in re: slm corporation 08-cv-01029-declaration of jonathan...
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Case 1:08-cv-01029-WHP Document 166 Filed 03/30/12 Page 1 of 92
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
: In re SLM Corporation Securities Litigation : Case No. 08 Civ. 1029 (WITP)
:
DECLARATION OF JONATHAN K. LEVINE IN SUPPORT OF LEAD PLAINTIFF’S UNOPPOSED MOTION FOR PRELIMINARY
APPROVAL OF CLASS ACTION SETTLEMENT
GIRARD GIBBS LLP Jonathan K. Levine 711 Third Avenue, 20th Floor New York, NY 10017 Telephone: (212) 867-1721 Facsimile: (212) 867-1767
- and –
Daniel C. Girard Amanda M. Steiner Christina C. Sharp 601 California Street, Suite 1400 San Francisco, CA 94108 Telephone: (415) 981-4800 Facsimile: (415) 981-4846
Lead Plaintiff’s Counsel
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I, Jonathan K. Levine, under penalty of perjury, hereby declare:
I am a partner of Girard Gibbs LLP, lead plaintiff’s counsel in this action, and am
admitted to practice in the Southern District of New York. I submit this declaration in support of
Lead Plaintiff SLM Ventures’ unopposed motion for preliminary approval of the class action
settlement in this matter. I have personal knowledge of and could competently testify about the
information set forth below.
2. The terms of the proposed settlement are set forth in a Stipulation and Agreement
of Settlement entered into by all parties dated March 23, 2012. A true and correct copy of the
Stipulation is attached hereto as Exhibit 1.
Lead Counsel’s Investigation Prior to Filing the Second Amended Complaint
3. In April 2009, SLM Ventures was appointed lead plaintiff and Girard Gibbs was
appointed lead counsel. My firm immediately began work on an amended complaint. Girard
Gibbs retained investigators to locate and interview potential witnesses and retained an
accounting expert to analyze SLM Corporation’s (“Sallie Mae”) financial statements and MD&A
disclosures and assist counsel in analyzing the accounting issues raised in the amended
complaint. The results of our investigation and the work done by our accounting expert are
reflected in the allegations set forth in the Second Amended Class Action Complaint (the
“Complaint”), which was filed by SLM Ventures in September 2009 (Dkt. No. 96). The Court
denied a motion to dismiss the Complaint in substantial part in September 2010. Dkt. No. 114.
Discovery
4. Following the initial case management conference, the parties served their initial
document requests in November and December 2010. SLM Ventures, an investment
partnership, ultimately produced more than 40,000 pages of documents in response to
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defendants’ document requests. In connection with class certification, defendants deposed Sam
Sotoodeh, the managing partner of SLM Ventures twice. Mr. Sotoodeh was deposed once in his
personal capacity and again as a Rule 30(b)(6) representative of SLM Ventures. Two of the
other principal investors in SLM Ventures, Mark Moshayedi and Wolfgang Reinicke, also were
deposed by defendants and produced responsive documents in connection with class
certification.
5. Discovery brought by SLM Ventures was necessarily more extensive, given the
plaintiff’s burden of proof in a Rule 10b-5 case. As a result of numerous meet and confer
sessions, defendants ultimately served three rounds of amended written responses to SLM
Ventures’ initial document requests, four different versions of their original privilege log (which
contained more than 400 entries), and three versions of their supplemental privilege log (which
contained more than 16,600 additional entries). My firm took an early Rule 30(b)(6) deposition
of defendants’ information technology expert to assist us in negotiations over the protocol for the
production and search for electronic documents. Later in the litigation, we took another Rule
30(b)(6) deposition concerning certain of Sallie Mae’s accounting practices and the employees,
committees and departments involved in the matters alleged in the Complaint and the relevant
documents created and maintained by those employees, committees and departments.
6. Discovery on behalf of SLM Ventures also extended to relevant non-parties. We
also served subpoenas on Pricewaterhouse Coopers (“PwC”) (Sallie Mae’s independent auditor)
and J.C. Flowers & Co. (the key player in the group of private equity investors that had agreed to
acquire Sallie Mae in 2007). Following the service of the subpoenas, we negotiated resolutions
of the objections asserted by the non-parties to the subpoenas and their demands for
compensation.
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7. Defendants, PwC and J.C. Flowers ultimately produced more than 1.7 million
pages of documents in response to SLM Ventures’ document requests and subpoenas. My firm
deployed a team of in-house attorneys and paralegals who reviewed and analyzed the
productions, which included hundreds of thousands of emails, Excel spreadsheets containing
accounting data, presentations relating to the PEL business and draft SEC filings. Our
accounting expert reviewed and analyzed PwC’s 2006-2008 audit and quarterly review
workpapers and many of the complex financial and accounting documents and spreadsheets
contained in Sallie Mae’s production, while our damages expert and consultants reviewed and
analyzed documents in the production relating to Sallie Mae’s public disclosures and
communications with securities analysts.
8. SLM Ventures served three additional short sets of document requests in
December 2011 and January 2012. In January 2012, following letter briefing and a telephonic
conference with the Court, the Court ordered defendants to produce emails from four additional
custodians and directed that defendants produce documents for an additional nine-month time
period in 2006.
9. I deposed nine senior current and former executives of Sallie Mae who
participated in the PEL business and the accounting practices at issue in the Complaint.
Depositions continued throughout the period of settlement negotiations, and at the time the
parties agreed to the proposed Settlement, additional depositions were scheduled to be conducted
within the month, including the depositions of the PwC audit partner, defendant Lord and a
number of other senior current and former executives of Sallie Mae. Defendants also were
conducting depositions during this period, and we appeared the depositions of four of the
confidential witnesses cited in the Complaint who defendants had subpoenaed for deposition.
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10. Finally, both SLM Ventures and defendants served extensive contention
interrogatories near the close of fact discovery. We were preparing responses to those
interrogatories at the time the parties agreed to the proposed Settlement.
Class Certification
11. We anticipated that class certification would be strongly contested by defendants
and at the outset retained Professor Gregg Jarrell as a testifying expert and Forensic Economics
as consultants with respect to the market efficiency, loss causation and damages issues we
expected to arise in the case. SLM Ventures’ motion for class certification included a
comprehensive affidavit from Professor Jarrell on market efficiency and a method for proving
loss causation later in the litigation, which was supported by the work done by Forensic
Economics. Professor Jarrell produced more than 18,000 pages of documents he relied upon in
preparing his affidavit, and was deposed twice by defendants in connection with class
certification. He also submitted a rebuttal affidavit to address the arguments raised by
defendants’ class certification expert, Professor Christopher James, who I deposed in connection
with class certification.
Experts and Consultants
12. Because of the complex accounting and financial fraud allegations in the case and
the significant loss causation and damages issues raised by defendants in their motion to dismiss
and opposition to class certification, we relied throughout the litigation on various experts and
consultants. In addition to preparing two affidavits and being deposed twice in connection with
class certification, at the time of settlement Professor Jarrell, assisted by Forensic Economics,
had begun working on damage and loss causation assessments and had also begun preliminary
work on an expert report. Our accounting expert, retained at the beginning of the litigation,
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assisted us in our pre-filing investigation, drafting the Complaint and discovery requests, and
advised us in the course of our negotiations with defendants and non-parties concerning the
accounting documents to be produced. He also reviewed relevant accounting and financial
documents, helped my firm prepare for many of the depositions, and had begun work on an
expert report at the time settlement was reached. We also consulted with an expert on loan loss
reserves, who was preparing to begin work on another expert report if the case did not settle.
Claims Administration
13. In connection with the proposed Settlement, we sought confidential bids from five
of the leading class action administration firms. The bidders were asked to detail price terms,
provide a firm estimate of the time needed to process class member claims, describe the results
of any past audits of their claims administration work, give information about their insurance
resources and detail their relevant experience. All five firms submitted bids, which we carefully
evaluated. Some of the firms were asked to provide supplemental information.
14. Subject to Court approval, we selected A.B. Data, Ltd, which has agreed to
aggressive price terms and undertaken to complete claims administration within six months of
the deadline for the filing of claim forms. A.B. Data has also agreed to financial penalties for
failing to complete claims administration in the time specified.
I declare under penalty of perjury under the laws of the United States of America that the
foregoing is true and correct. Executed this 30th day of March, 2012 at San Francisco,
California.
/s/ Jonathan K. Levine
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CERTIFICATE OF SERVICE
I, Jonathan K. Levine, hereby certify that on March 30, 2012, I caused the following
document(s) to be filed electronically with the United States District Court for the Southern
District of New York through the Court’s mandated ECF service:
DECLARATION OF JONATHAN K. LEVINE IN SUPPORT OF LEAD PLAINTIFF’S UNOPPOSED MOTION FOR PRELIMINARY
APPROVAL OF CLASS ACTION SETTLEMENT
Counsel of record are required by the Court to be registered e-filers, and as such are
automatically e-served with a copy of the document(s) upon confirmation of e-filing.
I declare under penalty of perjury that the foregoing is true and correct.
Executed this 30th day of March, 2012 at San Francisco, California.
/s/ Jonathan K. Levine Jonathan K. Levine
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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
x Case No. 08 Civ. 1029 ()AI-IP)
In re SLM Corporation Securities Litigation
x
STIPULATION AND AGREEMENT OF SETTLEMENT
This Stipulation and Agreement of Settlement (the "Stipulation") is submitted pursuant to
Rule 23 of the Federal Rules of Civil Procedure. Subject to the approval of the Court, this
Stipulation is entered into among Lead Plaintiff SLM Ventures ("Ventures") on behalf of itself
and the Certified Class (as hereinafter defined), and Defendants SLM Corporation ("SLM") and
Albert L. Lord (collectively, the "Settling Defendants"), by and through their respective counsel.
This Stipulation is intended by the Settling Parties to fully, finally and forever resolve, discharge
and settle the Released Claims, upon and subject to the terms and conditions hereof
L1 I ixc
A. The above-captioned action was initially filed in this Court on or about January
31, 2008, and is hereinafter referred to as the "Action";
B. On April 1, 2009, Ventures was appointed to serve as Lead Plaintiff in the Action,
and the law firm of Girard Gibbs LLP was appointed to serve as Lead Counsel;
C. On September 3, 2009, Lead Plaintiff filed a Second Amended Class Action
Complaint on behalf of itself and all other persons or entities who bought or otherwise acquired
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SLM common stock between January 18, 2007 and January 23, 2008, inclusive, alleging that
Settling Defendants and others had made materially false and misleading statements and
omissions in SLM's public statements, filings with the Securities and Exchange Commission
("SEC") and other public documents to the investing public regarding the loan underwriting
standards, forbearance practices and loss allowances of SLM, its subsidiaries and/or affiliates
with respect to certain student loans known as private education loans ("PELs") originated,
acquired, serviced or collected by SLM, its subsidiaries and/or affiliates, thereby understating
SLM's Joan loss reserves and overstating SLM's profitability, and allegedly artificially inflating
the price of SLM's common stock;
D. The Second Amended Class Action Complaint further alleges that Plaintiff and
other class members purchased the common stock of SLM during this period at prices artificially
inflated as a result of the Settling Defendants' dissemination of false and misleading statements
regarding the profitability of SLM's PEL portfolio, in violation of Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b) and 78t(a), and Rule lOb-5, 17 C.F.R.
§ 240. lOb-S. promulgated thereunder;
E. On December 11, 2009, Settling Defendants moved to dismiss the Second
Amended Class Action Complaint, which motion was granted in part and denied in part on
September 24, 2010;
F. On October 29, 2010, the Settling Defendants filed Answers to the Second
Amended Class Action Complaint;
G. On April 8, 2011, Lead Plaintiff moved for certification of a class of all persons
who purchased or otherwise acquired SLM common shares during the period January 18, 2007
through and including January 23, 2008 ("the Class Period");
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H. On June 6, 2011, Settling Defendants filed their memorandum of law in
opposition to Lead Plaintiffs motion for class certification;
I. On July 1, 2011, Lead Plaintiff filed its reply memorandum of law in support of
the motion for class certification, revising the class it sought to certify to a class of all persons
who purchased or otherwise acquired SLM common shares during the Class Period and who
possessed any of those shares over one or more of the dates of December 19, 2007, January 3,
2008 and January 23, 2008 ("the Class");
J. On January 24, 2012, the Court entered its Memorandum and Order certifying the
Class as proposed by Lead Plaintiff;
K. Lead Plaintiff has actively pursued document discovery for more than a year,
during which time Lead Counsel has obtained and reviewed over 1.7 million pages of responsive
information obtained from Settling Defendants and other non-parties, and conducted or defended
19 depositions;
L. The Settling Defendants and Released Parties (as defined below) deny any
wrongdoing whatsoever and this Stipulation shall in no event - in any forum (including, but not
limited to, any judicial, arbitral, or administrative proceeding) -- be construed or deemed to be
evidence of or an admission or concession on the part of any Settling Defendant or Released
Party with respect to any claim or of any fault, liability, wrongdoing or damage whatsoever, or
any infirmity in the defenses that the Settling Defendants have asserted. The parties to this
Stipulation recognize, however, that the Action has been filed by Lead Plaintiff on behalf of
itself and the Certified Class (as defined below), and defended by the Settling Defendants, in
good faith and with adequate basis in fact under Federal Rule of Civil Procedure 11, that the
Action is being voluntarily settled after advice of counsel, and that the terms of the settlement are
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fair, adequate and reasonable. This Stipulation shall not be construed or deemed to be a
concession by Lead Plaintiff of any infirmity in the claims asserted in the Action;
M. Lead Counsel has conducted an investigation relating to the claims and the
underlying events and transactions alleged in the Second Amended Class Action Complaint,
analyzed the evidence adduced during pretrial discovery and researched the applicable law with
respect to the claims of Lead Plaintiff and the Certified Class against the Settling Defendants and
the potential defenses thereto;
N. Lead Plaintiff and Lead Counsel have conducted discussions and arm's length
negotiations with Settling Defendants and their counsel and have participated in a mediation
before the Honorable Daniel Weinstein (Ret.) with respect to a compromise and settlement of the
Action as against the Settling Defendants with a view to settling the issues in dispute and
achieving the best relief possible consistent with the interests of the Certified Class;
0. Based upon their investigation and pretrial discovery as set forth above, Lead
Counsel has concluded that the terms and conditions of this Stipulation are fair, reasonable and
adequate to Lead Plaintiff and the Certified Class, and in their best interests, and Lead Plaintiff
has agreed to settle the claims raised in the Action, and any claims arising from substantially
similar facts (the "Settled Claims" as defined below), pursuant to the terms and provisions of this
Stipulation, after considering (1) the substantial benefits that members of the Certified Class will
receive from settlement of the Action, (2) the attendant risks of litigation, and (3) the desirability
of permitting the Settlement to be consummated as provided by the terms of this Stipulation; and
P. Nothing in this Stipulation shall be construed or deemed to be evidence of an
admission or concession on the part of any Settling Defendant or Released Party with respect to
any claim or any fault or liability or wrongdoing or damages whatsoever, or any infirmity in the
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defenses that the Settling Defendants have asserted or may assert. Likewise, nothing in this
Stipulation shall be construed or deemed to be evidence of an admission or concession on the
part of Lead Plaintiff or any Certified Class Member of any infirmity in the claims asserted in the
Action against the Settling Defendants.
