in re: iridium world comm. ltd. securities litigation 99...
TRANSCRIPT
Case 1:99-cv-01002 Document 241-4 Filed 02/13/2008 Page 2 of 31
UNITED STATES DISTRICT COURTFOR THE DISTRICT OF COLUMBIA
PARKER FREELAND, individually and on behalf: Civil Action No. 99-1002 (consolidated)of all others similarly situated, : (NKL)
Plaintiff,
vs.
IRIDIUM WORLD COMMUNICATIONS, LTD.,:et. al.,
Defendants.
x
STIPULATION AND AGREEMENT OF SETTLEMENTBETWEEN PLAINTIFF MANDELBAUM, THE SUB-CLASS AND THE
UNDERWRITER DEFENDANTS
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 Plaintiff Richard Mandelbaum, on behalf of himself and the
Sub-Class (as hereinafter defined) and the underwriters of Iridium's January 1999 Offering,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Goldman, Sachs & Co., NationsBanc
Montgomery Securities, LLC, Salomon Smith Barney, Inc., and SoundView Technology Group,
Inc. (the `UJnderwriter Defendants'), by and through their respective counsel.
This Stipulation does not settle or release any claims of Plaintiffs as against defendants
Edward Staiano, the former Vice-Chairman and Chief Executive Officer of Iridium LLC and
Iridium Operating and former Chairman and Chief Executive Officer of Iridium World
("Staiano") or Roy Grant, former Vice President and Chief Financial Officer of Iridium LLC and
Iridium World ("Grant"). Plaintiffs Richard Ackerman, Richard Mandelbaum, Antonio Pianos,
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Robert Predaina, Remy's Ltd., Allan Schulman, John Sekas, and Weda Developers, Inc.
("Plaintiffs"), on behalf of themselves and the Class (as hereinafter defined) are separately
settling with defendants Staiano and Grant. This Stipulation does not settle or release any claims
of Plaintiffs as against defendant Motorola Inc. ("Motorola"). Motorola, Staiano, Grant and the
Underwriter Defendants are collectively referred to as the "Defendants."
WHEREAS:
A. In or about April 1999, several actions were filed in the United States District
Court for the District of Columbia against Defendants. These actions were consolidated by
Order dated Marcb 15, 2001, and Plaintiffs Richard Ackerman, Richard Mandelbaum, Antonio
Pianos, Robert Predaina, Remy's Ltd., Jon Sekas, and Weda Developers, Inc., were appointed
Lead Plaintiffs pursuant to the Private Securities Litigation Reform Act of 1995. A Consolidated
Amended Complaint was filed on May 13, 2002 (the "Complaint")(the litigation pertaining to
this Complaint is sometimes referred to herein as the "Action"). On August 31, 2004, Judge
Thomas Penfield Jackson issued an Order denying Defendants' motions to dismiss the
Complaint;
B. This Action has since been transferred from Judge Jackson to Judge Nanette K.
Laughrey of the U.S. District Court for Western District of Missouri, sitting by designation for
the U.S. District Court for the District of Columbia.
C. Plaintiffs Richard Ackerman, Richard Mandelbaum, Antonio Pianos, Robert
Predaina, Remy's Ltd., John Sekas and Weda Developers, Inc., originally moved for class
certification pursuant to Fed. R. Civ. P. 23 on June 7, 2002. Plaintiffs then filed a renewed
motion for class certification pursuant to Fed. R. Civ. P. 23 on April 15, 2005. On January 9,
2006, Judge Laughrey certified the Class and Sub-Class. Notice of the pendency of this Action
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as a Class Action was disseminated to the members of the Class and Sub-Class by individual
mail notices and by publication notice.
D. The Class has asserted no claims against the Underwriter Defendants. In the
Complaint Plaintiff Richard Mandelbaum seeks to recover damages sustained by members ofthe
Sub-Class from the Underwriter Defendants under Sections 11 and 12(a)(2) of the Securities Act
of 1933 (the "Securities Act"), and from Motorola, Edward Staiano ("Staiano") and Roy Grant
("Grant") (Staiano and Grant being collectively referred to as the "Individual Defendants") under
Sections 11, 12(a)(2) and 15 of the Securities Act. In addition, all Plaintiffs seek to recover
damages sustained by members of the Class from Motorola, Staiano and Grant as a result of
alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the
"Exchange Act') and Rule lOb-5 promulgated thereunder by the Securities and Exchange
Commission.
E. Plaintiffs allege that Motorola, Staiano and Grant made a series of materially false
and misleading statements and omissions concerning, among other things, the commercial
viability of the Iridium system, the testing of the Iridium system, technical problems concerning
the Iridium system, its hardware and software and Iridium's ability to meet required subscriber
and revenue covenants, all of which artificially inflated the value of Iridium's stock. Plaintiff's
further allege that while the price of Iridium securities was artificially inflated, Iridium and all
the Defendants conducted a follow-on offering of Iridium stock on January 25, 1999. Plaintiffs
allege that on May 13, 1999, the last day of the Class Period, Motorola and the Individual
Defendants finally disclosed to the investing public that Iridium would not meet required
subscriber and revenue covenants necessary to maintain its bank financing and had hired
advisors to restructure its debt and reduce financing costs. Plaintiffs allege that this news caused
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the price of.Iridium common stock to decline and as a result of Defendants ' alleged actions,
Plaintiffs and other members of the Class were damaged.
F. Iridium is not a named defendant because it is shielded from ongoing litigation by
the stay of litigation afforded to debtors under the United States Bankruptcy Code.
G. The Complaint alleges that Plaintiffs and other Class Members purchased Iridium
securities, purchased call options, and/or sold Iridium put options during the period September 8,
1998 to May 13, 1999 , inclusive and suffered damages thereby as a result of Motorola, Staiano
and Grant ' s dissemination ofmaterially false and misleading statements regarding Iridium;
H. The Complaint further alleges that Plaintiff Mandelbaum and other Sub-Class
Members purchased Iridium Class A common stock on or traceable to the January 25, 1999
secondary offering of 7.5 million Iridium Class A common shares issued pursuant to a false and
misleading Registration Statement and Prospectus and that the Underwriter Defendants, Staiano
and Grant are liable under Sections 11 and 12 of the Securities Act.
I. The Underwriter Defendants moved for Summary Judgment with respect to the
claims of Mandelbaum and the Sub-Class under Sections 11 and 12 of the Securities Act, which
was granted in part, and denied in part, by this Court's September 15, 2006 Order. Pursuant to
the September 15, 2006 Order, the Section 12 claim was dismissed as against all of the
Underwriter Defendants except Salomon Smith Barney. The September 15, 2006 Order denied
the Underwriters' motion for Summary Judgment with respect to Mandelbaum and the Sub-
Class's claims under Section l 1 of the Securities Act.
J. The Underwriter Defendants deny any wrongdoing whatsoever and this
Stipulation shall in no event be construed' or deemed to be evidence of or an admission or
concession on the part of any Underwriter Defendant with respect to any claim or of any fault or
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liability or wrongdoing or damage whatsoever, or any infirmity in the defenses that the
Underwriter Defendants have or may have asserted. To the contrary, the Underwriter
Defendants deny any wrongdoing and are entering into this settlement solely to avoid the costs
and distraction of further litigation. The parties to this Stipulation recognize, however, that the
Action has been filed by Plaintiffs and defended by the Underwriter 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 fair, adequate
and reasonable. This Stipulation shall not be construed or deemed to be a concession by any
Plaintiff of any infirmity in the claims asserted in the Action;
K. Plaintiffs' Co-Lead Counsel have conducted an investigation relating to the
claims and the underlying events and transactions alleged in the Complaint. Plaintiffs' Co-Lead
Counsel have analyzed the evidence adduced during pretrial discovery and have researched the
applicable law with respect to the claims of the Plaintiffs and the Sub-Class against the
Underwriter Defendants and the potential defenses thereto; and
L. Based upon their investigation and pretrial discovery as set forth above, Plaintiffs'
Co-Lead Counsel have concluded that the terms and conditions of this Stipulation are fair,
reasonable and adequate to Plaintiff Mandelbaum and the Sub-Class, and in their best interests,
and have agreed to settle the claims raised in the Action pursuant to the terms and provisions of
this Stipulation, after considering (a) the substantial benefits that Plaintiff Mandelbaum and the
members of the Sub-Class will receive from settlement of the Action as against the Underwriter
Defendants, (b) the attendant risks of litigation, and (c) the desirability of permitting the
Settlement to be consummated as provided by the terms of this Stipulation.
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NOW THEREFORE, without any admission or concession on the part of Plaintiffs of any
lack of merit of the Action whatsoever, and without any admission or concession of any liability
or wrongdoing or lack of merit in the defenses whatsoever by the Underwriter 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 Released Claims (as defined below) of all Sub-Class Members as against the
Released Parties (as defined below) and all Underwriter Defendants' Claims (as defined below)
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) "Authorized Claimant" means a Sub-Class Member who submits a timely
and valid ProofofClaim form to the Claims Administrator.
(b) "Cash Settlement Amount" means the amount specified in paragraph 4
hereof.
(c) "Claims Administrator" means the firm of The Garden City Group, Inc.
which shall administer the Settlement.
(d) "Class" means all persons or entities who purchased Iridium securities,
purchased call options, and/or sold Iridium put options during the period from September 8, 1998
to May 13, 1999, inclusive (the "Class Period") and who suffered damages thereby (the "Class').
Excluded from the Class and Sub-Class are Defendants, the officers and directors of Iridium and
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Motorola, Inc. ("Motorola"), members of their immediate families and their legal
representatives, heirs, successors and assigns, and any entity in which any of the Defendants
have or had a controlling interest. Also excluded from the Class and Sub-Class are the persons
and entities who requested to be excluded pursuant to the Notice of Pendency as listed on
Schedule 1 to Exhibit B attached hereto. "Class Member" means a member ofthe Class.
(e) "Class Period" means the period from September 8, 1998 to May 13,
1999, inclusive.
(f) "Effective Date" means the date upon which the Settlement contemplated
by this Stipulation shall become effective, as set forth in paragraph 22 below.
(g) "Final," with respect to the Order and Final Judgment, means: (a) if no
appeal is filed, the expiration date of the time for filing or noticing of any appeal from the
Court's Judgment approving the Stipulation substantially in the form of Exhibit B hereto, i.e.
thirty (30) days after entry of the Judgment; or (b) the date of final dismissal of any appeal from
the Judgment , or the final dismissal of any proceeding on certiorari to review the Judgment; or
(c) the date of final affirmance on an appeal of the Judgment, the expiration of the time to file a
petition for a writ of certiorari, or the denial of a writ of certiorari to review the Judgment, and, if
certiorari is granted , the date of final affirmance of the Judgment following review pursuant to
that grant. Any proceeding or order, or any appeal or petition for a writ of certiorari pertaining
solely to any plan of allocation and/or application for attorneys ' fees, costs or expenses, shall not
in any way delay or preclude the Judgment from becoming Final.
(h) "Gross Settlement Fund" means the Cash Settlement Amount plus any
income or interest earned thereon.
(i) "Net Settlement Fund" has the meaning defined in paragraph 5 hereof.
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(j) "Notice of Pendency" means the Notice of Pendency of Class Action sent
to members of the Class pursuant to the order of this Court dated February 8, 2006 in this Action.
(k) "Notice of Settlement" means the Notice of Proposed Settlements with
Individual Defendants and Underwriter Defendants, Motion for Attorneys' Fees and Settlement
Fairness Hearing, which is to be sent to members of the Sub-Class substantially in the form
attached hereto as Exhibit 1 to Exhibit A-
(1) "Order and Final Judgment" or "Judgment" means the proposed order to
be entered approving the Settlement substantially in the form attached hereto as Exhibit B.
(m) "Order for Notice and Hearing" means the proposed order preliminarily
approving the Settlement and directing notice thereof to the Sub-Class substantially in the form
attached hereto as Exhibit A.
(n) 'Plaintiffs' Counsel" means Plaintiffs' Co-Lead Counsel,, Plaintiffs"
Executive Committee and all other counsel representing Class Member Plaintiffs in the Action.
(o) 'Plaintiffs' Co-Lead Counsel" means the Co-Chairs of The Executive
Committee in this action, the law firms of Milberg Weiss LLP and Wolf Haldenstein Adler
Freeman & Herz LLP.
(p) "Plaintiffs' Executive Committee" means Plaintiffs ' Co-Lead Counsel and
the following additional law firms Finklestein Thompson LLP, Entwistle & Cappucci, LLP and
Beatie and Osborn LLP.
(q) "Proof of Claim" means the Proof of Claim and Release for Sub-Class
Members substantially in the form attached as Exhibit 2 to Exhibit A.
(r) "Publication Notice" means the Summary Notice of Proposed Settlement
for publication substantially in the form attached as Exhibit 3 to Exhibit A-
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(s) "Registration Statement" means the registration statement filed by Iridium
on or about October 13, 1998 and amended on November 13, 1998 , that became effective on or
about January 25, 1999.
(t) "Released Claims" collectively means and includes any and all claims or
causes of action, including "Unknown Claims"(as defined below), debts, suits, rights of action,
dues, sums of money, accounts, bonds, bills, covenants, contracts, controversies, agreements,
promises, judgments, variances, executions, obligations, demands, rights, liabilities, damages,
losses, fees, and costs of any kind, nature and/or description whatsoever, matured or un-matured,
liquidated or un-liquidated, accrued or un-accrued, known or unknown, suspected or
unsuspected, contingent or non-contingent, whether or not asserted, threatened, alleged or
litigated, at law, equity or otherwise, including, without limitation, claims for contribution or
indemnification, claims for costs, expenses (including, without limitation, amounts paid in
settlement) and attorneys' fees, claims for negligence, gross negligence, breach of duty of care
and/or breach of duty of loyalty, misrepresentation, fraud, breach of fiduciary duty, or violations
of any federal, state or local statutes, common law, rules or regulations, that now exist or
heretofore existed, that have been or could have been asserted in the Action or any other forum
against the Released Parties, whether directly, indirectly, representatively, derivatively or in any
other capacity, which arise out of, are based upon or relate to, or are in connection with {i) the
claims or facts and circumstances asserted in the Action; or (ii) the purchase or sale or other
acquisition or disposition or holding of Class A common stock of Iridium World
Communications Ltd during the Class Period, pursuant to, or traceable to, the Registration
Statement; or (iii) this Settlement or the entry into it, except for breach of this Settlement.
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"Released Claims" does not mean or include claims against Motorola or the Individual
Defendants.
(u) "Released Parties" means any and all of the Underwriter Defendants, and
all of the following in their capacities as such to the Underwriter Defendants: the Underwriter
Defendants' past or present subsidiaries , parents, divisions, affiliates, successors, predecessors,
assigns, heirs , and their respective officers , directors, managing directors , agents, advisors,
employees, attorneys, members, partners , principals , trustees, consultants, insurers and agents of
each of them, and any person, firm, trust, corporation, officer, director or other individual or
entity in which any Underwriter Defendant has a controlling interest or which is related to or
affiliated with any of the Underwriter Defendants. Without in any way limiting this definition,
Released Parties specifically include Bank of America, N.A. and Bank of America Securities
LLC (successors to NationsBanc Montgomery Securities , LLC); The Charles Schwab
Corporation and Charles Schwab & Co . Inc. (successors to SoundView Technology Group, Inc.);
The Goldman Sachs Group, Inc.; Citigroup Global Markets Inc. (successor to Salomon Smith
Barney, Inc.); and their respective subsidiaries and affiliates . "Released Parties" does not
include Motorola or the Individual Defendants.
