling Defendants and/or their Related Parties may file the Stipulation
and/or the Judgment in any forum as may be necessary to establish principles ofresjudicata,
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collateral estoppel, release, accord and satisfaction, good faith settlement, judgment bar or
reduction, bar order, or any other theory preclusion, release, discharge, or claims bar.
Settling Defendants and/or their Related Parties may also file the Stipulation and/or the
Judgment in any forum as may be necessary to establish that the Stipulation and/or the
Settlement do not operate to admit, concede, or establish any allegation made in the
Litigation or any liability, wrongdoing, or fault by any Settling Defendant and/or Released
Party.
9.6 All agreements made and orders entered during the course of the Litigation
relating to the confidentiality of information shall survive this Stipulation.
9.7 All of the exhibits to the Stipulation are material and integral parts hereof and
are fully incorporated herein by this reference.
9.8 The Stipulation may be amended or modified only by a written instrument
signed by or on behalf of all Settling Parties or their respective successors-in-interest.
9.9 Lead Counsel, on behalf of the Class, are expressly authorized by the Lead
Plaintiffs to take all appropriate action required or permitted to be taken by the Class
pursuant to the Stipulation to effectuate its terms and also are expressly authorized to enter
into any modifications or amendments to the Stipulation on behalf of the Class which they
deem appropriate.
9.10 Each counsel or other Person executing the Stipulation or any of its exhibits
on behalf of any party hereto hereby warrants that such Person has the full authority to do so.
9.11 The 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. A
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signature transmitted by facsimile or in a .pdffile shall be deemed to have the same effect as
an original signature.
9.12 The Stipulation shall be binding upon, and inure to the benefit of, the
successors and assigns of the parties hereto.
9.13 The Court shall retain jurisdiction with respect to implementation and
enforcement of the terms of the Stipulation, and all parties hereto submit to the jurisdiction
of the Court for purposes of implementing and enforcing the settlement embodied in the
Stipulation.
9.14 The waiver by one party of any breach of this Stipulation by any other party
shall not be deemed a waiver by any other party or a waiver of any other prior or subsequent
breach of this Stipulation.
9.15 If a case is commenced with respect to any Settling Defendant under Title 11
of the United States 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 transfer of money to the Settlement Fund or any portion thereof
by or on behalf of the Settling Defendant to be a preference, voidable transfer, fraudulent
transfer or similar transaction, and any portion thereof is required to be returned, and such
amount is not promptly deposited to the Settlement Fund by others, then, at the election of
Lead Counsel, the parties shall jointly move the Court to vacate and set aside the releases
given and the Judgment entered in favor of such Settling Defendant pursuant to this
Stipulation, which releases and the Judgment shall be null and void, and the parties so
affected shall be restored to their respective positions in the Litigation as of September 25,
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2008 (unless a party so affected is Hacker Johnson, in which case, with respect to Hacker
Johnson, Lead Plaintiffs and Hacker Johnson shall be restored to their respective positions in
the Litigation and the Appeal as of January 9, 2009), and any other cash amounts in the
Settlement Fund paid by or on behalf of such affected Settling Defendant shall be returned as
provided herein.
9.16 The Stipulation and the exhibits hereto shall be considered to have been
negotiated, executed and delivered, and to be wholly performed, in the State of Florida, and
the fights and obligations of the parties to the Stipulation shall be construed and enforced in
accordance with, and governed by, the internal, substantive laws of the State of Florida
without giving effect to that state's choice-of-law principles.
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IN WITNESS WHEREOF, the parties hereto have caused the Stipulation to be
exeeuted, by their duly authorized attorneys, as of February •, 2009.
COUGHLIN STOIA GELLER RUDMAN & ROBBINS LLP
Paul.. Geller"(FBN: 984765) Jae'k Reise (FBN:058149) 120 East Palmetto Park Road Suite 500 Boca Raton, FL 33432 Tel.: (561) 750-3000 Fax: (561) 750-3364
and
Jeffrey D. Light Coughlin Stoia Geller Rudman
& Robbins LLP 655 West Broadway Suite 1900 San Diego, CA 92101 Tel.: (619) 231-1058 Fax: (619) 231-7423
Co-Lead Counsel for Lead Plainliffs and the Class
SAXENA WHITE P.A.
Maya • •f'pta-(FBl•: 0093494) Joseph( !./White (FBN: 0621064) 2424 N' ,Federal Highway Suite 257 Boca Raton, FL 33431 Tel.: (561) 394-3399 Fax: (561) 394-3382
Co-Lead Counsel for Lead Plaintiffs and the Class
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CARLTON FIELDS, P.A.
Samuel J. Salario, Jr. (FBN: 083460) Kathryn H. Christian (FBN: 0027594) 4221 W. Boy Scout Boulevard Suite 1000 Tampa, FL 33607 Tel: (813) 223-7000 Fax: (813) 229-4133
BATTAGLIA, ROSS, DICUS & WEIN, P.A.
Stephen J. Wein (FBN: 212814) Brian P. Battaglia (FBN: 557978) 980 Tyrone Boulevard P.O. Box 41100 St. Petersburg, FL 33743 Tel.: (727) 381-2300 Fax: (727) 343-4059
Counsel for Defendants Coast Financial Holdings, Inc., Brian F. Grimes, James K. Toomey, Joseph Gigliotti, Kennedy Legler III, Paul G. Nobbs, Thomas M. O'Brien, John Reinemeyer, Michael J. Ruffino, and M. Alex White
HILL WARD & HENDERSON, P.A.
Counsel for Defendant Brian P. Peters
FOWLER WHITE BOGGS P.A.
Benjamin H. Hill II! (FBN: 094585) Dennis P. Waggoner (FBN: 509426) 101 East Kennedy Boulevard Suite 3700 Tampa, FL 33602 Tel.: (813) 221-3900 Fax: (813) 221-2900
Counsel for Defendants Sandier O'Neill & Partners LP and Sterne, Agee & Leach, Inc.
Edward M. Waller (FBN: 0106341) Gianluca Morello (FBN: 0034997) Ceci Culpepper Berman (FBN: 0329060) 501 E. Kennedy Boulevard, Suite 1700 Tampa, FL 33602 Tel.: 813-228-7411 Fax: 813-229-8313
Counsel for Defendant Hacker, Johnson & Smith, P.A.
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CARLTON FIELDS, P.A.
Samuel J. Salario, Jr. (FBN: 083460) Kathryn H. Christian (FBN: 0027594) 4221 W. Boy Scout Boulevard Suite 1000 Tampa, FL 33607 Tel: (813) 223-7000 Fax: (813) 229-4133
BATTAGLIA, ROSS, DICUS & WEIN, P.A.
980 Tyrone Boulevard P.O. Box 41100 St. Petersburg, FL 33743 Tel.: (727) 381-2300 Fax: (727) 343-4059
Counsel for Defendants Coast Financial Holdings, Inc., Brian F. Grimes, James K. Toomey, Joseph Gigliotti, Kennedy Legler III, Paul G. Nobbs, Thomas M. O'Brien, John Reinemeyer, Michael J. Ruffino, and M. Alex White
HILL WARD & HENDERSON, P.A.
Counsel for Defendant Brian P. Peters
FOWLER WHITE BOGGS P.A.
Benjamin H. Hill III (FBN: 094585) Dennis P. Waggoner (FBN: 509426) 101 East Kennedy Boulevard Suite 3700 Tampa, FL 33602 Tel.: (813) 221-3900 Fax: (813) 221-2900
Counsel for Defendants Sandier O'Neill & Partners LP and Sterne, Agee & Leach, Inc.
Edward M. Waller (FBN: 0106341) Gianluca Morello (FBN: 0034997) Ceci Culpepper Berman (FBN: 0329060) 501 E. Kennedy Boulevard, Suite 1700 Tampa, FL 33602 Tel.: 813-228-7411 Fax: 813-229-8313
Counsel for Defendant Hacker, Johnson & Smith, P.A.
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CARLTON FIELDS, P.A. BATTAGLIA, ROSS, DICUS & WEIN, P.A.
Samuel J. Salario, Jr. (FBN: 083460) Kattu3rn H. Christian (FBN: 0027594) 4221 W. Boy Scout Boulevard Suite 1000 Tampa, FL 33607 Tel: (813) 223-7000 Fax: (813) 229-4133
Stephen J. Wein (FBN: 212814) Brian P. Battaglia (FBN: 557978) 980 Tyrone Boulevard P.O. Box 41100 St. Petersburg, FL 33743 Tel.: (727) 381-2300 Fax: (727) 343-4059
Counsel for Defendants Coast Financial Holdings, Inc., Brian F. Grimes, James K. Toomey, Joseph Gigliotti, Kennedy Legler III, Paul G. Nobbs, Thomas M. O'Brien, John Reinemeyer, Michael J. Ruffino, and M. Alex White
HILL WARD & HENDERSON, P.A.
De •J•nis ;. •ag;oneI/r ((Ft•: •f•585FB.I•.. 5•39422)
101 East Kennedy Boulevard Suite 3700 Tampa, FL 33602 Tel.: (813) 221-3900 Fax: (813) 221-2900
Counsel for Defendants Sandier O'Neill & Partners LP and Sterne, Agee & Leach, Inc.
Counsel for Defendant Brian P. Peters
FOWLER WHITE BOGGS P.A.
Edward M. Waller (FBN: 0106341) Gianluca Morello (FBN: 0034997) Ceci Culpepper Berman (FBN: 0329060) 501 E. Kennedy Boulevard, Suite 1700 Tampa, FL 33602 Tel.: 813-228-7411 Fax: 813-229-8313
Counsel for Defendant Hacker, Johnson & Smith, P.A.
40
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CARLTON FIELDS, P.A. BATTAGLIA, ROSS, DICUS & WEIN, P.A.
Samuel J. Salario, Jr. (FBN: 083460) Kathryn H. Christian (FBN: 0027594) 4221 W. Boy Scout Boulevard Suite 1000 Tampa, FL 33607 Tel: (813) 223-7000 Fax: (813) 229-4133
Stephen J. Wein (FBN: 212814) Brian P. Battaglia (FBN: 557978) 980 Tyrone Boulevard P.O. Box 41100 St. Petersburg, FL 33743 Tel.: (727) 381-2300 Fax: (727) 343-4059
Counsel for Defendants Coast Financial Holdings, Inc., Brian F. Grimes, James K. Toomey, Joseph Gigliotti, Kennedy Legler III, Paul G. Nobbs, Thomas M. O'Brien, John Reinemeyer, Michael J. Ruffino, and M. Alex White
HILL WARD & HENDERSON, P.A.
Benjamin H. Hill III (FBN: 094585) Dennis P. Waggoner (FBN: 509426) 101 East Kennedy Boulevard Suite 3700 Tampa, FL 33602 Tel.: (813) 221-3900 Fax: (813) 221-2900
Counsel for Defendants Sandier O'Neill & Partners LP and Sterne, Agee & Leach, Inc.
Counsel for Defendant Brian P. Peters
FOWLER WHITE B0•GS P.A.
Edward •aller (FBN: 0106341) Gianluca Morello (FBN: 0034997) Ceci Culpepper Berman (FBN: 0329060) 501 E. Kennedy Boulevard, Suite 1700 Tampa, FL 33602 Tel.: 813-228-7411 Fax: 813-229-8313
Counsel for Defendant Hacker, Johnson & Smith, P.A.
40
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UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
GRAND LODGE OF PENNSYLVANIA, and All Others Similarly Situated,
Plaintiff,
vs.
BRIAN P. PETERS, BRIAN F. GRIMES, JUSTIN D. LOCKE, ANNE V. LEE, and COAST FINANCIAL HOLDINGS, INC.,
Defendants.