NOW THEREFORE, without any admission or concession on the part of Lead Plaintiff
of any lack of merit of the Action whatsoever, and without any admission or concession of any
fault, liability, wrongdoing or damage whatsoever, or lack of merit in the defenses whatsoever,
by the Settling Defendants, it is hereby STIPULATED AND AGREED, by and among the
parties to this Stipulation, through their respective attorneys, subject to approval of the Court
pursuant to Rule 23(e) of the Federal Rules of Civil Procedure, in consideration of the benefits
flowing to the parties hereto from the Settlement, that all Settled Claims (as hereinafter defined)
as against the Released Parties (as hereinafter defined) and all Settled Defendants' Claims (as
hereinafter defined) shall be compromised, settled, released and dismissed with prejudice, upon
and subject to the following terms and conditions:
CERTAIN DEFINITIONS
1. As used in this Stipulation, the following terms shall have the following
meanings:
(a) Action" means In re SLM Corporation Securities Litigation, United
States District Court for the Southern District of New York, Case No. 1:08-c-01029-WHP and
all included consolidated actions.
(b) "Class Period" means, for the purposes of this Stipulation only, the period
of time commencing on January 18, 2007 through and including January 23, 2008.
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(c) "Certified Class" and "Certified Class Members" means all persons or
entities who purchased or otherwise acquired SLM Corporation common shares during the Class
Period, and who possessed any of those shares over one or more of the dates of December 19,
2007, January 3, 2008 and January 23, 2008. Excluded from the Certified Class are the two
Settling Defendants (as defined below) in this action; members of the immediate families
(parents, spouses, siblings and children) of Mr. Lord; any person, firm, trust, corporation, officer,
director or other individual or entity in which any Settling Defendant has a controlling interest;
any person who was an officer, director, partner, or controlling person of SLM (including any
officer, director, partner or controlling person of any of its subsidiaries or any other entity in
which SLM had a majority or controlling interest) during the Class Period; and the legal
representatives, heirs, successors in interest or assigns of any such persons or entities. Also
excluded from the Certified Class are any putative Certified Class Members who exclude
themselves by filing a request for exclusion in accordance with the requirements set forth in the
Settlement Notice (defined below, which notice shall be substantially in the form of Exhibit A-i
hereto).
(d) "Lead Plaintiff' means SLM Ventures.
(e) "Lead Counsel" means Girard Gibbs LLP.
(0 "Parties," as used in this Stipulation, refers collectively to all of the
following: Lead Plaintiff, Lead Counsel, Settling Defendants (defined below) and Settling
Defendants' Counsel (defined below).
(g) "Settling Defendants" means SLM Corporation and Albert L. Lord.
(h) "Settling Defendants' Counsel" means the law firm of Latham & Watkins
LLP.
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(i) "Effective Date of Settlement" or "Effective Date" means the date upon
which the Settlement contemplated by this Stipulation shall become effective, as set forth in ¶ 28
below.
(j) "Insurance Carriers" means the insurance carriers that issued policies of
directors and officers insurance to or on behalf of the Settling Defendants covering the claims
asserted in this Action.
(k) "Settlement Notice" means the Notice of (1) Pendency and Proposed
Settlement of Class Action; (2) Hearing on Proposed Settlement; and (3) Motion for Attorneys'
Fees and Reimbursement of Litigation Expenses, which is to be sent to members of the Certified
Class substantially in the form attached hereto as Exhibit A-I.
(1) "Order of Final Judgment" means the proposed order to be entered
approving the Settlement substantially in the form attached hereto as Exhibit B.
(m) "Preliminary Approval Order" means the proposed order preliminarily
approving the Settlement and directing notice thereof to the Certified Class substantially in the
form attached hereto as Exhibit A.
(n) "Publication Notice" means the summary notice of proposed Settlement
and hearing for publication substantially in the form attached as Exhibit A-3 hereto.
(o) "Released Parties" means any and all of the Settling Defendants, their past
or present subsidiaries and affiliates, parents, successors, predecessors, officers, directors,
agents, spouses, immediate family members, heirs, estates, partners, principals, shareholders,
members, employees, Insurance Carriers, and attorneys, and any person, firm, trust, corporation,
officer, director or other individual or entity in which any Settling Defendant has a controlling
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interest or which is related to or affiliated with any of the Settling Defendants, and the legal
representatives, heirs, executors, successors in interest or assigns of any such entity.
(p) "Settled Claims" means any and all claims, debts, demands, rights,
actions, suits, disputes, contracts, or causes of action or liabilities whatsoever (including, but not
limited to, any claims for damages, interest, attorneys' fees, expert or consulting fees, and any
other costs, expenses or liability whatsoever), whether based on federal, state, local, statutory,
regulatory, foreign, or common law or any other law, rule or regulation, whether fixed or
contingent, accrued or un-accrued, liquidated or un-liquidated, at law or in equity, whether under
tort or contract, matured or un-matured, whether class, individual or derivative in nature, whether
or not referred to in the Action, including both known claims and Unknown Claims (as defined
below), (i) that have been asserted in this Action by the Certified Class Members or their
attorneys or any of them against any of the Released Parties, or (ii) that could have been asserted
in any forum by the Certified Class Members or their attorneys or any of them or their successors
and assigns or any of them against any of the Released Parties which arise out of or are based
upon or relate in any way to the allegations, transactions, facts, matters or occurrences,
representations or omissions involved, set forth, or referred to in the Second Amended Class
Action Complaint and relate to the purchase or sale of shares of the common stock of SLM
during the Class Period, except for claims to enforce the Settlement.
(q) "Settled Defendants' Claims" means any and all claims, rights or causes of
action or liabilities whatsoever, whether based on federal, state, local, statutory or common law
or any other law, rule or regulation, including both known claims and Unknown Claims, that
have been or could have been asserted in the Action or any forum by the Settling Defendants or
any of them or the successors and assigns of any of them against any of the Lead Plaintiff,
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Certified Class Members or their attorneys, which arise out of or relate in any way to the
institution, prosecution, or settlement of the Action, except for claims to enforce the Settlement.
(r) "Settlement" means the settlement contemplated by this Stipulation.
(s) "Unknown Claims" means any and all Settled Claims which Lead Plaintiff
or any Certified Class Member does not know or suspect to exist in his, her or its favor at the
time of the release of the Released Parties, and any Settled Defendants' Claims which any
Settling Defendant does not know or suspect to exist in his, her or its favor at the time of the
release of the Released Parties that if known by him, her or it, might have affected his, her or its
settlement with and release of the Released Parties, or might have affected his, her or its decision
not to object to this settlement or not to exclude himself, herself or itself from the Certified
Class. With respect to any and all Settled Claims and Settled Defendants' Claims, the parties
stipulate and agree that upon the Effective Date, the Lead Plaintiff and the Settling Defendants
shall expressly, and each Certified Class Member shall be deemed to have, and by operation of
the Order and Final Judgment shall have, expressly waived any and all provisions, rights and
benefits conferred by any law of any state or territory of the United States, or principle of
common law, which is similar, comparable, or equivalent to Cal. Civ. Code § 1542, which
provides:
A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.
The Lead Plaintiff and Certified Class Members may hereafter discover facts in addition to or
different from those that any of them now knows or believes to be true with respect to the subject
matter of the Settled Claims, but the Lead Plaintiff shall expressly have, and upon the Effective
Date, each Certified Class Member shall be deemed to have, and by operation of the Judgment
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shall have fully, finally and forever settled and released any and all Settled Claims, known or
unknown, suspected or unsuspected, contingent or non-contingent, whether or not concealed or
hidden, that 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 that is negligent,
reckless, 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. Lead Plaintiff and
Settling Defendants acknowledge, and Certified Class Members by operation of law shall be
deemed to have acknowledged, that the inclusion of "Unknown Claims" in the definition of
Settled Claims and Settled Defendants' Claims was separately bargained for and was a key
element of the Settlement.
(t) "Claims Administrator" means A.B. Data, Ltd.
SCOPE AND EFFECT OF SETTLEMENT
2. (a) The obligations incurred pursuant to this Stipulation shall be in full and
final disposition of the Action as against the Settling Defendants and any and all Settled Claims
as against all Released Parties and any and all Settled Defendants' Claims.
(b) This Stipulation and Settlement is on behalf of Lead Plaintiff and the
Certified Class as defined in Paragraph 1(c) above. In connection with the motion to
preliminarily approve the Settlement, the Parties hereto shall request the Court to allow only the
members of the Certified Class to request exclusion in connection with this Settlement. The
procedures for requesting exclusion from the Settlement shall be set forth in the Settlement
Notice and/or Publication Notice, which Notices will be disseminated or published to members
of the Certified Class substantially in the forms attached hereto as Exhibits A-I and A-3,
respectively.
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3. After execution of this Stipulation, the Lead Plaintiff shall submit this Stipulation
together with its Exhibits to the Court and shall apply for entry of an order (the "Preliminary
Approval Order") substantially in the form and content of Exhibit A attached hereto, requesting,
inter al/a, the preliminary approval of the settlement set forth in this Stipulation, and final
approval of the Settlement Notice and the Publication Notice, substantially in the forms and
contents of Exhibits A-i and A3 hereto, respectively. The date and time of the Settlement
Fairness Hearing shall be added to the Notices before they are issued to Certified Class
Members.
4. At the Settlement Hearing, the Settling Parties shall jointly request entry of a
Judgment, substantially in the form attached hereto as Exhibit B:
(a) finally approving the Settlement as fair, reasonable, and adequate, within
the meaning of Rule 23 of the Federal Rules of Civil Procedure, and directing its consummation
pursuant to its terms;
(b) directing that the Action be dismissed without costs and with prejudice,
and releasing the Settled Claims and Settled Defendants' Claims;
(c) permanently barring and enjoining the institution and prosecution, by Lead
Plaintiff and the Certified Class Members, of any other action against the Settling Defendants
and Released Parties in any court asserting any Settled Claims and the institution and
prosecution, by the Settling Defendants and Released Parties, of any other action against Lead
Plaintiff, Lead Counsel and the Certified Class Members in any court asserting any Settled
Defendants' Claims;
(d) reserving jurisdiction over the Action, including all future proceedings
concerning the administration, consummation, and enforcement of this Stipulation;
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(e) finding that the complaint in the Action was filed on a good faith basis in
accordance with the Private Securities Litigation Reform Act of 1995 (the 'PSLRA") and Rule
11 of the Federal Rules of Civil Procedure;
(f) finding, pursuant to Rule 54(b) of the Federal Rules of Civil Procedure,
that there is no just reason for delaying and directing entry of a final judgment; and
(g) containing such other and further provisions consistent with the terms of
this Stipulation to which the Settling Parties expressly consent in writing.
5. (a) Upon the Effective Date of this Settlement, Lead Plaintiff and members of
the Certified Class on behalf of themselves, their heirs, executors, administrators, successors and
assigns, and any other Person claiming (now or in the future) through or on behalf of them, and
regardless of whether any such Lead Plaintiff or Certified Class Member ever seeks or obtains by
any means, including, without limitation, by submitting a Proof of Claim, any distribution from
the Net Settlement Fund established pursuant to the Stipulation, shall be deemed to have, and by
operation of this Judgment shall have, with respect to each and every Settled Claim, released and
forever discharged, and shall forever be enjoined from prosecuting, either directly or in any other
capacity, any Settled Claims against any of the Released Parties. and shall have covenanted not
to sue the Settling Defendants and Released Parties with respect to all such Released Claims.
(b) Upon the Effective Date of this Settlement, each of the Settling
Defendants, on behalf of themselves and the Released Parties, shall release and forever discharge
each and every of the Settled Defendants' Claims, and shall forever be enjoined from
prosecuting the Settled Defendants' Claims.
THE SETTLEMENT CONSIDERATION
6. The Settling Defendants shall provide the following consideration:
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(a) The Settling Defendants shall instruct the Insurance Carriers to cause a
total of Thirty-Five Million Dollars ($35,000,000.00) (US$) (the "Cash Settlement Amount") to
be paid into escrow on behalf of the Certified Class as follows:
(i) By no later than ten (10) days after entry of the Preliminary
Approval Order, Lead Counsel shall provide written instructions to the Settling Defendants and
the Insurance Carriers, specifying the payee, tax identification number, wire transfer instructions
and address for physical delivery of a check with a contact person's name and phone number and
executed W-9 form from the administrator of an interest-bearing escrow account ("Escrow
Agent") designated by Lead Counsel ("Escrow Account");
(ii) SLM shall instruct the Insurance Carriers to deposit, by check or
wire transfer within thirty (30) days of entry of the Preliminary Approval Order, their respective
contributions to the Cash Settlement Amount into the Escrow Account.
7. (a) The Cash Settlement Amount and any interest earned thereon shall be the
Gross Settlement Fund. No amount may be disbursed from the Gross Settlement Fund unless
and until the Effective Date, except that (i) reasonable costs of notice ("Notice and
Administration Costs") described in Tj 8-9, below, may be paid from the Gross Settlement Fund
as they become due; (ii) Taxes and Tax Expenses (as defined in subparagraph (d)-(e), below)
may be paid from the Gross Settlement Fund as they become due; and (iii) any fee and expense
award that is allowed by the Court may be paid from the Gross Settlement Fund in accordance
with the provisions of ¶ 10, below. Lead Plaintiff will attempt in good faith to minimize the
amount of Notice and Administrative Costs.
(b) If the settlement as described herein is finally disapproved by any court or it
is terminated by Defendants, or the Judgment is overturned on appeal or by writ, the Gross
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Settlement Fund, including the Cash Settlement Amount and all interest earned on the Settlement
Fund while held in escrow, and all payments disbursed, including all expenses and costs and any
fee and expense Award, excluding only Notice and Administrative Costs and Taxes and Tax
Expenses, will be refunded, reimbursed, and repaid by the Escrow Agent to Settling Defendants'
insurers within ten (10) business days after receiving notice pursuant to ¶ 29, below
(c) All funds held by the Escrow Agent shall be deemed to be in the custody of
the Court and shall remain subject to the jurisdiction of the Court until such time as the funds
shall be distributed or returned to the persons paying the same pursuant to this Stipulation and/or
further order of the Court. The Escrow Agent shall invest any funds in excess of $100,000 in
short term United States Agency or Treasury Securities (or a mutual fund invested solely in such
instruments), and shall collect and reinvest all interest accrued thereon. Any funds held in escrow
in an amount of less than $100,000 may be held in an interest bearing bank account insured by
the FDIC. The parties hereto agree that the Settlement Fund is intended to be a Qualified
Settlement Fund within the meaning of Treasury Regulation § 1.46813-1 and the Escrow Agent
shall timely make such elections as necessary or advisable to carry out the provisions of this
section, including the "relation-back election" (as defined in Treas. Reg. §1.468B-1) back to the
earliest permitted date, and that the Escrow Agent, as administrator of the Settlement Fund
within the meaning of Treasury Regulation § 1.468B-2(k)(3), shall be responsible to prepare and
deliver timely and properly the necessary documentation for signature by all necessary parties,
and thereafter to cause the appropriate filing to occur.
(d) For the purpose of §468B of the Internal Revenue Code of 1986, as amended,
and the regulations promulgated thereunder, the "administrator" shall be the Escrow Agent. The
Escrow Agent shall satisfy the administrative requirements imposed by Treas. Reg. §1.468B-2
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by, e.g., (i) obtaining a taxpayer identification number, (ii) satisfying any information reporting
or withholding requirements imposed on distributions from the Gross Settlement Fund, and (iii)
timely and properly filing applicable federal, state and local tax returns necessary or. advisable
with respect to the Gross Settlement Fund (including, without limitation, the returns described in
Treas. Reg. §1.468B-2(k)) and paying any taxes reported thereon. Such returns (as well as the
election described in subsection (c)) shall be consistent with this subparagraph (d) and in all
events shall reflect that all Taxes as defined in subparagraph (e) below on the income earned by
the Gross Settlement Fund shall be paid out of the Gross Settlement Fund as provided in
subparagraph (e) hereof.