(v) "Settlement" means the settlement contemplated by this Stipulation.
(w) "Underwriter Defendants" means Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Goldman, Sachs & Co., NationsBanc Montgomery Securities , LLC, Salomon
Smith Barney, Inc., and SoundView Technology Group, Inc., and their successors and assigns.
(x) "Underwriter 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
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Claims, that have been or could have been asserted in the Action or any forum by the
Underwriter Defendants or any of them or the successors and assigns of any of them against
Plaintiff Mandelbaum, any Sub-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).
(y) "Underwriter Defendants' Counsel" means the law firm of Clifford
Chance US LI.P.
(z) "Sub-Class" means all Class members who purchased Iridium Class A
common stock pursuant to, or traceable to, the Registration Statement, and who suffered
damages thereby.
(aa) "Unknown Claims" means any and all Released Claims which Plaintiff
Mandelbaum or any Sub-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 Underwriter Defendants' Claims which
any Underwriter Defendant does not know or suspect to exist in his, her or its favor, which if
known by Plaintiff Mandelbaum, any Sub-Class Member, or any Underwriter Defendants might
have affected his, her or its decision(s) with respect to the Settlement. With respect to any and
all Released Claims and Underwriter Defendants' Claims, the parties stipulate and agree that
upon the Effective Date, Plaintiff Mandelbaum and the Underwriter Defendants shall expressly
waive, and each Sub-Class Member shall be deemed to have waived, and by operation of the
Judgment shall have expressly waived, any and all provisions, rights and benefits conferred by
any law of any state or territory of the United States, or principle of common law, which is
similar, comparable, or equivalent to Cal. Civ. Code § 1542, which provides:
A general release does not extend to claims which thecreditor does not know or suspect to exist in his or her favor at the
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time of executing the release, which if known by him or her musthave materially affected his or her settlement with the debtor.
Plaintiff Mandelbaum and the Underwriter Defendants acknowledge, and all Sub-Class Members
by operation of law shall be deemed to have acknowledged, that the inclusion of "Unknown
Claims" in the definition of Released Claims and Underwriter Defendants' Claims was
separately bargained for and was a key element of the Settlement.
SCOPE AND EFFECT OF SETTLEMENT
2. The obligations incurred pursuant to this Stipulation shall be in full and final
disposition of the Action as against the Underwriter Defendants only, and of any and all
Released Claims as against all Released Parties and any and all Underwriter Defendants' Claims.
3. (a) Upon the Effective Date of this Settlement, Plaintiff Mandelbaurn and
members of the Sub-Class on behalf of themselves, their heirs, executors, administrators,
successors and assigns, shall, with respect to each and every Released Claim, be deemed to have
released and forever discharged , and shall forever be barred and enjoined from instituting,
commencing, maintaining or prosecuting , any and all Released Claims against any and all of the
Released Parties.
(b) Upon the Effective Date of this Settlement, each of the Underwriter
Defendants, on behalf of themselves and the Released Parties, shall be deemed to have released
and forever discharged each and every of the Underwriter Defendants' Claims, and shall forever
be barred and enjoined from instituting, commencing, maintaining or prosecuting the
Underwriter Defendants' Claims against Plaintifl'Mandelbaum, all Sub-Class Members and their
counsel.
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THE SETTLEMENT CONSIDERATION
4. The Underwriter Defendants shall pay into escrow for the benefit of Plaintiff
Mandelbaum and the Sub-Class a total of Eight Million Two Hundred Fifty Thousand Dollars
($8,250,000) in settlement of the Released Claims. The first payment shall be for one-half of
this amount, Four Million One Hundred Twenty-Five Thousand Dollars ($4,125,000), and shall
be paid within ten (10) days from entry of the Order for Notice and Hearing.' No later than ten
(10) days after the entry of the Order and Final Judgment, the Underwriter Defendants shall
make a second payment in the amount of Four Million One Hundred Twenty-Five Thousand
Dollars ($4,125,00) (the two payments shall be referred to as the "Cash Settlement Amount"j.2
The Cash Settlement Amount and any income or interest earned thereon shall be the "'Gross
Settlement Fund."
5. (a) The Gross Settlement Fund, net of any Taxes (as defined below) on the
income thereof, shall be used to pay (i) the Notice and Administration Costs referred to in
paragraph 7 hereof, (ii) the attorneys' fee and expense award referred to in paragraph 8 hereof,
and (iii) the remaining administration expenses referred to in paragraph 9 hereof. The balance of
the Gross Settlement Fund after the above payments shall be the "Net Settlement Fund." The Net
Settlement Fund shall be distributed to the Authorized Claimants as provided in paragraphs 10-
I In the event that an order is entered directing notice of this Settlement to the Class, but itis entered in a form not substantially in the form of the Order for Notice and Hearing attachedhereto as Exhibit A, and Defendants do not elect to terminate this Stipulation under theprovisions of paragraph 23 below, then the first payment shall be due within ten (10) days fromentry of the order directing notice of this Settlement to the Class.
2 In the event that an order is entered approving the Settlement, but it is entered in a formnot substantially in the form of the Order and Final Judgment attached hereto as Exhibit B, andno party hereto elects to terminate this Stipulation under the provisions of paragraph 23 below(i.e. it is an "Alternative Judgment" as defined in paragraph 22(b)), then the second paymentshall be due within ten (10) days from entry of the Alternative Judgment.
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12 hereof. Any sums required to be held in escrow hereunder shall be held by Plaintiffs' Co-
Lead Counsel as Escrow Agents for the Settlement Fund. All funds held by the Escrow Agents
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 or further order of the Court. The Escrow Agents shall invest
any funds in excess of $100,000 in short tern 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 a
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 § 1.468B-1 and
that the Escrow Agents, as administrators of the Settlement Fund within the meaning of Treasury
Regulation §1.468B-2(k)(3), shall be responsible for filing tax returns for the Settlement Fund
and paying from the Settlement Fund any Taxes owed with respect to the Settlement Fund. The
parties hereto agree that the Settlement fund shall be treated as a Qualified Settlement Fund from
the earliest date possible, and agree to any relation-back election required to treat the Settlement
Fund as a Qualified Settlement Fund from the earliest date possible. Counsel for Underwriter
Defendants agree to provide promptly to the Escrow Agents the statement described in Treasury
Regulation § 1.468B-3(e).
(b) All (i) taxes on the income of the Gross Settlement Fund and (ii) expenses
and costs incurred in connection with the taxation of the Gross Settlement Fund (including,
without limitation, expenses of tax attorneys and accountants) (collectively "Taxes") shall be
paid out of the Gross Settlement Fund, shall be considered to be a cost of administration of the
settlement and shall be timely paid by the Escrow Agents without prior Order of the Court.
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ADMINISTRATION
6. The Claims Administrator shall administer the Settlement subject to the
jurisdiction ofthe Court.
7. Plaintiffs' Co-Lead Counsel may pay from the Settlement Amount, without
further approval from the Underwriter Defendants, the reasonable costs and expenses associated
with identifying members ofthe Sub-Class and effecting individual mailed notice and publishing
the Publication Notice to the Sub-Class, and the administration of the Settlement, including
without limitation, the actual costs ofpublication, printing and mailing the Notice of Settlement,
reimbursements to nominee owners for forwarding notice to their beneficial owners, and the
administrative expenses incurred and fees charged by the Claims Administrator in connection
with providing notice and processing the submitted claims . Except for their obligation to pay the
Cash Settlement Amount, the Underwriter Defendants shall bear no responsibility for any such
costs.
ATTORNEYS' FEES AND EXPENSES
8. Plaintiffs' Co-Lead Counsel will apply to the Court for an award from the Gross
Settlement Fund of attorneys' fees and reimbursement of expenses. Such amounts as are
awarded by the Court shall be payable from the Gross Settlement Fund to Plaintiffs' Co-Lead
Counsel immediately upon award, notwithstanding the existence of any timely filed objections
thereto, or potential for appeal therefrom, or collateral attack on the settlement or any part
thereof. If Plaintiffs' Co-Lead Counsel withdraw their attorneys fees prior to the Effective Date,
they shall provide security or sign an undertaking in a form acceptable to Plaintiffs' Co-Lead
Counsel and the Underwriter Defendants obligating Plaintiffs' Co-Lead Counsel to make
appropriate refunds or repayments to the Settlement Fund plus accrued interest at the same net
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rate as is earned by the Gross Settlement Fund, if and when, as a result of any appeal and/or
further proceedings on remand, or successful collateral attack, the fee or cost award is reduced or
reversed, or if the Settlement does not become effective. Except for their obligation to pay the
Cash Settlement Amount, the Underwriter Defendants shall bear no responsibility for any
attorneys' fees and expenses.
ADMINISTRATION EXPENSES
9. Plaintiffs". Counsel will apply to the Court, on notice to Underwriter Defendants'
Counsel, for an order (the "Sub-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.
DISTRIBUTION TO AUTHORIZED CLAIMANTS
10. 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 Notice ofSettlement annexed hereto as Exhibit
1 to Exhibit A, or in such other Plan of Allocation as the Court approves).
11. The Plan of Allocation proposed in the Notice of Settlement is not a necessary
term of this Stipulation and it is not a condition of this Stipulation that any particular Plan of
Allocation be approved.
12. 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. The Underwriter Defendants
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shall not be entitled to get back any of the settlement monies once the Settlement becomes final.
The Underwriter Defendants shall have no involvement in reviewing or challenging claims.
ADMINISTRATION OF THE SETTLEMENT
13. Any member of the Sub-Class who does not submit a valid Proof of Claim will
not be entitled to receive any of the proceeds from the Net Settlement Amount 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 Released Claims.
1-4. The Claims Administrator shall process the Proofs ofClaim and, after entry of the
Sub-Class Distribution Order, distribute the Net Settlement Fund to the Authorized Claimants.
Except for their obligation to pay the Settlement Amount, Underwriter Defendants shall have no
liability, obligation or responsibility for the administration of the Settlement or disbursement of
the Net Settlement Fund. Plaintiffs' Co-Lead Counsel shall have the right, but not the obligation,
to advise the Claims Administrator to waive what Plaintiffs' Co-Lead Counsel deem to be formal
or technical defects in any Proofs of Claim submitted in the interests of achieving substantial
justice.
15. For purposes of determining the extent, if any, to which a Sub-Class Member
shall be entitled to be treated as an "Authorized Claimant", the following conditions shall apply:
(a) Each Sub-Class Member shall be required to submit a Proof ofClaim (see
attached Exhibit 2 to Exhibit A), 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;
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(b) All Proofs of Claim must be submitted by the date specified in the Notice
of Settlement, unless such period is extended in accordance with an Order of the Court. Any
Sub-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 Sub-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 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 Released Claims. Provided
that it is received before the motion for the Sub-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 mail 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 and the approved Plan of
Allocation 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 attempt to remedy the curable deficiencies in the Proofs of Claim
submitted. The Claims Administrator shall notify, in a timely fashion and in writing, each
Claimant whose Proof 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
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Case 1:99-cv-01002 Document 241-4 Filed 02/13/2008 Page 20 of 31
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
any supporting documentation, and requesting a review thereof by the Court. If a dispute
concerning a claim cannot be otherwise resolved, Plaintiffs' Co-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 Underwriter Defendants'
Counsel, for approval by the Court in the Sub-Class Distribution Order.
16. 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 Sub-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.
17. Payment pursuant to this Stipulation shall be deemed final and conclusive against
all Sub-Class Members. All Sub-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
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Case 1:99-cv-01002 Document 241-4 Filed 02/13/2008 Page 21 of 31
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 Released Claims.
18. All proceedings with respect to the administration, processing and determination
of claims described by paragraph 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 ofthe Court.
19. 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.
TERMS OF ORDER FOR NOTICE AND HEARING
20. Promptly after this Stipulation has been fully executed, Plaintiffs' Co-Lead
Counsel and Underwriter Defendants' Counsel jointly shall apply to the Court, on notice to
Motorola, Staiano and Grant, for entry of an Order for Notice and Hearing, substantially in the
form annexed hereto as Exhibit A.
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Case 1:99-cv-01002 Document 241-4 Filed 02/13/2008 Page 22 of 31
TERMS OF ORDER AND FINAL JUDGMENT
21. If the Settlement contemplated by this Stipulation is approved by the Court,
counsel for the parties shall jointly request that the Court enter an Order and Final Judgment
substantially in the form annexed hereto as Exhibit B.
EFFECTIVE DATE OF SETTLEMENT, WAIVER OR TERMINATION
22. The "Effective Date" of Settlement shall be the date when all the following shall
have occurred:
(a) approval by the Court of the Settlement, following notice to the Sub-Class
and a hearing, as prescribed by Rule 23 of the Federal Rules ofCivil Procedure; and
(b) entry by the Court of an Order and Final Judgment, substantially in the
form set forth in Exhibit B annexed hereto, and the Order and Final Judgment becoming "Final"
as defined herein, or, in the event that the Court enters an order and final judgment in a 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" as defined
herein.
23. Underwriter Defendants and Lead Plaintiffs each 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 of (a) the Court's
declining to enter or modifying the Order for Notice and Hearing 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 or modifying the Order and Final Judgment in any material respect; (d) the date upon
which the Order and Final Judgment is modified or reversed in any material respect by the Court
-21 -
Case 1:99-cv-01002 Document 241-4 Filed 02/13/2008 Page 23 of 31
of Appeals or the Supreme Court; or (e) the date upon which an Alternative Judgment is
modified or reversed in any material respect by the Court ofAppeals or the Supreme Court.
24. Except as otherwise provided herein, in the event the Settlement is terminated,
then the parties to this Stipulation shall be deemed to have reverted to their respective status in
the Action as of the date and time immediately prior to their settlement in principle, dated
November 3, 2006 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, and any portion of the
Settlement Amount previously paid by Underwriter Defendants, 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 Settlement Amount, shall be returned
to the persons paying the same.
NO ADMISSION OF WRONGDOING
25. This Stipulation, whether or not consummated, and any proceedings taken
pursuant to it
(a) shall not be offered or received against the Underwriter Defendants as
evidence of or construed as or deemed to be evidence of any presumption, concession, or
admission by any of the Underwriter Defendants 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 Underwriter Defendants;
(b) shall not be offered or received against the Underwriter Defendants as
evidence of a presumption, concession or admission of any fault, misrepresentation or omission
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Case 1:99-cv-01002 Document 241-4 Filed 02/13/2008 Page 24 of 31
with respect to any statement or written document approved or made by any Underwriter
Defendant;
(c) shall not be offered or received against the Underwriter Defendants 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
Underwriter Defendants, 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, the Underwriter Defendants
may refer to it to effectuate the liability protection granted them hereunder;
(d) shall not be construed against the Underwriter Defendants 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 Plaintiff Mandelbaum or any of the Sub-Class Members that
any of their claims are without merit, or that any defenses asserted by the Underwriter
Defendants have any merit, or that damages recoverable under the Complaint would not have
exceeded the Gross Settlement Fund.
MISCELLANEOUS PROVISIONS
26. All of the exhibits attached hereto are hereby incorporated by reference as though
fully set forth herein.