) ) ) ) ) ) ) ) ) ) ) ) )
No. 8:07-cv-479-T-26EAJ (Consolidated)
CLASS ACTION
[PROPOSED] ORDER PRELIMINARILY APPROVING
SETTLEMENT AND PROVIDING FOR NOTICE
EXHIBIT A
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WHEREAS, a consolidated securities class action is pending before the Court
entitled Grand Lodge Of Pennsylvania v. Brian P. Peters, et al., No. 8:07-cv-479-T-26EAJ
(Consolidated);
WHEREAS, the Court has received the Stipulation of Settlement dated as of
_____________, 2009 (the “Stipulation”), that has been entered into by Lead Plaintiffs and
the Settling Defendants, and the Court has reviewed the Stipulation and its attached Exhibits;
and
WHEREAS, Lead Plaintiffs having made application, pursuant to Federal Rule of
Civil Procedure 23(e), for an order preliminarily approving the settlement of the Litigation in
accordance with the Stipulation which, together with the Exhibits annexed thereto, sets forth
the terms and conditions for a proposed settlement of the Litigation and for dismissal of the
Litigation with prejudice upon the terms and conditions set forth therein; and the Court
having read and considered the Stipulation and the Exhibits annexed thereto; and
WHEREAS, all defined terms contained herein shall have the same meanings as set
forth in the Stipulation;
NOW, THEREFORE, IT IS HEREBY ORDERED:
1. The Court hereby certifies the following class for settlement purposes only:
All Persons who purchased Coast common stock between January 21, 2005 and January 22, 2007, inclusive. Excluded from the Class are the Settling Defendants, members of the immediate families of the Settling Defendants, the former and current directors, officers, subsidiaries and affiliates of Coast, as well as any person, firm, trust, corporation, officer, director or other individual or entity in which any Settling Defendant has a controlling interest and the legal representatives, affiliates, heirs, successors-in-interest, or assigns of any such excluded party. Also excluded from the Class are those Persons who timely and validly request exclusion from the Class pursuant to the Notice of Pendency and Proposed Settlement of Class Action.
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2. With respect to the Class, this Court finds that: (a) the members of the Class
are so numerous that joinder of all Class Members is impracticable; (b) there are questions of
law and fact common to members of the Class which predominate over any individual
questions; (c) the claims of Lead Plaintiffs are typical of the claims of the Class; (d) Lead
Plaintiffs and their counsel have fairly and adequately represented and protected the interests
of the respective members of the Class; and (e) a class action is superior to other available
methods for the fair and efficient adjudication of the controversy considering: (i) the interests
of the members of the Class in individually controlling the prosecution of the separate
actions; (ii) the extent and nature of any litigation concerning the controversy already
commenced by members of the Class; (iii) the desirability or undesirability of concentrating
the litigation of these claims in this particular forum; and (iv) the difficulties likely to be
encountered in the management of the class action.
3. Pursuant to Rule 23 of the Federal Rules of Civil Procedure, and for the
purposes of settlement only, the Court certifies Troy Ratcliff, Daniel Altenburg and Denis J.
Villere & Co. LLC as Class Representatives for the Class.
4. The Court does hereby preliminarily approve the Stipulation and the
settlement set forth therein, subject to further consideration at the Settlement Hearing
described below.
5. A hearing (the “Settlement Hearing”) shall be held before this Court on
_________, 2009, at ____ _.m., at the United States District Court for the Middle District of
Florida, Tampa Division, Sam M. Gibbons United States Courthouse, 801 N. Florida
Avenue, Tampa, Florida 33602 in Courtroom ___ to determine whether the proposed
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settlement of the Litigation 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 a
Judgment as provided in ¶1.10 of the Stipulation should be entered herein; whether the
proposed Plan of Allocation should be approved by the Court; to determine the amount of
attorneys’ fees and expenses that should be awarded to Lead Counsel; and whether the
expenses of the Lead Plaintiff should be reimbursed. The Court may adjourn the Settlement
Hearing without further notice to members of the Class.
6. The Court approves, as to form and content, the Notice of Pendency and
Proposed Settlement of Class Action (the “Notice”) and Summary Notice for publication
annexed as Exhibits A-1 and A-3 hereto and finds that the mailing and distribution of the
Notice and publishing of the Summary Notice substantially in the manner and form set forth
in ¶8 of this Order meet the requirements of Federal Rule of Civil Procedure 23, §27(a)(7) of
the Securities Act of 1933, 15 U.S.C. §77z-1(a)(7), as amended, including by the Private
Securities Litigation Reform Act of 1995 (“PSLRA”), §21D(a)(7) of the Securities Exchange
Act of 1934, 15 U.S.C. §78u-4(a)(7), as amended, including by the PSLRA, and due process,
and is the best notice practicable under the circumstances and shall constitute due and
sufficient notice to all Persons entitled thereto.
7. The firm of Saxena White, P.A. is appointed to act as Escrow Agent for the
Settlement Fund, pursuant to the terms agreed to in the Stipulation.
8. The firm of RSM McGladrey, Inc. (“Claims Administrator”) is hereby
appointed to supervise and administer the notice procedure as well as the processing of
claims as more fully set forth below:
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(a) The Settling Defendants shall cooperate in making Coast transfer
records and shareholder information available to the Claims Administrator for the purpose of
identifying and giving notice to the Class.
(b) The Claims Administrator shall make reasonable efforts to identify all
Persons who are members of the Class, and not later than ________, 2009 (the “Notice
Date”), the Claims Administrator shall cause a copy of the Notice substantially in the form
annexed as Exhibit A-1 hereto, to be mailed by first class mail to all Class Members who can
be identified with reasonable effort;
(c) Not later than _________, 2009, the Claims Administrator shall cause
the Summary Notice to be published once in the national edition of Investor’s Business
Daily; and
(d) At least seven (7) calendar days prior to the Settlement Hearing, Lead
Counsel shall cause to be served on Settling Defendants’ counsel and filed with the Court
proof, by affidavit or declaration, of such mailing and publishing.
9. Nominees who purchased or acquired Coast common stock for the beneficial
ownership of Class Members during the Class Period shall send the Notice to all beneficial
owners of such securities 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 mail the
Notice to such beneficial owners. Lead Counsel shall, if requested, reimburse banks,
brokerage houses or other nominees solely for their reasonable out-of-pocket expenses
incurred in providing notice to beneficial owners who are Class Members out of the Notice
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and Administration Fund, which expenses would not have been incurred except for the
sending of such Notice, subject to further order of this Court with respect to any dispute
concerning such compensation.
10. All members of the Class shall be bound by all determinations and judgments
in the Litigation concerning the settlement, whether favorable or unfavorable to the Class.
11. Pending final determination of whether the Stipulation should be approved,
Plaintiffs’ Counsel, Lead Plaintiff, and any Class Member are barred and enjoined from
commencing or prosecuting any action asserting any Released Claims against any Released
Parties.
12. Class Members who wish to participate in the Settlement shall complete and
submit a Proof of Claim and Release (“Proof of Claim”) form in accord with the instructions
contained therein. Unless the Court orders otherwise, all Proof of Claim forms must be
postmarked no later than ninety (90) days from the Notice Date or the first business day
thereafter if the 90th day falls on a weekend day or national holiday. Any Class Member
who does not submit a Proof of Claim within the time provided for shall not only be barred
from sharing in the distribution of the proceeds of the Settlement Fund, unless otherwise
ordered by the Court, but shall also be bound by all determinations and judgments in the
Litigation concerning the Settlement, whether favorable or unfavorable to the Class.
Notwithstanding the foregoing, Lead Counsel shall have discretion to accept late-submitted
claims for processing by the Claims Administrator so long as the distribution of the
Settlement Fund is not materially delayed thereby.
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13. Any member of the Class may enter an appearance in the Litigation, at their
own expense, individually or through counsel of their own choice, in which case such
counsel must file with the Clerk of the Court and deliver to Lead Counsel and Settling
Defendants’ counsel a notice of such appearance. If they do not enter an appearance, they
will be represented by Lead Counsel.
14. All papers in support of the Settlement, the Plan of Allocation and any
application by counsel for Lead Plaintiffs for attorneys’ fees and expenses shall be filed and
served no later than fourteen (14) calendar days prior to the objection deadline in ¶15 and
any reply papers shall be filed and served seven (7) calendar days prior to the Settlement
Hearing.
15. Any Person falling within the definition of the Class may, upon request, be
excluded from the Class. Any such Person must submit to the Claims Administrator a
request for exclusion (“Request for Exclusion”), received no later than ________, 2009. A
Request for Exclusion must state: (a) the name, address, and telephone number of the Person
requesting exclusion; (b) each of the Person’s purchases and sales of Coast common stock
made during the Class Period, including the dates of purchase or sale, the number of shares,
and the price paid or received for each such purchase or sale; and (c) that the Person wishes
to be excluded from the Class. All Persons who submit valid and timely Requests for
Exclusion in the manner set forth in this paragraph shall have no rights under the Stipulation,
shall not share in the distribution of the Net Settlement Fund, and shall not be bound by the
Stipulation or the Judgment entered in the Litigation.
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16. Any member of the Class may appear and show cause, if he, she or it has any,
why the proposed settlement of the Litigation should or should not be approved as fair,
reasonable and adequate, or why a judgment should or should not be entered thereon, why
the Plan of Allocation should or should not be approved, why attorneys’ fees and expenses
should or should not be awarded to Lead Counsel or the expenses of Lead Plaintiffs
reimbursed; provided, however, that no Class Member shall be heard or entitled to contest
such matters, unless that Class Member has delivered by hand or sent by first class mail
written objections and copies of any papers and briefs such that they are received on or
before _______________, 2009 by Coughlin Stoia Geller Rudman & Robbins LLP, Jeffrey
D. Light, 655 W. Broadway, Suite 1900, San Diego, CA, 92101; Saxena White P.A., Maya
Saxena, 2424 N. Federal Highway, Suite 257, Boca Raton, FL, 33431; Carlton Fields PA,
Samuel J. Salario, Jr., 4221 W. Boy Scout Boulevard, Tampa, FL, 33609; Battaglia, Ross,
Dicus & Wein, P.A., Stephen J. Wein, 980 Tyrone Boulevard, St. Petersburg, Florida,
33643; Hill, Ward & Henderson P.A., Benjamin H. Hill III, Bank of America Plaza, 101 East
Kennedy Boulevard, Suite 3700, Tampa, FL, 33602; Fowler White Boggs P.A., Gianluca
Morello, 501 East Kennedy Boulevard, Suite 1700, Tampa, FL 33602 and filed with the
Clerk of the United States District Court Middle District of Florida, Tampa Division, on or
before ________________, 2009. Any Person who does not make his, her or its objection in
the manner provided shall be deemed to have waived such objection and shall forever be
foreclosed from making any objection to the fairness or adequacy of the proposed settlement
as set forth in the Stipulation, to the Plan of Allocation and to the award of attorneys’ fees
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and reimbursement of expenses to counsel for the plaintiffs or the expenses of Lead Plaintiffs
unless otherwise ordered by the Court.
17. The passage of title and ownership of the Settlement Fund to the Escrow
Agent in accord with the terms and obligations of the Stipulation is approved. No person
that is not a Class Member or Lead Counsel shall have any right to any portion of, or interest
in the distribution of, the Settlement Fund unless otherwise ordered by the Court or
otherwise provided in the Stipulation.
18. All funds held by the Escrow Agent shall be deemed and considered to be in
custodia legis of the Court, and shall remain subject to the jurisdiction of the Court, until
such time as such funds shall be distributed pursuant to the Stipulation and/or further order(s)
of the Court.
19. Neither the Settling Defendants and their Related Parties nor Settling
Defendants’ counsel shall have any responsibility for any Plan of Allocation or any
application for attorneys’ fees or reimbursement of expenses submitted by Lead Counsel or
Lead Plaintiffs, and such matters will be considered separately from the fairness,
reasonableness and adequacy of the Settlement and shall not constitute grounds for the
termination or cancellation of the Stipulation or the Settlement.
20. All reasonable expenses incurred in identifying and notifying Class Members,
as well as administering the Settlement Fund, shall be paid as set forth in the Stipulation. In
the event the settlement is not approved by the Court, or otherwise fails to become effective,
neither the Lead Plaintiffs nor any of their counsel shall have any obligation to repay any
amounts incurred or properly disbursed beyond those set forth in the Stipulation.
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21. Neither the Stipulation, nor any of its terms or provisions, nor any of the
negotiations or proceedings connected with it, shall be construed as an admission or
concession by the Settling Defendants of the truth of any of the allegations in the Litigation,
or of any liability, fault, or wrongdoing of any kind.
22. In the event that the settlement contemplated by the Stipulation is disapproved
by the Court or any appellate court, or is terminated by any of the Settling Parties, or
otherwise fails to become effective for any reason, and the Settling Parties revert to litigation
of these consolidated actions, nothing in this Order shall be deemed to limit, prohibit, or
preclude the Settling Defendants from arguing that certification of a class would be
inappropriate for purposes of litigation, or to limit, prohibit, or preclude the Court from
considering those arguments.