(e) All (i) taxes (including any estimated taxes, interest or penalties) arising
with respect to the Gross Settlement Fund, including, without limitation, any taxes or tax
detriments that may be imposed upon Settling Defendants or their counsel with respect to any
income earned by the Gross Settlement Fund for any period during which the Gross Settlement
Fund does not qualify as a "qualified settlement fund" for federal or state income tax purposes;
and (ii) expenses and costs incurred in connection with the operation and implementation of this
subparagraph (e) including, without limitation, expenses of tax attorneys and accountants and
mailing and distribution costs and expenses relating to filing (or failing to file) the returns
(collectively "Tax Expenses") shall be paid out of the Gross Settlement Fund; in all events
neither Settling Defendants nor their counsel shall have any liability or responsibility for the
Taxes or the Tax Expenses. With funds from the Gross Settlement Fund, the Escrow Agent shall
indemnify and hold harmless Settling Defendants and their counsel for Taxes and Tax Expenses
(including, without limitation, Taxes payable by reason of any such indemnification). Further,
Taxes and Tax Expenses shall be considered to be a cost of administration of the Settlement and
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shall be timely paid by the Escrow Agent without prior Order of the Court and the Escrow Agent
shall be obligated (notwithstanding anything herein to the contrary) to withhold from distribution
to Certified Class Members any funds necessary to pay such amounts, 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(l)(2)); neither Settling Defendants
nor their counsel is responsible therefor, nor shall they have any liability therefor. The Settling
Parties 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 ¶ 7(e).
(f) The Cash Settlement Amount shall be the full and sole monetary
contribution made by or on behalf of the Settling Defendants and the Released Parties in
connection with the Settlement, and without limiting the generality of the foregoing in any way,
all costs of notice and settlement administration shall be paid out of the Gross Settlement Fund.
Except as otherwise provided in this Settlement Agreement with respect to payment of Lead
Counsel's fees and expenses out of the Gross Settlement Fund, the Parties shall bear their own
costs and expenses (including attorneys' fees) in connection with effectuating the Settlement and
securing all necessary Court orders and approvals with respect to the same.
ADMINISTRATION
8. The Claims Administrator, an independent contractor, shall administer the
Settlement subject to the jurisdiction of the Court. Lead Counsel shall cause the Claims
Administrator to print and mail the Settlement Notice and Proof of Claim Form to those
members of the Certified Class at the address of each such person as set forth in the records of
SLM or its transfer agent(s), or who otherwise may be identified through further reasonable
effort. Lead Counsel will cause the Claims Administrator to publish the Publication Notice
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pursuant to the terms of the Preliminary Approval Order or in whatever form or manner might be
ordered by the Court. Settling Defendants' Counsel shall cooperate in the administration of the
Settlement to the extent reasonably necessary to effectuate its terms, including providing without
charge all readily available information from SLM's transaction or sales records concerning the
identity of Certified Class Members and their transactions, without certifying its accuracy or
completeness. Except as otherwise provided herein, Settling Defendants, Settling Defendants'
Counsel and the Insurers shall have no responsibility for the administration of the Settlement and
shall have no liability to any person, including but not limited to, the Certified Class Members, in
connection with such administration.
9. The Escrow Agent may pay from the Cash Settlement Amount, without further
approval from the Settling Defendants or the Court, the reasonable costs and expenses associated
with identifying members of the Certified Class and effecting mailed Notice and Publication
Notice to the Certified Class, and the administration of the Settlement, including without
limitation, the actual costs of publication, printing and mailing the Settlement Notice and Proof
of Claim Form, reimbursements to nominee owners for forwarding notice to their beneficial
owners, publication of the Summary Notice, the administrative expenses incurred and fees
charged by the Claims Administrator in connection with providing Notice and processing the
submitted claims, and the fees, if any, of the Escrow Agent (the "Notice/Administration Costs").
Prior to the Effective Date, the Notice/Administration Costs shall not, in any event, exceed
$250,000.00 (two hundred fifty thousand dollars). In the event the Settlement is terminated
pursuant to the terms of this Stipulation, all Notice/Administration Costs reasonably paid or
reasonably incurred, shall not be returned or repaid to the Settling Defendants, any released
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party, the Insurers or any person or entity who or which paid any portion of the Cash Settlement
Amount on their behalf.
ATTORNEYS' FEES AND EXPENSES
10. (a) Upon such notice to the Certified Class as may be required, Lead Counsel
will apply to the Court for an award from the Gross Settlement Fund of attorneys' fees not to
exceed one-quarter (25 %) of the Gross Settlement Fund and reimbursement of expenses, plus
interest on such amounts. The amount of such attorneys' fees, expenses and interest as are
awarded by the Court shall be paid from the Gross Settlement Fund to Lead Counsel
immediately upon award. If, and when, as a result of any appeal and/or further proceedings on
remand, or successful collateral attack, the fee and expense award is overturned or lowered, or if
the settlement is terminated or is not approved by the Court, then Lead Counsel shall make the
appropriate refund or repayment in full no later than fifteen (15) business days after receiving
from Settling Defendants' Counsel or from a court of appropriate jurisdiction notice of any such
reduction of the award of attorneys' fees, expenses or interest, or notice of the termination of the
Settlement. Lead Counsel, as a condition of receiving such fees and expenses, on behalf of itself
and each partner and/or shareholder of it, agrees that the law firm and its partners and/or
shareholders are each responsible to make such refund and are subject to the jurisdiction of the
Court for the purpose of enforcing the provisions of this paragraph.
(b) Settling Defendants shall not lodge any objection to the fees and expense
application described in J 10(a). It is expressly agreed and understood, however, that whatever
fees and expense amount is awarded to Lead Counsel is within the discretion of the Court.
Should the amount of the fees and expenses awarded by the Court be less than the amount sought
by Lead Counsel, this shall not be a basis for Lead Plaintiff, Lead Counsel, or Certified Class
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members to set aside the Settlement. No order of the Court or modification or reversal on appeal
of any order of the Court concerning any fee and expense award or plan of allocation shall
constitute grounds for cancellation or termination of this Stipulation.
(c) The procedure for, and the allowance or disallowance by the Court of, the
fee and expense application are not part of the settlement set forth in this 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 this Stipulation. Any order or
proceeding relating to the fee and expense application, or any appeal from any fee and expense
award or any other order relating thereto or reversal or modification thereof, shall not operate to
terminate or cancel this Stipulation, or affect or delay the finality of the Judgment and the
settlement of the Action as set forth herein.
(d) Other than as set forth in ¶ 6(a) above, Settling Defendants shall have no
responsibility for, and no liability whatsoever with respect to, any payment(s) to Lead Counsel
pursuant to ¶ 10(a) above, and/or to any other Person who may assert some claim thereto, or any
fee and expense award that the Court may make in the Action.
DISTRIBUTION TO AUTHORIZED CLAIMANTS
11. Any member of the Certified Class who does not submit a valid Proof of Claim
within such period as may be ordered by the Court will not be entitled to receive any of the
proceeds from the Net Settlement Fund but will otherwise be bound by all of the terms of this
Stipulation and the Settlement, including the terms of the Judgment to be entered in the Action
and the releases provided for herein, and will be barred from bringing any action against the
Released Parties concerning the Settled Claims.
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12. The Claims Administrator shall process the Proofs of Claim and, after entry of the
Class Distribution Order, distribute the Net Settlement Fund to the Authorized Claimants.
Except for their obligation to pay and cause the payment of the Cash Settlement Amount, and to
cooperate in the production of information with respect to the identification of Class Members
from SLM's shareholder transaction or sales records, as provided herein, no Settling Defendant,
Insurance Carrier or any other Released Party shall have any liability, obligation or responsibility
whatsoever for the administration of the Settlement or disbursement of the Net Settlement Fund.
Lead Counsel shall have the right, but not the obligation, to direct the Claims Administrator to
waive what they deem to be formal or technical defects in any Proofs of Claim submitted in the
interests of achieving substantial justice.
13. For purposes of determining the extent, if any, to which a Class Member shall be
entitled to be treated as an Authorized Claimant", the following conditions shall apply:
(a) Each Certified Class Member shall be required to submit a Proof of Claim
(substantially in the form of Exhibit A-2 hereto) under penalty of perjury, supported by such
documents as are designated therein, including proof of the transactions claimed and the losses
incurred thereon, or such other documents or proof as the Claims Administrator, in its discretion,
may deem acceptable;
(b) All Proofs of Claim must be submitted by the date specified in the
Settlement Notice unless such period is extended by Order of the Court. Any Certified Class
Member who fails to submit a Proof of Claim by such date shall be forever barred from receiving
any payment pursuant to this Stipulation (unless, by Order of the Court, a later submitted Proof
of Claim by such Certified Class Member is approved), but shall in all other respects be bound
by all of the terms of this Stipulation and the Settlement including the terms of the Judgment to
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be entered in the Action and the releases provided for herein, and will be barred from bringing
any action against the Released Parties asserting the Settled Claims. Provided that it is received
before the motion for the Class Distribution Order is filed, a Proof of Claim shall be deemed to
have been submitted when posted, if received with a postmark indicated on the envelope and if
mailed by first-class mall and addressed in accordance with the instructions thereon. In all other
cases, the Proof of Claim shall be deemed to have been submitted when actually received by the
Claims Administrator;
(c) Each Proof of Claim shall be submitted to and reviewed by the Claims
Administrator, who shall determine in accordance with this Stipulation the extent, if any, to
which each claim shall be allowed, subject to review by the Court pursuant to subparagraph (e)
below;
(d) Proofs of Claim that do not meet the submission requirements may be
rejected. Prior to rejection of a Proof of Claim, the Claims Administrator shall communicate
with the Claimant in order to remedy the curable deficiencies in the Proof of Claims submitted.
The Claims Administrator shall notify, in a timely fashion and in writing, all Claimants whose
Proofs of Claim they propose to reject in whole or in part, setting forth the reasons therefor, and
shall indicate in such notice that the Claimant whose claim is to be rejected has the right to a
review by the Court if the Claimant so desires and complies with the requirements of
subparagraph (e) below;
(e) If any Claimant whose claim has been rejected in whole or in part desires
to contest such rejection, the Claimant must, within twenty (20) days after the date of mailing of
the notice required in subparagraph (d) above, serve upon the Claims Administrator a notice and
statement of reasons indicating the Claimant's grounds for contesting the rejection along with
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any supporting documentation, and requesting a review thereof by the Court. If a dispute
concerning a claim cannot be otherwise resolved, Lead Counsel shall thereafter present the
request for review to the Court; and
(f) The administrative determinations of the Claims Administrator accepting
and rejecting claims shall be presented to the Court, on notice to Settling Defendants' Counsel,
for approval by the Court in the Class Distribution Order.
14. Each Claimant shall be deemed to have submitted to the jurisdiction of the Court
with respect to the Claimant's claim, and the claim will be subject to investigation and discovery
under the Federal Rules of Civil Procedure, provided that such investigation and discovery shall
be limited to that Claimant's status as a Certified Class Member and the validity and amount of
the Claimant's claim. No discovery shall be allowed on the merits of the Action or Settlement in
connection with processing of the Proofs of Claim.
15. Payment pursuant to this Stipulation shall be deemed final and conclusive against
all Certified Class Members. All Certified Class Members whose claims are not approved by the
Court shall be barred from participating in distributions from the Net Settlement Fund, but
otherwise shall be bound by all of the terms of this Stipulation and the Settlement, including the
terms of the Judgment to be entered in the Action and the releases provided for herein, and will
be barred from bringing any action against the Released Parties concerning the Settled Claims.
16. All proceedings with respect to the administration, processing and determination
of claims described by ¶IJ 11-15 of this Stipulation and the determination of all controversies
relating thereto, including disputed questions of law and fact with respect to the validity of
claims, shall be subject to the jurisdiction of the Court.
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17. The Net Settlement Fund shall be distributed to Authorized Claimants by the
Claims Administrator only after the Effective Date and after: (i) all Claims have been processed,
and all Claimants whose Claims have been rejected or disallowed, in whole or in part, have been
notified and provided the opportunity to be heard concerning such rejection or disallowance; (ii)
all objections with respect to all rejected or disallowed claims have been resolved by the Court,
and all appeals therefrom have been resolved or the time therefor has expired; (iii) all matters
with respect to attorneys' fees, costs, and disbursements have been resolved by the Court, all
appeals therefrom have been resolved or the time therefor has expired; and (iv) all costs of
administration have been paid.
18. Lead Counsel will apply to the Court, on notice to Settling Defendants' Counsel,
for an order (the "Class Distribution Order") approving the Claims Administrator's
administrative determinations concerning the acceptance and rejection of the claims submitted
herein and approving any fees and expenses not previously applied for, including the fees and
expenses of the Claims Administrator, and, if the Effective Date has occurred, directing payment
of the Net Settlement Fund to Authorized Claimants.
19. The Claims Administrator shall determine each Authorized Claimant's pro rata
share of the Net Settlement Fund based upon each Authorized Claimant's Recognized Claim as
defined in the Plan of Allocation described in the Settlement Notice annexed hereto as Exhibit
A-i, or in such other Plan of Allocation as the Court approves. No funds from the Net
Settlement Fund shall be distributed to Authorized Claimants until the Effective Date.
20. It is understood and agreed by the parties hereto that the proposed Plan of
Allocation attached hereto as Exhibit A-I is not part of the Stipulation and is to be considered by
the Court separately from the Court's consideration of the fairness, reasonableness, and adequacy
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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 herein, or any other
orders entered pursuant to the Stipulation. The time to appeal from approval of the Settlement
shall commence upon the Court's entry of the Judgment regardless of whether a Plan of
Allocation has been submitted to the Court or has been approved.
21. Each Authorized Claimant shall be allocated a pro rata share of the Net
Settlement Fund based on his or her Recognized Claim compared to the total Recognized Claims
of all accepted claimants. This is not a claims-made settlement. When the Effective Date of the
Settlement is achieved pursuant to ¶ 28, neither the Settling Defendants nor the Insurance
Carriers shall be entitled to a return, recovery, or reversion of any amounts they contribute to the
Cash Settlement Amount, the Gross Settlement Fund, or the Net Settlement Fund. Neither the
Settling Defendants nor the Insurance Carriers shall have any involvement in reviewing or
challenging claims.
22. No person shall have any claim against Lead Plaintiff, Certified Class Members,
the Claims Administrator, the Settling Defendants or their respective counsel based on
investments or distributions made substantially in accordance with this Stipulation and the
Settlement contained herein, the Plan of Allocation or further orders of the Court. No Person
shall have any claim against the Settling Defendants and Released Parties or their counsel arising
from or relating to the management of, distributions from, or the disposition of the Gross
Settlement Fund or the Net Settlement Fund, and the Lead Plaintiff and each Class Member
hereby fully, finally and forever release, relinquish and discharge the Settling Defendants and
Released Parties and their counsel from any and all such liability.
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23. The Settling Defendants and their counsel shall have no responsibility for, interest
in or liability whatsoever with respect to:
(a) any act, omission or determination of the Escrow Agent, Settlement
Administrator, Lead Counsel, or any designees or agents of Lead Counsel, Escrow Agent or
Settlement Administrator;
(b) any act, omission or determination of Lead Counsel or their designees or
agents in connection with the administration of the Settlement;
(c) the management, investment, or distribution of the Settlement Fund;
(d) the determination, administration, calculation, or payment of any claims
asserted against the Settlement Fund;
(e) the payment or withholding of Taxes; or
(f) the Plan of Allocation.
24. 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 may reallocate such balance among Authorized
Claimants in an equitable and economic fashion, subject to Court approval. Any balance
remaining thereafter may be donated to an appropriate non-profit organization mutually
agreeable to the Settling Parties, subject to Court approval.
TERMS OF PRELIMINARY APPROVAL ORDER
25. Promptly after this Stipulation has been fully executed, Lead Counsel and Settling
Defendants' Counsel jointly shall move the Court for entry of the Preliminary Approval Order,
substantially in the form annexed hereto as Exhibit A.