27. Each Underwriter Defendant contributing to the Settlement Amount warrants as
to itself that , as to the payments made by or on behalf of it, at the time of such payment that the
Underwriter Defendant made or caused to be made pursuant to paragraph 4 above, it was not
-23 -
Case 1:99-cv-01002 Document 241-4 Filed 02/13/2008 Page 25 of 31
insolvent, nor did nor will the payment required to be made by or on behalf of it render such
Underwriter Defendant insolvent, within the meaning of and/or for the purposes of the United
States Bankruptcy Code, including §§ 101 and 547 thereof. This warranty is made by each such
Underwriter Defendant and not by such Underwriter Defendant's Counsel.
28. If a case is commenced in respect of any Underwriter Defendant contributing to
the Settlement Amount (or any insurer contributing funds to the Cash Settlement Amount on
behalf of any Underwriter Defendant) under Title I 1 of the United States Code (Bankruptcy), or
a trustee, receiver, conservator, or other fiduciary is appointed under any similar law, and in the
event of the entry of a final order of a court of competent jurisdiction determining the transfer of
money to the Gross Settlement Fund or any portion thereof by or on behalf of such Underwriter
Defendant to be a preference, voidable transfer, fraudulent transfer or similar transaction and any
portion thereof is required to be returned, and such amount is not promptly deposited to the
Gross Settlement Fund by others, then, at the election of Plaintiffs' Co-Lead Counsel, the parties
shall jointly move the Court to vacate and set aside the releases given and Judgment entered in
favor of the Underwriter Defendants pursuant to this Stipulation, which releases and Judgment
shall be null and void, and the parties shall be restored to their respective positions in the
litigation as of the date a day prior to the date of this Stipulation and all cash amounts contributed
to the Gross Settlement Fund, including all accrued interest, less Taxes paid or payable, and less
all Notice and Administration costs, shall be returned to the appropriate Underwriter Defendants.
29. 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 Sub-Class Members against
the Released Parties with respect to the Released Claims. Accordingly, Plaintiff Mandelbaum
and Underwriter Defendants agree not to assert in any forum that the litigation was brought by
-24-
Case 1:99-cv-01002 Document 241-4 Filed 02/13/2008 Page 26 of 31
Plaintiffs or defended by Underwriter Defendants in bad faith or without a reasonable basis. The
parties hereto shall assert no claims of any violation of Rule I 1 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.
30. 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.
31. The headings herein are used for the purpose of convenience only and are not
meant to have legal effect.
32. The administration and 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 awards of attorneys' fees and expenses to Plaintiffs'
Counsel and enforcing the terms of this Stipulation.
33. 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 ofthis Stipulation.
34. This Stipulation and its exhibits 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.
35. 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.
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Case 1:99-cv-01002 Document 241-4 Filed 02/13/2008 Page 27 of 31
36. This Stipulation shall be binding upon, and inure to the benefit of, the successors
and assigns of the parties hereto.
37. 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.
38. 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.
39. 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.
40. Plaintiffs' Co-Lead Counsel and Underwriter Defendants' Counsel agree to
cooperate fully with one another in seeking Court approval of the Order for Notice and Hearing,
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.
-26-
Case 1:99-cv-01002 Document 241-4 Filed 02/13/2008 Page 28 of 31
DATED: January ? 2008 FINKL N OMP N LLP
as G. Thompson, Jr.By.Donald J. Enright
The Duvall Foundry1050 30th Street, N.W.Washington, DC 20007Telephone: (202)Facsimile: (202)
Class Liaison Counsel and Executive CommitteeMember
By. r-V , -L • v v r
Robert A. WallnerBenjamin Y. Kaufman
One Pennsylvania PlazaNew Yodc, New York 10119Telephone: (212) 594-5300Facsimile: (212) 868-1229
-and-
WOLF HALDENSTEIN ADLER FREEMAN &HERZ I.LP
By.Fred Taylor IsquithGregory M. NespoleScott J. Farrell
270 Madison AvenueNew York, New York 10016Telephone: (212) 545-4600Facsimile: (212)
Class Co-Lead Counsel and Co-Chairs ofTheExecutive Committee
-27-
Case 1:99-cv-01002 Document 241-4 Filed 02/13/2008 Page 29 of 31
DATED: January , 2008 FINKLESTEIN THOMPSON LLP
By:Douglas G. Thompson, Jr.Donald J. Enright
The Duvall Foundry1050 30th Street, N.W.Washington, DC 20007Telephone: (202)Facsimile: (202)
Class Liaison Counsel and Executive CommitteeMember
MILBEHG/WELSS UL
By. ,V--
Robert A. WallnerBenjamin Y. Kaufman
One Pennsylvania PlazaNew York, New York 10119Telephone: (212) 594-5300Facsimile: {212) 868-1229
-and-
WOLF HALDENSTEIN ADLER FREEMAN &HERZ LLP
By:Fred Taylor IsquithGregory M. NespoleScott J. Farrell
270 Madison AvengeNew York, New York 10014Telephone: (212) 545-4600Facsimile: (212)
Class Co-Lead Counsel and Co-Chairs ofTheExecutive Committee
-27-
Case 1:99-cv-01002 Document 241-4 Filed 02/13/2008 Page 30 of 31
DATED: January , 2008 FINKLESTEIN THOMPSON LLP
By.Douglas G. Thompson, Jr.Donald J. Enright
The Duvall Foundry1050 30th Street, N.W.Washington, DC 20007Telephone: (202)Facsimile: (202)
Class Liaison Counsel andExecutive CommitterMember
By r T6-OL' vv r
"J Robert A. WaAnerBenjamin Y. Kaufinan
One Pennsylvania PlazaNew York, New York 10119Telephone: (212) 594-5300Facsimile: (212) 868-1229
-and-
WOLF HALDENSTEIN ADLER FREEMAN &IiERZ LLP
By.
Fred Taylor IsquithGregory M. NespoleScott J. Farrell
270 Madison AvenueNew York, New York 10016Telephone: (212) 545-4600Facsimile: (212)
Class Co-Lead Counsel and Co-Chairs ofTheExecutive Committee
-27-
Case 1:99-cv-01002 Document 241-4 Filed 02/13/2008 Page 31 of 31
ENTWISTLE & CAPPUCCI, LLPVincent R. CappucciRobert N. Cappucci280 Park Avenue, 26th Floor WestNew York, New York 10017Telephone: (212)Facsimile: (212)
Executive Committee Member
BEATIE AND OSBORN LLPRussel H. Beatie521 Fifth AvenueNew York, New York 10175Telephone: (212) 888-9000Facsimile: (212) 888-9664
Executive Committee Member
CLIFFORD CHANCE US L
By: 1'•James eidner, Esq.James 1. Moyle, Esq.
31 West 52nd StreetNew York, NY 10019Telephone: (212) 878-8000Facsimile: (212) 878-8375
CLIFFORD CHANCE US LLPJon R. Roelike, Esq.2001 K Street, N.W.Washington, DC 20006Telephone: (202) 912-5000Facsimile: (202) 912-6000
Counselfor Underwriter Defendants Merrill Lynch,Pierce, Fenner & Smith Incorporated, Goldman,Sachs A Co., NationsBanc Montgomery SecuritiesLLC, Salomon Smith Barney, and SoundViewTechnology Group, Inc.
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Case 1:99-cv-01002 Document 241-5 Filed 02/13/2008 Page 1 of 56
Exhibit A
Case 1:99-cv-01002 Document 241-5 Filed 02/13/2008 Page 2 of 56
UNITED STATES DISTRICT COURTFOR THE DISTRICT OF COLUMBIA
PARKER FREELAND , individually and on behalf:of all others similarly situated, : Civil Action No. 99-1002 (consolidated)
(NKL)Plaintiff,
vs.
IRIDIUM WORLD COMMUNICATIONS, LTD.,:et. al.,
Defendants.
PRELIMINARY ORDER FOR NOTICE AND HEARING IN CONNECTIONWITH SETTLEMENT PROCEEDINGS
WHEREAS, certain parties to the above -captioned action (the "Action") entered into a
Stipulation and Agreement of Settlement With Individual Defendants dated January 25, 2008
(the "Individual Defendants Stipulation") and certain parties to the Action entered into a
Stipulation and Agreement of Settlement With Underwriter Defendants dated January 25, 2008
(the "Underwriter's Stipulation") which are subject to review under Rule 23 of the Federal Rules
of Civil Procedure and which , together with the exhibits thereto, set forth the terms and
conditions for proposed settlements of the claims alleged in the Complaint on the merits and with
prejudice as against the Individual Defendants and Underwriter Defendants only; and the Court
having read and considered the Stipulations and the accompanying documents; and the parties to
the Stipulations having consented to the entry of this Order; and all capitalized terms used herein
having the meanings defined in the Stipulations; and
Case 1:99-cv-01002 Document 241-5 Filed 02/13/2008 Page 3 of 56
WHEREAS, by Order dated January 9, 2006 this Court previously granted the motion,
pursuant to Rule 23, of plaintiffs Richard Ackerman, Richard Mandelbaum, Antonio Pianos,
Robert Predaina, Remy's Ltd., John Sekas and Weda Developers, Inc., for certification of the
Action as a class action. The class consists of all persons or entities who purchased Iridium
securities, purchased call options, and/or sold Iridium put options during the period from
September 8, 1998 to May 13, 1999, inclusive (the "Class Period") and who suffered damages
thereby (the "Class"). The Court also certified a sub-class of all Class members who purchased
Iridium Class A common stock pursuant to, or traceable to, a Registration Statement filed by
Iridium on or about October 13, 1998 and amended November 13, 1998, and who suffered
damages thereby (the "Sub-Class"). Excluded from the Class and Sub-Class are Defendants, the
officers and directors of Iridium and Motorola, Inc., members of their immediate families and
their legal representatives, heirs, successors and assigns, and any entity in which any of the
Defendants have or had a controlling interest. A notice of the pendency of this Action as a class
action (the "Notice of Pendency") dated May 18, 2006 was mailed to Class Members beginning
on May 19, 2006 and a summary notice was published in the national edition of The Wall Street
Journal on May 24, 2006. Pursuant to the Notice of Pendency previously given to the members
of the Class, Class Members were given the opportunity to exclude themselves from the Class.
Nine (9) persons and entities elected to exclude themselves from the Class. Those persons and
entities are listed on Schedule 1 to Exhibit B of the Stipulations and they are excluded from the
Class and, to the extent that they also may have been members of the Sub-Class, they are
excluded from the Sub-Class as well.
NOW, THEREFORE, IT IS HEREBY ORDERED, this day of
2008 that:
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Case 1:99-cv-01002 Document 241-5 Filed 02/13/2008 Page 4 of 56
I. The Court does hereby preliminarily approve the Individual Defendants'
Stipulation and the Underwriters' Stipulation and the Settlements set forth therein, subject to
further consideration at the Settlement Fairness Hearing described below.
2. A hearing (the "Settlement Fairness Hearing") pursuant to Rule 23(e) of the
Federal Rules of Civil Procedure is hereby scheduled to be held before the Court on
2008, at_ _.m. for the following purposes:
(a) to determine whether either or both of the proposed Settlements are fair,
reasonable, and adequate, and should be approved by the Court;
(b) to determine whether the Orders and Final Judgments as provided under
the Individual Defendants' Stipulation and the Underwriters' Stipulation should be entered,
dismissing the Complaint filed herein, on the merits and with prejudice, as against the respective
settling Defendants only, and to determine whether the release by the Class and Sub-Class of the
respective Released Claims, as set forth in the Stipulations, should be provided to the Released
Parties;
(c) to determine whether the proposed Plan of Allocation for the proceeds of
the Settlements is fair and reasonable, and should be approved by the Court;
(d) to consider Plaintiffs' Counsel's application for an award of attorneys'
fees and expenses; and
(e) to rule upon such other matters as the Court may deem appropriate.
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Case 1:99-cv-01002 Document 241-5 Filed 02/13/2008 Page 5 of 56
3. The Court reserves the right to approve either or both of the Settlements with or
without modification and with or without further notice of any kind. The Court further reserves
the right to enter its Orders and Final Judgments approving the respective Stipulations and
dismissing the Complaint only as against the respective settling Defendants on the merits and
with prejudice regardless of whether it has approved the Plan of Allocation or awarded attorneys'
fees and expenses.
4. The Court approves the form, substance and requirements of the Notice of
Proposed Settlements with Individual Defendants and Underwriter Defendants, Motion for
Attorneys' Fees and Settlement Fairness Hearing (the "Notice of Settlement") and the Proof of
Claim form, annexed hereto as Exhibits 1 and 2 respectively.
5. The Court approves the appointment of The Garden City Group, Inc. as the
Claims Administrator. The Claims Administrator shall cause the Notice of Settlement and the
Proof of Claim, substantially in the forms annexed hereto, to be mailed, by first class mail,
postage prepaid, on or before , 2008, to all Class Members who can be
identified with reasonable effort, including all persons and entities to whom the prior Notice of
Pendency was mailed. The Claims Administrator shall use reasonable efforts to give notice to
nominee purchasers such as brokerage firms and other persons or entities who, during the period
September 8, 1998 to May 13, 1999, inclusive, purchased Iridium World Communications Ltd.
("Iridium") Class A common stock, purchased call options on Iridium Class A common stock,
and/or sold put options on Iridium Class A common stock, as record owners but not as beneficial
owners. To the extent that such nominees have not previously provided the names and addresses
of their beneficiaries to the Claims Administrator in connection with the Notice of Pendency,
such nominee purchasers are directed, within fourteen {14) days of their receipt of the Notice of
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Case 1:99-cv-01002 Document 241-5 Filed 02/13/2008 Page 6 of 56
Settlement, to either forward copies of the Notice of Settlement 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 Notice of
Settlement and Proof of Claim promptly to such identified beneficial owners. Additional copies
of the Notice of Settlement 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 Funds, upon receipt by the Claims Administrator of proper documentation,
for the reasonable expense of sending the Notices of Settlement and Proofs of Claim to
beneficial owners. Plaintiffs' Co-Lead Counsel shall, at or before the Settlement Fairness
Hearing, file with the Court proof of mailing of the Notice of Settlement and Proof ofClaim.
6. The Court approves the form of Publication Notice of the proposed settlements in
substantially the form and content annexed hereto as Exhibit 3 and directs that Plaintiffs' Co-
Lead Counsel shall cause the Publication Notice to be published in the national edition of The
Wall Street Journal within ten days of the mailing of the Notice of Settlement. Plaintiffs' Co-
Lead Counsel shall, at or before the Settlement Fairness Hearing, file with the Court proof of
publication of the Published Notice.
7. The form and content of the Notice of Settlement , and the method set forth herein
of notifying the Class of the Settlements and their terms and conditions, meet the requirements of
Rule 23 of the Federal Rules of Civil Procedure, Section 27 of the Securities Act of 1933, 15
U.S.C. § 77z-l(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.
-5-
Case 1:99-cv-01002 Document 241-5 Filed 02/13/2008 Page 7 of 56
8. In order to be entitled to participate in the Net Individual Defendants' Settlement
Fund from the Individual Defendants' Settlement, in the event the Individual Defendants'
Settlement is effected in accordance with the terms and conditions set forth in the Individual
Defendants' Stipulation, and in the case of Sub-Class members, to participate in the Net
Underwriters' Settlement Fund from the Underwriters' Settlement, in the event the Underwriters'
Settlement is effected in accordance with the terms and conditions set forth in the Underwriters'
Stipulation, each 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 Notice of Settlement, postmarked not later than
2008 . 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 of Settlement.