23. The Court reserves the right to adjourn the date of the Settlement Hearing
without further notice to the members of the Class, and retains jurisdiction to consider all
further applications arising out of or connected with the proposed settlement. The Court may
approve the settlement, with such modifications as may be agreed to by the Settling Parties,
if appropriate, without further notice to the Class.
IT IS SO ORDERED.
DATED: _________________________ THE HONORABLE RICHARD A. LAZZARA UNITED STATES DISTRICT JUDGE
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UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
GRAND LODGE OF PENNSYLVANIA, and All Others Similarly Situated,
Plaintiff,
vs.
BRIAN P. PETERS, BRIAN F. GRIMES, JUSTIN D. LOCKE, ANNE V. LEE, and COAST FINANCIAL HOLDINGS, INC.,
Defendants.
) ) ) ) ) ) ) ) ) ) ) ) )
No. 8:07-cv-479-T-26EAJ (Consolidated)
CLASS ACTION
NOTICE OF PENDENCY AND PROPOSED SETTLEMENT OF CLASS ACTION
EXHIBIT A-1
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If you purchased the common stock of Coast Financial Holdings, Inc. (“Coast” or
the “Company”) during the period from January 21, 2005 to January 22, 2007, inclusive,
you may be a member of the class (the “Class” and each member a “Class Member”) in a
federal securities class action involving Coast entitled to receive a payment from the
settlement of that case (the “Settlement”).
A federal court authorized this Notice. This is not a solicitation from a lawyer. If
you are a member of the Class, your rights will be affected by proceedings in this case. It
is important that you read this notice carefully.
SUMMARY OF THE CLASS ACTION SETTLEMENT
Purpose of this Notice: This Notice is given pursuant to Rule 23 of the Federal
Rules of Civil Procedure and an Order of the United States District Court for the Middle
District of Florida (the “Court”) dated ____________________, 2009. The purpose of this
Notice is to inform you of the pendency and settlement of this consolidated class action (the
“Litigation”), which will affect all Class Members’ rights. This Notice describes the rights
you may have under the Settlement and what steps you may take in relation to it. The Notice
is not an expression of any opinion by the Court as to the merits of any claims or defenses
asserted by any party in this Litigation, or the fairness or adequacy of the proposed
Settlement.
Security and Time Period: Coast common stock (symbol “CFHI”) purchased
between January 21, 2005 and January 22, 2007, inclusive (the “Class Period”). If you
purchased Coast common stock during the Class Period, you may be entitled to participate in
the Settlement.
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Nature of the Litigation: The Litigation is a consolidated federal securities class
action in which certain purchasers of Coast common stock (the “Lead Plaintiffs”), on behalf
of the Class, allege that Coast’s filings with the Securities and Exchange Commission and
other public statements contained false and misleading statements and omissions of fact
during the Class Period. Lead Plaintiffs allege that these false statements and omissions
caused Coast’s stock price to be artificially inflated during the Class Period, and that Lead
Plaintiffs and the Class Members suffered damages when the allegedly misrepresented and
omitted facts were revealed to investors. The Settling Defendants deny any wrongdoing,
fault, liability, or damage to Lead Plaintiffs or the Class.
Settlement Fund: $6,349,000 in cash. Your recovery will depend on the timing of
your purchases and any sales of Coast common stock during the Class Period. Based on the
information currently available to Lead Plaintiffs and the analysis performed by their damage
consultants, it is estimated that if Class Members submit claims for 100% of the shares for
which distribution under the Plan of Allocation (described below) is appropriate, the
estimated average distribution per share will be approximately $____ before deduction of
Court-approved fees and expenses, including the cost of settlement administration.
Historically, actual claims rates are less than 100%, which result in higher distributions per
share. A Class Member’s actual recovery will be a proportion of the Net Settlement Fund
determined by that claimant’s recognized claim as compared to the total recognized claims of
all Class Members who submit valid Proof of Claim and Release forms (“Proof of Claim”).
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Reasons for Settlement: The principal reason for the Settlement is the benefit to be
provided to the Class now. That benefit must be compared to the risk that no recovery might
be achieved after a contested trial and likely appeals, possibly years into the future.
If the Case Had Not Settled: Continuing with the case could have resulted in loss
on a pre-trial motion for summary judgment, at trial, or on appeal, with the consequence of
no recovery whatever for the Class. The parties disagree on the questions of whether the
Settling Defendants are liable and the amount of damages, if any, that would be recovered if
Lead Plainitffs prevailed at trial. Among other things, the parties disagree about: (1) whether
Coast’s SEC filings and public statements contained any materially misleading statements or
omissions of facts, (2) whether there was any wrongdoing on the part of the Settling
Defendants, including whether the Settling Defendants acted intentionally or recklessly in
making the alleged misstatements or omissions, (3) the amount by which the price of Coast
common stock was artificially inflated (if at all) during the Class Period; (4) the appropriate
economic model for determining the amount by which Coast common stock was artificially
inflated (if at all) during the Class Period; (5) the extent to which external factors, such as
general market conditions, influenced the trading price of Coast common stock at various
times during the Class Period; and (6) whether the claims under the Securities Act of 1933
are barred by the statute of limitations.
Lead Plaintiffs believe that the Settlement is a good recovery and is in the best
interest of the Class. The Settlement conveys substantial benefits to the Class immediately,
while litigation through trial and appeal may well have taken several years. Moreover,
because of the risks associated with continuing to litigate and proceeding to trial, there was a
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danger that Lead Plaintiffs would not have prevailed on any claims, in which case the Class
would receive nothing. Even if Lead Plaintiffs prevailed on these liability questions, the
Settling Defendants would vigorously contest the amount of damages to which Lead
Plaintiffs and the Class were entitled. Finally, even if Lead Plaintiffs prevailed at trial, there
exists the risk of reversal on appeal.
Attorneys’ Fees and Expenses and Lead Plaintiffs’ Expenses: Court-appointed
Lead Counsel will ask the Court for attorneys’ fees of 33% of the Settlement Fund and
expenses not to exceed $_______ to be paid from the Settlement Fund plus interest. In
addition, Lead Plaintiffs will ask the Court for reimbursement of their own expenses not to
exceed $75,000 in the aggregate. If the above amounts are requested and approved by the
Court, the average cost per share will be $0.__. Lead Counsel have not received any
payment for their work investigating the facts, prosecuting this Litigation and negotiating
this Settlement on behalf of the Lead Plaintiffs and the Class.
Court Hearing: On _____________, 2009 at ____________, the Court will hold a
hearing to determine whether the Settlement is fair, reasonable, and adequate for the Class;
whether the Settlement should be approved; whether the proposed Plan of Allocation should
be approved; and whether the fees and expenses of Lead Plaintiffs and Lead Counsel should
be approved. The hearing will be held at Courtroom ___, Sam Gibbons United States
Courthouse, 801 N. Florida Avenue, Tampa, Florida 33602. If the Court approves the
Settlement, and you do not exclude yourself from the Class, you will be bound by the terms
of the Settlement and any orders and judgments of the Court in the Litigation.
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YOUR LEGAL RIGHTS AND OPTIONS IN THIS SETTLEMENT:
SUBMIT A CLAIM FORM The only way to get a payment.
EXCLUDE YOURSELF Get no payment. This is the only option that allows you to
participate in another lawsuit against the Settling Defendants
and the other Released Persons relating to the issues in this
case.
OBJECT You may write to the Court if you do not like this settlement,
the request for attorneys’ fees and expenses, the request for
Lead Plaintiffs’ expenses, or the Plan of Allocation.
GO TO A HEARING You may ask to speak in Court about the fairness of the
Settlement.
DO NOTHING Get no payment. Give up rights.
• Your legal rights are affected whether you act, or do not act. Read this Notice
carefully.
• These rights and options — and the deadlines to exercise them — are explained in
this Notice.
DEADLINES:
Submit Claim: _________________, 2009
Request Exclusion: ___________, 2009
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File Objection: ___________, 2009
More Information: www.______.com or
Claims Administrator: Coast Securities Litigation Claims Administrator c/o RSM McGladrey, Inc. _______________ _______________ _______________
Representative of Lead Counsel: Rick Nelson Shareholder Relations Coughlin Stoia Geller Rudman & Robbins LLP 655 West Broadway, Suite 1900 San Diego, CA 92101 1-800-449-4900
Maya Saxena Saxena White P.A. 2424 N. Federal Highway, Suite 257 Boca Raton, FL 33431 1-561-394-3399
• The Court in charge of this case must decide whether to approve the Settlement.
Payments will be made if the Court approves the Settlement and, if there are any
appeals, after appeals are resolved. Please be patient.
BASIC INFORMATION
1. Why did I get this notice package?
You or someone in your family may have purchased Coast common stock between
January 21, 2005 and January 22, 2007, inclusive.
The Court directed that you be sent this Notice because you have a right to know
about a class action lawsuit and the proposed Settlement of that lawsuit, and about all of your
options, before the Court decides whether to approve the Settlement. If the Court approves
it, and after any objections or appeals (if there are any) are resolved, the Claims
Administrator appointed by the Court will make the payments that the Settlement allows.
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This package explains the lawsuit, the Settlement, your legal rights, what benefits are
available, who is eligible for them, and how to get them.
The Court in charge of the case is the United States District Court for the Middle
District of Florida, Tampa Division, and the case is known as Grand Lodge of Pennsylvania
V. Peters, et al., No. 8:07-cv-479-T-26EAJ. The persons who lead the Litigation, Troy
Ratcliff, Daniel Altenburg and St. Denis J. Villere & Co. LLC, are called Lead Plaintiffs or
Class Representatives and the companies and the individuals they sued are called
Defendants. The Defendants in this case include Coast, Brian P. Peters, Coast’s former
Chief Executive Officer and President, and Brian F. Grimes, Coast’s former Executive Vice
President and Chief Financial Officer and, subsequently, its Chief Executive Officer and
President. In addition, the following former directors of the Company are named defendants:
Joseph Gigliotti, Kennedy Legler III, Paul G. Nobbs, Thomas M. O’Brien, John R.
Reinemeyer, Michael T. Ruffino, James K. Toomey, and M. Alex White. These individual
defendants all signed the Form S-1 Registration Statement and all subsequent amendments
for Coast’s Secondary Public Offering (“SPO”) on October 5, 2005. The former Coast
officers and directors are sometimes referred to as the “Individual Defendants.” Sandler
O’Neill & Partners, L.P. and Sterne, Agee & Leach, Inc. served as the underwriters for
Coast’s SPO and are named defendants (sometimes referred to as the “Underwriter
Defendants”). Finally, Hacker, Johnson & Smith, P.A. (“Hacker Johnson”) served as the
Company’s auditor during the relevant period and is a named defendant. Coast, the
Individual Defendants, the Underwriter Defendants, and Hacker Johnson are collectively
referred to herein as the “Settling Defendants.”
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2. What is this lawsuit about?
The Litigation is a consolidated federal securities class action alleging claims under
the Securities Act of 1933 (the “Securities Act”) and the Securities Exchange Act of 1934
(the “Exchange Act”) on behalf of a Class of persons who purchased Coast common stock
during the period January 21, 2005 through January 22, 2007, inclusive (the “Class Period”)
and, with respect to the Securities Act claims, who purchased stock pursuant or traceable to
the October 5, 2005 registration statement for the SPO. With respect to the Securities Act
claims, Coast, the Individual Defendants, and the Underwriter Defendants were named as
Defendants. With respect to the Exchange Act claims, Coast, Individual Defendants Brian P.
Peters and Brian F. Grimes, and Hacker Johnson were named as Defendants.
Lead Plaintiffs allege that Coast’s SEC filings and public statements, including the
registration statement for the SPO, misrepresented and failed to disclose that Coast –
thorough its subsidiary, Coast Bank of Florida – was developing and had developed a
material concentration of residential construction-to-permanent loans to borrowers who had
contracted with a builder named Construction Compliance, Inc. (“CCI”) to build homes in
and around North Port, Florida. Lead Plaintiffs assert that the CCI loans were excessively
risky because they were made to individuals who were buying homes for investment
purposes, not with the intention of actually occupying the properties, and because Coast had
not performed due diligence on CCI, which Lead Plaintiffs assert was at all times in poor
financial condition. Lead Plaintiffs further allege that Coast’s accounting for the CCI loans
violated Generally Accepted Accounting Principles and that its SEC filings and public
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statements, including its financial statements, were materially false and misleading as a
result.