TERMS OF ORDER OF FINAL JUDGMENT
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26. If the Settlement contemplated by this Stipulation is approved by the Court,
counsel for the parties shall request that the Court enter an Order of Final Judgment in the form
annexed hereto as Exhibit B.
SUPPLEMENTAL AGREEMENT
27. Simultaneously herewith, Lead Counsel and Settling Defendants' Counsel are
executing a "Supplemental Agreement" setting forth certain conditions under which this
Stipulation may be terminated by any Settling Defendant if potential Certified Class Members
with claims and/or losses above a certain threshold amount exclude themselves from the
Certified Class. The Supplemental Agreement shall not be filed prior to the deadline for putative
Certified Class Members to file written requests for exclusion from the Settlement. In the event
of a withdrawal from this Stipulation pursuant to the Supplemental Agreement, this Stipulation
shall become null and void and of no further force and effect and the provisions of 130 shall
apply. Notwithstanding the foregoing, the Stipulation shall not become null and void as a result
of the election by a Settling Defendant to exercise its or his option to withdraw from the
Stipulation pursuant to the Supplemental Agreement until the conditions set forth in the
Supplemental Agreement have been satisfied.
EFFECTIVE DATE OF SETTLEMENT, WAIVER OR TERMINATION
2. The Effective Date of Settlement shall be achieved on the latest date when all the
following shall have occurred:
(a) Settling Defendants no longer have any right under ¶ 27, above, to
terminate this Stipulation or, if they do have such right, they have given written notice to Lead
Counsel that they will not exercise such right;
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(b) The Court has entered the Preliminary Approval Order in all material
respects in the form annexed hereto as Exhibit A;
(c) The Court has approved the Settlement, following notice to the Certified
Class and a hearing, as prescribed by Rule 23 of the Federal Rules of Civil Procedure; and
(d) The Court has entered the Order of Final Judgment, in the form attached
hereto as Exhibit B, and the expiration of any time for appeal or review of such Order of Final
Judgment, or, if any appeal is filed and not dismissed, after such Order of Final Judgment is
upheld on appeal in all material respects and is no longer subject to review upon appeal or
review by writ of certiorari, or, in the event that the Court enters an order and final judgment in
form other than that provided above ("Alternative Judgment") and none of the parties hereto
elect to terminate this Settlement, the date that such Alternative Judgment becomes final and no
longer subject to appeal or review.
29. Settling Defendants or Lead Counsel shall have the right to terminate the
Settlement and this Stipulation by providing written notice of their election to do so
('Termination Notice") to all other parties hereto within thirty (30) days after: (a) the Court's
declining to enter the Preliminary Approval Order in any material respect; (b) the Court's refusal
to approve this Stipulation or any material part of it; (c) the Court's declining to enter the Order
of Final Judgment in the form attached hereto as Exhibit B; (d) the date upon which the Order of
Final Judgment is modified or reversed by the Court of Appeals or the Supreme Court; or (e) the
date upon which an Alternative Judgment is modified or reversed by the Court of Appeals or the
Supreme Court. No Settling Party shall have any obligation whatsoever to proceed under any
terms other than substantially in the form provided and agreed to herein; provided, however, that
no order of the Court concerning any fee and expense application or Plan of Allocation, or any
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modification or reversal on appeal of such order, shall constitute grounds for cancellation or
termination of this Stipulation by any Settling Party.
30. Except as otherwise provided herein, in the event the Settlement is terminated or
fails to become effective for any reason, then (i) the parties to this Stipulation shall be deemed to
have reverted to their respective status in the Actions as of the date and time immediately prior to
the execution of this Stipulation and, except as otherwise expressly provided, the parties shall
proceed in all respects as if this Stipulation and any related orders had not been entered, (ii) any
portion of the Cash Settlement Amount previously paid by Settling Defendants and/or the
Insurance Carriers, together with any interest earned thereon, less any Taxes due with respect to
such income, and less costs of administration and notice actually incurred and paid or payable
from the Cash Settlement Amount shall be returned to the persons or Insurance Carriers paying
the same; (iii) the Escrow Agent or its designee shall apply for any tax refund owed to the Gross
Settlement Fund and pay the proceeds to Settling Defendants, after deduction of any fees or
expenses reasonably incurred in connection with such application(s) for refund, pursuant to such
written request; (iv) any judgment or order entered by the Court in accordance with the terms of
this Stipulation shall be treated as vacated, nunc pro tune; and (v) neither the existence nor the
terms of this Stipulation (nor any negotiations preceding this Stipulation nor any acts performed
pursuant to, or in furtherance of, this Stipulation) shall be used in the Action or in any other
action or proceeding for any purpose (other than to enforce the terms remaining in effect) In
such event, neither Lead Plaintiff nor Lead Counsel, nor any Certified Class Member shall be
liable for repaying any such Taxes due or any such costs of administration and notice actually
incurred and paid or payable from the Cash Settlement Amount.
NO ADMTSSION OF WRONGDOING
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31. This Stipulation, whether or not consummated, and any proceedings taken
pursuant to it:
(a) shall not be offered or received against the Settling Defendants or
Released Parties as evidence of or construed as or deemed to be evidence of any presumption,
concession, or admission by any of the Settling Defendants or Released Parties with respect to
the truth of any fact alleged by any of the plaintiffs or the validity of any claim that has been or
could have been asserted in the Action or in any litigation, or the deficiency of any defense that
has been or could have been asserted in the Action or in any litigation, or of any liability,
negligence, fault, or wrongdoing of the Settling Defendants or Released Parties;
(b) shall not be offered or received against the Settling Defendants or
Released Parties as evidence of a presumption, concession or admission of any fault,
misrepresentation or omission with respect to any statement or written document approved or
made by any Settling Defendant or Released Parties;
(c) shall not be offered or received against the Settling Defendants or
Released Parties as evidence of a presumption, concession or admission with respect to any
liability, negligence, fault or wrongdoing, or in any way referred to for any other reason as
against any of the Settling Defendants or Released Parties, 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 or Released Parties may refer to it to effectuate the
liability protection granted them hereunder;
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(d) shall not be construed 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 construed as or received in evidence as an admission,
concession or presumption against Lead Plaintiff or any of the Certified Class Members that any
of their claims are without merit, or that any defenses asserted by the Settling Defendants have
any merit, or that damages recoverable under the Complaint would not have exceeded the Gross
Settlement Fund.
MISCELLANEOUS PROVISIONS
32. All of the exhibits attached hereto are material and integral parts hereof and are
hereby incorporated by reference as though fully set forth herein.
33. Settling Defendants warrant that they have not filed or instituted proceedings for
any type of bankruptcy (whether voluntary or involuntary), made an assignment for the benefit
of creditors or commenced or become subject to any similar action or proceeding, and that its
participation in this Settlement will not render it insolvent within the meaning of and/or for the
purposes of the United States Bankruptcy Code, including § § 101 and 547 thereof.
34. The provisions of this Stipulation, including the fact of the proposed Settlement,
shall remain completely confidential until such time as a motion for preliminary approval of the
Settlement is filed with the Court; provided, however, that the parties to this Stipulation may
jointly report the pendency of the Settlement to the Court in the Action. SLM or any of its
affiliates and subsidiaries and Mr. Lord may, at their sole discretion, disclose this Stipulation and
the Settlement to their auditors or other persons or entities as reasonably necessary, including but
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not limited to, in connection with any public filings with the SEC or in connection with financing
transactions.
35. Neither Lead Plaintiff nor Lead Counsel will, before a motion for preliminary
approval of the Settlement is filed with the Court in the Action, issue press releases or make
statements of any kind to any third party regarding this Stipulation or the Settlement unless the
Settling Defendants agree to such press releases or public statements in advance, which
agreement shall not be unreasonably withheld. Nothing in the preceding sentence shall restrict
Lead Counsel from communicating, on a confidential basis, with their experts as reasonably
necessary to develop a plan of allocation or with claims administrators bidding on the
administration of the Settlement. Additionally, the parties to this Stipulation may make public
statements to the Court in which the Action is pending as necessary to obtain preliminary or final
approval of the Settlement. This paragraph does not prohibit Lead Counsel from communicating
with any person in the putative Certified Class regarding the Action or the Settlement; provided,
however, Lead Counsel must comply with the terms of confidentiality set forth in this paragraph
in communicating with such persons, and will not disclose information that is not part of the
public record.
36. Lead Plaintiff will not, at any time, issue press releases or make public statements
of any kind to any third party relating, in any way, to the Stipulation, the Action, or the
Settlement unless the Settling Defendants agree to such press releases or public statements in
advance, which agreement shall not be unreasonably withheld.
37. Lead Counsel will not issue press releases relating, in any way, to the Stipulation,
the Action, or the Settlement unless the Settling Defendants agree to such press releases in
advance, which agreement shall not be unreasonably withheld. After a motion for preliminary
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approval is filed with the Court, Lead Counsel may make public statements, including disclosure
on its internet website, involving the following facts: (i) its representation of Lead Plaintiff in the
Action; (ii) the Action was resolved through Settlement; (iii) the amount of the Cash Settlement
Amount associated with the Settlement; and (iv) the procedural status of the Case in the U.S.
District Court (collectively, these facts are referred to as the "Permissible Disclosures"). The
Permissible Disclosures shall conform to the non-disparagement provisions of 38 of the
Stipulation. Lead Counsel shall not make any public statements beyond the Permissible
Disclosures unless the Settling Defendants agree to such public statements in advance, which
agreement shall not be unreasonably withheld. Nothing in this paragraph shall restrict Lead
Counsel from referring to matters of public record or communicating on a confidential basis with
their experts as necessary to develop a plan of allocation or with Claims Administrators bidding
on the administration of the Settlement.
38. Lead Plaintiff and Lead Counsel shall refrain from disparaging either SLM or
Albert L. Lord or taking any action designed or reasonably foreseeable to cause harm to the
public perception of either SLM or Mr. Lord regarding any issue related in any way to the Action
of the Settlement.
39. The parties to this Stipulation intend the Settlement to be a final and complete
resolution of all disputes asserted or which could be asserted by the Plaintiffs, the Certified Class
or their attorneys against the Released Parties with respect to the Settled Claims. Accordingly,
Lead Plaintiff, the Certified Class and the Settling Defendants' Counsel agree not to assert in any
forum (including, but not limited to, any judicial, arbitral, or administrative proceeding) that the
Action was brought by Lead Plaintiff or defended by the Settling Defendants in bad faith or
without a reasonable basis. The parties hereto shall assert no claims of any violation of Rule 11
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of the Federal Rules of Civil Procedure relating to the prosecution, defense, or settlement of the
Action. The parties agree that the amount paid and the other terms of the Settlement were
negotiated at arm's length in good faith by the parties, and reflect a settlement that was reached
voluntarily after consultation with experienced legal counsel.
40. This Stipulation may not be modified or amended, nor may any of its provisions
be waived except by a writing signed by all parties hereto or their successors-in-interest.
41. The headings herein are used for the purpose of convenience only and are not
meant to have legal effect.
42. The administration and final consummation of the Settlement as embodied in this
Stipulation shall be under the authority of the Court and the Court shall retain jurisdiction for the
purpose of entering orders providing for the award of attorneys' fees and expenses to Lead
Counsel and enforcing the terms of this Stipulation. All parties hereto submit to the jurisdiction
of the Court for purposes of implementing and enforcing the settlement embodied in this
Stipulation.
43. The waiver by one party of any breach of this Stipulation by any other party shall
not be deemed a waiver of any other prior or subsequent breach of this Stipulation.
44. This Stipulation, its exhibits and the Supplemental Agreement constitute the
entire agreement among the parties hereto concerning the Settlement of the Action, and no
representations, warranties, or inducements have been made by any party hereto concerning this
Stipulation and its exhibits other than those contained and memorialized in such documents.
45. This Stipulation may be executed in one or more counterparts. All executed
counterparts and each of them shall be deemed to be one and the same instrument provided that
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counsel for the parties to this Stipulation shall exchange among themselves original signed
counterparts.
46. This Stipulation shall be binding upon, and inure to the benefit of, the successors
and assigns of the parties hereto.
47. The construction, interpretation, operation, effect and validity of this Stipulation,
and all documents necessary to effectuate it, shall be governed by the internal laws of the State of
New York without regard to conflicts of laws, except to the extent that federal law requires that
federal law governs.
48. This Stipulation shall not be construed more strictly against one party than
another merely by virtue of the fact that it, or any part of it, may have been prepared by counsel
for one of the parties, it being recognized that it is the result of arm's-length negotiations
between the parties and all parties have contributed substantially and materially to the
preparation of this Stipulation.
49. All counsel and any other person executing this Stipulation and any of the
exhibits hereto, or any related settlement documents, warrant and represent that they have the full
authority to do so and that they have the authority to take appropriate action required or
permitted to be taken pursuant to the Stipulation to effectuate its terms.
50. Lead Plaintiff, Lead Counsel, Settling Defendants and Settling Defendants'
Counsel agree to cooperate fully with one another in seeking Court approval of the Preliminary
Approval Order, the Stipulation and the Settlement, and to promptly agree upon and execute all
such other documentation as may be reasonably required to obtain final approval by the District
Court of the Settlement.
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DATED: t 3 ' GARD GIBBS LLP
By: Danie'teGirard
Amanda M. Steiner Christina C. Sharp 601 California Street, Suite 1400 San Francisco, CA 94108 Telephone: (415) 981-4800 Facsimile: (415) 981-4846
Jonathan K. Levine 711 Third Avenue, 20th Floor New Ydrk,NY 10017 Telephone: (212) 867-1721 Facsimile: (212) 867-1767
Lead Plaintiffs Counsel
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DATED: 3 / LATHAM & WATKINS LLP
By: QV- Peter A. Wald
505 Montgomery Street, Suite 200 San Francisco, CA 94111 Telephone: (415) 981-4800 Facsimile: (415) 981-4846
Abid R. Qureshi 555 Eleventh Street NW, Suite 1000 Washington, D.C. 2004 Telephone: (202) 637-2200 Facsimile: (202) 637-2201
Christopher R. Harris 885 Third Avenue New York, NY 10022 Telephone: (212) 906-1880 Facsimile: (212) 751-4846
Counsel for Defendants SLM Corporation and Albert L. Lord
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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
IN RE SLM CORPORATION SECURITIES : Case No. 08 Civ. 1029 (WHP) LITIGATION :
:
ORDER PRELIMINARILY APPROVING SETTLEMENT
WHEREAS, on September 3, 2009, Lead Plaintiff SLM Ventures (“Lead Plaintiff”) filed
a Second Amended Class Action Complaint on behalf of itself and all other persons or entities
who bought or otherwise acquired SLM Corporation (“SLM”) common stock between January
18, 2007 and January 23, 2008, inclusive, alleging that Defendants SLM and Albert L. Lord
(“Settling Defendants”), and others, had made materially false and misleading statements and
omissions in Settling Defendants’ public statements, filings with the Securities and Exchange
Commission (“SEC”) and other public documents to the investing public regarding the loan
underwriting standards, forbearance practices and loss allowances of SLM, its subsidiaries
and/or affiliates with respect to certain student loans known as private education loans (“PELs”)
originated, acquired, serviced or collected by SLM, its subsidiaries and/or affiliates, thereby
understating SLM’s loan loss reserves and overstating SLM’s profitability, and allegedly
artificially inflating the price of SLM’s common stock;
WHEREAS, the Second Amended Class Action Complaint further alleges that Lead
Plaintiff and other class members purchased the common stock of SLM during this period at
prices artificially inflated as a result of the dissemination by Settling Defendants and others of
false and misleading statements regarding the profitability of SLM’s PEL portfolio, in violation
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of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b) and
78t(a), and Rule 10b-5, 17 C.F.R. § 240.10b-5, promulgated thereunder;
WHEREAS, on January 24, 2012, this Court granted Lead Plaintiff’s motion for class
certification and certified a class, pursuant to Rules 23(a) and (b)(3) of the Federal Rules of Civil
Procedure, of all persons or entities who purchased or otherwise acquired SLM common shares
between January 18, 2007 and January 23, 2008, inclusive, and who possessed any of those
shares over one or more of the dates of December 19, 2007, January 3, 2008, and January 23,
2008 (the “Certified Class”). Excluded from the Certified Class are the two Settling Defendants
in this action; members of the immediate families (parents, spouses, siblings and children) of Mr.
