IN THE IOWA DISTRICT COURT FOR DALLAS COUNTY

Transcription

1 IN THE IOWA DISTRICT COURT FOR DALLAS COUNTY DUANE SMITH and BROOKE SMITH, on behalf of themselves and all others similarly situated, C.A. No. CVCV Plaintiffs, MARTIN BROTHERS DISTRIBUTING COMPANY, INC., IOWA EDUCATORS CORPORATION d/b/a IOWA EDUCATORS CONSORTIUM, and THE IOWA ASSOCIATION FOR EDUCATIONAL PURCHASING, v. Defendants. SETTLEMENT AGREEMENT AND RELEASE #

2 TABLE OF CONTENTS I. RECITALS...1 II. DEFINITIONS...3 III. SETTLEMENT TERMS...8 A. LIMITED CERTIFICATION OF SETTLEMENT CLASS ONLY...8 B. NO ADMISSION OF LIABILITY...8 C. SETTLEMENT CONSIDERATION Settlement Fund/Escrow Account/Qualified Settlement Fund Plan of Allocation Remaining Funds...13 D. NOTICE AND CLAIMS ADMINISTRATION Notice and Administrative Costs Settlement Administrator Notice Retention of Records...16 E. SETTLEMENT APPROVAL PROCESS Motion for Preliminary Approval Entry of Final Judgment Deadlines...17 F. EFFECTIVE DATE...18 G. EXCLUSIVE REMEDY/DISMISSAL OF CLAIMS/JURISDICTION Exclusive Remedy Dismissal of Claims Jurisdiction...19 H. RELEASES AND RESERVATIONS V1

3 I. ATTORNEYS FEES AND EXPENSES AND INCENTIVE AWARDS...21 J. MISCELLANEOUS PROVISIONS Reasonable Best Efforts No Admission Enforcement Authorization to Enter Agreement No Party Is the Drafter Choice of Law Amendment or Waiver Execution in Counterparts Integrated Agreement Construction K. TERMINATION OF THIS AGREEMENT Termination Effect of Termination V1

4 I. RECITALS This Settlement Agreement ( Agreement ) is made and entered into by and among the Class Plaintiffs Duane Smith and Brooke Smith ( Plaintiffs ), on behalf of themselves and all Settlement Class Members as defined herein, and Martin Brothers Distributing Company, Inc. ( Martin Brothers ) (collectively, Plaintiffs and Martin Brothers shall be referred to as the Parties ). WHEREAS, on January 27, 2011, Plaintiffs filed a suit (the Action ) in the Iowa District Court for Dallas County against Martin Brothers and the Iowa Educators Corporation ( IEC ) (collectively Defendants ), alleging claims for, inter alia, violations of the Iowa Competition Law, common law conspiracy and unjust enrichment; WHEREAS, Martin Brothers has asserted a number of defenses to Plaintiffs' claims and has denied and continues to deny Plaintiffs' claims; WHEREAS, the Parties agree that this Agreement shall not be deemed or construed as an admission or as evidence of any violation of any statute or law, or of any liability or wrongdoing by any of the Releasees, or of the truth of any of the claims or allegations alleged in the Action; WHEREAS, the Parties have conducted a thorough examination and investigation of the facts and law relating to the asserted and potential claims and defenses in the Action; WHEREAS, Settlement Class Counsel maintain that they have: (a) made a thorough investigation of the facts and circumstances surrounding the allegations asserted in the Action; (b) engaged in investigation and discovery of the claims asserted in the Action, including but not limited to (i) researching, reviewing and analyzing industry data, information, and public reports; (ii) reviewing documents produced by Defendants and third parties; (iii) #

5 interviewing and/or deposing third party and Martin Brothers witnesses; and (iv) investigating the law applicable to the claims asserted, including the defenses that Martin Brothers would likely assert. Martin Brothers engaged in similar activities, including an extensive investigation and review of the claims made in the Action and the facts surrounding the provision of food service to Iowa schools. Martin Brothers retained experts who provided assistance and opinions regarding the Plaintiffs claims. Additionally, the Parties have fully briefed Plaintiffs Motion for Class Certification as well as Martin Brothers motion to strike the report of Plaintiffs expert witness, and the Court held a full-day hearing on class certification and the motion to strike; WHEREAS, Settlement Class Counsel and Martin Brothers Counsel participated in a formal mediation session on June 2, Both before, during, and after this formal mediation session, Settlement Class Counsel and Martin Brothers conducted vigorous, arm s-length settlement negotiations and were able to agree to this Settlement; WHEREAS, Settlement Class Counsel have concluded, after extensive discovery and investigation of the facts and after carefully considering the circumstances of the Action, that it would be in Plaintiffs' best interests to enter into this Agreement to avoid the uncertainties, burdens, and risks of litigation, and to assure that the substantial benefits reflected herein are obtained for Plaintiffs and the Class, and further, that this Agreement is fair, reasonable, adequate, and in the best interests of all putative members of the Class; WHEREAS, Martin Brothers, despite its belief that it has strong defenses to the claims described herein, has agreed to enter into this Agreement to reduce and avoid further expense, burden, and inconvenience of protracted litigation, and to resolve finally and completely the claims of Plaintiffs and the Class; - 2 -