After the close of trading on January 18, 2007, Coast announced that a local builder,
which was later identified as CCI, had informed it that it was financially unable to complete
construction on homes for roughly 482 borrowers who had contracted with CCI and that the
failure of CCI was, therefore, expected to have a material adverse effect on Coast’s
residential construction-to-permanent loan portfolio. Coast provided further information
regarding these matters in an announcement on January 22, 2007. According to Lead
Plaintiffs, these announcements caused a decline in the value of Coast’s common stock.
The claims of the Lead Plaintiffs in the Litigation, and the factual allegations
underlying these claims, are described in detail in the Stipulation of Settlement (the
“Stipulation”) and the Lead Plaintiffs’ Amended Consolidated Class Action Complaint (the
“Complaint”) on file with the Court. These documents may also be viewed at the website of
the Claims Administrator – www._________.
The Court has not decided that the Settling Defendants have done anything wrong.
The Settling Defendants deny any wrongdoing, fault, liability, or damage to Lead Plainitffs
or the Class. The Settling Defendants dispute that Lead Plaintiffs and the Class can prove
the elements of their Securities Act and Exchange Act claims, and have asserted numerous
defenses to these claims. But for the Settlement described in this Notice, the Settling
Defendants would vigorously contest the issues of liability and damages in this case.
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3. What has happened in this case?
This Litigation was initiated in March and April 2007, when three proposed securities
class actions were filed in the United States District Court for the Middle District of Florida,
Tampa Division (the “Court”) on behalf of a class of purchasers of the common stock of
Coast. On June 22, 2007 – following the publication of notice in accord with the provisions
of the Private Securities Litigation Reform Act of 1995 (the “PSLRA”) – the Court entered
an Order consolidating all of these cases under the caption Grand Lodge of Pennsylvania v.
Brian P. Peters, et al., Case No. 8:07-cv-479-T-26EAJ (Consolidated) (the “Litigation”).1
Pursuant to the applicable provisions of the PSLRA, the June 22, 2007 Order also appointed
R. Daniel Altenburg and Troy Ratcliff as lead plaintiffs pursuant to §21D(a)(3)(B) of the
Securities Exchange Act of 1934 (the “Exchange Act”) and approved their selection of
Coughlin Stoia Geller Rudman & Robbins LLP and Saxena White P.A. as Lead Counsel.
On August 25, 2007, the Lead Plaintiffs filed a Consolidated Class Action Complaint
(the “Original Complaint”). All defendants moved to dismiss the Original Complaint, which
motions the Court granted in whole or in part and denied in part by order dated March 13,
2008. In that order, the Court sustained the Exchange Act claims against Coast, Peters, and
Grimes, but dismissed that claim as against Hacker Johnson. The Court also dismissed the
1 The three cases comprising the Litigation are Grand Lodge of Pennsylvania v. Brian P. Peters, et al., Case No. 8:07-cv-478-T-26EAJ; Troy Ratcliff v. Coast Financial Holdings, Inc., Case No. 8:07-cv-504-T-26MAP; and Daniel Altenburg v. Coast Financial Holdings Incorporated, et al., Case No. 8:07-cv-642-T-26TGW. Among other former Coast officers, these initial complaints named as defendants Anne V. Lee and Justin D. Locke. On August 30, 2007, the Lead Plaintiffs filed a stipulation voluntarily dismissing Ms. Lee and Ms. Locke from the Litigation without prejudice.
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Securities Act claims on grounds that the Lead Plaintiffs lacked standing to assert those
claims.
On April 2, 2008, Lead Plaintiffs filed an Amended Consolidated Class Action
Complaint (the “Complaint”), which is the operative complaint in the Litigation. To address
the standing deficiency in the Securities Act claims, the Complaint named St. Denis J.
Villere & Company LLC as a new plaintiff. The Complaint did not amend the allegations or
assert a claim against Hacker Johnson, and Lead Plaintiffs appealed the order dismissing the
claims against Hacker Johnson to the United States Court of Appeals for the Eleventh
Circuit.
Coast, the Individual Defendants, and the Underwriter Defendants filed motions to
dismiss the Securities Act claims in the Complaint, asserting standing, statute of limitations,
and failure to state a claim as grounds. On June 6, 2008, the Court entered an order denying
those motions. Coast, the Individual Defendants, and the Underwriter Defendants filed
answers to the Complaint on June 26, 2006. These defendants also requested that the Court
certify its order denying the motions to dismiss the Complaint for immediate appellate
review. On July 18, 2008, the Court entered an order denying that motion.
Beginning in the spring of 2008, Lead Counsel and Counsel for Coast and the
Individual Defendants began having discussions about a possible Settlement of the
Litigation. Following extensive, arm’s-length discussions, they agreed to a mediation before
the Honorable Layn R. Phillips, a retired United States District Judge. Counsel for Lead
Plaintiffs, Coast, the Individual Defendants, and Coast’s insurer engaged in a day of arm’s-
length mediation before Judge Phillips on September 22, 2008. The case did not settle, and
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further negotiations, facilitated by Judge Phillips, continued throughout the week of
September 22, 2008. On September 26, 2008, Lead Plaintiffs, Coast, and the Individual
Defendants reached an agreement-in-principle to settle the Litigation as to Coast, the
Individual Defendants, and the Underwriter Defendants for the sum of $6,250,000.
On October 8, 2008, the Court entered a final judgment under Fed. R. Civ. P. 54(b)
dismissing the claim against Hacker Johnson. On October 22, 2008, Lead Plaintiffs timely
filed a Notice of Appeal concerning the Court’s order dated March 13, 2008, granting
Hacker Johnson’s motion to dismiss. Lead Plaintiffs’ appeal was docketed as Grand Lodge
of Pennsylvania v. Brian P. Peters, et al., Appeal No. 08-16075 (F) (11th Cir.) (the
“Appeal”). Following the filing of Lead Plaintiffs’ initial appellate brief on December 15,
2008, counsel for Lead Plaintiffs and Hacker Johnson participated in several conferences
with the Eleventh Circuit mediator, Catherine Novak, which culminated in an agreement-in-
principle to settle the Litigation and the Appeal as to Hacker Johnson for $99,000.
Taken together, these settlements will finally and forever terminate the Litigation
against all of the Settling Defendants.
4. Why is this a class action?
In a class action, one or more people called class representatives (in this case, the
Court-appointed Lead Plaintiffs, Troy Ratcliff, Daniel Altenburg and named plaintiff St.
Denis J. Villere & Co. LLC) sue on behalf of people who have similar claims. All of these
people and/or entities are called a Class or Class Members. One court resolves the issues for
all Class Members, except for those who exclude themselves from the class. In this case,
United States District Court Judge Richard A. Lazzara is in charge of this case.
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5. Why is there a settlement?
The Court did not decide in favor of Lead Plaintiffs or the Settling Defendants.
Instead, the lawyers for both sides of the lawsuit, with the assistance of highly respected
mediators, have negotiated the Settlement, which they believe is in the best interests of their
respective clients. The Settlement allows both sides to avoid the risks and cost of lengthy
and uncertain litigation and the uncertainty of a trial and appeals, and permits Class
Members who qualify to be compensated without further delay.
Before agreeing to the Settlement, Lead Counsel conducted a thorough investigation
relating to the events and transactions underlying Lead Plaintiffs’ claims. Lead Counsel’s
decision to enter into the Settlement was made with knowledge of the facts and
circumstances underlying Lead Plaintiffs’ claims and the strengths and weaknesses of those
claims. In determining to settle the Litigation, they have evaluated the extensive pre-trial
investigation undertaken and the substantial expense and length of time necessary to
prosecute the Litigation through pre-trial motions, trial, post-trial motions, and appeals,
taking into account the significant uncertainties in predicting the outcome of this complex
litigation. Lead Counsel believe that the Settlement confers substantial benefits upon the
Class. Based upon their consideration of all of these factors, Lead Plaintiffs and Lead
Counsel have concluded that it is in the best interest of the Class to settle the Litigation on
the terms described in this Notice.
The Settling Defendants deny all allegations of wrongdoing and liability. The
Settling Defendants recognize, however, that continued litigation would be protracted,
expensive, and uncertain and, therefore, desired to settle and terminate all existing or
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potential claims and proceedings against them, without in any way acknowledging fault or
liability.
The amount of damages, if any, that Lead Plaintiffs could prove was also a matter of
serious dispute, and the use of a formula for distributing the Settlement proceeds should not
be viewed as a finding that, if the Litigation had gone to trial, provable damages could be
measured by that formula. The determination of damages, like the determination of liability,
is a complex and uncertain process, typically involving conflicting expert opinions. During
the course of the Litigation, the Settling Defendants, in addition to denying liability, would
have vigorously disputed damages issues. The Settlement herein provides an immediate and
substantial cash benefit and avoids the risks associated with presenting these issues at trial.
WHO IS IN THE SETTLEMENT
To see if you will get money from this Settlement, you first have to determine if you
are a Class Member.
6. How do I know if I am part of the Settlement?
The Class includes all persons who purchased the common stock of Coast between
January 21, 2005 and January 22, 2007, inclusive.
7. Are there exceptions to being included in the Class?
Yes. Excluded from the Class are the Settling Defendants, members of the
immediate families of the Settling Defendants, the former and current directors, officers,
subsidiaries and affiliates of Coast, as well as any person, firm, trust, corporation, officer,
director or other individual or entity in which any Settling Defendant has a controlling
interest and the legal representatives, affiliates, heirs, successors-in-interest, or assigns of any
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such excluded party. Also excluded from the Class are those Persons who timely and validly
request exclusion from the Class pursuant to this Notice.
8. I’m still not sure if I am included.
If you still are not sure whether you are included, you can ask for free help. You can
call ___________ or visit www.________ for more information; or, you can call Rick
Nelson at 1-800-449-4900 or Maya Saxena at 561-394-3399 for more information; or you
can fill out and return the claim form described in Question 10 to see if you qualify.
THE SETTLEMENT BENEFITS – WHAT YOU GET
9. What does the Settlement provide?
Coast, Coast’s insurer, and Hacker Johnson’s insurer will fund a settlement of
$6,349,000 (the “Settlement Fund”), which, together with any accrued interest, will be
divided among all eligible Class Members who send in valid claim forms (“Authorized
Claimants”), after payment of Court-approved attorneys’ fees and expenses, and the costs of
claims administration, including the costs of printing and mailing this Notice and the cost of
publishing newspaper notice (the “Net Settlement Fund”).
10. How much will my payment be?
Your share of the Net Settlement Fund will depend on the number of valid claim
forms that Class Members send in and how many shares of stock you purchased or acquired
during the relevant period and when you bought and sold them.
In the unlikely event that there are sufficient funds in the Net Settlement Fund, each
Authorized Claimant will receive an amount equal to the Authorized Claimant’s claim, as
defined below. In the likely event that the amount in the Net Settlement Fund is not
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sufficient to permit payment of the total claim of each Authorized Claimant, then each
Authorized Claimant shall be paid the percentage of the Net Settlement Fund that each
Authorized Claimant’s claim bears to the total of the claims of all Authorized Claimants.
Payment in this manner shall be deemed conclusive against all Authorized Claimants.
A “Claim” will be calculated as follows:
[to be inserted]
The date of purchase or sale is the “contract” or “trade” date as distinguished from
the “settlement” date.
For Class Members who held Coast common stock at the beginning of the Class
Period or made multiple purchases or sales during the Class Period, the first-in, first-out
(“FIFO”) method will be applied to such holdings, purchases and sales for purposes of
calculating a claim. Under the FIFO method, sales of Coast common stock during the Class
Period will be matched, in chronological order, first against stock held at the beginning of
the Class Period. The remaining sales of stock during the Class Period will then be matched,
in chronological order, against stock purchased during the Class Period.
An Authorized Claimant will be eligible to receive a distribution from the Net
Settlement Fund only if a Class Member had a net loss, after all profits from transactions in
Coast common stock during the Class Period are subtracted from all losses. However, the
proceeds from sales of stock which have been matched against stock held at the beginning of
the Class Period will not be used in the calculation of such net loss. No distributions will be
made to Authorized Claimants who would otherwise receive a distribution of less than
$10.00.
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The Court has reserved jurisdiction to consider whether to allow, disallow or adjust
the claim of any Class Member.