(b) The Proof of Claim submitted by each 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
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
-6-
Case 1:99-cv-01002 Document 241-5 Filed 02/13/2008 Page 8 of 56
documentation as is deemed adequate by Plaintiffs' Co-Lead Counsel; (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 Class Member or Sub-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 Class Member and/or Sub-Class
Member shall submit to the jurisdiction of the Court with respect to the claim submitted, and
shall (subject to effectuation of the respective Settlements) release all Released Claims against
the settling Defendants and Released Parties as respectively provided in the Stipulations.
9. Regardless of whether they submit a Proof of Claim, all Class Members and Sub-
Class Members shall be bound by all determinations and judgments in this Action, whether
favorable or unfavorable, unless such persons are listed on Schedule I to Exhibit B of the
Stipulation as having previously and effectively requested exclusion from the Class. The persons
and entities who previously and effectively requested exclusion from the Class in response to the
Notice of Pendency of class action are excluded from the Class and Sub-Class and shall not be
entitled to submit any Proof of Claim forms and shall not be entitled to receive any payment out
of the Net Settlement Funds as described in the Stipulations and in the Notice of Settlement. No
further opportunity to request exclusion need be given in this Action.
10. The Court will consider comments and/or objections to either or both of the
Settlements, the Plan of Allocation, or the award of attorneys' fees and reimbursement of
expenses only if such comments or objections and any supporting papers are filed in writing, on
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Case 1:99-cv-01002 Document 241-5 Filed 02/13/2008 Page 9 of 56
or before , 2008, with the Office of the Clerk of Court, United States District
Court for the District of Columbia, 1225 E. Barrett Prettyman United States Courthouse, 333
Constitution Avenue, N.W., Washington, DC 20001, and copies of all such filed papers are
served upon each of the following: (i) Robert A. Wallner, Esq., Milberg Weiss LLP, One
Pennsylvania Plaza, New York, New York 10119, or Fred Taylor Isquith, Esq., Wolf
Haldenstein Adler Freeman & Herz LLP, 270 Madison Avenue, New York, New York 10016,
on behalf of the Plaintiffs and the Class, (ii); and James B. Weidner, Esq., Clifford Chance US
LLP, 31 West 52nd Street, New York, NY 10019 on behalf of the Underwriter Defendants, and
(iii) Daryl A. Libow, Esq., Sullivan & Cromwell LLP, 1701 Pennsylvania Avenue, N.W.,
Washington, District of Columbia 20006-5805, on behalf of the Individual Defendants.
Attendance at the hearing is not necessary; however, persons wishing to be heard orally in
opposition to the approval of either or both of the Settlements, 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 either or both of the Settlements, 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 exhibits they intend to
introduce into evidence at the Settlement Fairness Hearing. Class Members and Sub-Class
Members do not need to appear at the hearing or take any other action to indicate their approval.
11. Pending final determination of whether either or both of the Settlements should be
approved, all Plaintiffs, Class Members and Sub-Class Members, and each of them, and anyone
who acts or purports to act on their behalf, shall not institute, commence, maintain or prosecute
any action which asserts any Released Claims against any Released Party.
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12. As provided in the Stipulations, Plaintiffs' Co-Lead Counsel may pay the Claims
Administrator the reasonable fees and costs associated with giving notice to the Class and the
review of claims and administration of the Settlements, proportionately in relation to the
Settlements' amounts, out of the respective Gross Settlement Funds without further order of the
Court.
13. If any specified condition to either of the Settlements set forth in the Stipulations
is not satisfied and Plaintiffs' Co-Lead Counsel or Counsel for the respective settling Defendants
elects to terminate the affected Settlement as provided in ¶ 23 of the Stipulations, then, in any
such event, the affected Stipulation(s), including any amendment(s) thereof, and this Preliminary
Order (with respect to such terminated Stipulation(s)) 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 affected Stipulation(s), as
specifically provided for in the affected Stipulation(s).
14. The Court retains exclusive jurisdiction over the Action to consider all further
matters arising out of or connected with the Settlements.
Dated: Jefferson City, Missouri
.2008
Honorable Nanette K. LaughreyUNITED STATES DISTRICT JUDGE
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Exhibit 1
Case 1:99-cv-01002 Document 241-5 Filed 02/13/2008 Page 12 of 56
UNITED STATES DISTRICT COURTFOR THE DISTRICT OF COLUMBIA
PARKER FREELAND, individually and on behalf :of all others similarly situated, Civil Action No. 99-1002 (consolidated)
(NKL)Plaintiff,
vs.
IRIDIUM WORLD COMMUNICATIONS, LTD.,et. al.,
Defendants.
x
NOTICE OF PROPOSED SETTLEMENTS WITH INDIVIDUAL DEFENDANTS ANDUNDERWRITER DEFENDANTS, MOTION FOR ATTORNEYS' FEES AND
SETTLEMENT FAIRNESS HEARING
TO: All Persons or Entities who Purchased Securities , Purchased Call Options, and/orSold Iridium Put Options of Iridium World Communications Ltd., Iridium LLC,and Iridium Operating LLC ("Iridium") During the Period from September 8,1998to May 13,1999 Inclusive (the "Class Period ") who Suffered Damages Thereby (the"Class").
AndAll Persons or Entities who Purchased Iridium Class A Common Stock Pursuant to,or Traceable to, a Registration Statement Filed by Iridium on or About October 13,1998, Amended November 13, 1998, (that Became Effective on or About January 25,1999) who Suffered Damages Thereby (the "Sub-Class")
A federal court authorized this notice . This is not a solicitationfrom a lawyer.
• The Settlement with the Individual Defendants will provide a $14.85 million settlementfund for the benefit of the Class of investors who purchased Iridium securities, (and/orsold Iridium put options) during the Class Period and who suffered damages thereby.
• The Settlement with the Underwriter Defendants will provide an $8.25 million settlementfund for the benefit of the Sub-Class of investors who bought Iridium Class A CommonStock on or traceable to the secondary offering of Iridium Class A common stock thatbecame effective on January 25, 1999 (the "Secondary Offering").
Case 1:99-cv-01002 Document 241-5 Filed 02/13/2008 Page 13 of 56
• The Settlements partially resolve a lawsuit over whether Iridium's reports and releasescontained material misstatements or omissions regarding Iridium's financial conditionand future earnings. The lawsuit is continuing against defendant Motorola, Inc.
• Your legal rights are affected whether you act or do not act. Read this notice carefully.
YOUR LEGAL RIGHTS AND OPTIONS IN THIS SETTLEMENT:
SUBMIT A CLAIM FORMBY 12008
The only way to get a payment.
OBJECT BY ,2008
Write to the Court about why you do not like the Settlements.
GO TO A HEARING ON,2008
Ask to speak in Court about the Settlements.
DO NOTHING Get no payment. Give up rights.
These rights and options - and the deadlines to exercise them - are explained in thisnotice.
• The Court in charge of this case still has to decide whether to approve the Settlements.Payments will be made if the Court approves the Settlements and after appeals areresolved. Please be patient.
SUMMARY NOTICE
Statement of Plaintiff Recovery
Settlements are proposed with respect to (i) the Individual Defendants, and (ii) the UnderwriterDefendants (together, the "Settling Defendants"). The Litigation is continuing with respect toDefendant Motorola, Inc. Pursuant to the Individual Defendants' Settlement described herein, aSettlement Fund consisting of $14.85 million in cash will benefit the entire Class. Pursuant tothe Underwriter Settlement described herein, a Settlement Fund consisting of $8.25 million incash will be established for the benefit of the Sub-Class. Plaintiffs estimate that there wereapproximately 19.73 million shares of Iridium Class A common stock outstanding during theClass Period. Based on certain assumptions that Plaintiffs' Counsel believe to be reasonable, butare unable to verify by reference to reliable data, Plaintiffs estimate that there were $363.5million face amount of debt instruments which may have been damaged. Plaintiffs estimate thatthe average recovery per damaged share of Iridium Class A common stock and per $1,000 faceamount of debt instruments for all Class Members under the Individual Defendants' Settlementis $0.43 per damaged Iridium Class A common share and $3.73 per $1,000 of face amount of
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debt instruments' before deduction of Court-awarded attorneys' fees and expenses. Plaintiffsestimate that there were approximately 7.5 million shares of Iridium Class A common stock soldin the January 25, 1999 Secondary Offering which may have been damaged. Plaintiffs estimatethat the average recovery per damaged share of Iridium Class A common stock for all Sub-ClassMembers under the Underwriter Defendants' Settlement is $1.10 per damaged Iridium Class Acommon share2 before deduction of Court-awarded attorneys' fees and expenses. ClassMember's (and Sub-Class Members') actual recoveries will be a proportion of the respective NetSettlement Funds determined by that claimant's Recognized Claim as compared to the totalRecognized Claims of all Class Members (or Sub-Class members with respect to the NetSettlement from the Underwriters Settlement) who submit acceptable Proofs of Claim.Depending on the number of claims submitted, whether and when a Class Member or Sub-ClassMember sold those shares, an individual Class (or Sub-Class) Member may receive more or lessthan this average amount. See the Plan of Allocation beginning on page for moreinformation on your Recognized Claim.
Statement of Potential Outcome of Case
The parties disagree on both liability and damages and do not agree on the average amount ofdamages per share, if any, that would be recoverable if plaintiffs were to have prevailed on eachclaim alleged. The Settling Defendants deny (i) any wrongdoing, (ii) that they are liable toPlaintiffs, the Class or the Sub-Class; and (iii) that Plaintiffs, the Class or the Sub-Class havesuffered any damages. The Settling Defendants also contend, among other things, that thedecline in Iridium's Class A common stock that was sold pursuant to the Secondary Offeringwas attributable to the effects of disclosed risks and other adverse business developments and notto any alleged misrepresentation or omission in the Registration Statement or Prospectus, andthat such declines are not their responsibility.
Statement of Attorneys' Fees and Costs Sought
Plaintiffs' Counsel are moving the Court to award attorneys' fees not to exceed one-third(33 %3%) of the Gross Settlement Funds, and for reimbursement of expenses incurred inconnection with the prosecution of this Action in the approximate amount of $1.5 million. Therequested fees and expenses would amount to an average of $0.44 per shares of Iridium Class Acommon stock sold in the January 25, 1999 Secondary Offering with respect to the UnderwritersSettlement. The requested fees and expenses would amount to an average of $0.17 per share,and $1.48 per $1,000 of face amount of debt instruments for all Class Members under theIndividual Defendants' Settlement. Plaintiffs' Counsel have expended considerable time andeffort in the prosecution of this litigation on a contingent-fee basis, and have advanced theexpenses of the litigation, in the expectation that if they were successful in obtaining a recovery
' An allegedly damaged share or debt instrument might have been traded more than once during the ClassPeriod, and the indicated average recovery would be the total for all purchasers of that share.
2 An allegedly damaged share might have been traded more than once during the Class Period, and theindicated average recovery would be the total for all purchasers of that share.
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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.
Further Information
Further information regarding the Action and this Notice may be obtained by contactingPlaintiffs' Co-Lead Counsel: Robert A. Wallner, Esq., Milberg Weiss LLP, One PennsylvaniaPlaza, New York, New York 10119-0165, Telephone (212) 594-5300; or Fred Taylor Isquith,Esq., Wolf Haldenstein Adler Freeman & Herz LLP, 270 Madison Avenue, New York, NewYork 10016, Telephone (212) 545-4600.
Reasons for the Settlement
For Plaintiffs, the principal reason for the Settlements is the cash benefits to be provided to theClass and Sub-Class now. These cash benefits must be compared to the risks that less or norecovery might be achieved from the Individual Defendants or the Underwriter Defendants aftera contested trial and likely appeals, possibly years into the future. Plaintiffs and the Class retaintheir rights to pursue further recoveries from Non-Settling Defendant Motorola Inc. (althoughtheir potential recovery on the claims against the Non-Settling Defendant will be reduced by theamount of the recoveries from the Individual Defendants and the Underwriter Defendants, or bythe Individual Defendants' and the Underwriter Defendants' proportionate responsibility for theclaimed damages as determined at trial.)
For the Settling Defendants, who deny all allegations of wrongdoing or liability whatsoever, theprincipal reason for the Settlement is to eliminate the expense and distraction of the litigation.
[END OF COVER PAGE)
WHAT THIS NOTICE CONTAINS
Table of Contents
Page
SUMMARY NOTICE .....................................................................................................................2
Statement of Plaintiff Recovery ..........................................................................................2
Statement of Potential Outcome of Case .............................................................................3
Statement of Attorneys' Fees and Costs Sought ................................................................. 3
Further Information .............................................................................................................4
Reasons for the Settlement ..................................................................................................4
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BASIC INFORMATION ................................................................................................................7
1. Why did I get this notice package?..............................................................7
2. What is this lawsuit about? .......................................................................... 8
3. Why is this a class action? ...........................................................................8
4. Why is there a settlement? ...........................................................................9
WHO ARE IN THE SETTLEMENTS ............................................................................................9
5. How do I know if I am part of the settlements? ..........................................9
6. Are there exceptions to being included? .................................................... 10
7. What if I am still not sure if I am included? .............................................. 10
THE SETTLEMENTS BENEFITS - WHAT YOU GET ..........................................................10
8. What do the settlements provide? .............................................................. 10
9. How much will my payment be? ...............................................................11
HOW YOU GET A PAYMENT - SUBMITTING A PROOF OF CLAIM FORM ..................11
10. How can I get a payment? .........................................................................11
11. When would I get my payment? ................................................................12
12. What am I giving up to get a payment? ..................................................... 12
NO FURTHER EXCLUSION FROM THE CLASS OR SUB-CLASS ....................................... 14
13. Can I exclude myself from the Sub-Class now?........................................ 14
14. If I previously excluded myself, can I get money from theproposed settlement? .................................................................................15
THE LAWYERS REPRESENTING YOU ...................................................................................15
15. Do I have a lawyer in this case? ................................................................15
16. How will the lawyers be paid? ..................................................................15
OBJECTING TO THE SETTLEMENTS .....................................................................................16
17. How do I tell the Court that I do not like either or both of theproposed settlements ? ................................................................................16
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THE COURT'S SETTLEMENT FAIRNESS HEARING ............................................................ 17
18. When and where will the Court decide whether to approve theproposed settlements? ................................................................................17
19. Do I have to come to the hearing? ............................................................. 18
20. May I speak at the hearing? .......................................................................18
IF YOU DO NOTHING ................................................................................................................19
21. What happens if I do nothing at all? .......................................................... 19
GETTING MORE INFORMATION ............................................................................................19
22. Are there more details about the proposed settlements? ........................... 19
23. How do I get more information? ............................................................... 19
PLAN OF ALLOCATION OF NET SETTLEMENT FUNDS AMONG CLASS ANDSUB-CLASS MEMBERS .................................................................................................19
SPECIAL NOTICE TO SECURITIES BROKERS AND OTHER NOMINEES ........................26
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BASIC INFORMATION
1. Why did I get this notice package?
You or someone in your family may have purchased Iridium Class A common stock, and/orpurchased call options on Iridium Class A common stock, and/or sold put options on IridiumClass A common stock, during the period from September 8, 1998 to May 13, 1999, inclusive,
and been damaged thereby. If so, you may be a Class Member. If you purchased Iridium ClassA common stock pursuant to, or traceable to, a Registration Statement filed by Iridium on orabout October 13, 1998, amended on November 13, 1998 and that became effective on or aboutJanuary 25, 1999, and were damaged thereby, then you may also be a Sub-Class Member.