Lord; any person, firm, trust, corporation, officer, director or other individual or entity in which
any Settling Defendant has a controlling interest; any person who was an officer, director,
partner, or controlling person of SLM (including any officer, director, partner or controlling
person of any of its subsidiaries or any other entity in which SLM had a majority or controlling
interest) during the Class Period; and the legal representatives, heirs, successors in interest or
assigns of any such persons or entities; and
WHEREAS, on March 23, 2012, Lead Plaintiff and Settling Defendants entered into a
Stipulation and Agreement of Settlement (the “Stipulation”) which is subject to review under
Rule 23 of the Federal Rules of Civil Procedure and which, together with the exhibits thereto,
sets forth the terms and conditions for the proposed settlement of the claims alleged in the Action
as against the Settling Defendants and for dismissal of the Action on the merits and with
prejudice; and
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WHEREAS, the Court having read and considered the Stipulation and the accompanying
documents; and the parties to the Stipulation having consented to the entry of this Order; and all
capitalized terms used herein having the meanings defined in the Stipulation.
NOW, THEREFORE, IT IS HEREBY ORDERED:
This Order (the “Preliminary Approval Order”) incorporates by reference the
definitions in the Stipulation, and all capitalized terms used herein, and not otherwise defined
herein, shall have the same meanings set forth in the Stipulation.
2. The Court preliminarily approves the Stipulation, including the releases contained
therein, and preliminarily approves the Settlement as being fair, reasonable, and adequate to the
Certified Class.
3. A hearing (the “Settlement Fairness Hearing”) pursuant to Rule 23(e) of the
Federal Rules of Civil Procedure shall be held on ______, 2012 at __:__ __.m., before the
Honorable William H. Pauley, United States District Judge, at the United States District Court
for the Southern District of New York, 500 Pearl Street, Courtroom 11D, New York, New York
10007 for the following purposes:
(a) to determine whether the proposed Settlement as set forth in the
Stipulation is fair, reasonable, and adequate, and should be approved by the Court;
(b) to determine whether the Order of Final Judgment substantially in the
form of Exhibit B to the Stipulation should be entered;
(c) to determine whether the proposed Plan of Allocation for the proceeds of
the Settlement is fair and reasonable, and should be approved by the Court;
(d) to consider Lead Counsel’s motion for an award of attorneys’ fees and
expenses; and
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(e) to rule upon such other matters as the Court may deem appropriate.
4. The Court may adjourn and/or continue the Settlement Fairness Hearing from
time to time and without further notice to the Certified Class. The Court reserves the right to
approve the Settlement at or after the Settlement Fairness Hearing with such modifications as
may be consented to by the Settling Parties and without further notice to the Settlement Class.
The Court further reserves the right to enter its Order of Final Judgment approving the
Stipulation and dismissing the Second Amended Complaint as against the Settling Defendants on
the merits and with prejudice regardless of whether it has approved the Plan of Allocation or
awarded attorneys’ fees and expenses.
5. The Court approves the form, substance and requirements of the Notice of (1)
Pendency and Proposed Settlement of Class Action; (2) Hearing on Proposed Settlement; and (3)
Motion for Attorneys’ Fees and Reimbursement of Litigation Expenses (the “Settlement
Notice”), and the Proof of Claim form annexed hereto as Exhibits 1 and 2 respectively.
6. The Court approves the appointment of A.B. Data, Ltd. as the Claims
Administrator. The Claims Administrator shall cause the Settlement Notice and the Proof of
Claim, substantially in the forms annexed hereto, to be mailed, by first class mail, postage
prepaid, on or before __, 2012 to all Certified Class Members who can be identified with
reasonable effort. SLM shall cooperate in making its transfer records and shareholder
information available to the Claims Administrator for the purpose of identifying and giving
notice to the Certified Class. The Claims Administrator shall use reasonable efforts to give
notice to nominee owners such as brokerage firms and other persons or entities who purchased
SLM common shares during the Class Period but not as beneficial owners. Such nominee
purchasers or holders are directed, within seven (7) days of their receipt of the Settlement Notice,
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to either forward copies of the Settlement Notice and Proof of Claim to their beneficial owners or
to provide the Claims Administrator with lists of the names and addresses of the beneficial
owners, and the Claims Administrator is ordered to send the Settlement Notice and Proof of
Claim promptly to such beneficial owners. Nominee purchasers who elect to send the Settlement
Notice and Proof of Claim to their beneficial owners are directed to send a statement to the
Claims Administrator confirming that the mailing was made as directed. Additional copies of
the Notice shall be made available to any record holder requesting such for the purpose of
distribution to beneficial owners, and such record holders shall be reimbursed from the Gross
Settlement Fund, upon receipt by the Claims Administrator of proper documentation, for the
reasonable expense of sending the Settlement Notices and Proofs of Claim to beneficial owners.
Lead Counsel shall, at or before the Settlement Fairness Hearing, file with the Court proof of
mailing of the Settlement Notice and Proof of Claim.
7. The Court approves the form of the Summary Notice of Pendency and Proposed
Settlement of Class Action (“Publication Notice”) in substantially the form and content annexed
hereto as Exhibit 3 and directs that Lead Counsel shall cause the Publication Notice to be
published once in the national edition of Investors Business Daily within ten days of the mailing
of the Settlement Notice. Lead Counsel shall, at or before the Settlement Fairness Hearing, file
with the Court proof of publication of the Publication Notice.
8. The date and time of the Settlement Fairness Hearing shall be added to the
Settlement Notice and the Publication Notice before they are mailed and published.
9. All reasonable costs and expenses incurred in identifying and providing notice to
Certified Class Members and in administering the Gross Settlement Fund shall be paid as set
forth in the Stipulation.
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10. The form and content of the Settlement Notice and the Publication Notice, and the
method set forth herein of notifying the Certified Class of the Settlement and its terms and
conditions, meet the requirements of Rule 23 of the Federal Rules of Civil Procedure, Section
21D(a)(7) of the Securities Exchange Act of 1934, 15 U.S.C. § 78u-4(a)(7) as amended by the
Private Securities Litigation Reform Act of 1995, and due process, constitute the best notice
practicable under the circumstances, and shall constitute due and sufficient notice to all persons
and entities entitled thereto.
11. In order to be entitled to participate in the Net Settlement Fund, in the event the
Settlement is effected in accordance with all of the terms and conditions set forth in the
Stipulation, each Certified Class Member shall take the following actions and be subject to the
following conditions:
(a) A properly executed Proof of Claim (the “Proof of Claim”), substantially
in the form attached hereto as Exhibit 2, must be submitted to the Claims Administrator, at the
post office box indicated in the Settlement Notice, postmarked not later than __, 2012. Such
deadline may be further extended by Court order. Each Proof of Claim shall be deemed to have
been submitted when postmarked (if properly addressed and mailed by first class mail, postage
prepaid) provided such Proof of Claim is actually received prior to the motion for an order of the
Court approving distribution of the Net Settlement Fund. Any Proof of Claim submitted in any
other manner shall be deemed to have been submitted when it was actually received at the
address designated in the Notice.
(b) The Proof of Claim submitted by each Certified Class Member must
satisfy the following conditions: (i) it must be properly completed, signed and submitted in a
timely manner in accordance with the provisions of the preceding subparagraph; (ii) it must be
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accompanied by adequate supporting documentation for the transactions reported therein, in the
form of broker confirmation slips, broker account statements, an authorized statement from the
broker containing the transactional information found in a broker confirmation slip, or such other
documentation as is deemed adequate by the Claims Administrator; (iii) if the person executing
the Proof of Claim is acting in a representative capacity, a certification of his current authority to
act on behalf of the Certified Class Member must be included in the Proof of Claim; and (iv) the
Proof of Claim must be complete and contain no material deletions or modifications of any of the
printed matter contained therein and must be signed under penalty of perjury.
(c) As part of the Proof of Claim, each Certified Class Member shall submit
to the jurisdiction of the Court with respect to the claim submitted, and shall (subject to
effectuation of the Settlement) release all Settled Claims as provided in the Stipulation.
12. Unless otherwise ordered by the Court, all Persons who fall within the definition
of the Certified Class and who do not timely and validly request to be excluded from the
Certified Class in accordance with the instructions set forth in the Settlement Notice and the
Publication Notice shall be subject to and bound by the provisions of the Stipulation, the releases
contained therein, and the Judgment with respect to all Released Claims, regardless of whether
such Persons seek or obtain by any means, including, without limitation, by submitting a Proof
of Claim and Release or any similar document, any distribution from the Gross Settlement Fund
or the Net Settlement. A Certified Class Member wishing to be excluded from the Certified
Class shall mail the request in written form by first class mail postmarked no later than __, 2012
to the address designated in the Settlement Notice. Such request for exclusion shall clearly
indicate the name, address and telephone number of the person seeking exclusion, that the sender
“requests to be excluded from the Class in the SLM Corporation Securities Litigation,” and must
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be signed by such person. Such persons requesting exclusion must also list the date(s), price(s),
and number(s) of shares of all purchases and sales of SLM common shares during the Class
Period. The request for exclusion shall not be effective unless it provides the required
information and is made within the time stated above, or the exclusion is otherwise accepted by
the Court.
13. Upon the Effective Date, the Lead Plaintiff and each Certified Class Member who
does not timely and validly request exclusion, on behalf of themselves, their successors and
assigns, and any other Person claiming (now or in the future) through or on behalf of them, and
regardless of whether any such Lead Plaintiff or Certified Class Member ever seeks or obtains by
any means, including, without limitation, by submitting a Proof of Claim, any distribution from
the Gross Settlement Fund, shall be deemed to have, and by operation of the Judgment shall
have, fully, finally, and forever released, relinquished, and discharged all Released Claims
against the Settling Defendants and Released Parties and shall have covenanted not to sue the
Settling Defendants and Released Parties with respect to all such Released Claims, and shall be
permanently barred and enjoined from instituting, commencing, prosecuting or asserting any
such Released Claim against the the Settling Defendants and Released Parties.
14. Certified Class Members who validly request exclusion from the Certified Class
shall not be entitled to receive any payment out of the Net Settlement Fund as described in the
Stipulation and Settlement Notice. Any person who requests exclusion from the Certified Class
shall immediately waive any right to object or comment upon the Settlement, the Plan of
Allocation, or the award of attorneys’ fees and reimbursement of expenses and any objections
made by such persons shall be entirely void and without any legal effect.
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15. Any Certified Class Member may appear and show cause (if he, she, or it has any)
why the Court should or should not (a) approve the proposed Settlement as set forth in the
Stipulation as fair, reasonable, and adequate; or (b) enter the Judgment substantially in the form
annexed as Exhibit B to the Stipulation. The Court will consider objections to the Settlement,
the Plan of Allocation, or the award of attorneys’ fees and reimbursement of expenses only if
such objections and any supporting papers are filed in writing with the Clerk of the Court, United
States District Court for the Southern District of New York, 500 Pearl Street, New York, New
York 10007-1312, and copies of all such papers are served, on or before ________, 2012, upon
each of the following: Jonathan K. Levine, Esq., Girard Gibbs LLP, 601 California Street, Suite
1400, San Francisco, California, on behalf of Lead Plaintiff; and Christopher Harris, Esq.,
Latham & Watkins LLP, 885 Third Avenue, New York, New York 10022 on behalf of the
Settling Defendants. Attendance at the hearing is not necessary; however, persons wishing to be
heard orally in opposition to the approval of the Settlement, the Plan of Allocation, and/or the
request for attorneys’ fees are required to indicate in their written objection their intention to
appear at the hearing. Persons who intend to object to the Settlement, the Plan of Allocation,
and/or counsel’s application for an award of attorneys’ fees and expenses and desire to present
evidence at the Settlement Fairness Hearing must include in their written objections the identity
of any witnesses they may call to testify and copies of all exhibits they intend to introduce into
evidence at the Settlement Fairness Hearing. Certified Class Members do not need to appear at
the hearing or take any other action to indicate their approval. Persons who submit any
objections may be subject to discovery, including deposition, by any party to this Action on ten
calendar days’ notice.
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16. Any person who fails to comply with the requirements regarding objections set
forth herein, including discovery requirements, shall be deemed to have waived his or her right
to object. Any objections made by such persons shall be entirely void and without any legal
effect.
17. If: (a) the Settlement is terminated pursuant to ¶ 29 of the Stipulation; (b) any
specified condition to the Settlement set forth in the Stipulation is not satisfied and the
satisfaction of such condition is not waived in writing by Lead Counsel and Counsel for the
Settling Defendants; (c) the Court rejects, in any respect, the Order of Final Judgment in
substantially the form and content annexed to the Stipulation as Exhibit B and Lead Counsel and
Counsel for the Settling Defendants fail to consent to the entry of another form of order in lieu
thereof; (d) the Court rejects the Stipulation, including any amendment thereto approved by Lead
Counsel and Counsel for the Settling Defendants; or (e) the Court approves the Stipulation,
including any amendment thereto approved by Lead Counsel and Counsel for the Settling
Defendants, but such approval is reversed on appeal and such reversal becomes final by lapse of
time or otherwise, then, in any such event, the Stipulation, including any amendment(s) thereof,
and this Order shall be null and void, of no further force or effect, and without prejudice to any
party, and may not be introduced as evidence or referred to in any actions or proceedings by any
person or entity, and each party shall be restored to his, her or its respective position as it existed
prior to the execution of the Stipulation.
18. Pending final determination as to whether the Settlement should be approved, no
Certified Class Member shall commence, prosecute, pursue or litigate any Released Claim
against the Settling Defendants, whether directly, representatively or in any other capacity, and
regardless of whether or not any such Certified Class Member has appeared in the Action.
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19. Neither the Stipulation nor the Settlement, nor any act performed or document
executed pursuant to or in furtherance of the Stipulation or the Settlement: (a) is or may be
deemed to be or may be used as an admission of, or evidence of, the validity of any Released
Claims, of any allegation made in the Action, or of any wrongdoing or liability of the Settling
Defendants or Released Parties; or (b) is or may be deemed to be or may be used as an admission
of, or evidence of, any liability, fault or omission of the Settling Defendants or Released Parties
in any civil, criminal, or administrative proceeding in any court, administrative agency, or other
tribunal. Neither the Stipulation nor the Settlement, nor any act performed or document executed
pursuant to or in furtherance of the Stipulation or the Settlement, shall be admissible in any
proceeding for any purpose, except to enforce the terms of the Settlement, and except that the
Settling Defendants or Released Parties may file this Stipulation and/or the Judgment in any
action for any purpose, including, but not limited to, in order to support a defense or
counterclaim based on principles of res judicata, collateral estoppel, release, good faith
settlement, judgment bar, or reduction, or any other theory of claim preclusion or issue
preclusion or similar defense or counterclaim.
20. The Settlement Amount and any accrued interest thereon 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, further notice to the Certified Class and/or further order(s) of the Court.
21. Without further order of the Court, the Settling Parties may agree to reasonable
extensions of time to carry out any of the provisions of this Preliminary Approval Order or the
Stipulation.
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22. The Court retains exclusive jurisdiction over the Action to consider all further
matters arising out of or connected with the Stipulation and/or Settlement.