6 NOW, THEREFORE, the undersigned counsel on behalf of Martin Brothers and Plaintiffs, individually and on behalf of the Settlement Class, agree that the Action shall be settled, compromised, and/or dismissed with prejudice on the terms and conditions set forth in this Agreement, subject to Court approval of this Agreement. II. DEFINITIONS 1. Action is defined as the lawsuit entitled Duane Smith and Brooke Smith v. Martin Brothers Distributing Company, Inc., Iowa Educators Corporation d/b/a Iowa Educators Consortium and The Iowa Association For Educational Purchasing, Case No. CVCV036641, filed in the Iowa District Court for Dallas County. 2. Agreement means this Settlement Agreement, including all exhibits thereto. 3. Attorneys Fees and Expenses means Plaintiffs attorneys fees and out-of-pocket costs, including expert witness costs, which will be the subject of a motion by Plaintiffs to be ruled upon by the Court. 4. Authorized Claimant means any Settlement Class Member whose claim for recovery has been allowed pursuant to the terms of this Agreement. 5. Authorized Payment means a payment to an Authorized Claimant as the result of the submission of a timely, valid and sworn Claim Form. 6. Claimant means any Settlement Class Member who files a Claim Form in such form and manner, and within such time, as the Court shall prescribe. 7. Claim Form means the Claim Form substantially in the form attached hereto as Exhibit D. 8. Claims Deadline means the deadline for which Claimants have to submit claims within sixty (60) days from the Court s Preliminary Approval Order

7 9. Class Counsel or Settlement Class Counsel or Plaintiffs Counsel means the law firms of Hagens Berman Sobol Shapiro LLP and Hudson Mallaney Shindler & Anderson P.C. 10. Class Notice means the Court-approved forms of notice to Settlement Class Members, in substantially the same form as Exhibits B ( Summary Notice ) and C ( Long Form Notice ) that will notify Settlement Class Members of the preliminary approval of the settlement, and scheduling of the Final Approval Hearing, among other things. 11. Class Period means the period of time from January 1, 2000 through the date of Preliminary Approval. 12. Class Plaintiffs means Duane Smith and Brooke Smith. 13. Court means the Iowa District Court for Dallas County. 14. Days means calendar days, except that, when computing any period of time prescribed or allowed by this Agreement, the day of the act, event, or default from which the designated period of time begins to run shall not be included. Further, when computing any period of time prescribed or allowed by this Agreement, the last day of the period so computed shall be included, unless it is a Saturday, a Sunday, or a legal holiday, in which event the period runs until the end of the next day which is not a Saturday, Sunday, or legal holiday. 15. Defense Counsel means Martin Brothers counsel of record in the Action: Deborah M. Tharnish and Sarah E. Crane of Davis, Brown, Koehn, Shors & Roberts P.C.; Richard A. Duncan, Emily E. Chow, and Kimberly J. Walker of Faegre Baker Daniels, L.L.P Effective Date means the date the Judgment in the Action becomes Final. 17. Fairness Hearing means the hearing held by the Court in the Action to determine whether the terms of this Agreement are fair, reasonable and adequate for the Settlement Class as a whole, whether the Settlement should be granted final approval, and whether the Judgment should - 4 -

8 be entered. The Fairness Hearing shall be held at a time convenient for the Court following seventy-seven (77) days from the Court s Preliminary Approval Order. 18. Final with respect to the Judgment or to any award of Attorneys Fees and Expenses (hereafter Fee Award) means that the time for appeal or writ review has expired or, if an appeal or petition for review is taken and dismissed or the Settlement (or Fee Award) is affirmed, the time period after which further petition for hearing, appeal, or writ of certiorari can be taken has expired. If the Judgment is set aside, materially modified, or overturned by the Court or on appeal, and is not fully reinstated on further appeal, the Judgment shall not become Final. Any proceeding or order or any appeal or petition for review or writ of certiorari pertaining solely to Fee Award or any award of incentive payments to Plaintiffs will not in any way delay or preclude the Judgment from becoming Final. 19. Final Approval means the court order approving the settlement of the Action after the Fairness Hearing is conducted. 20. Final Excess Amount means the Settlement Payment less Authorized Payments, Attorneys Fees and Expenses, and Incentive Awards. 21. Incentive Awards means compensation for the Plaintiffs for their time and effort undertaken in the Action. 22. IEC-Member School means any one of those schools or districts listed on Exhibit A. 23. Judgment means the judgment to be entered by the Court in the Action pursuant to the Settlement. 24. Notice And Administrative Costs means one half of the reasonable and authorized costs and expenses of disseminating and publishing the Class Notice in accordance with - 5 -

9 the Preliminary Approval Order, and all reasonable and authorized costs and expenses incurred by the Settlement Administrator in administering the Settlement, all of which is to be paid by Martin Brothers separate from the Settlement Payment. 25. Notice Date means the first day on which the Settlement Administrator or its designee publishes or otherwise disseminates the Class Notice. 26. Notice Program means the plan approved by the Court for disseminating the Class Notice by publication to the Settlement Class. 27. Objection Date means the date, to be set by the Court no later than 67 days from the Court s Preliminary Approval Order, by which Settlement Class Members must file objections, if any, to the Settlement. 28. Parties means Plaintiffs and Martin Brothers. 29. Person means an individual, corporation, partnership, limited partnership, association, joint stock company, estate, legal representative, trust, unincorporated association, any business or legal entity, and such individual s or entity s spouse, heirs, predecessors, successors, representatives, and assignees. 30. Preliminary Approval Order means an order substantially in the form of Exhibit E hereto, providing for, among other things, preliminary approval of the Settlement; dissemination and publication of the Notice to the Class; and finding that the means of Notice set forth in the Preliminary Approval Order are reasonably calculated to apprise the Class Members of the pendency of the Action, the material terms of the proposed Settlement, and Class Members options with respect thereto