The Court directed that this Notice of Settlement be sent to all Class members because they havea right to know about proposed partial settlements of this class action lawsuit, and about all oftheir options, before the Court decides whether to approve the Settlement with the IndividualDefendants and/or the Settlement with the Underwriter Defendants. If the Court approves one orboth Settlements, and after any objections and appeals are resolved, an administrator appointedby the Court will make the payments that the Settlement(s) allow.
This package explains the lawsuit, the Settlements, Class and Sub-Class Members' 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 District of Columbia,and the case is known as Freeland, et al v. Iridium World Communications, Ltd. et al. This casewas assigned to Judge Nanette K. Laughrey of the U.S. District Court for Western District ofMissouri, sitting by designation for the U.S. District Court for the District of Columbia.
The people who sued, Richard Ackerman, Richard Mandelbaum, Antonio Planos, RobertPredaina, Remy's Ltd., John Sekas and Weda Developers, Inc., are called Plaintiffs.
The people who they sued, Motorola Inc. (the "Non-Settling Defendant"); Edward Staiano, theformer Vice-Chairman and Chief Executive Officer of Iridium LLC and Iridium Operating andformer Chairman and Chief Executive Officer of Iridium World; Roy Grant, former VicePresident and Chief Financial Officer of Iridium LLC and Iridium World (the "IndividualDefendants"); and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Goldman, Sachs & Co.,NationsBanc Montgomery Securities, LLC, Salomon Smith Barney, Inc., and SoundViewTechnology Group, Inc. (the "Underwriter Defendants"), are collectively referred to as the"Defendants." The Individual Defendants and Underwriter Defendants are sometimes called the"Settling Defendants." Iridium is not a named defendant because it is shielded from ongoinglitigation by the stay of litigation afforded to debtors under the United States Bankruptcy Code.
The proposed Settlements will settle all of Plaintiffs' and all Class Members' Released Claimsagainst the Individual Defendants (as defined below in response 12) and all of PlaintiffMandelbaum's and the Sub-Class's Released Claims against the Underwriter Defendants (asdefined below in response 12).
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The Stipulations do not settle or release any claims of the Plaintiffs or any Class Member asagainst Motorola, Inc.
2. What is this lawsuit about?
This case involves the construction, operation, and financing of a global satellite
communications system (the "Iridium System"). The Iridium System was conceived andconstructed to revolutionize the communications industry by providing wireless telephone
service anywhere in the world. The Iridium System ended in bankruptcy and worthless
securities.
All the Plaintiffs seek to recover damages sustained by members of the Class from the Non-Underwriter Defendants as a result of alleged violations of Sections 10(b) and 20(a) of theSecurities Exchange Act of 1934 (the "Exchange Act") and Rule 1 Ob-5 promulgated thereunderby the Securities and Exchange Commission with respect to misstatements made in Iridium'sfinancial statements and press releases made during the Class Period.
Plaintiff Richard Mandelbaum also seeks to recover damages sustained by members of the Sub-Class from the Individual Defendants and Underwriter Defendants under Sections 11, 12(a)(2)and 15 of the Securities Act of 1933 (the "Securities Act") with respect to alleged misstatementsand omissions made in a Registration Statement and Prospectus used to sell 7.5 million shares ofIridium Class A common stock in a secondary offering that became effective on or about January25, 1999.
Plaintiffs allege that the Defendants made a series of materially false and misleading statementsand omissions concerning, among other things, the commercial viability of the Iridium system,the testing of the Iridium system, technical problems concerning the Iridium system, its hardwareand software and Iridium's ability to meet required subscriber and revenue covenants, all ofwhich artificially inflated the value of Iridium's stock.
All the Defendants deny all allegations of misconduct contained in the Complaint, deny anyliability to the Class or Sub-Class, and deny having engaged in any wrongdoing whatsoever.
3. Why is this a class action?
In a class action, one or more people, called class representatives, sue on behalf of people whohave similar claims. All these people are a class or class members. Bringing a case, such as thisone, as a class action allows adjudication of many similar claims of persons and entities thatmight be economically too small to bring in individual actions. One court resolves the issues forall class members, except for those who exclude themselves from the class.
The members of the Class in this Action (including all Sub-Class Members) have similar claimsunder the Exchange Act against Motorola and the Individual Defendants, but not against the
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Underwriter Defendants.. In this case, there is also a Sub-Class of members of the Class who, inaddition to the Exchange Act claims against Motorola and the Individual Defendants, also haveSecurities Act claims against the Individual Defendants and Underwriter Defendants.
4. Why is there a settlement?
Although the Court has denied Defendants' motion to dismiss the Complaint, and denied in partand granted in part the Underwriter Defendants' motion for summary judgment, and deniedPlaintiffs' motion for partial summary judgment as against defendant Motorola, the Court has notdecided the merits of all the claims or defenses of Plaintiffs or Defendants.
The litigation has been proceeding towards trial. The trial is scheduled to commence on or about[May _, 2008.] The Individual Defendants and Plaintiffs, on behalf of the Class, have agreedto a settlement, subject to approval by the Court, after notice to the Class. The UnderwriterDefendants and Plaintiff Mandelbaum, on behalf of the Sub-Class, have agreed to a settlement,subject to approval by the Court, after notice to the Sub-Class. That way, they avoid the risks,costs and distraction of a trial, and, from the Plaintiffs perspective, the people affected will getcompensation. The Class and Sub-Class representatives and their attorneys think the proposedSettlements are best for all Class and Sub-Class Members.
WHO IS PART OF THE SETTLEMENTS?
To see if you will get money from the Settlements, you first have to decide if you are a ClassMember. If you are a Class Member, you may also be a Sub-Class Member.
5. How do I know if I am part of the settlements?
The Class includes all persons or entities who purchased Iridium securities, purchased calloptions, and/or sold Iridium put options during the period from September 8, 1998 to May 13,1999, inclusive (the "Class Period") and who suffered damages thereby. If you purchasedIridium shares or call options, or sold Iridium put options during the Class Period, and you weredamaged thereby, then unless you are excluded, you are a member of the Class and mayparticipate in the Individual Defendants' Settlement.
The Sub-Class includes all Class members who purchased Iridium Class A common stockpursuant to, or traceable to, a Registration Statement filed by Iridium on or about October 13,1998 and amended November 13, 1998 and who suffered damages thereby. The RegistrationStatement became effective, and the Iridium Class A common stock shares were sold at $33.50per share on or about January 25, 1999. If you purchased your shares in that SecondaryOffering, or can trace the shares you purchased to that Secondary Offering, and you weredamaged thereby, then unless you are excluded, you are a member of the Sub-Class and mayalso participate in the Underwriters' Settlement.
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6. Are there exceptions to being included?
Excluded from the Class and Sub-Class are Defendants, the officers and directors of Iridium andMotorola, Inc. ("Motorola"), members of their immediate families and their legalrepresentatives, heirs, successors and assigns, and any entity in which any of the Defendantshave or had a controlling interest. Also excluded are the persons who previously requestedexclusion from the Class and Sub-Class pursuant to the Notice of Pendency, described below.
A prior notice of the pendency of this Action ("Notice of Pendency") was mailed to ClassMembers beginning on May 19, 2006 and a summary notice was published in the nationaledition of The Wall Street Journal on May 24, 2006. If you submitted a request for exclusion inresponse to the prior Notice of Pendency, then you are excluded from the Class and Sub-Classand may not submit a Proof of Claim form to participate in the Settlements, nor may you objectto the Settlements.
If one of your mutual funds purchased Iridium shares (whether or not pursuant to, or traceable to,the Registration Statement filed by Iridium on or about October 13, 1998) or purchased calloptions or other Iridium securities, or sold Iridium put options during the Class Period, that alonedoes not make you a Class Member. You are a Class Member and/or Sub-Class Member only ifyou directly purchased Iridium shares, purchased Iridium call options or other Iridium securities,or sold Iridium put options during the Class Period. Check your investment records or contactyour broker to see if you purchased such Iridium Class A Common Stock, call options onIridium common stock or sold put options on Iridium common stock.
If you sold Iridium Class A common stock, sold call options on Iridium common stock, orpurchased put options on Iridium common stock, that alone does not make you a Class or Sub-Class Member.
7. What if I am still not sure if I am included?
If you are still not sure whether you are included, you can ask for free help. You can call 1-866-825-2465 or visit www.gardencitygroup.com for more information . Or you can fill out andreturn the Proof of Claim form described on page L], in question 10, to see if you qualify.
THE SETTLEMENTS BENEFITS - WHAT YOU GET
8. What do the settlements provide?
In exchange for the Settlement and dismissal of the Action as against the Individual Defendants,the Individual Defendants have agreed to create a $14.85 million fund to be divided, after feesand expenses, among all Class Members who send in a valid Proof of Claim form.
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In exchange for the Settlement and dismissal of the Action as against the UnderwriterDefendants, the Underwriter Defendants have agreed to create an $8.25 million fund to bedivided, after fees and expenses, among all Sub-Class Members who send in a valid Proof ofClaim form.
9. How much will my payment be?
If you are a member of the Class, your share of the fund from the Individual Defendants'Settlement will depend on the total Recognized Claims represented by the valid Proof of Claimforms that Class Members send in, how many shares of Iridium Class A common stock and/orcall options on Iridium common stock you bought during the Class Period, and/or how many putoptions on Iridium common stock you sold during the Class Period, how much you paid orreceived for them, and when you bought or sold, and whether you still owned them at and afterthe end of the Class Period.
If you are a member of the Sub-Class, your share of the fund from the Underwriters' Settlementwill depend on the total Recognized Claims represented by the valid Proof of Claim forms thatSub-Class Members send in, how many shares of Iridium Class A common stock you bought onor traceable to the Registration Statement that became effective on or about January 25, 1999,how much you paid for them, and whether or when you sold them, and if so for how much yousold them.
You can calculate your Recognized Claim in accordance with the formula shown below in thePlan of Allocation. It is unlikely that you will get a payment for all of your Recognized Claim.After all Class Members have sent in their Proof of Claim forms, the payment you get will bepart of the Net Settlement Fund from the Individual Defendants Settlement equal to yourRecognized Claim divided by the total of everyone's Recognized Claims, and, if you are also aSub-Class member, the additional payment you get will be that part of the Net Settlement Fundfrom the Underwriter Defendants Settlement equal to your Recognized Claim from purchases ofshares of Iridium Class A common stock you bought on or traceable to the RegistrationStatement, divided by the total of everyone's Recognized Claims from shares of Iridium Class Acommon stock purchased on or traceable to the Registration Statement. See the Plan ofAllocation beginning on page [] for more information on your Recognized Claim.
HOW YOU GET A PAYMENT - SUBMITTING A PROOF OF CLAIM FORM
10. How can I get a payment?
To qualify for a payment, you must send in a Proof of Claim form. A Proof of Claim form isbeing circulated with this Notice of Settlement. You may also get a Proof of Claim form on theInternet at www.gardencitygroup.com. Read the instructions carefully, fill out the Proof of
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Claim form, include all the documents the form asks for, sign it, and mail it postmarked no laterthan , 2008.
11. When would I get my payment?
The Court will hold a hearing on , 2008 , to decide whether to approve theSettlements. If the Court approves one or both of the Settlements after that, there may beappeals. It is always uncertain whether these appeals can be resolved, and resolving them cantake time, perhaps more than a year. It also takes time for all the Proofs of Claim to beprocessed. Please be patient.
12. What am I giving up to get a payment?
Upon the "Effective Date" of the Individual Defendants Settlement, Class Members will releaseall "Released Claims" against the "Released Parties" (as those terms are defined in theIndividual Defendants Settlement). Upon the "Effective Date" of the Underwriters DefendantsSettlement, Sub-Class Members will release all "Released Claims" against the "ReleasedParties" (as those terms are defined in the Underwriters Settlement).
As defined in the Individual Defendants Settlement, "Released Claims" collectively means andincludes any and all claims or causes of action, including "Unknown Claims" (as defined below),debts, suits, rights of action, dues, sums of money, accounts, bonds, bills, covenants, contracts,controversies, agreements, promises, judgments, variances, executions, obligations, demands,rights, liabilities, damages, losses, fees, and costs of any kind, nature and/or descriptionwhatsoever, matured or un-matured, liquidated or un-liquidated, accrued or un-accrued, knownor unknown, suspected or unsuspected, contingent or non-contingent, whether or not asserted,threatened, alleged or litigated, at law, equity or otherwise, including, without limitation, claimsfor contribution or indemnification, claims for costs, expenses (including, without limitation,amounts paid in settlement) and attorneys' fees, claims for negligence, gross negligence, breachof duty of care and/or breach of duty of loyalty, misrepresentation, fraud, breach of fiduciaryduty, or violations of any federal, state or local statutes, common law, rules or regulations, thatnow exist or heretofore existed, whether class or individual in nature, that have been or couldhave been asserted in the Action or any other forum against the Released Parties, whetherdirectly, indirectly, representatively, derivatively or in any other capacity, which arise out of, arebased upon, relate to, or are in connection with: (i) the claims, facts or circumstances asserted inthis Action; or (ii) the purchase or sale of Iridium World Communications Ltd. ("Iridium") ClassA common stock, the purchase or sale of call options on Iridium Class A common stock, and/orthe purchase or sale of put options on Iridium Class A common stock, during the periodSeptember 8, 1998 to May 13, 1999, inclusive, or (iii) this Settlement or the entry into it, exceptfor any claimed breach of this Settlement. "Released Claims" does not mean or include claimsagainst Motorola or the Underwriter Defendants.
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As defined in the Individual Defendants Settlement, "Released Parties" means the IndividualDefendants, and the legal representatives, heirs, successors in interest or assigns of the IndividualDefendants. "Released Parties" does not include Motorola or all of the Underwriter Defendants.
As defined in the Underwriters Settlement, "Released Claims" collectively means and includesany and all claims or causes of action, including "Unknown Claims"(as defined below), debts,suits, rights of action, dues, sums of money, accounts, bonds, bills, covenants, contracts,controversies, agreements, promises, judgments, variances, executions, obligations, demands,rights, liabilities, damages, losses, fees, and costs of any kind, nature and/or descriptionwhatsoever, matured or un-matured, liquidated or un-liquidated, accrued or un-accrued, knownor unknown, suspected or unsuspected, contingent or non-contingent, whether or not asserted,threatened, alleged or litigated, at law, equity or otherwise, including, without limitation, claimsfor contribution or indemnification, claims for costs, expenses (including, without limitation,amounts paid in settlement) and attorneys' fees, claims for negligence, gross negligence, breachof duty of care and/or breach of duty of loyalty, misrepresentation, fraud, breach of fiduciaryduty, or violations of any federal, state or local statutes, common law, rules or regulations, thatnow exist or heretofore existed, that have been or could have been asserted in the Action or anyother forum against the Released Parties, whether directly, indirectly, representatively,derivatively or in any other capacity, which arise out of, are based upon or relate to, or are inconnection with (i) the claims or facts and circumstances asserted in the Action; or (ii) thepurchase or sale or other acquisition or disposition or holding of Class A common stock ofIridium World Communications Ltd during the Class Period, pursuant to, or traceable to, theRegistration Statement; or (iii) this Settlement or the entry into it, except for breach of thisSettlement. "Released Claims" does not mean or include claims against Motorola or theIndividual Defendants.