Dated: New York, New York
2012
HONORABLE WILLIAM H. PAULEY UNITED STATES DISTRICT JUDGE
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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
IN RE SLM CORPORATION SECURITIES : Case No. 08 Civ. 1029 (WHP) LITIGATION :
NOTICE OF (1) PENDENCY AND PROPOSED SETTLEMENT OF CLASS ACTION; (2) HEARING ON PROPOSED SETTLEMENT; AND (3) MOTION FOR ATTORNEYS’
FEES AND REIMBURSEMENT OF LITIGATION EXPENSES
TO: ALL PERSONS OR ENTITIES WHO PURCHASED OR OTHERWISE ACQUIRED SLM CORPORATION COMMON SHARES DURING THE PERIOD OF TIME COMMENCING ON JANUARY 18, 2007 THROUGH AND INCLUDING JANUARY 23, 2008, AND WHO POSSESSED ANY OF THOSE SHARES OVER ONE OR MORE OF THE DATES OF DECEMBER 19, 2007, JANUARY 3, 2008 AND JANUARY 23, 2008. (THE “CLASS”);
If you are a member of the Class, you could get a payment from a class action settlement.
A federal court authorized this notice. This is not a solicitation from a lawyer.
The settlement will provide a $35,000,000.00 settlement fund for the benefit of the Class.
• The settlement resolves class litigation over whether SLM and certain of its executives misled investors regarding the loan underwriting standards, forbearance practices and loss allowances of SLM, its subsidiaries and/or affiliates with respect to certain student loans known as private education loans (“PELs”) originated, acquired, serviced or collected by SLM, its subsidiaries and/or affiliates,, thereby understating SLM’s loan loss reserves and overstating SLM’s profitability.
• Your legal rights are affected whether you act or don’t act. Please read this notice carefully.
Case 1:08-cv-01029-WHP Document 166 Filed 03/30/12 Page 60 of 92
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 ever be part of any other lawsuit against the defendants about the legal claims in this case.
OBJECT Write to the Court about why you do not like the settlement.
GO TO A HEARING Ask to speak in Court about the fairness of the settlement.
DO NOTHING Get no payment. Give up rights.
• These rights and options - and the deadlines to exercise them - are explained in this notice.
• The Court in charge of this case still has to decide whether to approve the settlement. Payments will be made if the Court approves the settlement and after appeals are resolved. Please be patient.
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SUMMARY NOTICE
Statement of Plaintiff Recovery
The parties have agreed to settle this lawsuit and have established a Settlement Fund of $35,000,000.00 in cash, plus interest. Lead Plaintiff SLM Ventures’ (“Lead Plaintiff”) damages consultant estimates that there were approximately 498 million shares of SLM common stock traded during the Class Period which may have been damaged. Lead Plaintiff estimates that the average recovery per damaged share of SLM common shares under the settlement is $0.07 per damaged share before deduction of Court-awarded attorneys’ fees and expenses. A Class Member’s actual recovery will be a portion of the Net Settlement Fund equal to his, her or its Recognized Claim divided by the total Recognized Claims of all Class Members who submit acceptable Proofs of Claim, multiplied by the Net Settlement Fund.
Statement of Potential Outcome of Case
The parties disagreed on both liability and damages and do not agree on the average amount of damages per share that would be recoverable if Lead Plaintiff were to have prevailed at trial. The Defendants deny that they are liable to the Lead Plaintiff or the Class and deny that Lead Plaintiff or the Class have suffered any damages.
Statement of Attorneys’ Fees and Costs Sought
Plaintiff’s Lead Counsel is moving the Court to award attorneys’ fees not to exceed one-quarter (25%) of the Gross Settlement Fund (defined below), and for reimbursement of expenses incurred in connection with the prosecution of this Action not to exceed $1.25 million. The requested fees and expenses would amount to an average of $0.02 per damaged share. Plaintiff’s Lead Counsel have expended considerable time and effort in the prosecution of this litigation on a contingent fee basis, and have advanced the expenses of the litigation, in the expectation that if they were successful in obtaining a recovery for the Class they would be paid from such recovery. In this type of litigation it is customary for counsel to be awarded a percentage of the common fund recovery as their attorneys’ fees and expenses.
Further Information
You may get further information about the Action and this Notice by contacting Plaintiff’s Lead Counsel: Jonathan K. Levine, Esq., Girard Gibbs LLP, 601 California Street, Suite 1400, San Francisco, California, Telephone: 415-981-4800.
Reasons for the Settlement
The principal reason for the settlement is to provide a benefit to the Class now. This 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. While Lead Plaintiff was prepared to go to trial and was confident in its ability to present a case, it recognized that a trial is a risky proposition and that Lead Plaintiff and the Class might not have prevailed on all their claims. The claims advanced by the Class involve numerous complex legal and financial issues, requiring extensive expert testimony, which would add considerably to the expense and duration
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of the litigation. Even after extensive fact and expert discovery, questions remain regarding the extent of Defendants’ liability and the true measure of the Class’s damages. In particular, because the decline in SLM’s stock price might have been subject to industry-wide market factors that were driving down the stock prices of many companies, there existed a substantial risk that Lead Plaintiff may not have been able to prove at trial that its losses were actually due to Defendants’ allegedly false and misleading statements.
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WHAT THIS NOTICE CONTAINS
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BASIC INFORMATION
1. Why did I get this notice package?
You or someone in your family may have purchased or otherwise acquired SLM common shares between January 18, 2007 and January 23, 2008, inclusive, and possessed any of those shares over one or more of the dates of December 19, 2007, January 3, 2008 and January 23, 2008.
The Court directed that this notice be sent to you because you have a right to know about a proposed settlement of a class action lawsuit, and about all of your options, before the Court decides whether to approve the settlement. If the Court approves the settlement, and after any objections and appeals are resolved, an administrator appointed by the Court will make the payments that the settlement allows.
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 Southern District of New York, and the case is known as In re SLM Corporation Securities Litigation, Civil No. 08 Civ. 1029 (WHP). This case was assigned to United States District Judge William H. Pauley. The entity that has sued is called the Lead Plaintiff, and SLM and individual defendant Albert L. Lord are called the Settling Defendants.
2. What is this lawsuit about?
The lawsuit claims that Settling Defendants and others made materially false and misleading statements and omissions in the Settling Defendants’ public statements, filings with the Securities and Exchange Commission (“SEC”) and other public documents to the investing public regarding the loan underwriting standards, forbearance practices and loss allowances of SLM, its subsidiaries and/or affiliates with respect to certain student loans known as private education loans (“PELs”) originated, acquired, serviced or collected by SLM, its subsidiaries and/or affiliates, thereby understating SLM’s loan loss reserves and overstating SLM’s profitability, and allegedly artificially inflating the price of SLM’s common stock. The lawsuit further alleges that this conduct by SLM caused damages to persons who purchased or otherwise acquired SLM’s common shares at such allegedly inflated prices. The lawsuit seeks money damages against the Settling Defendants for violations of the federal securities laws.
3. Why is this a class action?
In a class action, one or more people called class representatives (in this case, Lead Plaintiff), sue on behalf of people who have similar claims. All these people are a Class or Class Members. One court resolves the issues for all Class Members, except for those who exclude themselves from the Class.
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4. Why is there a settlement?
The Court did not decide in favor of Lead Plaintiff or the Settling Defendants. Instead, these parties agreed to a settlement. Settlement avoids the risks, delay and cost of a trial, and the people affected will get compensation. The Lead Plaintiff and the attorneys think the settlement is best for all Class Members.
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.
5. How do I know if I am part of the settlement?
The Court directed, for purposes of this settlement, that everyone who fits this description is a Class Member: all persons or entities who purchased or otherwise acquired SLM common shares between January 18, 2007 and January 23, 2008, inclusive and possessed any of those shares over one or more of the dates of December 19, 2007, January 3, 2008 and January 23, 2008 (the “Class”).
6. Are there exceptions to being included?
You are not a Class Member if you are any one of the Settling Defendants in this action, a member of the immediate family (parents, spouses, siblings and children) of Mr. Lord, an officer, director or other individual or entity in which any Settling Defendant has a controlling interest, a person who was an officer, director, partner, or controlling person of SLM (including any officer, director, partner or controlling person of any of its subsidiaries or any other entity in which SLM had a majority or controlling interest) during the Class Period, or a legal representative, heir, successor in interest or assign of any such persons or entities.
Also excluded from the Class are any putative Class Members who exclude themselves by filing a request for exclusion in accordance with the requirements set forth in the Settlement Notice
If you sold SLM common stock during the Class Period (January 18, 2007 through and including January 23, 2008), that alone does not make you a Class Member. You are a Class Member only if you purchased or otherwise acquired shares during the Class Period and possessed any of those shares over one or more of the dates of December 19, 2007, January 3, 2008 and January 23, 2008.
7. I’m still not sure if I am included?
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If you are still not sure whether you are included, you can ask for free help. You can call __ or visit www.__.com for more information. Or you can fill out and return the Proof of Claim form described in question 10 to see if you qualify.
THE SETTLEMENT BENEFITS — WHAT YOU GET
8. What does the settlement provide?
The Settling Defendants and their insurers have agreed to create a $35,000,000.00 fund. The fund, after deduction of Court awarded attorneys’ fees and expenses and settlement administration costs, will be divided among all Class Members who send in valid claim forms.
9. How much will my payment be?
Your share of the fund will depend on the amount of valid claim forms that Class Members send in, how many SLM common shares you purchased or otherwise acquired and for what price, and whether and when you sold them. The proposed Plan of Allocation is described at the end of this Notice.
By following the instructions in the Plan of Allocation below, you can calculate what is called your Recognized Claim. It is unlikely that you will get a payment for all of your Recognized Claim. After all Class Members have sent in their claim forms, the payment you get will be a part of the net settlement fund equal to Recognized Claim divided by the total of everyone’s Recognized Claims. See the instructions in the Plan of Allocation for more information on calculating your Recognized Claim.
HOW YOU GET A PAYMENT — SUBMITTING A CLAIM FORM
10. How can I get a payment?
To qualify for payment, you must send in a Proof of Claim form. A Proof of Claim form is being circulated with this Notice. You may also get a Proof of Claim form on the Internet at www._________.com. Read the instructions carefully, fill out the form, include all the documents the form asks for, sign it, and mail it postmarked no later than __ .
11. When would I get my payment?
The Court will hold a hearing on __, 2012 to decide whether to approve the settlement. If the Court approves the settlement after that, there may be appeals. It is always uncertain whether these appeals can be resolved, and resolving them can take time, perhaps more than a year. Please be patient.
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12. What am I giving up to get a payment or stay in the Class?
Unless you exclude yourself, you are staying in the Class, and that means that, if the settlement is approved, you will release all “Settled Claims” (as defined below) against the “Released Parties” (as defined below), even if you do not submit a Proof of Claim.
“Settled Claims” means any and all claims, debts, demands, rights, actions, suits, disputes, contracts, or causes of action or liabilities whatsoever (including, but not limited to, any claims for damages, interest, attorneys’ fees, expert or consulting fees, and any other costs, expenses or liability whatsoever), whether based on federal, state, local, statutory, regulatory, foreign, or common law or any other law, rule or regulation, whether fixed or contingent, accrued or un-accrued, liquidated or un-liquidated, at law or in equity, whether under tort or contract, matured or un-matured, whether class, individual or derivative in nature, whether or not referred to in the Action, including both known claims and Unknown Claims (i) that have been asserted in this Action by the Class Members or their attorneys or any of them against any of the Released Parties, or (ii) that could have been asserted in any forum by the Class Members or their attorneys or any of them or their successors and assigns or any of them against any of the Released Parties which arise out of or are based upon or relate in any way to the allegations, transactions, facts, matters or occurrences, representations or omissions involved, set forth, or referred to in the Second Amended Class Action Complaint and relate to the purchase or sale of shares of the common stock of SLM during the Class Period, except for claims to enforce the Settlement.
“Released Parties” means any and all of the Settling Defendants, their past or present subsidiaries, parents, successors, predecessors, officers, directors, agents, partners, principals, shareholders, members, employees, Insurance Carriers, and attorneys, and any person, firm, trust, corporation, officer, director or other individual or entity in which any Settling Defendant has a controlling interest or which is related to or affiliated with any of the Settling Defendants, and the legal representatives, heirs, executors, successors in interest or assigns of any such entity.
If you remain a member of the Class, all of the Court’s orders will apply to you and legally bind you, even if you do not submit a Proof of Claim.
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 SLM or any of the Released Parties on your own about any of the Settled Claims, then you must take steps to get out. This is called excluding yourself — or is sometimes referred to as “opting out” of the Class.
13. How do I get out of the settlement?
To exclude yourself from the settlement, you must send a letter by mail clearly indicating your name, address and telephone number, the date(s), price(s), and number(s) of shares of all purchases and sales of SLM common shares during the Class Period and stating that you
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“request to be excluded from the Class in the SLM Securities Litigation,” and you must sign the letter. You must mail your exclusion request postmarked no later than __ to:
SLM Securities Litigation Exclusions c/o
__ City, ST 00000-0000
You cannot exclude yourself by phone or by e-mail. If exclude yourself from the Class, you will not get any settlement payment, and you cannot object to the settlement. You may be able to sue (or continue to sue) SLM in the future.
14. If I don’t exclude myself, can I sue SLM for the same thing later?
No. Unless you exclude yourself, you give up any rights to sue SLM and the Released Parties for the claims that this settlement resolves. If you have a pending lawsuit, speak to your lawyer in that case immediately. You must exclude yourself from this Class to continue your own lawsuit. Remember, the exclusion deadline is __ .
15. 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. But, you may sue, continue to sue, or be part of a different lawsuit against the Released Parties.
THE LAWYERS REPRESENTING YOU
16. Do I have a lawyer in this case?
The Court ordered that Girard Gibbs LLP, 601 California Street, Suite 1400, San Francisco, California, Telephone: 415-981-4800, will represent you and the other Class Members. The Girard Gibbs firm is called Plaintiff’s Lead Counsel. If you want to be represented by your own lawyer, you may hire one at your own expense.
17. How will the lawyers be paid?
Plaintiff’s Lead Counsel are moving the Court to award attorneys’ fees from the Settlement Fund in an amount not greater than one-quarter (25%) of the Gross Settlement Fund and for reimbursement of their expenses not to exceed $1.25 million, plus interest on such expenses at the same rate as earned by the Settlement Fund. Costs to administer the settlement will also be paid out of the Settlement Fund.
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OBJECTING TO THE SETTLEMENT
You can tell the Court that you don’t agree with the settlement or some part of it.
18. How do I tell the Court that I don’t like the settlement?
If you are a Class Member, you can object to the settlement if you don’t like any part of it. You can give reasons why you think the Court should not approve it. The Court will consider your views. To object, you must send a signed letter saying that you object to the proposed settlement in the In re SLM Corporation Securities Litigation . You must include your name, address, telephone number, and your signature, identify the date(s), price(s), and number(s) of shares of all purchases and sales of SLM common stock you made during the Class Period, and state the reasons why you object to the propose settlement. Mail the objection to each of the following addresses postmarked no later than __:
COURT PLAINTIFF’S LEAD DEFENDANTS’ COUNSEL COUNSEL
Honorable William H. Pauley GIRARD GIBBS LLP LATHAM & WATKINS United States District Judge LLP United States District Court Jonathan K. Levine for the Southern District of GIRARD GIBBS LLP Christopher Harris New York 601 California Street, 14 th 885 Third Avenue Daniel Patrick Moynihan Floor New York, New York 10022 United States Courthouse San Francisco, CA 94108 Telephone: 212-906-1200 500 Pearl St. Telephone: 415-981-4800 Facsimile: 212-751-4864 New York, NY 10007-1312 Facsimile: 415-981-4846
Peter A. Wald Abid R. Qureshi 505 Montgomery Street, Suite 2000 San Francisco, California 94111 Telephone: 415-391-0600 Facsimile: 415-395-8095
Anyone making an objection may be subject to discovery by any party, including a deposition, on ten calendar days’ notice. If a person who makes an objection does not comply with all of the requirements set forth in this notice, his or her objection will be deemed to be waived.