10 31. Released Claims means the claims released in Section III.H.1 of this Agreement. The Agreement does not release any claims outside of the Class period, or personal injury, product liability or breach of warranty claims that the Class may have now or that may accrue in the future. 32. Released Persons or Releasees means Martin Brothers and its predecessors, successors, affiliates, parents, subsidiaries, assigns, officers, directors, employees, partners, agents, and attorneys. 33. Releasing Persons or Releasors means Plaintiffs, on behalf of themselves and all Class Members; each of the Class Members; and the respective parents, other legal guardians, children, other heirs, administrators, representatives, agents, partners, successors and assigns of each of the Plaintiffs and each of the Class Members. 34. Settlement means the settlement set forth in this Agreement. 35. Settlement Administrator means a qualified third party appointed by the Court for the oversight of and/or dissemination of Class Notice and the implementation of the claims process, including distributing the settlement proceeds pursuant to the terms of this Agreement. 36. Settlement Class or Class means all persons who paid for food, between January 1, 2000 and [Date of Preliminary Approval], at an Iowa school that, at the time of payment was a member of the Iowa Educators Corporation (IEC) or The Iowa Association for Educational Purchasing (IAEP), and had one or more grades from pre-kindergarten through 12th grade. Excluded from the Settlement Class are: (1) Martin Brothers, each of its respective affiliates, subsidiaries, and parents; each of the respective directors, officers, employees, legal representatives, successors, and assigns of Martin Brothers, and their respective affiliates, subsidiaries, and parents; and (2) any Judge to whom the Action is assigned and all members of his or her immediate family

11 37. Settlement Class Member means a Person who falls within the definition of the Settlement Class. 38. Settlement Consideration shall mean the aggregate of the Settlement Payment and the Notice and Administrative Costs. 39. Settlement Fund means the fund, account or trust established by the Settlement Administrator and into which Martin Brothers will deposit the Settlement Payment and may deposit the Notice and Administrative Expenses at the direction of the Settlement Administrator. 40. Settling Parties means, collectively, the Released Persons, the Releasing Persons, and all Class Members. 41. Settlement Payment means the amount of $1,925,000 to be paid by Martin Brothers at the times set forth below. III. SETTLEMENT TERMS A. LIMITED CERTIFICATION OF SETTLEMENT CLASS ONLY Martin Brothers conditionally agrees and consents to certification of the Settlement Class for settlement purposes only. Martin Brothers willingness to enter into the Agreement is not an admission as to the propriety of a litigation class in this or any other litigation. Except as to the particular Settlement Class defined in the Agreement, and for the limited purposes of settlement, no Party or other litigant shall use Martin Brothers agreement to the certification of the Settlement Class as the basis for arguing that a litigation class may be certified. B. NO ADMISSION OF LIABILITY Neither the Agreement nor any statement, transaction or proceeding in connection with the negotiation, execution, or implementation of this Agreement is intended to be or may be construed as or deemed to be evidence of an admission or concession by Martin Brothers of any - 8 -

12 liability or wrongdoing or of the truth of any allegations in the Petition filed in the Action against Martin Brothers, and none of them shall be admissible in evidence for any such purpose in any proceeding. Martin Brothers conditional agreement is contingent upon execution of this Agreement by the Parties and Final Approval by the Court. If this Agreement, for any reason, is not finally approved or is otherwise terminated, Martin Brothers reserves the right to reassert all of its objections and defenses to certification of any class for litigation purposes, and Plaintiffs will not offer this conditional agreement as evidence for any purpose, including but not limited to in support of a motion to certify any class for litigation purposes. C. SETTLEMENT CONSIDERATION In full and final settlement of the Released Claims of the Settlement Class Members, Martin Brothers will pay the Settlement Consideration, which is comprised of the Settlement Payment in the amount of $1,925,000, plus the Notice and Administrative Costs. 1. Settlement Fund/Escrow Account/Qualified Settlement Fund a. Settlement Fund/Escrow Account In full and final settlement of the Settlement Class Members Released Claims, Martin Brothers shall pay the Settlement Consideration as follows: 1. Martin Brothers shall pay the Notice and Administrative Costs in one or more payments as invoiced by or through the Settlement Administrator within ten (10) business days of the amount becoming due. 2. Within (10) days following Final Approval, Martin Brothers will transfer to the Settlement Fund that portion of the Settlement Payment necessary to cover the cost of Authorized Payments, Attorneys Fees and Expenses, and Incentive Awards as approved by the Court

13 3. No later than March 31, 2015, Martin Brothers will transfer the Final Excess Amount to the Settlement Fund for cy pres distribution as approved by the Court. 4. The payment set forth in this section shall be made by electronic funds transfer (pursuant to written instructions to be provided to Martin Brothers by the Settlement Administrator) into an Escrow Account to be established by the Settlement Administrator. Monies held in the Escrow Account shall be invested by the Escrow Agent (as defined in the Escrow Agreement) in short-term United States Agency or Treasury Securities (or a mutual fund invested solely in such instruments) or other similar short-term United States government obligations, if appropriate, and any interest earned thereon shall become part of the Settlement Fund. b. Qualified Settlement Fund 1. The Parties will treat the bank account containing the Settlement Fund as a qualified settlement fund within the meaning of Treasury Regulations 1.468B-1 through 1.468B-5, 26 C.F.R B-1 through 1.468B-5 (1992). They will treat the Settlement Fund as a qualified settlement fund for all reporting purposes under the federal tax laws. In addition, the Escrow Agent and, as required, Martin Brothers, will jointly and timely make the relation-back election (as defined in Treasury Regulation 1.468B-1) back to the earliest permitted date. Such election will be made in compliance with the procedures and requirements contained in such regulations. It will be the responsibility of the Escrow Agent to timely and properly prepare and deliver the necessary documentation for signature by all necessary parties, and thereafter to cause the appropriate filing to occur. 2. The Administrator will be the Escrow Agent within the meaning of section 468B of the Internal Revenue Code of 1986 and Treasury Regulation 1.468B for the Settlement Fund. The Escrow Agent will timely and properly file all informational and other tax returns necessary