As defined in the Underwriters Settlement, "Released Parties" means any and all of theUnderwriter Defendants, and all of the following in their capacities as such to the UnderwriterDefendants: the Underwriter Defendants' past or present subsidiaries, parents, divisions,affiliates, successors, predecessors, assigns, heirs, and their respective officers, directors,managing directors, agents, advisors, employees, attorneys, members, partners, principals,trustees, consultants, insurers and agents of each of them, and any person, firm, trust,corporation, officer, director or other individual or entity in which any Underwriter Defendanthas a controlling interest or which is related to or affiliated with any of the UnderwriterDefendants. Without in any way limiting this definition, Released Parties specifically includeBank of America, N.A. and Bank of America Securities LLC (successors to NationsBancMontgomery Securities, LLC); The Charles Schwab Corporation and Charles Schwab & Co. Inc.(successors to SoundView Technology Group, Inc.); The Goldman Sachs Group, Inc.; CitigroupGlobal Markets Inc. (successor to Salomon Smith Barney, Inc.); and their respective subsidiariesand affiliates. "Released Parties" does not include Motorola or the Individual Defendants.
"Unknown Claims" means any and all Released Claims which Plaintiffs or any Class Member orSub-Class Member do not know or suspect to exist in his, her or its favor at the time of therelease of the Released Parties, and any Individual Defendants' Claims or UnderwriterDefendants' Claims which any Settling Defendant does not know or suspect to exist in his, her orits favor, which if known by Plaintiffs or any Class Member or Sub-Class Member, or anySettling Defendants might have affected his, her or its decision(s) with respect to the Settlement.
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With respect to any and all Released Claims, Individual Defendants' Claims and UnderwriterDefendants' Claims, the parties stipulate and agree that upon the Effective Date, Plaintiffs andthe Settling Defendants shall expressly waive, and each Class Member and Sub-Class Membershall be deemed to have waived, and by operation of the Judgment shall have expressly waived,any and all provisions, rights and benefits conferred by any law of any state or territory of theUnited 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 thecreditor does not know or suspect to exist in his or her favor at thetime of executing the release, which if known by him or her musthave materially affected his or her settlement with the debtor.
Plaintiffs and Settling Defendants acknowledge, and all Class Members and Sub-Class Membersby operation of law shall be deemed to have acknowledged, that the inclusion of "UnknownClaims" in the definition of Released Claims and Individual Defendants' Claims andUnderwriter Defendants' Claims was separately bargained for and was a key element of theSettlement.
The "Effective Date" will occur when an Order entered by the Court approving the Settlementbecomes final and not subject to appeal.
NO FURTHER EXCLUSION FROM THE CLASS OR SUB-CLASS
The Court previously certified this litigation to proceed as a class action. As described in theprior Notice of Pendency and the prior summary notice, Class and Sub-Class Members wereprovided the opportunity, until August 1, 2006, to elect either to exclude themselves from theClass for all purposes or to remain as members of the Class and Sub-Class and be bound by theseproceedings. The Settlement does not provide for any new right to be excluded from the ClassOR Sub-Class. If the Settlement is approved, it will be binding on all Class Members and allSub-Class Members.
The persons and entities who previously requested exclusion from the Class and Sub-Class areexcluded from the Class and Sub-Class for purposes of the Settlements. Class or Sub-ClassMembers who did not request exclusion in response to the Notice of Pendency may not nowrequest exclusion from the Class or Sub-Class.
If you previously submitted a request for exclusion from the Class or Sub-Class in accordancewith the prior Notice of Pendency, then you may not submit a Proof of Claim form to participatein the Settlements herein.
13. Can I exclude myself from the Class or Sub-Class now?
No. Pursuant to the prior Notice of Pendency, Class Members were allowed to request exclusionuntil August 1, 2006. The Settlements do not provide another opportunity to request exclusion.
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As described in question 17 below, Class members may object to the Individual DefendantsSettlement. Sub-Class Members may object to either or both of the Settlements.
14. If I previously excluded myself, can I get money from the proposed settlements?
No. If you previously excluded yourself, you cannot get money from the proposed Settlements.Do not send in a claim form to ask for any money.
THE LAWYERS REPRESENTING YOU
15. Do I have a lawyer in this case?
The Court ordered that the law firms of Wolf Haldenstein Adler Freeman & Herz LLP, MilbergWeiss LLP3, Finkelstein Thompson LLP4, Entwhistle & Cappucci LLP and Beatie & OsbornLLP will represent all members of the Class and Sub-Class. These lawyers are called Plaintiffs'Executive Committee. You will not be separately charged for these lawyers. The Court willdetermine the amount of Plaintiffs' Counsel's fees and expenses, which will be paid from theGross Settlement Fund. If you want to be represented by your own lawyer, you may hire one atyour own expense.
16. How will the lawyers be paid?
Plaintiffs ' Executive Committee are moving the Court to award attorneys' fees from the GrossSettlement Funds in an amount of one-third (33-1/3%) of the Gross Settlement Funds and forreimbursement of their expenses in the approximate amount of $1.5 million , plus interest on suchexpenses at the same rate as may be earned by the Settlement Funds.
Milberg Weiss LLP was formerly known as Milberg Weiss Bershad & Schulman LLP. On May18, 2006 in the United States District Court for the Central District of California (Los Angeles), MilbergWeiss Bershad & Schulman LLP and two of its partners, David J. Bershad and Steven G. Schulman, andothers, were named as defendants in an indictment. The indictment alleged that, in certain casesidentified in the indictment, portions of attorneys' fees awarded to the firm were improperly shared withcertain plaintiffs. Milberg Weiss LLP has pleaded not guilty. The two partners named in the indictmenthave left the firm and have agreed to plead guilty to conspiracy to obstruct justice. On September 20,2007 a superseding indictment was filed which added Melvyn I. Weiss as a named defendant. Mr. Weisshas pleaded not guilty. The indictment does not refer to this action, and makes no allegations of anyimpropriety in the conduct of this action.
Finkelstein Thompson LLP was formerly known as Finkelstein Thompson & Loughran.
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Plaintiffs' Executive Committee reserves the right to move the Court to award a payment to
Plaintiffs for their reasonable costs and expenses (including lost wages) directly relating to
Plaintiffs representation of the Class and Plaintiff Mandelbaum's representation of the Sub-
Class.
Plaintiffs' Executive Committee, without further notice to the Class or Sub-Class, willsubsequently apply to the Court for payment of the Claims Administrator's fees and expenses
incurred in connection with giving notice, administering the Settlements and distributing the
Settlements proceeds to the members of the Class and Sub-Class.
OBJECTING TO THE SETTLEMENT
You can tell the Court that you do not agree with one or both of the Settlements or any parts ofthem.
17. How do I tell the Court that I do not like the proposed Settlements?
If you are a Class Member5 and you did not previously exclude yourself from the Class pursuantto the Notice of Pendency, you can object to the Individual Defendants Settlement or any of itsterms, the proposed Plan of Allocation and/or the application by Plaintiffs' Executive Committeefor an award of fees and expenses. If you are a Sub-Class Member and did not previouslyexclude yourself from the Class (and Sub-Class) pursuant to the Notice of Pendency, you canalso object to the Underwriters Settlement or any of its terms, the proposed Plan of Allocationand/or the application by Plaintiffs' Executive Committee for an award of fees and expenses.Class Members who are not also Sub-Class Members are not affected by the UnderwritersSettlement and therefore cannot object to the Underwriters Settlement.
To object, you may simply write to the Court setting out your objection. You may give reasonswhy you think the Court should not approve the Individual Defendants Settlement's (and if youare also a Sub-Class Member, the Underwriters Settlement's)' terms or arrangements. The Courtwill consider your views if you file a proper objection within the deadline identified, andaccording to the following procedures.
To object to the Individual Defendants Settlement, you must send a signed letter stating that youare a Class Member and that you object to the proposed Individual Defendants Settlements in theFreeland v. Iridium World Communications, Ltd. Securities Litigation. To object to theUnderwriters Settlement, you must send a signed letter stating that you are a Sub-Class Memberand that you object to the proposed Underwriters Settlements in the Freeland v. Iridium WorldCommunications, Ltd. Securities Litigation. Either way, the letter must include your name,address, telephone number, and your signature, show that during the Class Period you purchased
5 Sub-Class Members are also Class Members and have the same rights to object as otherClass Members.
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Iridium Class A common stock or call options on Iridium common stock, or sold put options onIridium common stock, (and, in the case of any objection to the Underwriters Settlement, showthat you bought Iridium Class A Common Stock on or traceable to the Secondary Offering) andstate the reasons why you object to the Settlement(s). Your objection must be filed with theCourt and served on all the following counsel on or before , 2008:
COURT PLAINTIFFS' CO-LEADCOUNSEL
SETTLINGDEFENDANTS'COUNSEL
Office of the Clerk of CourtUnited States District Courtfor the District of Columbia1225 E. Barrett PrettymanUnited States Courthouse333 Constitution Ave., N.W.Washington, DC 20001
Robert A. Wallner, Esq.,Milberg Weiss LLPOne Pennsylvania PlazaNew York, NY 10119
or
Fred Taylor Isquith, Esq.Wolf Haldenstein AdlerFreeman & Herz LLP270 Madison AvenueNew York, NY 10016
James B. Weidner, Esq.James F. Moyle, Esq.Clifford Chance US LLP31 West 52nd StreetNew York, NY 10019
Daryl A. Libow, Esq.Thomas R. Leuba, Esq.Sullivan & Cromwell LLP1701 Pennsylvania Ave. N.W.Washington, D.C. 20006
You do not need to go to the Settlement Fairness Hearing to have your written objectionconsidered by the Court. At the Settlement Fairness Hearing, any Class Member who has notpreviously submitted a request for exclusion from the Class and who has complied with theprocedures set out in this question 17 and question 20 below for filing with the Court andproviding to the counsel for Plaintiffs and Defendants a statement of an intention to appear at theSettlement Fairness Hearing may also appear and be heard, to the extent allowed by the Court, tostate any objection to either or both of the Settlements, the Plan of Allocation or Plaintiffs'Executive Committee's motion for an award of attorneys' fees and reimbursement of expenses.Any such objector may appear in person or arrange, at that objector's expense, for a lawyer torepresent the objector at the Hearing.
THE COURT'S SETTLEMENT FAIRNESS HEARING
The Court will hold a hearing to decide whether to approve the proposed Settlements. You mayattend and you may ask to speak, but you do not have to.
18. When and where will the Court decide whether to approve the proposed settlements?
The Court will hold a Settlement Fairness Hearing at _: _.m. on day,, 2008, at the United States District Court for the District of Columbia
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1225 E. Barrett Prettyman United States Courthouse, 333 Constitution Avenue, N.W.,Washington, DC 20001. At this hearing the Court will consider whether the Settlements are fair,reasonable and adequate. At the Settlement Fairness Hearing, the Court also will consider theproposed Plan of Allocation for the proceeds of the Settlements and the application of Plaintiffs'Executive Committee for attorneys' fees and reimbursement of expenses. The Court will takeinto consideration any written objections filed in accordance with the instructions at question 17.The Court also may listen to people who have properly indicated, within the deadline identifiedabove, an intention to speak at the hearing; but decisions regarding the conduct of the hearingwill be made by the Court. See question 20 for more information about speaking at the hearing.The Court may also decide how much to pay to Plaintiffs' Counsel. After the hearing, the Courtwill decide whether to approve the Settlements. We do not know how long these decisions willtake.
You should be aware that the Court may change the date and time of the Settlement FairnessHearing. Thus, if you want to come to the hearing, you should check with Plaintiffs' Co-LeadCounsel before coming to be sure that the date and/or time has not changed.
19. Do I have to come to the hearing?
No. Plaintiffs' Counsel will answer questions the Court may have. But, you are welcome tocome at your own expense. If you send an objection, you do not have to come to Court to talkabout it. As long as you filed your written objection on time, the Court will consider it. Youmay also pay your own lawyer to attend, but it is not necessary. Class and Sub-Class Membersdo not need to appear at the hearing or take any other action to indicate their approval.
20. May I speak at the hearing?
If you object to one or both of the Settlements, you may ask the Court for permission to speak atthe Settlement Fairness Hearing. To do so, you must include with your objection (see question17 above) a statement stating that it is your "Notice of Intention to Appear in the Freeland vs.Iridium Securities Litigation, Civil Actions Nos. 99-1002 et al (Consolidated) (NKL)" Personswho intend to object to one or both of the Settlements, the Plan of Allocation, and/or counsel'sapplication for an award of attorneys' fees and expenses and desire to present evidence at theSettlement Fairness Hearing must include in their written objections the identity of any witnessesthey may call to testify and exhibits they intend to introduce into evidence at the SettlementFairness Hearing. Unless otherwise ordered by the Court, you cannot speak at the hearing if youexcluded yourself from the Class or if you have not provided written notice of your intention tospeak at the Settlement Fairness Hearing by the deadline identified, and in accordance with theprocedures described in question 17 above.
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IF YOU DO NOTHING
21. What happens if I do nothing at all?
If you are a Class Member or a Sub-Class Member and do nothing, you will get no money fromthe Settlements and you will be precluded from starting a lawsuit, continuing with a lawsuit, orbeing part of any other lawsuit against the Settling Defendants and the other Released Partiesabout the Released Claims in this case, ever again. To share in the Net Settlement Fund youmust submit a Proof of Claim form (see question 10).
GETTING MORE INFORMATION
22. Are there more details about the proposed settlements?
This notice summarizes the proposed Settlements. More details are in the Stipulation andAgreement of Settlement with the Individual Defendants dated January , 2008 and theStipulation and Agreement of Settlement with the Underwriter Defendants dated January _,2008 "Stipulations"). You can get a copy of the Stipulations by writing to Robert A. Wallner,Esq., Milberg Weiss LLP, One Pennsylvania Plaza, New York, NY 10119-0165, or Fred TaylorIsquith, Esq., Wolf Haldenstein Adler Freeman & Herz LLP, 270 Madison Avenue, New York,New York 10016, or by visiting www.gardencilygroup.com.
You also can call the Claims Administrator at 1-866-825-2465 toll free; write to Iridium ClassSettlement, P.O. Box 9000 #6401,Merrick, NY 11566-9000, or visit the website atwww.gardencitygroup.com, where you will find answers to common questions about thesettlement, a Proof of Claim form, plus other information to help you determine whether you area Class or Sub-Class Member and whether you are eligible for a payment.
23. How do I get more information?
For even more detailed information concerning the matters involved in this Action, reference ismade to the pleadings, to the Stipulations, to the Orders entered by the Court and to the otherpapers filed in the Action, which may be inspected at the Office of the Clerk of Court UnitedStates District Court for the District of Columbia, 1225 E. Barrett Prettyman United StatesCourthouse, 333 Constitution Avenue, N.W., Washington, DC 20001during regular businesshours.
PLAN OF ALLOCATION OF NET SETTLEMENT FUNDS
PLAN FOR INDIVIDUAL DEFENDANTS SETTLEMENT FUND DISTRIBUTION TOCLASS MEMBERS
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The $14,850,000 Individual Defendants Settlement Amount and any interest earned thereon shallbe the Gross Individual Defendants Settlement Fund. The Gross Individual DefendantsSettlement Fund, less all applicable taxes, approved costs, fees and expenses (the "Net IndividualDefendants Settlement Fund") shall be distributed to members of the Class who submitacceptable Proofs of Claim ("Authorized Claimants").