Payment pursuant to the Plan of Allocation set forth above shall be conclusive
against all Authorized Claimants. No Person shall have any claim against Lead Plaintiffs,
Plaintiffs’ Counsel or any claims administrator or other Person designated by Lead Counsel
or Settling Defendants and/or the Related Parties and/or their counsel based on distributions
made substantially in accordance with the Stipulation and the Settlement contained therein,
the Plan of Allocation, or further orders of the Court. All Class Members who fail to
complete and file a valid and timely Proof of Claim shall be barred from participating in
distributions from the Net Settlement Fund (unless otherwise ordered by the Court), but
otherwise shall be bound by all of the terms of the Stipulation, including the terms of any
judgment entered and the releases given.
HOW YOU GET A PAYMENT – SUBMITTING A CLAIM FORM
11. How will I get a payment?
To qualify for a payment, you must send in a claim form. A claim form is enclosed
with this Notice. Read the instructions carefully, fill out the form, include all the documents
the form asks for, sign it, and mail it in the enclosed envelope postmarked no later than
_________, 2009.
12. When would I get my payment?
The Court will hold a hearing on _________, 2009, at ______, to decide whether to
approve the Settlement. If Judge Lazzara approves the Settlement, there may be appeals. It
is always uncertain whether these appeals can be resolved favorably, and resolving them can
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take time, perhaps more than a year. It also takes time for all the claim forms to be
processed. If there are no appeals and depending on the number of claims submitted, the
Claims Administrator could distribute the Net Settlement Fund as early as nine months after
the fairness hearing. Please be patient.
13. What am I giving up to get a payment or stay in the Class?
Unless you exclude yourself, you are staying in the Class. If you stay in the Class, all
of the Court’s orders and judgments will apply to and legally bind you, the claims asserted
on your behalf in the Litigation will be dismissed with prejudice and on the merits, and you
will be deemed to have released all of your Released Claims against the Released Persons, as
those terms are defined in the Settlement documents on file with the Court. These terms are
explained more fully below, but generally this means that you will not be able to sue any of
the Settling Defendants and certain parties related to the Settling Defendants on any claim
related to the Litigation and your purchase, sale, or holding of Coast common stock.
“Released Claims,” which are the claims that you, Lead Plaintiffs, and the rest of the
Class will release under the Settlement, means any and all claims, rights, demands,
obligations, controversies, debts, damages, losses, actions, causes of action, and liabilities of
any kind or nature whatsoever (collectively, “Claims”) whether in law or equity, whether
based on federal, state, local, statutory, or common law or any other law, whether accrued or
unaccrued, fixed or contingent, or matured or unmatured, including both known and
Unknown Claims, that have been or could have been asserted by the Lead Plaintiffs or the
Class Members, or any of them, or the heirs, executors, successors, or assigns of any of
them, directly, derivatively, or in any representative or other capacity, in the Litigation or
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any other forum at any point from the beginning of time to the date of the Stipulation’s
execution arising out of, based upon, or in any way related to the purchase of Coast common
stock during the Class Period (including the sale or holding of any shares purchased during
the Class Period) and the allegations, transactions, facts, events, matters, occurrences, acts,
representations, or omissions involved in, set forth in, or referred to in the Complaint or that
could have been asserted in the Complaint, including, without limitation, Claims for
negligence, gross negligence, breach of fiduciary duty, breach of the duty of care, breach of
the duty of loyalty, breach of the duty of candor, fraud, fraud in the inducement, negligent
misrepresentation, or violations of any state or federal securities laws.
The “Released Persons” – those parties who you will be releasing from Released
Claims under the Settlement – are the Settling Defendants and (i) each of the Settling
Defendants’ present or former immediate family members, heirs, executors, administrators,
successors, assigns, employees, officers (including, but not limited to, former Coast officers
Justin D. Locke and Anne V. Lee), directors, attorneys, legal representatives, insurers,
reinsurers, accountants or auditors, banks, investment banks, underwriters, consultants, and
agents, (ii) any person or entity which is or has been related to or affiliated with any Settling
Defendant, including, but not limited to, any direct or indirect predecessor, successor, parent,
subsidiary, or sister corporation or business organization of any Settling Defendant
(including, but not limited to, Coast Bank of Florida, First Banks, Inc. and First Bank), and
(iii) any person or entity in which any Settling Defendant has or had a controlling interest
and the present and former parents, subsidiaries, divisions, affiliates, predecessors,
successors, employees, officers, directors, attorneys, assigns, legal representatives, insurers,
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reinsurers, accountants or auditors, banks, investment banks, underwriters, consultants, and
agents of any such person or entity.
“Unknown Claims,” which are among the Released Claims under the Settlement,
means any and all Released Claims that any Plaintiff or Class Member does not know or
suspect to exist in his, her or its favor at the time of the release of the Released Persons from
the Released Claims which, if known by him, her or it, might have affected his, her or its
decisions with respect to the Settlement with and release of the Released Persons, or might
have affected his, her or its decision not to object to this Settlement. Lead Plaintiffs and the
Class Members shall waive the provisions, rights and benefits of California Civil Code
§1542, which provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
Under the Settlement, Lead Plaintiffs and the Class Members shall waive any and all
provisions, rights and benefits conferred by any law of any state or territory of the United
States, or principle of common law, which is similar, comparable or equivalent to California
Civil Code §1542. Lead Plaintiffs and Class Members may hereafter discover facts in
addition to or different from those which they now know or believe to be true with respect to
the subject matter of the Released Claims, but Lead Plaintiffs and the Class Members shall
expressly fully, finally and forever settle and release all Released Claims, known or
unknown, suspected or unsuspected, contingent or non-contingent, whether or not concealed
or hidden, which now exist, or heretofore have existed, upon any theory of law or equity now
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existing or coming into existence in the future, including, but not limited to, conduct which is
negligent, intentional, with or without malice, or a breach of any duty, law or rule, without
regard to the subsequent discovery or existence of such different or additional facts. The
foregoing waiver and inclusion of Unknown Claims in the definition of Released Claims was
separately bargained for and a key element of the Settlement.
EXCLUDING YOURSELF FROM THE SETTLEMENT
If you do not want a payment from this Settlement, but you want to keep the right to
sue or continue to sue the Released Persons with respect to Released Claims, you must take
steps to get out of the Settlement. This is called excluding yourself or is sometimes referred
to as opting out of the Class.
14. How do I get out of the Class?
To exclude yourself from the Class, you must send a letter by mail stating that you
want to be excluded from Grand Lodge of Pennsylvania v. Brian P. Peters, et al., Case No.
8:08-cv-479-T-26EAJ. You must include your name, address, telephone number, your
signature, and the number of shares of Coast common stock you purchased between January
21, 2005 and January 22, 2007, and the dates and prices of such purchases. You cannot
exclude yourself on the phone or by e-mail. You must mail your exclusion request or your
request to retract your previous request to be excluded postmarked no later than _________,
2009 to:
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Coast Securities Litigation EXCLUSIONS Claims Administrator c/o RSM McGladrey, Inc. _____________________ _____________________
If your request for exclusion is not postmarked by __________________, then you
will not be excluded from the Class, and you will be bound by the Settlement and any orders
of the Court, regardless of whether you make a claim to share in the Settlement or receive a
payment, unless the Court orders otherwise. If you ask to be excluded, you are not eligible
to get any Settlement payment, and you cannot object to the Settlement. You will not be
legally bound by anything that happens in this lawsuit.
15. If I don’t exclude myself, can I sue the Settling Defendants for the same
thing later?
No. Unless you exclude yourself, you give up any right to sue the Settling
Defendants for the claims that this Settlement resolves. Remember, the exclusion deadline is
_________, 2009.
16. If I exclude myself, can I get money from this Settlement?
No. If you exclude yourself, do not send in a claim form to ask for any money. Once
you exclude yourself, you will receive no cash payment even if you also submit a claim
form, unless you withdraw your notice of exclusion before the deadline for submitting a
claim form.
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THE LAWYERS REPRESENTING YOU
17. Do I have a lawyer in this case?
The Court appointed the law firms of Saxena White P.A. and Coughlin Stoia Geller
Rudman & Robbins LLP to represent you and other Class Members. These lawyers are
called Lead Counsel. You will not be charged for these lawyers’ work. If you want to be
represented by your own lawyer, you may hire one at your own expense.
18. How will the lawyers be paid?
At the fairness hearing, Lead Counsel will request the Court to award attorneys’ fees
of 33% of the Settlement Fund and for expenses up to $_________, which were incurred in
connection with the Litigation. In addition, Lead Plaintiffs Troy Ratcliff, Daniel Altenburg
and St. Denis J. Villere & Co. LLC may request up to $25,000.00 each for their expenses in
representing the Class. If awarded, the cost would be $0.__ per share. This compensation
will be paid from the Settlement Fund. Class Members are not personally liable for any such
fees or expenses. To date, Lead Counsel have not received any payment for their services in
conducting this Litigation on behalf of the Lead Plaintiffs and the Class, nor have counsel
been paid for their expenses. The fee requested will compensate Lead Counsel for their
work in achieving the Settlement Fund and is well within the range of fees awarded to class
counsel under similar circumstances in other cases of this type. The Court may award less
than this amount.
OBJECTING TO THE SETTLEMENT
You can tell the Court that you don’t agree with the Settlement or some part of it.
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19. How do I tell the Court that I don’t like the Settlement?
If you are a Class Member (and you have not excluded yourself), you can object to
the Settlement, the request for attorneys’ fees and expenses, Lead Plaintiffs’ expenses or the
Plan of Allocation if you do not like any part of it. You can give reasons why you think the
Court should not approve the Settlement, the request for attorneys’ fees and expenses, Lead
Plaintiffs’ expenses or the Plan of Allocation. The Court will consider your views. To
object, you must send a signed letter saying that you object to the proposed Settlement in
Grand Lodge of Pennsylvania v. Peters, et al., No. 8:07-cv-479-T-26EAJ. Be sure to include
your name, address, telephone number, your signature, the number of shares of Coast
common stock purchased between January 21, 2005 and January 22, 2007, and the reasons
you object to the Settlement, the requested attorneys’ fees and expenses, Lead Plaintiffs’
expenses or the Plan of Allocation. Any objection to the Settlement, the requested attorneys’
fees and expenses, Lead Plaintiffs’ expenses or the Plan of Allocation must be mailed or
delivered such that it is received by each of the following no later than ____________, 2009:
Clerk of the Court United States District Court
Middle District of Florida, Tampa Division 801 North Florida Ave.
Tampa, FL 33602
COUGHLIN STOIA GELLER RUDMAN & ROBBINS LLP JEFFREY D. LIGHT
655 West Broadway, Suite 1900 San Diego, CA 92101
SAXENA WHITE P.A.
MAYA SAXENA 2424 N. Federal Highway, Suite 257
Boca Raton, FL 33431
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CARLTON FIELDS P.A.
SAMUEL J. SALARIO, JR. 4221 W. Boy Scout Boulevard
Tampa, FL 33609
BATTAGLIA, ROSS, DICUS & WEIN, P.A. STEPHEN J. WEIN
980 Tyrone Boulevard St. Petersburg, FL 33743
HILL, WARD & HENDERSON P.A.
BENJAMIN H. HILL III Bank of America Plaza
101 East Kennedy Boulevard Suite 3700
Tampa, FL 33602
FOWLER WHITE BOGGS P.A. GIANLUCA MORELLO
501 East Kennedy Boulevard Suite 1700
Tampa, FL 33602
20. What is the difference between objecting and excluding myself from the
Settlement?
Objecting is telling the Court that you do not like something about the proposed
Settlement. You can object only if you stay in the Class. Excluding yourself is telling the
Court that you do not want to be part of the Class. If you exclude yourself, you have no
basis to object because the case no longer applies to you.
THE COURT’S FAIRNESS HEARING
The Court will hold a hearing to decide whether to approve the proposed Settlement.
You may attend, but you do not have to.
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21. When and where will the Court decide whether to approve the
Settlement?
The Court will hold a hearing at ______, on _________, 2009, at the United States
District Court for the Middle District of Florida, Tampa Division, 801 North Florida Ave.,
Tampa, FL 33602. At this hearing, the Court will consider whether the Settlement is fair,
reasonable and adequate. If there are objections, the Court will consider them. The Court
will listen to people who have timely asked to speak at the hearing. The Court will also
decide whether to approve the payment of fees and expenses to Lead Counsel including the
expenses of Lead Plaintiffs and the Plan of Allocation. We do not know how long the
hearing will take or whether the Court will make its decision about the Settlement on the day
of the hearing or sometime later.