14 or advisable with respect to the Settlement Fund (including without limitation the returns described in Treasury Regulation 1.468B-2(k)). Such returns (as well as the election described in paragraph (a) of this Part) will be consistent with this paragraph (b) and (c) of this Part and in any event will reflect that all taxes (including any estimated taxes, interest or penalties) on the income earned by the Settlement Fund will be paid out of the Settlement Fund. 3. All (a) taxes (including any estimated taxes, interest or penalties) arising with respect to the income earned by the Settlement Fund ( Taxes ) and (b) expenses and costs incurred in connection with the operation and implementation of paragraphs (a) and (b) of this Part (including, without limitation, expenses of tax attorneys and/or accountants and mailing and distribution costs and expenses relating to filing (or failing to file) the returns) ( Tax Expenses ), will be paid out of the Settlement Fund; in no event will Martin Brothers, Settlement Class Counsel, or any Settlement Class Member have any liability or responsibility for the Taxes, the Tax Expenses, or the filing of any tax returns or other documents with the Internal Revenue Service or any other state or local taxing authority. The Escrow Agent and the Settlement Fund will indemnify and hold the Parties harmless for Taxes and Tax Expenses (including, without limitation, Taxes payable by reason of any such indemnification). Furthermore, Taxes and Tax Expenses will be timely paid by the Escrow Agent out of the Settlement Fund without prior Court order, and the Parties are not responsible for and will have no liability for any of the same, or for any reporting requirements that may relate thereto. The 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 paragraph. 4. If this Agreement is not approved by the Court or the Settlement is terminated or fails to become effective in accordance with the terms of this Agreement, the entire Settlement

15 Fund, less (a) amounts paid, incurred, or due and owing in connection with Taxes or Tax Expenses and (b) amounts paid, incurred, or due and owing for Notice And Administrative Costs, will be refunded to Martin Brothers. In such event, neither Plaintiffs nor Settlement Class Counsel nor any Settlement Class Member will have any obligation to repay Martin Brothers for any such amounts paid, incurred, or due and owing. 2. Plan of Allocation Unless otherwise directed in this Agreement, the Settlement Administrator shall make payments from the Settlement Fund to Authorized Claimants as follows: 1. The Settlement Administrator shall allow Settlement Class Members to submit claims through an on-line claim form, or a hard copy claim form submitted via electronic mail, facsimile or regular mail. 2. Each Settlement Class Member who files a valid, sworn and timely Claim Form, as verified by the Settlement Administrator, shall be deemed an Authorized Claimant. a. A Claim Form shall be deemed to be valid if a Settlement Class Member provides the following information: (1) the names of each Person (or in the case of parents or guardians, their student) who attended an IEC-Member School; (2) the names of the IEC-Member school(s) that each of their students attended; (3) the years of attendance at each identified school for each student; and (4) the Person who paid for food at the IEC-member school. b. A Claim Form shall be deemed to be timely if it is received on-line, via electronic mail or via facsimile by the Claims Deadline, or it is post-marked via U.S. Mail by the Claims Deadline

16 c. A Claim Form shall be deemed to be sworn if physically signed by the Settlement Class Member if submitted in hard copy form, or if electronically signed if submitted on-line. 3. All Authorized Claimants shall be entitled to a payment from the Settlement Fund in the amount of $3.50 for each year that the student on whose behalf a claim is made attended an IEC-Member School during the Class Period, subject to a $50 cap per student and any pro rata reduction if the Settlement Fund is oversubscribed. The amount computed for Settlement Class Members as set forth in this sub-paragraph shall be referred to as Authorized Payments. 4. Authorized Payments shall not exceed an aggregate amount of $50 per student. 5. If the total of the Authorized Payments exceeds the Net Settlement Fund, the Authorized Payments shall be reduced pro rata, and there shall be no cy pres distribution. 6. Upon distribution of the Authorized Payments to Authorized Claimants, all taxes due, if any, on any individual Authorized Payments shall be the responsibility of the Authorized Claimants respectively. No representations have been made to the Authorized Claimants, the Settlement Class Members, Class Counsel, or any Person regarding the tax consequences of the receipt of any payment under this Agreement. 7. Following the Effective Date, nothing herein precludes the Escrow Agent, upon approval by the Court, from establishing a reserve from the Settlement Fund to pay any taxes that may be owed for the period prior to distribution of the Settlement Fund, but are not yet due, and for expenses related to payment of such Taxes or the filing of related tax returns. 3. Remaining Funds 1. Within fourteen (14) days of the Claims Deadline, the Settlement Administrator shall identify and submit to Settlement Class Counsel and Defense Counsel an accounting of all Authorized Payments, and all pro rata payments, if any, the Settlement Administrator intends to