19. What’s the difference between objecting and excluding?
Objecting is simply telling the Court that you do not like something about the settlement. You can object only if you stay in the Class. Excluding yourself is telling the Court that you do not
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want to be part of the Class. If you exclude yourself, you cannot object because the case no longer affects you.
THE COURT’S SETTLEMENT HEARING
The Court will hold a hearing to decide whether to approve the settlement. You may come to the hearing and you may ask to speak, but you don’t have to.
20. When and where will the Court decide whether to approve the settlement?
The Court will hold a Settlement Fairness Hearing at __ on __, at the United States District Court for the Southern District of New York, 500 Pearl Street, New York, New York 10007-1312, Courtroom 11D. 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 asked to speak at the hearing. The Court may also decide how much to pay to Plaintiff’s Lead Counsel. After the hearing, the Court will decide whether to approve the settlement. We do not know how long these decisions will take.
21. Do I have to come to the hearing?
No. Plaintiff’s Lead Counsel will answer questions the Court may have. But, you are welcome to come at your own expense. If you send an objection, you do not have to come to Court to talk about it. As long as you mailed your written objection on time and have complied with all of the requirements set forth in this notice, the Court will consider it. You may also pay your own lawyer to attend, but it is not necessary for you to do so.
22. May I speak at the hearing?
You may ask the Court for permission to speak at the Fairness Hearing. To do so, you must include with your objection, described in paragraph 18 above, the statement, “I hereby give notice that I intend to appear at the Fairness Hearing in In re SLM Corporation Securities Litigation .” Be sure to include your name, address and telephone number, identify the date(s), price(s), and number(s) of shares of all purchases and sales of SLM common stock you made during the Class Period, and sign the letter. If you intend to have any witnesses testify or to introduce any evidence at the Fairness Hearing, you must provide a list the witnesses and submit copies of the evidence along with your objection. Your Notice of Intention to Appear must be postmarked no later than __, and be sent to the Clerk of the Court, Plaintiff’s Lead Counsel, and Defendants’ Counsel, at the addresses shown in the answer to question 18. You cannot speak at the hearing if you exclude yourself. You also cannot speak at the hearing if your objection has been waived because you did not comply with the requirements set forth in this notice.
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IF YOU DO NOTHING
23. What happens if I do nothing at all?
If you do nothing, you will get no money from this settlement. But, unless you exclude yourself, you will not be able to start a lawsuit, continue with a lawsuit, or be part of any other lawsuit against SLM and the Released Parties about the legal issues in this case, ever again.
GETTING MORE INFORMATION
24. Are there more details about the settlement?
This notice summarizes the proposed settlement. More details are in a Stipulation and Agreement of Settlement dated March 23, 2012 (the “Stipulation”). You can get a copy of the Stipulation by visiting www.__.com. Copies of the Stipulation may also be obtained from Plaintiff’s Lead Counsel.
25. How do I get more information?
You can call the Claims Administrator at __ toll free with questions about submitting a Proof of Claim, or visit their website at www.__.com, where you will find answers to common questions about the settlement, a claim form, plus other information to help you determine whether you are a Class Member and whether you are eligible for a payment. Any other questions should be directed to Plaintiff’s Lead Counsel identified in paragraph 18 above.
PLAN OF ALLOCATION OF NET SETTLEMENT FUND AMONG CLASS MEMBERS
The $35,000,000.00 Cash Settlement Amount and the interest earned thereon shall be the Gross Settlement Fund. The Gross Settlement Fund, less all taxes, approved costs, fees and expenses (the “Net Settlement Fund”) shall be distributed to members of the Class who submit acceptable Proofs of Claim (“Authorized Claimants”).
The Claims Administrator shall determine each Authorized Claimant’s pro rata share of the Net Settlement Fund based upon each Authorized Claimant’s “Recognized Claim,” which is based on the Recognized Loss per Share Formula in the Plan of Allocation described below. The Recognized Loss formula is not intended to be an estimate of the amount of what a Class Member might have been able to recover after a trial; nor is it an estimate of the amount that will be paid to Authorized Claimants pursuant to the settlement. The Recognized Loss formula is the basis upon which the Net Settlement Fund will be proportionately allocated to the Authorized Claimants.
The following proposed Plan of Allocation reflects the proposition that the price of SLM common stock was artificially inflated from the beginning of the Class Period on January 18, 2007 until the end of the Class Period on January 23, 2008, and that certain disclosures during
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the Class Period partially reduced the alleged artificial inflation. The decreases in the price of SLM common stock occurring on December 19, 2007 and January 3, 2008 reflected elimination of part of the artificial inflation that the Settling Defendants’ alleged misrepresentations may have caused. By the end of the Class Period, January 23, 2008, no further artificial inflation was alleged to be contained in the price of SLM common stock. Computation of the loss per share reflects price changes of SLM common stock, adjusting for price changes that were attributable to market and industry forces, or other company information unrelated to the alleged fraud, based on the allegations in the case and the evidence developed in support thereof.
“Recognized Loss per Share” will be calculated for purposes of the Settlement as follows:
For SLM common stock purchased from January 18, 2007 through October 10, 2007 and: (i) sold prior to December 19, 2007, the Recognized Loss is $0.00 per share; (ii) sold after December 18, 2007 but before January 4, 2008, the Recognized Loss is
the lesser of (a) $1.06 per share and (b) the purchase price less the sales price; (iii) sold after January 3, 2008 but before January 23, 2008, the Recognized Loss is
the lesser of (a) $1.79 per share and (b) the purchase price less the sales price; (iv) retained after January 22, 2008, the Recognized Loss is the lesser of (a) $1.88 per
share and (b) the purchase price less $19.70.
2. For SLM common stock purchased from October 11, 2007 through December 18, 2007 and: (i) sold prior to December 19, 2007, the Recognized Loss is $0.00 per share; (ii) sold after December 18, 2007 but before January 4, 2008, the Recognized Loss is
the lesser of (a) $1.41 per share and (b) the purchase price less the sales price; (iii) sold after January 3, 2008 but before January 23, 2008, the Recognized Loss is
the lesser of (a) $2.38 per share and (b) the purchase price less the sales price; (iv) retained after January 22, 2008, the Recognized Loss is the lesser of (a) $2.50 per
share and (b) the purchase price less $19.70.
3. For SLM common stock purchased from December 19, 2007 through January 3, 2008 and: (i) sold prior to January 4, 2008, the Recognized Loss is $0.00 per share; (ii) sold after January 3, 2008 but before January 23, 2008, the Recognized Loss is (a)
the lesser of $0.97 per share and (b) the purchase price less the sales price; (iii) retained after January 22, 2008, the Recognized Loss is the lesser of (a) $1.09 per
share and (b) the purchase price less $19.70.
4. For SLM common stock purchased from January 4, 2008 through January 22, 2008 and (i) sold prior to January 23, 2008, the Recognized Loss is $0.00 per share; (ii) retained after January 22, 2008, the Recognized Loss is the lesser of (a) $0.12 per
share and (b) the purchase price less $19.70.
The Recognized Loss per Share cannot be less than $0.00 per share.
For Claimants who made multiple purchases, acquisitions or sales of SLM common stock during the Class Period, the earliest subsequent sale shall be matched first against the Claimant’s
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closing position the day before the first day of the Class Period, and then matched chronologically thereafter against each purchase or acquisition made during the Class Period.
To the extent a Claimant had a gain from his, her or its overall transactions in SLM common stock during the Class Period, the value of the Recognized Claim will be zero. To the extent that a Claimant suffered an overall loss on his, her or its overall transactions in SLM common stock during the Class Period, but that loss was less than the Recognized Claim calculated pursuant to the above provisions, then the Recognized Claim shall be limited to the amount of the actual loss. A payment to any Claimant that would amount to less than $10.00 in total will not be included in the calculation of the Net Settlement Fund, and no payment to these Claimants will be distributed.
For purposes of determining whether a Claimant had a gain from his, her or its overall transactions in SLM common stock during the Class Period or suffered a loss, the Claims Administrator shall: (i) total the amount paid for all SLM common stock purchased during the Class Period by the claimant (the “Total Purchase Amount”); (ii) match any sales of SLM common stock during the Class Period first against the Claimant’s opening position in the stock (the proceeds of those sales will not be considered for purposes of calculating gains or losses); (iii) total the amount received for sales of the remaining shares of SLM common stock sold during the Class Period (the “Sales Proceeds”); (iv) ascribe a holding value of $19.70, the price on January 24, 2008, times the number of shares of SLM common stock purchased during the Class Period and still held at the end of the Class Period (“Holding Value”). The difference between (i) the Total Purchase Amount and (ii) the sum of the Sales Proceeds and Holding Value, will be deemed a Claimant’s gain or loss on his, her or its overall transactions in SLM common stock during the Class Period.
Each Authorized Claimant shall be allocated a pro rata share of the Net Settlement Fund based on his, her or its Recognized Claim as compared to the total Recognized Claims of all Authorized Claimants.
Class Members who do not submit acceptable Proofs of Claim will not share in the settlement proceeds. Class Members who do not either submit a request for exclusion or submit an acceptable Proof of Claim will nevertheless be bound by the settlement and the Order and Final Judgment of the Court dismissing this Action.
Payments will be distributed to Authorized Claimants after all claims have been processed and after the Court has finally approved the settlement. If any funds remain in the Net Settlement Fund by reason of uncashed checks or otherwise, then, after the Claims Administrator has made reasonable and diligent efforts to have Class Members who are entitled to participate in the distribution of the Net Settlement Fund cash their distribution checks, any balance remaining in the Net Settlement Fund one (1) year after the initial distribution of such funds shall be re-distributed to Class Members who have cashed their checks and who would receive at least $10.00 from such re-distribution, after payment of any unpaid costs or fees incurred in administering the Net Settlement Fund for such re-distribution. If after six months after such re-distribution any funds shall remain in the Net Settlement Fund, then such balance shall be contributed to non-sectarian, not-for-profit, 501(c)(3) organization(s) designated by Plaintiff’s Lead Counsel.
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The Court has reserved jurisdiction to allow, disallow or adjust on equitable grounds the claim of any Class Member. The Court also reserves the right to modify the Plan of Allocation without further notice to Class Members. Payment pursuant to the Plan of Allocation approved by the Court shall be conclusive against all Authorized Claimants. No person shall have any claim against Lead Plaintiff, its counsel, the Claims Administrator, or any other agents designated by counsel based on distributions made substantially in accordance with the Agreement and the Settlement contained therein, the Plan of Allocation, or further orders of the Court.
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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
IN RE SLM CORPORATION SECURITIES : Case No. 08 Civ. 1029 (WHP) LITIGATION :
:
PROOF OF CLAIM AND RELEASE
DEADLINE FOR SUBMISSION: , 2012.
IF YOU PURCHASED OR OTHERWISE ACQUIRED SLM CORPORATION (“SLM”) COMMON SHARES DURING THE PERIOD BETWEEN JANUARY 18, 2007 AND JANUARY 23, 2008, INCLUSIVE (THE “CLASS PERIOD”), AND HELD ANY OF THOSE SHARES OVER ONE OR MORE OF THE DATES OF DECEMBER 19, 2007, JANUARY 3, 2008 AND JANUARY 23, 2008,YOU ARE A “CLASS MEMBER” AND YOU MAY BE ENTITLED TO SHARE IN THE SETTLEMENT PROCEEDS. (EXCLUDED FROM THE CLASS ARE THE SETTLING DEFENDANTS IN THIS ACTION, MEMBERS OF THE IMMEDIATE FAMILY OF DEFENDANT ALBERT L. LORD, AN OFFICER, DIRECTOR OR OTHER INDIVIDUAL OR ENTITY IN WHICH ANY SETTLING DEFENDANT HAS A CONTROLLING INTEREST, A PERSON WHO WAS AN OFFICER, DIRECTOR, PARTNER, OR CONTROLLING PERSON OF SLM DURING THE CLASS PERIOD, AND A LEGAL REPRESENTATIVE, HEIR, SUCCESSOR IN INTEREST OR ASSIGN OF ANY SUCH PERSONS OR ENTITIES.)
IF YOU FILED A REQUEST FOR EXCLUSION FROM THE CLASS, YOU ARE NOT A CLASS MEMBER, NOT ELIGIBLE FOR ANY SETTLEMENT BENEFITS AND MAY NOT SUBMIT THIS FORM.
IF YOU ARE A CLASS MEMBER, YOU MUST COMPLETE AND SUBMIT THIS FORM IN ORDER TO BE ELIGIBLE FOR ANY SETTLEMENT BENEFITS.
YOU MUST COMPLETE AND SIGN THIS PROOF OF CLAIM AND MAIL IT BY FIRST CLASS MAIL, POSTMARKED NO LATER THAN ___________, 2012 TO THE FOLLOWING ADDRESS:
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In re SLM Corporation Securities Litigation c/o Claims Administrator
Post Office Box __________, ___
YOUR FAILURE TO SUBMIT YOUR CLAIM BY __________, 2012 WILL SUBJECT YOUR CLAIM TO REJECTION AND PRECLUDE YOUR RECEIVING ANY MONEY IN CONNECTION WITH THE SETTLEMENT OF THIS LITIGATION. DO NOT MAIL OR DELIVER YOUR CLAIM TO THE COURT OR TO ANY OF THE PARTIES OR THEIR COUNSEL AS ANY SUCH CLAIM WILL BE DEEMED NOT TO HAVE BEEN SUBMITTED. SUBMIT YOUR CLAIM ONLY TO THE CLAIMS ADMINISTRATOR.
I purchased or otherwise acquired SLM common shares between January 18,
2007 and January 23, 2008, inclusive, and held some of those shares over one or more of the
dates of December 19, 2007, January 3, 2008 and January 23, 2008. (Do not submit this Proof of
Claim if you did not purchase or otherwise acquire SLM common shares during this period and
hold some of those shares over one of the December 2007 or January 2008 dates listed above).
2. By submitting this Proof of Claim, I state that I believe in good faith that I am a
Class Member as defined above and in the Notice of (1) Pendency and Proposed Settlement of
Class Action; (2) Hearing on Proposed Settlement; and (3) Motion for Attorneys’ Fees and
Reimbursement of Litigation Expenses (the “Settlement Notice”), or am acting for such person;
that I am not a Defendant in the Action or excluded from the Class; that I have read and
understand the Settlement Notice; that I believe that I am entitled to receive a share of the Net
Settlement Fund; that I elect to participate in the proposed Settlement described in the Settlement
Notice; and that I have not filed a request for exclusion. (If you are acting in a representative
capacity on behalf of a Class Member (e.g., as an executor, administrator, trustee, or other
representative), you must submit evidence of your current authority to act on behalf of that Class
Member. Such evidence would include, for example, letters testamentary, letters of
administration, or a copy of the trust documents.)
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I have set forth where requested below all relevant information with respect to
each purchase or acquisition of SLM common shares during the Class Period, and each sale, if
any, of such securities. I agree to furnish additional information (including transactions in other
SLM securities) to the Claims Administrator to support this claim if requested to do so.
4. I have enclosed photocopies of the stockbroker’s confirmation slips, stockbroker’s
statements, relevant portions of my tax returns or other documents evidencing each purchase,
acquisition, sale or retention of SLM common shares listed below in support of my claim. (IF
ANY SUCH DOCUMENTS ARE NOT IN YOUR POSSESSION, PLEASE OBTAIN A COPY
OR EQUIVALENT DOCUMENTS FROM YOUR BROKER OR TAX ADVISOR BECAUSE
THESE DOCUMENTS ARE NECESSARY TO PROVE AND PROCESS YOUR CLAIM.).