22. Do I have to come to the hearing?
No. Lead Counsel will answer questions Judge Lazzara may have. But, you are
welcome to come at your own expense. If you send an objection, you don’t have to come to
Court to talk about it. As long as you mailed your written objection on time, the Court will
consider it. You may also pay your own lawyer to attend, but it is not necessary.
23. May I speak at the hearing?
You may ask the Court for permission to speak at the hearing. To do so, you must
send a letter saying that it is your intention to appear in Grand Lodge of Pennsylvania v.
Peters, et al., No. 8:07-cv-479-T-26EAJ. Be sure to include your name, address, telephone
number, your signature, and the number of shares of Coast purchased between January 21,
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2005 to January 22, 2007. Your notice of intention to appear must be received no later than
_________________, 2009 by the Clerk of the Court, Lead Counsel, and Defendants’
counsel, at the addresses listed in Question 19. You cannot speak at the hearing if you
exclude yourself from the Class.
IF YOU DO NOTHING
24. What happens if I do nothing at all?
If you do nothing, you’ll get no money from the Settlement. But, unless you exclude
yourself, you won’t be able to start a lawsuit, continue with a lawsuit, or be part of any other
lawsuit against the Settling Defendants about the same issues in this case.
GETTING MORE INFORMATION
25. Are there more details about the Settlement?
This Notice is a summary and does not describe all of the details of the Settlement,
which has been memorialized in a Stipulation of Settlement (the “Stipulation”) executed by
the parties and filed with the Court. For full details of the matters discussed in this Notice,
you may review the Stipulation, with exhibits, at the Clerk’s office at the United States
District Court, Middle District of Florida, Tampa Division, 801 North Florida Ave., Tampa,
FL 33602, during regular business hours, or at www._________.
26. How do I get more information?
You can call 1-800-449-4900 or write to a representative of Lead Counsel, Rick
Nelson, Coughlin Stoia Geller Rudman & Robbins LLP, 655 West Broadway, Suite 1900,
San Diego, CA 92101 or Maya Saxena, Saxena White P.A., 2424 N. Federal Highway, Suite
257, Boca Raton, FL 33431, 1-561-394-3399, or visit the Claims Administrator’s website at
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www._________. Please do not call the Court or the Clerk of the Court for additional
information about the Settlement.
27. Special notice to nominees
If you hold any Coast common stock purchased between January 21, 2005 and
January 22, 2007, inclusive as a nominee for a beneficial owner, then, within ten (10) days
after you receive this Notice, you must either: (1) send a copy of this Notice and
accompanying Proof of Claim by first class mail to all such Persons; or (2) provide a list of
the names and addresses of such Persons to the Claims Administrator:
Coast Securities Litigation Claims Administrator c/o RSM McGladrey, Inc. ________________________ ________________________
If you choose to mail the Notice and Proof of Claim yourself, you may obtain from
the Claims Administrator (without cost to you) as many additional copies of these documents
as you will need to complete the mailing.
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Regardless of whether you choose to complete the mailing yourself or elect to have
the mailing performed for you, you may obtain reimbursement for or advancement of
reasonable administrative costs actually incurred or expected to be incurred in connection
with forwarding the Notice and which would not have been incurred but for the obligation to
forward the Notice, upon submission of appropriate documentation to the Claims
Administrator.
DATED: __________________, 2008 BY ORDER OF THE COURT UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION
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UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
GRAND LODGE OF PENNSYLVANIA, and All Others Similarly Situated,
Plaintiff,
vs.
BRIAN P. PETERS, BRIAN F. GRIMES, JUSTIN D. LOCKE, ANNE V. LEE, and COAST FINANCIAL HOLDINGS, INC.,
Defendants.
) ) ) ) ) ) ) ) ) ) ) ) )
No. 8:07-cv-479-T-26EAJ (Consolidated)
CLASS ACTION
PROOF OF CLAIM AND RELEASE
EXHIBIT A-2
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NOTE: You are urged to read carefully the accompanying Notice of Pendency and
Proposed Settlement of Class Action (the “Notice”). In order to be eligible to participate in
the settlement described in the Notice (the “Settlement”), Class Members or their authorized
representatives must complete this Proof of Claim and Release (“Proof of Claim”), sign it
and mail it, sufficient postage pre-paid, to the Claim Administrator postmarked no later
than ______________________, 2009. If you need assistance filling out this Proof of
Claim, please contact the Claims Administrator.
I. GENERAL INSTRUCTIONS FOR THIS PROOF OF CLAIM
1. Please read the instructions to this Proof of Claim very carefully. If you do
not accurately and timely submit this Proof of Claim, you may be prohibited from
participating in the Settlement. Even if this occurs, you will still be bound by the terms of
the Settlement and any orders and judgments of the Court unless you exclude yourself from
the Settlement as provided in the Notice.
2. In order to be eligible to participate in the Settlement in Grand Lodge of
Pennsylvania v. Peters, et al., Case No. 8:07-cv-478-T-26EAJ (the “Litigation”), you must
have purchased the common stock of Coast Financial Holdings, Inc. (“Coast”) during the
period January 21, 2005 through January 22, 2007, inclusive (the “Class Period”). Even if
you purchased Coast common stock during the Class Period, you are excluded from
participation in the settlement if you are (a) one of the defendants in the Litigation, (b) a
partner, officer, director, or affiliate of any of the defendants in the Litigation, (c) a member
of the immediate family (parent, spouse, sibling, or child) of any of the defendants in the
litigation, or (d) are an entity in which any of the defendants in the Litigation have a
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controlling interest. If you did not purchase Coast common stock during the Class
Period, or are excluded from participation in the settlement as described in this
paragraph, please do NOT submit this Proof of Claim.
3. To be eligible to participate in the Settlement, you must truthfully and
accurately complete and, on page ___ hereof, sign this Proof of Claim. YOU MUST MAIL
YOUR COMPLETED AND SIGNED PROOF OF CLAIM AND RELEASE
POSTMARKED ON OR BEFORE ___________, 2009, ADDRESSED AS FOLLOWS:
Coast Securities Litigation Claims Administrator c/o RSM McGladrey, Inc. ______________________ ______________________
If you do not truthfully or accurately complete this Proof of Claim, or if you do not mail your
Proof of Claim to the Claims Administrator on or before ______________, 2009, you will
not be entitled to participate in the Settlement, but you will still be bound by the terms of the
Settlement and any orders of the Court.
4. Submission of this Proof of Claim, however, does not assure that you will
share in the proceeds of settlement in the Litigation.
5. If you are a member of the Class and you have not timely requested
exclusion, you are bound by the terms of any judgment entered in the Litigation, whether or
not you submit this Proof of Claim.
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II. INSTRUCTIONS FOR PART I OF THIS PROOF OF CLAIM – CLAIMANT IDENTIFICATION
1. This claim must be filed by the actual beneficial purchaser of Coast common
stock or the legal representative of the actual beneficial purchaser, and not by the record
purchaser of the stock. If you purchased Coast common stock and held the certificate(s) in
your own name, then you are the beneficial purchaser of the stock. If you purchased Coast
common stock and the certificate(s) were registered in the name of a third party, such as a
nominee or brokerage firm, you are still the beneficial purchaser, but the third party is the
record purchaser.
2. If you are a record purchaser or nominee for a beneficial purchaser of Coast
common stock, then you must, within ten (10) days after receiving the Notice, either (a) send
a copy of the Notice and this Proof of Claim by first class mail to all beneficial purchasers
during the Class Period of Coast common stock for whom you hold as a record purchaser or
nominee or (b) provide a list of the names and addresses of all beneficial purchasers of such
Coast common stock to the Claims Administrator. Additional information about these issues
is included in Section __ of the Notice.
3. If you are a beneficial purchaser of Coast common stock during the Class
Period, please use Part I of this form entitled “Claimant Identification” to provide
information identifying yourself. Where indicated in Part I, you should also identify any
record purchaser or nominee for the shares of Coast common stock to which this Proof of
Claim pertains, if that record purchaser or nominee is different from the beneficial purchaser
of the Coast common stock.
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4. If the shares of Coast common stock to which this Proof of Claim pertains
were owned jointly, each joint purchaser must complete and sign this Proof of Claim.
5. Executors, administrators, guardians, conservators and trustees must
complete and sign this Proof of Claim on behalf of persons represented by them, and they
must identify the persons or entities whom they represent and provide proof of their authority
(e.g., powers of attorney or currently effective letters testamentary or letters of
administration) to submit this Proof of Claim. The Social Security (or taxpayer
identification) number and telephone number of the beneficial owner may be used in
verifying the claim. Failure to provide the foregoing information could delay verification of
your claim or result in rejection of the claim.
6. Please complete and submit a separate Proof of Claim for each differently
named account or form of ownership, such as an individual account, an IRA account, a joint
account, a custodial account, etc. Joint tenants, co-owners, or UGMA custodians should file
a single claim. Persons who file more than one claim (e.g., one in the person’s name and one
for an IRA or joint account) must identify the other claims filed.
III. INSTRUCTIONS FOR PART II OF THIS PROOF OF CLAIM – SCHEDULE OF TRANSACTIONS IN COAST COMMON STOCK
1. Use Part II of this form entitled “Schedule of Transactions in Coast Common
Stock” to supply all required details of your transaction(s) in Coast common stock. If you
need more space or additional schedules, attach separate sheets giving all of the required
information in substantially the same form. Sign and print or type your name on each
additional sheet.
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2. On the schedules, provide all of the requested information with respect to all
of your purchases and all of your sales of Coast common stock which took place at any time
between January 21, 2005 through January 22, 2007, inclusive, whether such transactions
resulted in a profit or a loss. Failure to report all such transactions may result in the rejection
of your claim.
3. List each transaction in the Class Period separately and in chronological
order, by trade date, beginning with the earliest. You must accurately provide the month,
day and year of each transaction you list.
4. The date of purchase and/or sale of shares of Coast common stock is the
“trade” date and not the “settlement” date.
5. The date of covering a “short sale” is deemed to be the date of purchase of
Coast common stock. The date of a “short sale” is deemed to be the date of sale of Coast
common stock.
6. You must attach to this Proof of Claim copies of brokerage confirmations,
monthly statements, or other documentation evidencing your transactions in Coast common
stock during the Class Period in order for your claim to be valid. Please do not attach
original documents.
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UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION Grand Lodge of Pennsylvania v. Peters, et al.,
No. 8:07-cv-479-T-26EAJ PROOF OF CLAIM
Must Be Postmarked No Later Than: ___________, 2009
Please Type or Print
PART I: CLAIMANT IDENTIFICATION
Beneficial Owner’s Name (First, Middle, Last)
Street Address
City
State or Province
Zip Code or Postal Code
Country
Individual Social Security Number or Taxpayer Identification Number
Corporation/Other
Area Code
Telephone Number (work)
Area Code
Telephone Number (home)
Record Owner’s Name (if different from beneficial owner listed above)
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PART II: SCHEDULE OF TRANSACTIONS IN COAST COMMON STOCK
A. Number of shares of Coast common stock held at the beginning of trading on January 21, 2005: ________________________
B. Purchases (January 21, 2005 – January 22, 2007, inclusive) of Coast common stock:
Trade Date Mo. Day Year
Number of Shares Purchased
Total Purchase Price
1.____________
2.____________
3.____________
1.____________
2.____________
3.____________
1.____________
2.____________
3.____________
IMPORTANT: Identify by number listed above all purchases in which you covered a “short sale”: ________________________
D. Sales (January 21, 2005 – January 22, 2007, inclusive) of Coast common stock:
Trade Date Mo. Day Year
Number of Shares Sold Total Sales Price
1.____________
2.____________
3.____________
1.____________
2.____________
3.____________
1.____________
2.____________
3.____________
E. Number of shares of Coast common stock held at close of trading on January 22, 2007: ________________________
If you require additional space, attach extra schedules in the same format as above. Sign and print your name on each additional page.
YOU MUST READ THE RELEASE AND YOUR SIGNATURE ON PAGE __ WILL CONSTITUTE YOUR ACKNOWLEDGMENT OF THE RELEASE.