17 pay. At the same time, the Settlement Administrator will provide Settlement Class Counsel and Martin Brothers with sufficient information to (i) identify, for the Settlement Class, the aggregate of all amounts the Settlement Administrator intends to pay to Authorized Claimants, and (ii) explain the calculation as provided for in this section. Within ten (10) days of such notice, Martin Brothers shall identify any issues or communicate their agreement with the payments proposed to be made by the Settlement Administrator. If Martin Brothers and the Settlement Administrator are unable to agree on the appropriate payments to be made or the resolution of any outstanding issues, or if Settlement Class Counsel has an objection, they shall request an Order from the Court resolving any such issues. No payments shall be made until so ordered by the Court. 2. If the Settlement Fund has not been exhausted after all Authorized Payments, Attorneys Fees and Expenses, and Incentive Awards ordered by the Court have been made, the Settlement Administrator shall notify Settlement Class Counsel and Defense Counsel of the Final Excess Amount. The Parties shall then apply to the Court for an order to distribute the Final Excess Amount as cy pres payments to IEC-Member Schools as agreed to by the Parties and approved by the Court. Prior to distribution of any cy pres award, a joint communication will be prepared by Martin Brothers, subject to Settlement Class Counsel s approval, which will not be unreasonably withheld, to accompany any cy pres payment approved by the Court. D. NOTICE AND CLAIMS ADMINISTRATION 1. Notice and Administrative Costs All Notice and Administrative Costs, which are defined to include one half of all costs to provide notice to the Settlement Class of the Settlement, as agreed to by the Parties and approved by the Court, as well as all costs associated with the implementation and administration of this Settlement Agreement and distribution of the Settlement Fund, will be paid for by Martin

18 Brothers in addition to and independent from the Settlement Payment. The other half of the costs to provide notice to the Settlement Class of the Settlement will be paid through the separate settlement between the Plaintiffs and the IEC and IAEP. 2. Settlement Administrator The Settlement Administrator shall be an independent professional service company to be selected by Martin Brothers, acceptable to Settlement Class Counsel and subject to approval of the Court, and charged with administering the claims process, arranging for Court-ordered dissemination of required notices, and, distributing the Settlement Payment pursuant to the terms of this Agreement. The Settlement Administrator may appoint such claims officers, experts, and/or advisors as are reasonably necessary to carry out the duties of the claims administration expeditiously. The Settlement Administrator shall be responsible for disseminating information to Settlement Class Members concerning settlement procedures, among other ways, by establishing a website where Class Members can access and submit on-line Claims Forms. In addition, the Settlement Administrator shall assist the Court in processing and tabulating opt-out requests, shall receive all opt-out forms and documentation, shall receive, process, classify, and pay claims as provided in this Agreement and any applicable orders of the Court, and shall operate under the continuing supervision of the Court. 3. Notice a. As directed by the Court s Preliminary Approval Order, Class Notice shall be disseminated which shall provide all Settlement Class Members with notice reasonably calculated to apprise the Class Members of the Settlement, in substantially the forms attached hereto as Exhibits B and C, or as otherwise ordered by the Court. Such notice shall include publication on a web site established by the Settlement Administrator

19 b. All notice contemplated under this Settlement and the Notice Plan shall be completed within thirty (30) days of the Court s Preliminary Approval Order, unless otherwise ordered by the Court. c. Prior to the Final Approval Hearing, the Settlement Administrator shall provide to the Court documentation that Class Notice was provided in accordance with the Notice Program. 4. Retention of Records The Settlement Administrator shall retain all records relating to payment of claims under this Agreement for a period of five (5) years from the Effective Date of the Agreement. E. SETTLEMENT APPROVAL PROCESS 1. Motion for Preliminary Approval Concurrent with submission of this Agreement for the Court s consideration, Plaintiffs shall submit to the Court a motion for preliminary approval of this Agreement. The motion shall request entry of a Preliminary Approval Order substantially in the form attached as Exhibit E, which includes a provision enjoining Settlement Class Members from litigating Released Claims pending Final Approval of this Agreement. 2. Entry of Final Judgment If the Court approves this Agreement following the Final Fairness Hearing scheduled by the Court pursuant to the Preliminary Approval Order, counsel for the Parties shall request that the Court enter a Final Approval Order

20 3. Deadlines Unless otherwise ordered by the Court, the following deadlines will apply: a. Completion of Notice Program Notice to the Settlement Class shall be completed within thirty (30) days of the Court s Preliminary Approval Order. b. Opt-Out Deadline All requests to opt out of the Settlement Class must be sent in writing to the Settlement Administrator and postmarked within forty-five (45) days of the Court s Preliminary Approval Order. The Notice Administrator shall provide Settlement Class Counsel, Defense Counsel and the Court with a list of the persons that have requested to opt out of the Settlement Class ( Opt- Out List ) within five (5) days of the Opt-Out Deadline. No class or mass opt-outs are permitted under this Agreement. c. Claims Deadline The Claims Deadline shall be sixty (60) days from the Court s Preliminary Approval Order. A Claim Form shall be deemed to be timely if it is received on-line, via electronic mail or via facsimile by the Claims Deadline, or if it is post-marked via U.S. Mail by the Claims Deadline d. Motion For Final Approval of the Settlement and Attorneys Fees and Expenses Settlement Class Counsel shall file a Motion for Final Approval of the Settlement, together with a petition for Attorneys Fees and Expenses within sixty (60) days from the Court s Preliminary Approval Order

21 e. Objections to and Comments In Support of the Settlement and/or Plaintiffs Application for Attorneys Fees and Expenses All objections to and comments in support of the Settlement and/ or to Plaintiffs Application for Attorneys Fees and Expenses must be postmarked within sixty-seven (67) days of the Court s Preliminary Approval Order. The Parties replies to the objections must be filed thereafter within ten (10) days from the objection deadline. f. Fairness Hearing The Court shall set a date for the Fairness Hearing at its discretion at least seventy-seven (77) days after the Court s Preliminary Approval Order. F. EFFECTIVE DATE occurred: This Agreement shall be effective on the first date after all of the following events have 1. Entry of the Preliminary Approval Order, substantially in the form attached as Exhibit E, or entry of a Preliminary Approval Order in an alternative form with respect to which all Parties consent in writing; 2. Final Approval of this Agreement by the Court, following notice to Settlement Class Members and a Final Fairness Hearing; 3. Entry of the Final Approval Order; and 4. The Final Approval Order becomes Final. G. EXCLUSIVE REMEDY/DISMISSAL OF CLAIMS/JURISDICTION 1. Exclusive Remedy This Agreement shall be the exclusive remedy for any and all Released Claims. No Releasee shall be subject to liability or expense of any kind to any Settlement Class Member related to the Released Claims except as provided in this Agreement. Upon the Court s