5. I understand that the information contained in this Proof of Claim is subject to
such verification as the Claims Administrator may request or as the Court may direct, and I agree
to cooperate in any such verification. (The information requested herein is designed to provide
the minimum amount of information necessary to process most simple claims. The Claims
Administrator may request additional information as required to efficiently and reliably calculate
your Recognized Claim. In some cases the Claims Administrator may condition acceptance of
the claim based upon the production of additional information, including, where applicable,
information concerning transactions in any derivatives of the subject securities such as options.)
6. Upon the occurrence of the Effective Date (as defined in the Settlement Notice),
my signature hereto will constitute confirmation of a full and complete release, remise and
discharge by me or, if I am submitting this Proof of Claim on behalf of a corporation, a
partnership, estate or one or more other persons, by it, him, her or them, and by my, its, his, her
Case 1:08-cv-01029-WHP Document 166 Filed 03/30/12 Page 78 of 92
or their heirs, executors, administrators, predecessors, successors, and assigns of each of the
“Released Parties” of all “Settled Claims,” as defined in the Notice.
7. NOTICE REGARDING ELECTRONIC FILES: Certain claimants with large
numbers of transactions may request, or may be requested, to submit information regarding their
transactions in electronic files. All Claimants MUST submit a manually signed paper Proof of
Claim form listing all their transactions whether or not they also submit electronic copies. If you
wish to file your claim electronically, you must contact the Claims Administrator at
or visit their website at www._________.com to obtain the required file
layout. No electronic files will be considered to have been properly submitted unless the Claims
Administrator issues to the Claimant a written acknowledgment of receipt and acceptance of
electronically submitted data.
8. Statement of Claim
Name(s) of Beneficial Owner(s):
Name
Joint Owner’s Name (if any)
Address of Beneficial Owner(s):
Street No.
City State Zip Code
( ) ( ) Telephone No. (Day) Telephone No. (Night)
Taxpayer I.D. No. or Social Security No.
Check one:
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Case 1:08-cv-01029-WHP Document 166 Filed 03/30/12 Page 79 of 92
___ Individual ___ Corporation ___ Joint Owners ___ IRA
Estate Other (specify)
Case 1:08-cv-01029-WHP Document 166 Filed 03/30/12 Page 80 of 92
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At the close of business on January 17, 2007, I owned __________ SLM common
shares.
10. I made the following purchases of SLM common shares during the period January
18, 2007 through and including January 23, 2008:
Date(s) of Purchase Number of Shares of (List Common Stock Chronologically) Purchased (Month/Day/Year)
___/___/_____ ______________
___/___/_____ ______________
___/___/_____ ______________
___/___/_____ ______________
___/___/_____ ______________
Purchase Price Per Share of Common Stock
$
$
$
$
$
Aggregate Cost (including commissions, taxes, and fees)
$____________
$____________
$____________
$____________
$
11. I made the following sales of SLM common shares during the period January 18,
2007 through and including January 23, 2008:
Date(s) of Sale Number of Shares of (List Common Stock Sold Chronologically) (Month/Day/Year)
___/___/_____ ______________
___/___/_____ ______________
___/___/_____ ______________
___/___/____ ______________
/ /
Sale Price Per Share of Common Stock
$
$
$
$
$
Amount Received (net of commissions, taxes, and fees)
$
$
$
$
$
12. At the close of business on January 23, 2008, I still owned
SLM
common shares.
IF YOU NEED ADDITIONAL SPACE TO LIST YOUR TRANSACTIONS PHOTOCOPY THIS PAGE
13. Substitute Form W-9
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Request for Taxpayer Identification Number:
Enter taxpayer identification number below for the Beneficial Owner(s). For most
individuals, this is your Social Security Number. The Internal Revenue Service (“I.R.S.”)
requires such taxpayer identification number. If you fail to provide this information, your claim
may be rejected.
Social Security Number (for individuals) or
Taxpayer Identification Number (for estates, trusts, corporations, etc.)
14. Certification
UNDER THE PENALTIES OF PERJURY, I (WE) CERTIFY THAT ALL OF THE
INFORMATION PROVIDED ON THIS FORM IS TRUE, CORRECT AND COMPLETE.
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 I.R.S. that I am (we are) subject
to backup withholding as a result of a failure to report all interest or dividends, or (c) the I.R.S.
has notified me (us) that I am (we are) no longer subject to backup withholding.
NOTE: If you have been notified by the I.R.S. that you are subject to backup withholding, please
strike out the language that you are not subject to backup withholding in the certification above.
Signature of Claimant (If this claim is being made on behalf of Joint Claimants, then each must sign)
(Signature)
(Signature)
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THIS PROOF OF CLAIM MUST BE SUBMITTED NO LATER THAN ____________,
2012, AND MUST BE MAILED TO:
In re SLM Corporation Securities Litigation c/o Claims Administrator
Post Office Box ___
A Proof of Claim received by the Claims Administrator shall be deemed to have been
submitted when posted, if mailed by ________, 2012, and if a postmark is indicated on the
envelope and it is mailed first class, and addressed in accordance with the above instructions. In
all other cases, a Proof of Claim shall be deemed to have been submitted when actually received
by the Claims Administrator.
If you wish to be assured that your Proof of Claim is actually received by the Claims
Administrator then you should send it by Certified Mail, Return Receipt Requested. No
acknowledgment will be made as to the receipt of claim forms. You should be aware that it will
take a significant amount of time to process fully all of the Proofs of Claim and to administer the
Settlement. This work will be completed as promptly as time permits, given the need to
investigate and tabulate each Proof of Claim. Please notify the Claims Administrator of any
change of address.
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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
IN RE SLM CORPORATION SECURITIES : Case No. 08 Civ. 1029 (WHP) LITIGATION :
:
SUMMARY NOTICE OF PENDENCY AND PROPOSED SETTLEMENT OF CLASS ACTION
TO: ALL PERSONS WHO PURCHASED OR OTHERWISE ACQUIRED SLM CORPORATION COMMON SHARES DURING THE PERIOD OF TIME COMMENCING ON JANUARY 18, 2007 THROUGH AND INCLUDING JANUARY 23, 2008, AND WHO POSSESSED ANY OF THOSE SHARES OVER ONE OR MORE OF THE DATES OF DECEMBER 19, 2007, JANUARY 3, 2008 AND JANUARY 23, 2008.
YOU ARE HEREBY NOTIFIED, that the above-captioned action has been certified as a
class action and that a settlement for $35,000,000.00 has been proposed. A hearing will be held
before the Honorable William H. Pauley of the United States District Court for the Southern
District of New York, 500 Pearl Street, New York, New York 10007-1312, Courtroom 11D, at
__, on __, 2012 to determine whether the proposed settlement should be approved by the Court
as fair, reasonable, and adequate, and to consider the motion of Plaintiff’s Lead Counsel for
attorneys’ fees and reimbursement of litigation expenses.
IF YOU ARE A MEMBER OF THE CLASS DESCRIBED ABOVE, YOUR RIGHTS
WILL BE AFFECTED AND YOU MAY BE ENTITLED TO SHARE IN THE SETTLEMENT
FUND. If you have not yet received the full printed Notice of (1) Pendency and Proposed
Settlement of Class Action; (2) Hearing on Proposed Settlement; and (3) Motion for Attorneys’
Case 1:08-cv-01029-WHP Document 166 Filed 03/30/12 Page 85 of 92
Fees and Reimbursement of Litigation Expenses (the “Settlement Notice”) and a Proof of Claim
form, you may obtain copies of these documents by contacting:
In re SLM Corporation Securities Litigation c/o A.B. Data, Ltd., Claims Administrator
Post Office Box _________,
__ www. .com
Inquiries, other than requests for the Settlement Notice and Proof of Claim forms, may be
made to Plaintiff’s Lead Counsel: Jonathan K. Levine, Esq., Girard Gibbs LLP, 601 California
Street, Suite 1400, San Francisco, California, Telephone: 415-981-4800.
To participate in the Settlement, you must submit a Proof of Claim no later than __. As
more fully described in the Settlement Notice, any exclusions must be postmarked no later than
__. If you do not request submit an exclusion, your rights will be affected even if you do not
submit a Proof of Claim.
Further information may be obtained by directing your inquiry in writing to the Claims
Administrator, A.B. Data, Ltd., at the address listed above.
By Order of The Court
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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
IN RE SLM CORPORATION SECURITIES : Case No. 08 Civ. 1029 (WHP) LITIGATION :
:
ORDER OF FINAL JUDGMENT
This matter having come before the Court for hearing, pursuant to the Order of this
Court, dated ___________, 2012 (Docket No. ____), on the application of the Parties for
approval of the settlement set forth in the Stipulation of Settlement dated as of March 23, 2012
(Docket No. ____), and due and adequate notice having been given to the Certified 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 therefore,
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that:
As used in this Order the capitalized terms not otherwise defined herein have the
meanings set forth in the Stipulation.
2. The Court has jurisdiction over the subject matter of the Action, the Lead
Plaintiff, all Certified Class Members, and the Settling Defendants, and to consider and enter this
Order.
3. Notice of the pendency of this Action as a class action and of the proposed
Settlement was given to all Certified Class Members who could be identified with reasonable
effort. The form and method of notifying the Certified Class of the pendency of the action as a
class action and of the terms and conditions of the proposed Settlement met the requirements of
Case 1:08-cv-01029-WHP Document 166 Filed 03/30/12 Page 88 of 92
Rule 23 of the Federal Rules of Civil Procedure, Section 21D(a)(7) of the Securities Exchange
Act of 1934, 15 U.S.C. 78u-4(a)(7) as amended by the Private Securities Litigation Reform Act
of 1995 (“PSLRA”), due process and any other applicable law, constituted the best notice
practicable under the circumstances, and constituted due and adequate notice to all persons and
entities entitled thereto.
4. Pursuant to Rule 23 of the Federal Rules of Civil Procedure, this Court hereby
approves the Settlement as set forth in the Stipulation, finds that said Settlement is, in all
respects, fair, reasonable and adequate with respect to the Certified Class and directs that the
Settlement be consummated in accordance with the terms and provisions of the Stipulation.
The Action is hereby dismissed with prejudice and without costs, except as
provided in the Stipulation.
6. Upon the Effective Date, the Lead Plaintiff and each Certified Class Member, on
behalf of themselves, their successors and assigns, and any other Person claiming (now or in the
future) through or on behalf of them, and regardless of whether any such Lead Plaintiff or
Certified Class Member ever seeks or obtains by any means, including, without limitation, by
submitting a Proof of Claim, any distribution from the Net Settlement Fund established pursuant
to the Stipulation, 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
Settling Defendants and Released Parties and shall have covenanted not to sue the Settling
Defendants and Released Parties with respect to all such Released Claims, and shall be
permanently barred and enjoined from instituting, commencing or prosecuting, either directly or
in any other capacity, any and all Settled Claims against any and all of the Released Parties. The
Settled Claims are hereby compromised, settled, released, discharged and dismissed as against
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the Released Parties on the merits and with prejudice by virtue of the proceedings herein and this
Order of Final Judgment.
7. Upon the Effective Date, the Settling Defendants and the successors and assigns
of any of them, are hereby permanently barred and enjoined from instituting, commencing or
prosecuting, either directly or in any other capacity, any and all Settled Defendants’ Claims. The
Settled Defendants’ Claims of all the Released Parties are hereby compromised, settled, released,
discharged and dismissed on the merits and with prejudice by virtue of the proceedings herein
and this Order of Final Judgment.
8. Upon the Effective Date, all obligations of the Settling Defendants and Released
Parties to Lead Plaintiff and the Certified Class Members arising out of, based upon or otherwise
related to the transactions and occurrences that were alleged, or could have been alleged, on
behalf of Lead Plaintiff and the Certified Class Members in the Action shall be fully, finally, and
forever discharged, and all Persons shall be permanently barred and enjoined from instituting,
prosecuting, pursuing or litigating in any manner (regardless of whether such Persons purport to
act individually, representatively, or in any other capacity and regardless of whether such
Persons purport to allege direct claims, claims for contribution, indemnification, or
reimbursement, or any other claims) claims regarding any such obligations.
9. Neither this Order of Final Judgment, the Stipulation, nor any of their terms and
provisions, nor any of the negotiations or proceedings connected with them, nor any of the
documents or statements referred to therein shall be:
(a) offered or received against the Settling Defendants or against Lead
Plaintiff or the Certified Class as evidence of or construed as or deemed to be evidence of any
presumption, concession, or admission by any of the Settling Defendants or by Lead Plaintiff or
Case 1:08-cv-01029-WHP Document 166 Filed 03/30/12 Page 90 of 92
the Certified Class with respect to the truth of any fact alleged by Lead Plaintiff or the validity of
any claim that had been or could have been asserted in the Action or in any litigation, or the
deficiency of any defense that has been or could have been asserted in the Action or in any
litigation, or of any liability, negligence, fault, or wrongdoing of the Settling Defendants;
(b) offered or received against the Settling Defendants as evidence of a
presumption, concession or admission of any fault, misrepresentation or omission with respect to
any statement or written document approved or made by any Settling Defendant, or against Lead
Plaintiff and the Certified Class as evidence of any infirmity in the claims of Lead Plaintiff and
the Certified Class;
(c) offered or received against the Settling Defendants or against Lead
Plaintiff or the Certified Class as evidence of a presumption, concession or admission with
respect to any liability, negligence, fault or wrongdoing, or in any way referred to for any other
reason as against any of the parties to the Stipulation, in any other civil, criminal or
administrative action or proceeding, other than such proceedings as may be necessary to
effectuate the provisions of the Stipulation; provided, however, that Settling Defendants may
refer to the Stipulation to effectuate the liability protection granted them thereunder;
(d) construed against the Settling Defendants or Lead Plaintiff and the
Certified 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; or
(e) construed as or received in evidence as an admission, concession or
presumption against Lead Plaintiff or the Certified Class or any of them that any of their claims
are without merit or that damages recoverable under the Complaint would not have exceeded the
Gross Settlement Fund.
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10. The Plan of Allocation is approved as fair and reasonable, and the Claims
Administrator is directed to administer the Settlement in accordance with its terms and
provisions.
11. The Court finds that all parties and their counsel have complied with each
requirement of Rule 11 of the Federal Rules of Civil Procedure as to all proceedings herein.
12. Lead Counsel is hereby awarded _________ in fees, which sum the Court finds to
be fair and reasonable, and $____________ in reimbursement of expenses, which fees and
expenses shall be paid to Lead Counsel from the Settlement Fund with interest from the date
such Settlement Fund was funded to the date of payment at the same net rate that the Settlement
Fund earns.
13. Without affecting the finality of this Judgment in any way, this Court retains
continuing jurisdiction over (a) implementation of the Settlement; (b) any award or distribution
of the settlement fund established pursuant to the Stipulation, including interest earned thereon;
and (c) all other proceedings related to the implementation and enforcement of the terms of the
Stipulation and/or the Settlement. The time to appeal from this Judgment shall commence upon
its entry.
14. Without further order of the Court, the parties may agree to reasonable extensions
of time to carry out any of the provisions of the Stipulation.
15. This Judgment is a final judgment in the Action as to all claims among Settling
Defendants, on the one hand, and the Lead Plaintiff and Certified Class, on the other. There is
no just reason for delay in the entry of this Order and Final Judgment and immediate entry by the
Clerk of the Court is expressly directed pursuant to Rule 54(b) of the Federal Rules of Civil
Procedure.
Case 1:08-cv-01029-WHP Document 166 Filed 03/30/12 Page 92 of 92
16. The Clerk of the Court is directed to enter this order in the files of this civil
action.
17. In the event that this Judgment does not become Final, this Judgment shall be
rendered null and void and shall be vacated, nunc pro tunc, and the provisions of ¶ 30 of the
Stipulation shall apply
Dated: New York, New York , 2012
Honorable William H. Pauley UNITED STATES DISTRICT JUDGE
6