The Claims Administrator shall determine each Authorized Claimant's pro rata share of the NetIndividual Defendants Settlement Fund based upon each Authorized Claimant's "RecognizedClaim - Individual Defendants." The Recognized Claim formula is not intended to be anestimate of the amount of what a Class Member might have been able to recover after a trial; noris it an estimate of the amount that will be paid to Authorized Claimants pursuant to theIndividual Defendants Settlement. The Recognized Claim - Individual Defendants formula is thebasis upon which the Net Individual Defendants Settlement Fund will be proportionatelyallocated to the Authorized Claimants.
The following proposed Plan of Allocation for the Net Individual Defendants Settlement Fundreflects Plaintiffs' allegations that the price of Iridium's common stock was inflated artificiallyby reason of allegedly false and misleading statements made by Defendants during the ClassPeriod. Plaintiffs' Damage Expert's analysis states that the price of Iridium's common stock wasinflated by the following amounts for the periods indicated:
Time Period Inflation
September 18, 1998 through February 18, 1999 $11.72 per share
February 19, 1999 through March 28, 1999 $7.78 per share
March 29, 1999 through April 21, 1999 $5.59 per share
April 22, 1999 through May 13, 1999 $3.67 per share
The Recognized Claim is limited to no more than the out-of-pocket loss actually incurred on thepurchase and sale of the stock including any sales through August 11, 1999 (90 days after theMay 13, 1999 end of the Class Period)
Common Stock Purchases
1. No claim will be recognized for any shares of Iridium common stock purchased duringthe Class Period that were not held as of the close of trading on at least one of the followingdates: February 18, 1999, March 28, 1999, April 21, 1999 or May 13, 1999.
2. For shares of Iridium common stock purchased during the Class Period and sold at a losson or before August 11, 1999, "Recognized Claims" will be calculated for purposes of theSettlement as the lesser of (a) the Inflation per share on the Date of Purchase, less the Inflationper share on the date of sale, or (b) the purchase price paid (including commissions, etc.) less thesales proceeds received (net of commissions, etc.)
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3. For shares of Iridium common stock purchased during the Class Period and still held atthe close of trading on s August 11, 1999, "Recognized Claims" will be calculated for purposesof the Settlement as the Inflation per share on the Date of Purchase.
Recognized Claimsfrom Option Trading
Call Option Purchases
1. No claim will be recognized for any Iridium Call Option purchased during the ClassPeriod that were not open and unexpired positions as of the close of trading on at least one of thefollowingdates: February 18. 1999, March 28, 1999, April 21, 1999 or May 13, 1999.
2. The following chart indicates the maximum amount of Recognized Claim that will beallowed (per share covered by an eligible Call Option)
Maximum Recognized Claims from Call Option Purchases During the Class PeriodFor Call (still) Held at (still) Held at (still) Held at (still) Held atoptions the close of the close of the close of the close ofpurchased trading on trading on trading on April trading on Mayduring the February 18, March 28, 1999 21, 1999 13, 1999Period shown 1999 (per share) (per share) (per share)below: (per share)
9/18/1998 $1.97 $3.065 $4.025 $5.86through2/18/1999
2/19/1999 N/A $1.095 $2.055 $3.89through3/28/1999
3/29/1999 N/A N/A $0.96 $2.795through4/21/1999
4/22/1999 N/A N/A N/A $2.835through5/131999
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3. For Iridium Call Options purchased during the Class Period an Authorized Claimant's"Recognized Claim" shall be the lesser of. (a) 50%6of the difference, if a loss, between (x) theamount paid for the call options during the Class Period (including brokerage commissions andtransaction charges)(the "PPP") and (y) the sum for which said call options were subsequentlysold at a loss (after brokerage commissions and transaction charges)(or less $0.00 if the Call
Option expired while still owned by the Authorized Claimant) (the "SPR"); or (b) the MaximumRecognized Claims from Call Option Purchases During the Class Period as indicated in theabove chart.
4. No loss shall be Recognized based on a purchase of any Put Option that was previouslysold by the Claimant.
NOTE: Shares of Iridium acquired during the Class Period through the exercise of a Call Optionshall be treated as a purchase on the date of exercise for the exercise price plus one-half of thecost of the call option , and any Recognized Claim arising from such transaction shall becomputed as provided for other purchases of common stock.
Put Option Sales (Writings):
1. No claim will be recognized for any Iridium Put Options sold (written) during the ClassPeriod that were not the unexpired liability obligation of the claimant as of the close of tradingon February 18, 1999, March 28, 1999, April 21, 1999 or May 13, 1999.
2. The following chart indicates the maximum amount of Recognized Claim that will beallowed (per common share covered by an eligible Put Option) for Put Options sold (written)during the Class Period:
Maximum Recognized Claims from Selling (Writing) Put Options During the ClassPeriod
For Put Options AND still the AND still the AND still the AND still thesold (written) liability of the liability of the liability of the liability of theduring the seller at the seller at the seller at the seller at thePeriod shown close of trading close of trading close of trading close of tradingbelow: on Feb. 18, on March 28, on April 21, on May 13,
1999 (per 1999 (per 1999 (per 1999 (pershare). share). share). share).
September 18, $3.94 $6.13 $8.05 $11.721998 throughFebruary 18,1999
6 This discount reflects the fact that a purchase of a Call option includes the payment of atime premium.
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February 19, N/A $2.19 $4.11 $7.781999 throughMarch 28, 1999
March 29, 1999 N/A N/A $1.92 $5.59through April21, 1999
April 22, 1999 N/A N/A N/A $3.67through May13, 1999
3. For Iridium Put Options sold (written) during the Class Period an Authorized Claimant's"Recognized Claim" shall be the lesser of (a) the difference, if a loss, between (x) the amountreceived for writing the put options during the Class Period (net of brokerage commissions andtransaction charges) (the "SPR") and (y) the sum for which said put options were re-purchased ata loss? (including brokerage commissions and transaction charges) (the "PPP"); or (b) MaximumRecognized Claims from Selling (Writing) Put Options During the Class Period as indicated inthe above chart.
4. No loss shall be Recognized based on a sale of any Put Option that was previouslypurchased by the Claimant.
NOTE : For Iridium Put Options written during the Class Period that were "put" to theAuthorized Claimant (i.e. exercised) , the Authorized Claimant's "Recognized Claim" shall becalculated as a purchase of common stock as shown above, and as if the sale of the Put Optionwere instead a purchase of Iridium common stock on the date of the sale of the Put Option, andthe "purchase price paid" shall be the strike price less the proceeds received on the sale of the PutOption.
Iridium Debt Securities
Based on available price data for Iridium bonds during the relevant period, and on Plaintiffs'Damage Expert's analysis of artificial inflation the price of Iridium's common stock during theClass Period, Plaintiffs assert that the prices of Iridium's debt securities were inflated by thefollowing amounts for the periods indicated:
Time Period Inflation
For Iridium put options sold (written) during the Class Period that expired unexercised,an Authorized Claimant's "Recognized Claim" shall be $0.00.
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September 18, 1998 through February 18, 1999 $40 per $100 of face value
February 19, 1999 through March 28, 1999 $40 per $100 of face value
March 29, 1999 through April 21, 1999 $30 per $100 of face value
April 22, 1999 through May 13, 1999 $25 per $100 of face value
2. No claim will be recognized for Iridium debt securities purchased during the Class Periodthat were not owned as of the close of trading on at least one of the following dates: February 18,1999, March 28, 1999, April 21, 1999 or May 13, 1999.
3. For other Iridium debt securities purchased during the Class Period and sold at a loss onor before August 11, 1999, "Recognized Claims" will be calculated for purposes of theSettlement as the lesser of (a) the Inflation per $100 of face value on the Date of Purchase, lessthe Inflation per $100 of face value on the date of sale, or (b) the purchase price paid (includingcommissions , etc.) less the sales proceeds received (net of commissions, etc.)
3. For other Iridium securities purchased during the Class Period and still held at the closeof trading on August 11, 1999, "Recognized Claims" will be calculated for purposes of theSettlement as the lesser of (a) the Inflation per $100 of face value on the Date of Purchase, or (b)the purchase price paid (including commissions, etc.) less the sales proceeds received (net ofcommissions, etc.) whenever sold, or if not sold, less any value received or to be received fromIridium's bankruptcy estate on such Iridium debt securities.
PLAN FOR UNDERWRITERS SETTLEMENT FUND DISTRIBUTRION TO SUB-CLASS MEMBERS
The $8,250,000 Underwriters Settlement Amount and any interest earned thereon shall be theGross Underwriters Settlement Fund. The Gross Underwriters Settlement Fund, less allapplicable taxes, approved costs, fees and expenses (the "Net Underwriters Settlement Fund")shall be distributed to members of the Sub-Class who submit acceptable Proofs of Claim("Authorized Sub-Class Claimants").
The Claims Administrator shall determine each Authorized Sub-Class Claimant's pro rata shareof the Net Underwriters Settlement Fund based upon each Authorized Sub-Class Claimant's"Recognized Claim - Underwriters." The Recognized Claim formula is not intended to be anestimate of the amount of what a Sub-Class Member might have been able to recover after atrial; nor is it an estimate of the amount that will be paid to Authorized Sub-Class Claimantspursuant to the Settlement. The Recognized Claim formula is the basis upon which the NetUnderwriters Settlement Fund will be proportionately allocated to the Authorized Sub-ClassClaimants.
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For shares of Iridium Class A common stock purchased on or traceable to the January 25, 1999Secondary Offering, an Authorized Sub-Class Claimant's "Recognized Claim - Underwriters"shall mean:
A) If the shares were sold at a loss on or before April 22, 1999 (the date when suit wascommenced), the difference, if a loss, between the $33.50 per share offering price, and the pricefor which such shares were sold (net of commissions, taxes and fees, etc.).
B) If the shares were sold at a loss after April 22, 1999 (the date when suit was commenced),the lesser of (a) the difference, if a loss, between the $33.50 per share offering price, and theprice for which such shares were sold (net of commissions, taxes and fees, etc.), or (b) $16.44per share (the difference between the $33.50 per share offering price and $17.06 (the closingprice of Iridium Class A common stock on the date when suit was commenced).
C) If the shares are still held, $16.44 per share (the difference between the $33.50 per shareoffering price and $17.06 (the closing price of Iridium Class A common stock on the date whensuit was commenced).
PROVISIONS GENERALLY APPLICABLE TO ALL ALLOCATIONS
In the event a Class Member has more than one purchase or sale of Iridium securities, allpurchases and sales of a particular security (common, call option or put option) shall be matchedon a First In First Out ("FIFO") basis. Class Period sales of Iridium common stock will bematched first against any shares of Iridium Class A common stock held prior to the September 8,1998 beginning of the Class Period, and then in chronological order against Class Periodpurchases. The receipt or grant by gift, devise or operation of law of shares of Iridium Class Acommon stock purchased during the Class Period shall not be deemed a purchase of shares ofIridium Class A common stock during the Class Period, nor shall it be deemed an assignment ofany claim relating to the purchase of such shares unless specifically provided in the instrument ofgift or assignment. Transactions resulting in a gain shall not be included in the calculation of anAuthorized Claimant's Recognized Claim.
To the extent a Claimant had a gain from his, her or its overall transactions in Iridium securitiesduring the Class Period, the value of the Recognized Claim will be zero. To the extent that aClaimant suffered an overall loss on his, her or its overall transactions in Iridium securitiesduring the Class Period, but that loss was less than the Recognized Claim calculated above, thenthe Recognized Claim shall be limited to the amount of the actual loss.
For purposes of determining whether a Claimant had a gain from his, her or its overalltransactions in Iridium securities during the Class Period or suffered a loss, the ClaimsAdministrator shall: (i) total the amount paid for all Iridium securities purchased during theClass Period by the claimant (the "Total Purchase Amount"); (ii) match any sales of Iridiumsecurities during the Class Period first against the Claimant's opening position in the applicablesecurities (the proceeds of those sales will not be considered for purposes of calculating gains orlosses); (iii) total the amount received for sales of the remaining Iridium securities sold duringthe Class Period (the "Sales Proceeds"); and (iv) ascribe a $10.44 per share holding value for thenumber of shares of Iridium common stock purchased during the Class Period and still held at
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the end of the Class Period, ascribe a holding value equal to the difference between the strikeprice of any Call options that is below the $10.44 per share holding value for the number ofshares covered by such in-the-money option, and ascribe a negative holding value (cost) equal tothe difference between the strike price of any Put options that is above the $10.44 per shareholding value for the number of shares covered by such in-the-money put option that was still theresponsibility of the Claimant who was a put seller ("Holding Value"). The difference between(x) the Total Purchase Amount ((i) above) and (y) the sum of the Sales Proceeds ((iii) above) andthe Holding Value ((iv) above) will be deemed a Claimant's gain or loss on his, her or its overalltransactions in Iridium securities during the Class Period.
Class or Sub-Class Members who do not submit acceptable Proofs of Claim will not share in thesettlements proceeds but will nevertheless be bound by the Settlements and the Orders and FinalJudgments of the Court dismissing this Action.
Distributions will be made to Authorized Claimants after all claims have been processed andafter the Court has finally approved the settlement(s). If any funds remain in either of the NetSettlement Funds by reason of un-cashed distributions or otherwise, then, after the ClaimsAdministrator has made reasonable and diligent efforts to have Class or Sub-Class Members whoare entitled to participate in the distributions of the Net Settlement Funds cash their distributions,any balance remaining in the Net Settlement Funds one (1) year after the initial distribution ofsuch funds shall be re-distributed to Class and/or Sub-Class Members who have cashed theirinitial distributions and who would receive at least $10.00 from such re-distributions, afterpayment of any unpaid costs or fees incurred in administering the Net Settlement Funds for suchre-distributions. If after six months after such re-distributions any funds shall remain in either ofthe Net Settlement Funds, then such balance(s) shall be contributed to non-sectarian, not-for-profit, 501 (c)(3) organization(s) designated by Plaintiffs' Co-Lead Counsel, and approved by theCourt after notice to counsel to the Settling Defendants.
Plaintiffs, Settling Defendants, their respective counsel, and all other Released Parties shall haveno responsibility for or liability whatsoever for the investment or distribution of the SettlementFund, the Net Settlement Funds, the Plan of Allocation or the determination, administration,calculation, or payment of any Proof of Claim or non-performance of the Claims Administrator,the payment or withholding of taxes owed by the Settlement Funds or any losses incurred inconnection therewith.