22 Preliminary Approval Order, each Settlement Class Member shall be barred from initiating, asserting or prosecuting any Released Claims against any Releasee unless they have complied with the opt-out provisions in Section III.E. 2. Dismissal of Claims The Parties agree that upon the Effective Date of this Agreement, all Released Claims shall be dismissed with prejudice in accordance with a Final Approval Order. 3. Jurisdiction The Court shall retain exclusive and continuing jurisdiction over the Action, the Parties, the Settlement Fund, and this Agreement with respect to the performance of its terms and conditions (and disputes arising out of or relating to this Agreement), the proper provision of all benefits, and the implementation and enforcement of its terms, conditions, and obligations. H. RELEASES AND RESERVATIONS 1. Upon the Effective Date of this Agreement, and in consideration of the provisions of the Agreement, including payment of the Settlement Consideration, the Releasees shall be released and forever discharged by the Releasors from any and all claims that were or could have been asserted by the Releasors arising from or related to Martin Brothers conduct at issue in the Action including, but not limited to, any and all claims, causes of action, demands, actions, suits, rights, obligations, controversies or the like, known or unknown, including, but not limited to, under antitrust, conspiracy, or unjust enrichment law (the Released Claims ). Released Claims shall not include claims for personal injury, product liability, or breach of warranty that Releasors may have now or that may accrue in the future. All Releasors covenant and agree that they shall not hereafter seek to establish liability against any Released Party based, in whole or in part, on any of the Released Claims. Each Releasor expressly waives and fully, finally, and forever settles and releases any known or unknown, suspected or unsuspected, contingent or non

23 contingent Released Claims without regard to the subsequent discovery or existence of different or additional facts. 2. Each Releasor may hereafter discover facts other than or different from those which he, she, or it knows or believes to be true with respect to the claims which are the subject matter of this Paragraph, but each Releasor hereby expressly waives and fully, finally, and forever settles and releases, upon the Agreement becoming Effective, any known or unknown, suspected or unsuspected, contingent or non-contingent Released Claims with respect to the subject matter of this Paragraph whether or not concealed or hidden, without regard to the subsequent discovery or existence of such different or additional facts. 3. The Parties agree that this Agreement, whether or not the Effective Date occurs, and any and all negotiations, documents, and discussion associated with it shall be without prejudice to the rights of any Party (other than those compromised herein); shall not be deemed or construed to be an admission or evidence of any violation of any statute or law, of any liability or wrongdoing by Released Parties, or of the truth of any of the claims or allegations contained in the Petition at issue in the Action. The Parties expressly reserve all their rights if this Agreement fails to become final and effective substantially in accordance with its terms. 4. This means, inter alia and without limitation, that if the Court does not certify the Settlement Class or this Agreement is not approved by the Court in accordance with its terms and does not become subject to a final Order following such approval, or Final Approval does not become Final, then no Class will be deemed certified by or as a result of this Agreement, and the Action for all purposes will revert to its status as of the date before the execution of this Agreement. In such event, Martin Brothers will not be deemed to have consented to certification of the Settlement Class or of a Litigation Class, and will retain all rights to oppose class

24 certification, including but not limited to certification of the Settlement Class provided for herein. I. ATTORNEYS FEES AND EXPENSES AND INCENTIVE AWARDS Understanding that the award of attorneys fees to Settlement Class Counsel is a matter of the Court s sole discretion, the Releasees will not object to Settlement Class Counsels Fee and Expense Application for: (a) an award of Plaintiffs attorneys fees of up to thirty percent (33%) of the Settlement Payment, to be divided amongst Settlement Class Counsel, at their sole discretion and as they will agree, among themselves, (b) reimbursement of Settlement Class Counsels litigation expenses actually incurred, including but not limited to the fees, costs and expenses of any experts or consultants retained by them. Further, the Releasees will not object to Incentive Awards not to exceed $2,500 for each Class Plaintiff. These amounts shall be paid from the Settlement Fund. J. MISCELLANEOUS PROVISIONS 1. Reasonable Best Efforts The Parties agree to use their reasonable best efforts, including all steps required by this Agreement and other efforts that may be necessary or appropriate, by order of the Court or otherwise, to carry out the terms of this Agreement. 2. No Admission Nothing in this Agreement, including any of its provisions, any statement made or document related to or filed in connection herewith, or the Parties' willingness to enter into this Agreement, shall be construed as an admission as to the propriety of the litigation in this matter or any other litigation, any liability or wrongdoing of any Releasees, or of the truth of any allegations in any complaint against any Releasees; and neither the Agreement nor any statement