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IV. SUBMISSION TO JURISDICTION OF COURT AND ACKNOWLEDGMENTS
I (We) submit this Proof of Claim under the terms of the Stipulation described in the
Notice. I (We) also submit to the jurisdiction of the Middle District of Florida, Tampa
Division, with respect to my (our) claim as a Class Member and for purposes of enforcing
the release set forth herein. I (We) further acknowledge that I am (we are) bound by and
subject to the terms of any judgment that may be entered in the Litigation. I (We) agree to
furnish additional information to the Claims Administrator or Lead Counsel to support this
claim if required to do so. I (We) have not submitted any other claim covering the same
purchases or sales of Coast common stock during the Class Period and know of no other
Person having done so on my (our) behalf.
V. RELEASE
1. By signing this Proof of Claim, and in consideration of the establishment of
the Settlement Fund as described in the Notice, I (We), on behalf of myself (ourselves) and
my (our) heirs, executors, administrators, successors, assigns, representatives, and all other
persons who may claim by or through me (us), do hereby fully, finally and forever settle,
release, any and all Released Persons from any and all Released Claims. By signing this
Proof of Claim, I (we) also covenant and agree to refrain from instituting, commencing,
prosecuting, or participating in, either directly, indirectly, representatively, or in any other
capacity, any and all Released Claims against any and all Released Persons.
2. For purposes of this Proof of Claim and the release contained herein,
“Released Claims” means any and all claims, rights, demands, obligations, controversies,
debts, damages, losses, actions, causes of action, and liabilities of any kind or nature
whatsoever (collectively, “Claims”) whether in law or equity, whether based on federal,
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state, local, statutory, or common law or any other law, whether accrued or unaccrued, fixed
or contingent, or matured or unmatured, including both known and Unknown Claims, that
have been or could have been asserted by the Lead Plaintiffs or the Class Members, or any of
them, or the heirs, executors, successors, or assigns of any of them, directly, derivatively, or
in any representative or other capacity, in the Litigation or any other forum at any point from
the beginning of time to the date of the Stipulation’s execution arising out of, based upon, or
in any way related to the purchase of Coast common stock during the Class Period (including
the sale or holding of any shares purchased during the Class Period) and the allegations,
transactions, facts, events, matters, occurrences, acts, representations, or omissions involved
in, set forth in, or referred to in the Complaint or that could have been asserted in the
Complaint, including, without limitation, Claims for negligence, gross negligence, breach of
fiduciary duty, breach of the duty of care, breach of the duty of loyalty, breach of the duty of
candor, fraud, fraud in the inducement, negligent misrepresentation, or violations of any state
or federal securities laws.
3. For purposes of this Proof of Claim and the release contained herein,
“Unknown Claims” means any and all Released Claims that I (we) do not know or suspect to
exist in my (our) favor at the time of the release of the Released Parties from the Released
Claims which, if known by me (us), might have affected my (our) decisions with respect to
the Settlement with and release of the Released Persons, or might have affected my (our)
decision not to object to the Settlement. With respect to any and all Released Claims, I (we)
expressly waive the provisions, rights and benefits of California Civil Code §1542, which
provides:
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A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
I (we) also expressly waive any and all provisions, rights and benefits conferred by any law
of any state or territory of the United States, or principle of common law, which is similar,
comparable or equivalent to California Civil Code §1542. I (we) acknowledge that I (we)
may hereafter discover facts in addition to or different from those which I (we) now know or
believe to be true with respect to the subject matter of the Released Claims, but I (we)
nonetheless expressly fully, finally and forever settle and release, any and all Released
Claims, known or unknown, suspected or unsuspected, contingent or non-contingent,
whether or not concealed or hidden, which now exist, or heretofore have existed, upon any
theory of law or equity now existing or coming into existence in the future, including, but not
limited to, conduct which is negligent, intentional, with or without malice, or a breach of any
duty, law or rule, without regard to the subsequent discovery or existence of such different or
additional facts. I (we) acknowledge that the foregoing waiver and inclusion of Unknown
Claims in the definition of Released Claims was separately bargained for and a key element
of the Settlement of which this release is a part.
4. For purposes of this Proof of Claim and the release contained herein,
“Released Persons” means Coast, Brian P. Peters, Brian F. Grimes, James K. Toomey,
Joseph Gigliotti, Kennedy Legler III, Paul G. Nobbs, Thomas M. O’Brian, John R.
Reinemeyer, Michael T. Ruffino, M. Alex White, Sandler O’Neill & Partners, L.P., Sterne,
Agee & Leach, Inc., and Hacker, Johnson & Smith, P.A. (collectively, the “Settling
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Defendants”), together with (i) each of the Settling Defendants’ present or former immediate
family members, heirs, executors, administrators, successors, assigns, employees, officers
(including, but not limited to, former Coast officers Justin D. Locke and Anne V. Lee),
directors, attorneys, legal representatives, insurers, reinsurers, accountants or auditors, banks,
investment banks, underwriters, consultants, and agents, (ii) any person or entity which is or
has been related to or affiliated with any Settling Defendant, including, but not limited to,
any direct or indirect predecessor, successor, parent, subsidiary, or sister corporation or
business organization of any Settling Defendant (including, but not limited to, Coast Bank of
Florida, First Banks, Inc. and First Bank), and (iii) any person or entity in which any Settling
Defendant has or had a controlling interest and the present and former parents, subsidiaries,
divisions, affiliates, predecessors, successors, employees, officers, directors, attorneys,
assigns, legal representatives, insurers, reinsurers, accountants or auditors, banks, investment
banks, underwriters, consultants, and agents of any such person or entity.
5. This release shall be of no force or effect unless and until the Court approves
the Stipulation and the Stipulation becomes effective on the Effective Date (as defined in the
Stipulation).
VI. REPRESENTATIONS AND WARRANTIES
1. I (we) represent and warrant that I (we) am (are) the sole and lawful owner of
all right, title, and interest in the matters released pursuant to Section V of this Proof of
Claim. If I (we) am (are) submitting this Proof of Claim in a representative capacity (e.g.,
executor, guardian, etc.), I (we) represent and warrant the persons or entities I (we) represent
are the sole and lawful owner(s) of all right, title, and interest in the matters released
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pursuant to Section V of this Proof of Claim and that I (we) have all authority necessary to
dispose of those matters. I (We) hereby warrant and represent that I (we) have not assigned
or transferred or purported to assign or transfer, voluntarily or involuntarily, any matter
released pursuant to this release or any other part or portion thereof.
2. I (we) represent and warrant that I (we) am (are) fully authorized to execute
and deliver this Proof of Claim.
3. I (We) hereby warrant and represent that I (we) have included information
about all of my (our) transactions in Coast common stock which occurred during the Class
Period as well as the number of shares of Coast common stock held by me (us) at the
opening of trading on January 21, 2005 and at the close of trading on January 22, 2007.
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SUBSTITUTE FORM W-9
Request for Taxpayer Identification Number (“TIN”) and Certification
PART I
NAME:
Check appropriate box:
� Individual/Sole Proprietor � Pension Plan � Corporation � Partnership � Trust � IRA � Other
Enter TIN on appropriate line.
For individuals, this is your social security number (“SSN”).
For sole proprietors, you must show your individual name, but you may also enter your business or “doing business as” name. You may enter either your SSN or your Employer Identification Number (“EIN”).
For other entities, it is your EIN.
__ __ __ - __ __ - __ __ __ __ or __ __ - __ __ __ __ __ __ __ Social Security Number Employer Identification Number
PART II
For Payees Exempt from Backup Withholding
If you are exempt from backup withholding, enter your correct TIN in Part I and write “exempt” on the following line: ________________________________.
PART III
Certification
UNDER THE PENALTY OF PERJURY, I (WE) CERTIFY THAT:
1. The number shown on this form is my correct TIN; and
2. I (We) certify that I am (we are) NOT subject to backup withholding under the provisions of Section 3406 (a)(1)(C) of the Internal Revenue Code because: (a) I am (we are) exempt from backup withholding; or (b) I (we) have not been notified by the Internal Revenue Service that I am (we are) subject to backup withholding as a result
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of a failure to report all interest or dividends; or (c) the Internal Revenue Service has notified me (us) that I am (we are) no longer subject to backup withholding.
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NOTE: If you have been notified by the Internal Revenue Service that you are subject to backup withholding, you must cross out Item 2 above.
SEE ENCLOSED FORM W-9 INSTRUCTIONS
The Internal Revenue Service does not require your consent to any provision of this
document other than the certification required to avoid backup withholding.
I declare under penalty of perjury under the laws of the United States of America that
the foregoing information supplied by the undersigned is true and correct.
Executed this _________ day of ___________________, (Month/Year)
in _____________________, ______________________________. (City) (State/Country)
(Sign your name here)
(Type or print your name here)
(Capacity of person(s) signing, e.g., Beneficial Purchaser, Acquirer, Executor or Administrator)
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ACCURATE CLAIMS PROCESSING TAKES A SIGNIFICANT AMOUNT OF TIME.
THANK YOU FOR YOUR PATIENCE.
Reminder Checklist:
1. Please sign the above release and declaration.
2. Remember to attach supporting documentation, if available.
3. Do not send original stock certificates.
4. Keep a copy of your claim form for your records.
5. If you desire an acknowledgment of receipt of your claim form, please send it Certified Mail, Return Receipt Requested.
6. If you move, please send us your new address.
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UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
GRAND LODGE OF PENNSYLVANIA, and All Others Similarly Situated,
Plaintiff,
vs.
BRIAN P. PETERS, BRIAN F. GRIMES, JUSTIN D. LOCKE, ANNE V. LEE, and COAST FINANCIAL HOLDINGS, INC.,
Defendants.
) ) ) ) ) ) ) ) ) ) ) ) )
No. 8:07-cv-479-T-26EAJ (Consolidated)
CLASS ACTION
SUMMARY NOTICE
EXHIBIT A-3
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TO: ALL PERSONS WHO PURCHASED COAST FINANCIAL HOLDINGS, INC. (“COAST”) COMMON STOCK BETWEEN JANUARY 21, 2005 AND JANUARY 22, 2007, INCLUSIVE (THE “CLASS”)
YOU ARE HEREBY NOTIFIED that the Lead Plaintiffs, as defined in the
Stipulation of Settlement dated February __, 2009, in the above-captioned federal court
action (the “Litigation”), for themselves and on behalf of the Class Members, have entered
into a settlement with the defendants to resolve the Litigation. (All capitalized terms herein
are as defined in the Stipulation on file with the Court).
YOU ARE FURTHER NOTIFIED that, pursuant to an Order of the United States
District Court for the Middle District of Florida, Tampa Division (the “Court”), that a
hearing will be held on _________, 2009, at __:__ _.m., before the Honorable Richard A.
Lazzara, United States District Judge, at Courtroom __ of the Sam Gibbons United States
Courthouse, 801 North Florida Ave., Tampa, Florida, 33602, for the purpose of determining:
(1) whether the proposed settlement of the claims in the Litigation against the Settling
Defendants for the sum of $6,349,000 in cash upon the terms set forth in the Stipulation,
including the releases of the Settling Defendants and their Related Parties provided for
therein, should be approved by the Court as fair, just, reasonable, and adequate; (2) whether,
thereafter, this Litigation should be dismissed with prejudice as set forth in the Stipulation;
(3) whether the Plan of Allocation is fair, just, reasonable, and adequate and therefore should
be approved; and (4) whether the application of Lead Counsel for the payment of attorneys’
fees and expenses and the payment of the Lead Plaintiffs’ expenses incurred in connection
with this Litigation should be approved.
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IF YOU ARE A MEMBER OF THE CLASS DESCRIBED ABOVE, YOUR
RIGHTS WILL BE AFFECTED BY THIS SETTLEMENT AND YOU MAY BE
ENTITLED TO SHARE IN THE SETTLEMENT FUND. If you have not received a
detailed Notice of Pendency and Proposed Settlement of Class Action and a copy of the
Proof of Claim and Release form, you may obtain copies by writing to Coast Securities
Litigation, c/o RSM McGladrey, Inc., ________________________ or you can download
them at www.________.com. If you are a Class Member, in order to share in the distribution
of the Net Settlement Fund, you must submit a Proof of Claim and Release postmarked no
later than ___________, 2009, establishing that you are entitled to recovery. You will be
bound by any judgment rendered in the Litigation and the releases provided for in the
Stipulation whether or not you make a claim.