25 made or document related to or filed in connection therewith shall be admissible in evidence for any such purpose in any proceeding. 3. Enforcement Notwithstanding the preceding Paragraph, this Agreement may be pleaded as a full and complete defense to any action, suit or other proceeding that has been or may be instituted, prosecuted or attempted with respect to any of the Released Claims, and may be filed, offered, received into evidence, and otherwise used for such defense. This Agreement may also be used in connection with the Parties' application for approval or enforcement of this Agreement and all proceedings incident thereto, including requests for attorneys' fees, costs, disbursements and compensation to the Settlement Class and any disputes arising from this Agreement. 4. Authorization to Enter Agreement The undersigned representatives of Martin Brothers represent that they are fully authorized to enter into and execute this Agreement on behalf of Martin Brothers. Settlement Class Counsel represent that they are fully authorized to conduct settlement negotiations with Defendants Counsel on behalf of Class Plaintiffs and to enter into and execute this Agreement on behalf of Class Plaintiffs, subject to approval by the Court. 5. No Party Is the Drafter None of the Parties to this Agreement shall be considered the drafter of this Agreement or any included provision for the purpose of any statute, case law or rule of construction that would or might cause any provision to be construed against the drafter. 6. Choice of Law This Agreement shall be governed by and interpreted according to the substantive laws of the state of Iowa without regard to its choice of law or conflict of laws principles

26 7. Amendment or Waiver This Agreement shall not be modified in any respect except by a writing executed by all Parties to this Agreement. The waiver of any rights conferred by this Agreement shall be effective only if made in writing by the waiving Party. The waiver by any Party of any breach of this Agreement shall not be deemed or construed as a waiver of any other breach, whether prior to, subsequent to, or contemporaneous with this Agreement. 8. Execution in Counterparts This Agreement may be executed in counterparts. Facsimile or PDF signatures shall be valid signatures as of the date thereof. 9. Integrated Agreement This Agreement, including its Exhibits, contains an entire, complete, and integrated statement of the terms agreed to by and between the Parties. 10. Construction. This Agreement shall be construed and interpreted to effectuate the Parties' intent, which is to resolve completely the Released Claims with respect to the Released Parties through this Agreement. K. TERMINATION OF THIS AGREEMENT 1. Termination This Agreement shall be terminated, without notice, if the Court declines to enter an order approving this Agreement, of if such approval order does not become Final (as a result of reversal on appeal or otherwise). 2. Effect of Termination In the event of termination, this Agreement shall be of no force or effect; the Parties shall request the Court to vacate any order certifying the Settlement Class; and the remaining portion

27 of any monies advanced by Martin Brothers for class notice and related expenses or payment of any Authorized Payment, together with any accrued interest, if any, shall be refunded to Martin Brothers by the Escrow Agent

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114 Legal Notice Exhibit B If you paid for food purchases between January 1, 2000 and [date of preliminary approval], at an Iowa-based pre-kindergarten, elementary school, middle school, or high school that, at the time of payment, was a member of the Iowa Educators Corporation or The Iowa Association for Educational Purchasing, your legal rights may be affected by two class action settlements. WHAT IS THIS LAWSUIT ABOUT? Plaintiffs Duane Smith of 432 N. 11th Pl., Adel, IA 50003, and Brooke Smith of O Ave., Bouton, IA 50039, on behalf of themselves and all others similarly situated, in a lawsuit pending in the Iowa District Court for Dallas County, Case No. CVCV036641, claim that Iowa Educators Corporation ( IEC ), its successor The Iowa Association for Educational Purchasing ( IAEP ), and Martin Brothers Distributing Company, Inc. ( Martin Brothers ), conspired to restrain competition in the market for the retail sale of food at schools in Iowa and that Martin Brothers attempted to monopolize that market in violation of Iowa antitrust laws. Among other things, Plaintiffs seek a determination that the case may be maintained as a class action; a declaration that the Plaintiffs be the representative of the class and that their counsel be counsel for the class; a declaration of the unlawfulness of the alleged conduct, in violation of the Iowa antitrust laws and the common laws of civil conspiracy and unjust enrichment; recovery of actual and exemplary damages; recovery of the amounts by which the Defendants allegedly were unjustly enriched; injunction against the continuation of the alleged illegal activities; and recovery of the Plaintiffs and the class costs of suit including reasonable attorneys fees and expenses. Defendants deny they did anything wrong. Defendants assert that the bidding for school foodservice distribution was fair and appropriate and that they have reached a settlement to avoid the costs and delays associated with litigation. The Court has not decided who is right and who is wrong. WHAT ARE THE TERMS OF THE SETTLEMENTS? Martin Brothers has agreed to pay $1,925,000 to pay the claims of Class Members and to cover attorneys fees and costs and incentive awards for the Class Representatives, plus will separately pay one half of the actual costs of Notice to the Class and the full costs of administering the Settlement. Class Members may receive up to $3.50 per student per year that they attended an IEC-member school, up to a maximum of $50.00 per student. While neither the IEC nor IAEP maintains cash reserves to fund a substantial judgment, the IEC and IAEP have separately agreed to injunctive relief that requires changes to the IAEP contract bidding process as well as requires information regarding pricing to be made publicly available. Plaintiffs claims against Defendants are released with the exception of claims for personal injury, product liability or breach of warranty. The IEC and IAEP, through their insurer, will also make payments totaling $150,000 to cover certain costs, including one half of the actual costs of Notice to the Class, a portion of attorneys fees and costs, and incentive awards. Each of the settlements is contingent on the Court s final approval of that proposed settlement. For more details, call or write to the Settlement Administrator at the number or address identified below. ARE YOU AFFECTED? You are a member of the Settlement Class if you paid for food, between January 1, 2000 and [the date of Preliminary Approval], at an Iowa-based school that, at the time of payment, (i) was a member of the Iowa Educators Corporation (IEC) or The Iowa Association for Educational Purchasing (IAEP), and (ii) had one or more grades from pre-kindergarten through 12th grade. A list of the member schools is available at WHAT ARE MY LEGAL RIGHTS? Settlement Class Members shall be entitled to and will be bound by the terms of equitable and injunctive relief set forth in the Settlement Agreement with the IEC and Injunction Order governing the IEC s conduct and shall not be permitted to opt out of the Settlement with the IEC. Settlement Class Members shall be entitled to and will be bound by the terms of the Martin Brothers Settlement, but are permitted to opt out of the Settlement with Martin Brothers. Settlement Class Members may submit a claim form to receive appropriate compensation under the Settlement with Martin Brothers as explained in the more detailed notice. To object to or comment upon the settlements, you must file your written statement with the Clerk of the Court, and serve copies on Class Counsel and Defense Counsel, by, 201. Claims or opt-outs of the Martin Brothers Settlement must be submitted to the Settlement Administrator by. A detailed notice containing more information is available to you by calling (888) or by visiting The detailed notice explains the requirements to make any objection, submit a claim, or opt out. WHO REPRESENTS ME? The Court has appointed Hagens Berman Sobol Shapiro LLP, 1144 W. Lake St., Suite 400, Oak Park, IL 60301, and Hudson Mallaney Shindler & Anderson P.C., 5015 Grand Ridge Drive, Suite 100, West Des Moines, IA 50265, to represent the Settlement Class as Class Counsel. You may hire your own attorney, if you wish, at your own expense. You have the right to enter an appearance in the lawsuit either personally or through your attorney if you wish. THE FAIRNESS HEARING: The Court will hold a Fairness Hearing on, 201_ at (a.m./p.m.) at the Dallas County Courthouse at 801 Court Street, Adel, Iowa 50003, to determine whether the proposed settlements are fair, reasonable, and adequate and to approve attorney fees and costs. If you are a member of the Settlement Class, you may file an objection to the proposed settlements with the Clerk of the Court, and may ask to speak at the hearing about the fairness of the proposed settlement, in keeping with the requirements set forth in the detailed notice. HOW CAN I GET MORE INFORMATION? If you have questions call (888) , visit or write to Iowa School Food Settlement, c/o Gilardi & Co. LLC, P.O. Box 8060, San Rafael, CA Call (888) to Learn More.

115 Exhibit C IOWA DISTRICT COURT FOR DALLAS COUNTY If you paid for food purchases between January 1, 2000 and [date of preliminary approval] at an Iowa-based pre-kindergarten, elementary school, middle school, or high school that, at the time of payment, was a member of the Iowa Educators Corporation or The Iowa Association for Educational Purchasing, your legal rights may be affected by two class action settlements. A district court authorized this Notice. This is not a solicitation from a lawyer. Plaintiffs Duane Smith of 432 N. 11th Pl., of Adel, IA 50003, and Brooke Smith of O Ave., Bouton, IA 50039, on behalf of themselves and all others similarly situated, sued Iowa Educators Corporation ( IEC ) and its successor The Iowa Association for Educational Purchasing ( IAEP ), and Martin Brothers Distributing Company, Inc. ( Martin Brothers ), in the Iowa District Court for Dallas County, Case No. CVC036641, claiming that they conspired to restrain competition in the market for the retail sale of food at schools in Iowa and that Martin Brothers attempted to monopolize that market in violation of Iowa antitrust laws. Among other things, Plaintiffs seek a determination that the case may be maintained as a class action; a declaration that the Plaintiffs be the representatives of the class and that their counsel be counsel for the class; a declaration of the unlawfulness of the alleged conduct, in violation of Iowa antitrust laws and the common laws of civil conspiracy and unjust enrichment; recovery of actual and exemplary damages; recovery of the amounts by which the Defendants allegedly were unjustly enriched; injunction against the continuation of the alleged illegal activities; and recovery of the Plaintiffs and the class costs of suit including reasonable attorneys fees and expenses. Defendants dispute these claims. They deny engaging in any unlawful conduct. Defendants assert that the bidding for school foodservice distribution was fair and appropriate. Defendants assert that they have reached settlements to avoid the costs and delays associated with litigation. No court, or other authority, has found that Defendants engaged in any wrongdoing. The IEC and IAEP have agreed to settle the claims against them with the Settlement Class (defined in Paragraph 2.1 below). Neither the IEC nor the IAEP has or maintains significant cash reserves and neither has the financial reserves to withstand a substantial monetary judgment. However, they do maintain limited insurance and have the ability to agree to injunctive relief. Accordingly, for the benefit of the Settlement Class and to resolve all claims, the IEC and IAEP have agreed to injunctive relief that requires changes to the IAEP contract bidding process as well as requires information regarding pricing to be made publicly available. The IEC and IAEP will make payments totaling $150,000 to cover certain costs, including one half of the costs of Notice to the class and a portion of Class Counsel s attorneys fees and expenses. Martin Brothers has separately agreed to settle the claims against it with the Settlement Class. Martin Brothers has agreed to pay $1,925,000 to cover Class members claims, attorneys fees and costs, and incentive awards for the Class Representatives, as well as to separately pay for one half of the costs of Notice to the Class and the full costs of administering the Settlement. Claims for personal injury, product liability or breach of warranty are expressly not released. Each of the settlements is contingent on the Court s final approval of that proposed settlement. TO DETERMINE WHETHER YOU ARE AFFECTED BY THE PROPOSED SETTLEMENTS IN THESE CASES, PLEASE READ THIS NOTICE CAREFULLY. Your rights and options and the deadlines to exercise them are explained in this Notice. Please contact the Settlement Administrator at Gilardi & Co. LLC, P.O. Box 8060, San Rafael, CA or visit for court documents about the proposed settlement, frequently asked questions, and more information. DO NOT CONTACT THE COURT IF YOU HAVE QUESTIONS REGARDING THIS NOTICE 1 Questions or Need Help? Call the Settlement Administrator at or Visit