If you desire to be excluded from the Class, you must submit a Request for Exclusion
postmarked by ____________, 2009, in the manner and form explained in the detailed
Notice referred to above. All members of the Class who have not requested exclusion from
the Class will be bound by any judgment entered in the Litigation pursuant to the Stipulation.
Any objection to the settlement must be mailed or delivered such that it is received
by each of the following no later than ____________, 2009:
CLERK OF THE COURT UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION 801 North Florida Ave. Tampa, FL 33602 COUGHLIN STOIA GELLER RUDMAN & ROBBINS LLP JEFFREY D. LIGHT
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655 West Broadway, Suite 1900 San Diego, CA 92101 SAXENA WHITE P.A. MAYA SAXENA 2424 N. Federal Highway, Suite 257 Boca Raton, FL 33431 Co-Lead Counsel for Plaintiffs CARLTON FIELDS, P.A. SAMUEL J. SALARIO, JR. 4221 W. Boy Scout Boulevard Tampa, FL 33607 Counsel for Defendants Coast, Brian F. Grimes, James K. Toomey, Joseph Gigliotti, Kennedy Legler III, Paul G. Nobbs, Thomas O’Brian, John Reinemeyer, Michael J. Ruffino and M. Alex White BATTAGLIA ROSS DICUS & WEIN, P.A. STEPHEN J. WEIN 980 Tyrone Boulevard St. Petersburg, FL 33743 Counsel for Defendant Brian P. Peters HILL, WARD & HENDERSON P.A. BENJAMIN H. HILL III Bank of America Plaza 101 East Kennedy Boulevard Suite 3700 Tampa, FL 33602 Counsel for Defendants Sterne, Agee & Leach, Inc. and Sandler O’Neill & Partners LP FOWLER WHITE BOGGS P.A. GIANLUCA MORELLO 501 East Kennedy Boulevard Suite 1700 Tampa, FL 33602 Counsel for Defendant Hacker Johnson & Smith, P.A.
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PLEASE DO NOT CONTACT THE COURT OR THE CLERK'S OFFICE
REGARDING THIS NOTICE.
DATED: ____________________, 2009 BY ORDER OF THE COURT
UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION
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UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
GRAND LODGE OF PENNSYLVANIA, and All Others Similarly Situated,
Plaintiff,
vs.
BRIAN P. PETERS, BRIAN F. GRIMES, JUSTIN D. LOCKE, ANNE V. LEE, and COAST FINANCIAL HOLDINGS, INC.,
Defendants.
) ) ) ) ) ) ) ) ) ) ) ) )
No. 8:07-cv-479-T-26EAJ (Consolidated)
CLASS ACTION
[PROPOSED] FINAL JUDGMENT AND ORDER OF DISMISSAL WITH PREJUDICE
EXHIBIT B
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This matter came before the Court for hearing pursuant to the Order Preliminarily
Approving Settlement and Providing for Notice (“Order”) dated _________, 2009, on the
application of Lead Plaintiffs for approval of the settlement set forth in the Stipulation of
Settlement dated _____________, 2009 (the “Stipulation”). Due and adequate notice having
been given to the Class as required in said Order, and the Court having considered all papers
filed and proceedings had herein and otherwise being fully informed in the premises and
good cause appearing therefor, IT IS HEREBY ORDERED, ADJUDGED AND DECREED
that:
1. This Judgment incorporates by reference the definitions in the Stipulation,
and all terms used herein shall have the same meanings as set forth in the Stipulation, unless
otherwise set forth herein.
2. This Court has jurisdiction over the subject matter of the Litigation and over
all parties to the Litigation, including all members of the Class.
3. The Court hereby certifies the following class for settlement purposes only:
All Persons who purchased Coast common stock between January 21, 2005 and January 22, 2007, inclusive (“Class Period”). Excluded from the Class are the Settling Defendants, members of the immediate families of the Settling Defendants, the former and current directors, officers, subsidiaries and affiliates of Coast, as well as any person, firm, trust, corporation, officer, director or other individual or entity in which any Settling Defendant has a controlling interest and the legal representatives, affiliates, heirs, successors-in-interest, or assigns of any such excluded party. Also excluded from the Class are those Persons who timely and validly request exclusion from the Class pursuant to the Notice of Pendency and Proposed Settlement of Class Action.
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4. Pursuant to Federal Rule of Civil Procedure 23, this Court hereby approves
the Settlement set forth in the Stipulation and finds that said Settlement is, in all respects,
fair, reasonable, and adequate to the Class.
5. Pursuant to Rule 23 of the Federal Rules of Civil Procedure, the Court finds
that the Stipulation and Settlement are fair, reasonable, and adequate as to each of the
Settling Parties and Class Members, and that the Stipulation and Settlement are hereby
finally approved in all respects, and the Settling Parties are hereby directed to perform their
terms.
6. Accordingly, the Court authorizes and directs implementation of all the terms
and provisions of the Stipulation, as well as the terms and provisions hereof. The Court
hereby dismisses the Litigation and all Released Claims of the Class with prejudice and on
the merits, without costs as to any Settling Party, except as and to the extent provided in the
Stipulation and herein.
7. Upon the Effective Date, Lead Plaintiffs shall, and each of the Class Members
shall be deemed to have, and by operation of this Judgment shall have, fully, finally, and
forever released, relinquished and discharged all Released Claims against the Released
Persons, whether or not such Class Member executes and delivers the Proof of Claim and
Release.
8. Upon the Effective Date, each of the Settling Defendants shall be deemed to
have, and by operation of this Judgment shall have, fully, finally, and forever released,
relinquished and discharged Lead Plaintiffs, each and all of the Class Members and
Plaintiffs’ Counsel from all claims (including Unknown Claims) arising out of, relating to, or
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in connection with the institution, prosecution, assertion, settlement or resolution of the
Litigation.
9. Within ten (10) calendar days after the Effective Date, Lead Plaintiffs shall
file with the United States Court of Appeals for the Eleventh Circuit a motion to dismiss with
prejudice the appeal in Grand Lodge of Pennsylvania v. Brian P. Peters, et al., Appeal No.
08-16075, in accordance with the terms provided in the Stipulation.
10. Lead Plaintiff, all members of the Class, the successors and assigns of any of
them and anyone claiming through or on behalf of any of them, are hereby permanently
barred, enjoined and restrained from instituting, commencing, prosecuting, or maintaining,
whether directly, derivatively, representatively, or in any other capacity, in the Litigation or
any other action or proceeding, any Released Claims against any of the Released Persons.
The Released Claims against each and all of the Released Persons shall be released and
dismissed with prejudice and on the merits. Nothing in this paragraph shall release the
Released Claims against the Released Persons of any Person who submitted a timely, signed
request for exclusion from the Class and who did not submit a timely, signed request to
revoke the prior request for exclusion (“Opt-Out Plaintiffs”).
11. In accordance with the provisions of the Private Securities Litigation Reform
Act of 1995, 15 U.S.C. §78u-4, each of the Settling Defendants is by virtue of the Settlement
of the Litigation as set forth in the Stipulation, discharged from all claims for contribution by
any person and in any forum arising out of or related to any claim that has been or could be
raised in the Litigation, or the acts, facts or events alleged in the Litigation.
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12. The Notice of Pendency and Proposed Settlement of Class Action given to the
Class was the best notice practicable under the circumstances, including the individual
notice to all members of the Class who could be identified through reasonable effort. Said
notice provided the best notice practicable under the circumstances of the proceedings and of
the matters set forth therein, including the proposed settlement set forth in the Stipulation, to
all Persons entitled to such notice, and said notice fully satisfied the requirements of Federal
Rule of Civil Procedure 23, §27(a)(7) of the Securities Act of 1933, 15 U.S.C. §77z-1(a)(7),
as amended, including by the Private Securities Litigation Reform Act of 1995 (“PSLRA”),
§21D(a)(7) of the Securities Exchange Act of 1934, 15 U.S.C. §78u-4(a)(7), as amended,
including by the PSLRA, and the requirements of due process.
13. Any plan of allocation submitted by Lead Counsel or any order entered
regarding any attorneys’ fee and expense application shall in no way disturb or affect this
Judgment and shall be considered separate from this Judgment.
14. The Stipulation, any act performed or document executed pursuant to or in
furtherance of the Stipulation or the Settlement, and any negotiations, discussions or
proceedings in connection with this Stipulation or the Settlement:
(a) shall not be offered or received against any Settling Defendant or their
Related Persons as evidence of or construed as or deemed to be evidence of any
presumption, concession, or admission by any Settling Defendant or its Related Persons of
the truth of any fact alleged by the Lead Plaintiffs or the validity of any claim that has been
or could have been asserted in the Litigation or any other litigation, or the deficiency of any
defense that has been or could have been asserted in the Litigation or in any other litigation,
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or of any liability, negligence, fault, or wrongdoing of the Settling Defendants and their
Related Persons;
(b) shall not be offered or received against any Settling Defendant or its
Related Persons as evidence of or construed or deemed to be evidence of a presumption,
concession, admission of any fault, misrepresentation or omission with respect to any
statement or written document approved or made by any Settling Defendant or its Related
Persons, or against the Lead Plaintiffs or any Class Member as evidence of any infirmity in
the claims of the Lead Plaintiffs and the Class;
(c) shall not be offered or received against any Settling Defendant as
evidence or construed or deemed to be evidence of a presumption, concession, or admission
of any liability, negligence, fault or wrongdoing, or in any way referred to for any other
reason as against any of the parties to this Stipulation, in any other civil, criminal or
administrative action or proceeding, other than such proceedings as may be necessary to
effectuate the provisions of this Stipulation; provided, however, that if this Stipulation is
approved by the Court, Settling Defendants and their Related Parties may refer to it to
effectuate the dismissals, releases, and liability protections granted them hereunder;
(d) shall not be offered, received, or construed against any Settling
Defendant or its Related Persons as evidence or construed or deemed to be evidence against
Settling Defendants, Lead Plaintiffs or the Class as an admission or concession that the
consideration to be given hereunder represents the amount which could be or would have
been recovered after trial; and
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(e) shall not be offered, construed, or received in evidence as an
admission, concession, or presumption against any Settling Defendant or its Related Persons
that class certification would be proper for any purpose other than the Settlement.
15. The Settling Defendants and/or their Related Parties may file the Stipulation
and/or the Judgment in any forum as may be necessary to establish principles of res judicata,
collateral estoppel, release, accord and satisfaction, good faith settlement, judgment bar or
reduction, bar order, or any other theory of preclusion, release, discharge, or claims bar.
Settling Defendants and/or their Related Parties may also file the Stipulation and/or the
Judgment in any forum as may be necessary to establish that the Stipulation and/or the
Settlement do not operate to admit, concede, or establish any allegation made in the
Litigation or any liability, wrongdoing, or fault by any Settling Defendant and/or Released
Person.
16. Without affecting the finality of this Judgment in any way, this Court hereby
retains continuing exclusive jurisdiction over: (a) implementation of this settlement and any
award or distribution of the Settlement Fund, including interest earned thereon;
(b) disposition of the Settlement Fund; (c) hearing and determining applications for
attorneys’ fees, interest and expenses in the Litigation; and (d) all parties hereto for the
purpose of construing, enforcing and administering the Stipulation.
17. The Court finds that during the course of the Litigation, the Settling Parties
and their respective counsel at all times complied with the requirements of Federal Rule of
Civil Procedure 11.
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18. In the event that the settlement does not become effective in accordance with
the terms of the Stipulation, or the Effective Date does not occur, or in the event that the
Settlement Fund, or any portion thereof, is returned to the Settling Defendants, then this
Judgment shall be rendered null and void to the extent provided by and in accordance with
the Stipulation and shall be vacated and, in such event, all orders entered and releases
delivered in connection herewith shall be null and void to the extent provided by and in
accordance with the Stipulation.
19. Without further order of the Court, the Settling Parties may agree to
reasonable extensions of time to carry out any of the provisions of the Stipulation.
20. There is no reason for delay in the entry of this Final Judgment and Order of
Dismissal with Prejudice and immediate entry by the Clerk of the Court is expressly directed
pursuant to Rule 54(b) of the Federal Rules of Civil Procedure.
IT IS SO ORDERED.
DATED: _________________________ THE HONORABLE RICHARD A. LAZZARA UNITED STATES DISTRICT JUDGE
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