SPECIAL NOTICE TO SECURITIES BROKERS AND OTHER NOMINEES
If during the Class Period September 8, 1998 to May 13, 1999 , inclusive, you purchased IridiumClass A common stock or call options on Iridium common stock, or sold put options on Iridiumcommon stock , for the beneficial interest of a person or organization other than yourself, and ifyou have not already provided the Claims Administrator with a list of those beneficiaries inresponse to the May 18 , 2006 Notice of Pendency , then the Court has directed that, WITHINFOURTEEN (14) DAYS OF YOUR RECEIPT OF THIS NOTICE, you either (a) provide to theClaims Administrator the name and last known address of each person or organization for whomor which , during the Class Period , you purchased Iridium Class A common stock or call optionson Iridium common stock , or sold put options on Iridium common stock , or (b) requestadditional copies of this Notice of Settlement and the Proof of Claim form, which will be
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provided to you free of charge, and mail the Notice of Settlement and Proof of Claim formdirectly to the beneficial owners of those securities. You are entitled to reimbursement from theSettlement Funds of your reasonable expenses actually incurred in connection with theforegoing, including reimbursement of postage expense and the cost of ascertaining the namesand addresses of beneficial owners. Those expenses will be paid upon request and submission ofappropriate supporting documentation. All communications concerning the foregoing should beaddressed to the Claims Administrator:
In re Iridium Securities Litigationc/o The Garden City Group, Inc., Claims Administrator
P.O. Box 9000 #6401Merrick, NY 11566-9000
1 (866) 825-2465
Dated: Washington, DC By Order of the Court, 2008 CLERK OF THE COURT
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Exhibit 2
Case 1:99-cv-01002 Document 241-5 Filed 02/13/2008 Page 40 of 56
UNITED STATES DISTRICT COURTFOR THE DISTRICT OF COLUMBIA
PARKER FREELAND, individually and on behalfof all others similarly situated, : Civil Action No. 99-1002 (consolidated)
(NKL)Plaintiff,
vs.
IRIDIUM WORLD COMMUNICATIONS, LTD.,et. al.,
Defendants.
PROOF OF CLAIM AND RELEASE
DEADLINE FOR SUBMISSION: . 2008.
IF YOU PURCHASED SECURITIES, PURCHASED CALL OPTIONS, AND/ORSOLD IRIDIUM PUT OPTIONS ON IRIDIUM WORLD COMMUNICATIONS LTD.,IRIDIUM LLC, AND IRIDIUM OPERATING LLC ("IRIDIUM"), DURING THEPERIOD FROM SEPTEMBER 8, 1998 TO MAY 13, 1999, INCLUSIVE (THE"CLASS PERIOD") AND SUFFERED DAMAGES THEREBY (THE "CLASS') YOUARE A "CLASS MEMBER" AND YOU MAY BE ENTITLED TO SHARE IN THEINDIVIDUAL DEFENDANTS SETTLEMENT'S PROCEEDS.
IF YOU PURCHASED IRIDIUM CLASS A COMMON STOCK PURSUANT TO, ORTRACEABLE TO, A REGISTRATION STATEMENT FILED BY IRIDIUM ON ORABOUT OCTOBER 13, 1998, AMENDED NOVEMBER 13, 1998 THAT BECAMEEFFECTIVE ON OR ABOUT JANUARY 25, 1999, AND SUFFERED DAMAGESTHEREBY (THE "SUB-CLASS'), YOU ARE A "SUB-CLASS MEMBER" AND YOUMAY BE ENTITLED TO SHARE IN THE UNDERWRITER DEFENDANTSSETTLEMENT'S PROCEEDS.
Excluded from the Class and Sub-Class are Defendants , the officers and directors ofIridium and Motorola, Inc., members of their immediate families and their legalrepresentatives , heirs, successors and assigns, and any entity in which any of theDefendants have or had a controlling interest . Also excluded are all persons and entitieswho requested exclusion pursuant to the Notice of Pendency dated May 18, 2006previously circulated in this matter.
Case 1:99-cv-01002 Document 241-5 Filed 02/13/2008 Page 41 of 56
IF YOU ARE A CLASS MEMBER, YOU MUST COMPLETE AND SUBMIT THISFORM IN ORDER TO BE ELIGIBLE FOR ANY SETTLEMENT BENEFITS.
YOU MUST COMPLETE AND SIGN THIS PROOF OF CLAIM AND MAIL IT BYFIRST CLASS MAIL, POSTMARKED NO LATER THAN , 2008 TOTHE FOLLOWING ADDRESS:
In re Iridium Securities Litigationc/o The Garden City Group, Inc., Claims Administrator
P.O. Box 9000 #6401Merrick, NY 11566-9000
1 (866) 825-2465
YOUR FAILURE TO SUBMIT YOUR CLAIM BY , 2008 WILLSUBJECT YOUR CLAIM TO REJECTION AND PRECLUDE YOUR RECEIVINGANY MONEY IN CONNECTION WITH THE SETTLEMENT OF THISLITIGATION. DO NOT MAIL OR DELIVER YOUR CLAIM TO THE COURT ORTO ANY OF THE PARTIES OR THEIR COUNSEL AS ANY SUCH CLAIM WILLBE DEEMED NOT TO HAVE BEEN SUBMITTED. SUBMIT YOUR CLAIM ONLYTO THE CLAIMS ADMINISTRATOR.
CLASS MEMBER CLAIMANT'S STATEMENT
1. a. I affirm that I purchased Iridium World Communications Ltd., Iridium
LLC, and/or Iridium Operating LLC ("Iridium") Class A common stock, and/or purchased call
options on Iridium Class A common stock , and/or sold put options on Iridium Class A common
stock, during the period September 8, 1998 to May 13, 1999, inclusive, and suffered damages
thereby.
b. If applicable check box: [_ ] I also affirm that I purchased Iridium
Class A common stock pursuant to or traceable to the registration statement filed by Iridium on
or about October 13, 1998 and amended on November 13, 1998, that became effective on or
about January 25, 1999.
2. By submitting this Proof of Claim, I state that I believe in good faith that I am a
Class Member [and, if box 1.b. is checked, a Sub-Class Member] as defined above and in the
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Notice of Proposed Settlements With Individual Defendants and Underwriter Defendants,
Motion for Attorneys' Fees and Settlement Fairness Hearing (the "Notice of Settlement"), or am
acting for such person; that I am not a Defendant in the Action or anyone excluded from the
Class; that I have read and understand the Notice of Settlement; that I believe that I am a Class
Member [and, ifbox Lb. is checked, a Sub-Class Member] entitled to receive a share of the Net
Settlement Fund from one or both of the Settlements; that I elect to participate in the proposed
Settlements described in the Notice of Settlement; and that I have not filed a request for
exclusion. (If you are acting in a representative capacity on behalf of a Class Member and/or a
Sub-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 and/or Sub-
Class Member. Such evidence would include, for example, letters testamentary, letters of
administration, or a copy of the trust documents.)
3. I consent to the jurisdiction of the Court with respect to all questions concerning
the validity of this Proof of Claim. I understand and agree that my claim may be subject to
investigation and discovery under the Federal Rules of Civil Procedure, provided that such
investigation and discovery shall be limited to my status as a Class Member and/or a Sub-Class
Member and the validity and amount ofmy claim. No discovery shall be allowed on the merits
of the Action or Settlements in connection with processing of the Proofs of Claim.
4. I have set forth where requested below all relevant information with respect to
each purchase and sale of Iridium Class A common stock, call options on Iridium common stock,
and put options on common stock I made during the Class Period September 8, 1998 to May 13,
1999, inclusive, including any purchase of Iridium Class A common stock pursuant to or
traceable to the registration statement filed by Iridium on or about October 13, 1998 and
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amended on November 13, 1998, that became effective on or about January 25, 1999, as well as
my opening positions, if any, as of September 8, 1998 in such securities, and my holdings as of
May 13, 1999, and subsequent sales where requested. I agree to furnish additional information
(including transactions in other Iridium securities) to the Claims Administrator to support this
claim if requested to do so.
In support ofmy claim, I have enclosed photocopies of the stockbroker's
confirmation slips , stockbroker ' s statements, or other documents evidencing each purchase and
sale of Iridium Class A common stock, call options and put options I made during the Class
Period September 8,1998 to May 13, 1999, inclusive, listed below. (IF ANY SUCH
DOCUMENTS ARE NOT IN YOUR POSSESSION, PLEASE OBTAIN A COPY OR
EQUIVALENT DOCUMENTS FROM YOUR BROKER BECAUSE THESE DOCUMENTS
ARE NECESSARY TO PROVE AND PROCESS YOUR CLAIM.)
6. 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.)
7. Upon the occurrence of the Effective Date my signature hereto will constitute a
full and complete release, remise and discharge by me and my heirs, executors, administrators,
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predecessors, successors, and assigns (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 its,
his, her or their heirs, executors, administrators, predecessors, successors, and assigns) of each of
the "Released Parties" of all "Released Claims," as defined in the Notice of Settlement.
8. 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 Proofof
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 1 (866) 825-
2465 or visit their website at www.gardencitygroup.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.
9. Statement of Claim
CLAIMANT IDENTIFICATION
Beneficial Owner's Name (First, Middle, Last) / Joint Owner's Name
Street Address
State Zip CodeCity
Foreign Province Foreign Country
(Daytime)
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Case 1:99-cv-01002 Document 241-5 Filed 02/13/2008 Page 45 of 56
Area Code
Area Code
Check appropriate box:
Telephone Number
Telephone Number(Evening)
q Individual/Sole Proprietor q
q Corporation q
q IRA q
Joint Owners q Pension PlanPartnership q TrustOther (describe:
Social Security Number or Taxpayer Identification Number
Record Owner's Name (if different from beneficial owner listed above)
FOR IRIDIUM COMMON STOCK:
10. At the close of business on September 7, 1998 I ownedshares of Iridium Class A common stock (If none, write "zero" or "0") (If other than zero, mustbe documented).
11. I made the following purchases of Iridium common stock during theperiod September 8, 1998 to May 13, 1999, inclusive (Persons who received Iridium commonstock during the Class Period other than by purchase are not eligible to submit claims for thosetransactions.)(NOTE: List Iridium shares purchased on or traceable to the January 25, 1999secondary offering in paragraphs 13 or 14 below):
Date(s) of Purchase(ListChronologically)(Month/Day/Year)
/ /
/ /
/ /
Number of Shares of Purchase Price PerCommon Stock Share ofCommonPurchased Stock
$$
Aggregate Cost(includingcommissions, taxes,and fees)
S
$
$
12. 1 made the following sales of Iridium common stock during the periodSeptember 8, 1998 to May 13, 1999, inclusive:
Date(s) of Sale Number of Shares of Sale Price Per Share Amount Received(List Common Stock Sold ofCommon Stock (net of commissions,
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Case 1:99-cv-01002 Document 241-5 Filed 02/13/2008 Page 46 of 56
Chronologically) taxes, and fees)(Month/Day/Year)
$
$
13. 1 made the following purchases of Iridium Class A common stock on theJanuary 25, 1999 secondary offering of Iridium Class A common at the [$33.50] per shareoffering price (list number of shares purchased on the offering, mustbe documented).
14. I made the following purchases of Iridium Class A common stock which Itrace to the January 25, 1999 secondary offering of Iridium Class A common (must bedocumented):
Date(s) of Purchase Number of Shares of Purchase Price Per Aggregate Cost(List Common Stock Share of Common (includingChronologically) Purchased Stock commissions, taxes,(Month/Day/Year) and fees)
You must attach documentation showing how these shares can be traced to the January 25, 1999secondary offering of Iridium Class A common.
15. I made the following sales of Iridium Class A common stock during theperiod September 8, 1998 to May 13, 1999, inclusive (must be documented):
Date(s) of Sale Number of Shares of Sale Price Per Share Amount Received(List Common Stock Sold of Common Stock (net of commissions,Chronologically) taxes, and fees)(Month/Day/Year)
16. At the close of trading on May 13, 1999, 1 still owned shares
of Iridium common stock (Ifnone, write 0).
17. If you listed in paragraph 13 or 14 any purchase of shares of Iridiumcommon stock on or traceable to the January 25, 1999 secondary offering, and still owned shares
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Case 1:99-cv-01002 Document 241-5 Filed 02/13/2008 Page 47 of 56
of Iridium on May 13, 1999, list all sales of Iridium common sock you have made since May 13,1999 to the current date here:
Date(s) of Sale(ListChronologically)(Month/Day/Year)
/ /
/ /
Number of Shares of Sale Price Per ShareCommon Stock Sold of Common Stock
Amount Received(net of commissions,taxes, and fees)
$
18. If you listed in paragraph 13 or 14 any purchase of shares ofIridiumcommon stock on or traceable to the January 25, 1999 secondary offering, and still own shares ofIridium currently state the number of you currently own: I currently ownshares of Iridium Class A common stock (If other than zero, must be documented).
IF YOU NEED ADDITIONAL SPACE TO LIST YOUR TRANSACTIONS, PHOTOCOPY THISPAGE
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Case 1:99-cv-01002 Document 241-5 Filed 02/13/2008 Page 48 of 56
FOR CALL OPTIONS ON IRIDIUM COMMON STOCK:
19. At the close of trading on September 8, 1998, I owned the following calloptions on Iridium common stock:
Number of Contracts Strike Price Expiration Date (Month/Day/Year)
20. I made the following purchases of call options on Iridium common stockduring the period September 8, 1998 to May 13, 1999, inclusive:
Date of Purchase Number of Strike Price Expiration Date Purchase Aggregate Cost(List Chronologically) Contracts (Month/Day/Year) Price Per (including(Month/Day/Year) Shane commissions, taxes,
and fees)
21. I made the following sales of call options on Iridium common stock duringthe period September 8, 1998 to May 13, 1999, inclusive:
Date of Sale Number of Strike Price Expiration Date Sale Price Amount Received (net(List Chronologically) Contracts (Month/Day/Year) Per Share of conunissions, taxes,(Month/Day/Year) and fees)
22. I exercised the following call options on Iridium common stock during theperiod September 8, 1998 to May 13, 1999, inclusive:
Date ofExercise Strike Price Expiration Date Number ofContracts(Month/Day/Year) (Month/Day/Year)
23. At the close of trading on May 13, 1999, I still owned the following calloptions on Iridium common stock, which I thereafter either sold or exercised or which expired asfollows:
Number of Strike PriceContracts
Expiration Date(Month/Day/Year)
/ /
/ /
Sale Proceeds
$
Exercised Expired
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Case 1:99-cv-01002 Document 241-5 Filed 02/13/2008 Page 49 of 56
FOR PUT OPTIONS ON IRIDIUM COMMON STOCK:
24. At the close of trading on September 7, 1998, I was obligated on thefollowing put options on Iridium common stock:
Number of Contracts Strike Price Expiration Date (Month/Day/Year)
25. I wrote (sold) put options on Iridium common stock during the periodSeptember 8, 1998 to May 13, 1999, inclusive, as follows:
Date ofWriting (Sale) Number of Strike Price Expiration Daft Sale Price Amount Received (net of(List Chronologically) Contracts (Month/Day/Year) Per Share commissions, taxes, and(Month/DayfYear) fees)
26. I made the following repurchases ofput options on Iridium common stockduring the period September 8, 1998 to May 13, 1999, inclusive:
Date ofPurchase Number of Strike Price Expiration Date Price Paid Per Aggregate Cost(List Chronologically) Contracts (Month/Day/Year) Shan (including(Month/Day/Year) commissions, taxes,
and fees)
27. The following put options on Iridium common stock which I wrote (sold)during the period September 8, 1998 to May 13, 1999, inclusive, were exercised by the holdersthereof and assigned to me: (Include all exercises whether occurring during or after the ClassPeriod)
Number of Contracts Strike Price Expiration Date Date of Exercise(Month/Day/Year) (Month/Day/Year)
28. At the close of trading on May 13 , 1999, 1 was obligated on the followingput options on Iridium common stock, which I thereafter either re-purchased, or were exercisedand assigned to me or which expired as follows:
Number of Strike Price Expiration Date Re-purchased Date Purchase Cost Exercised ExpiredContracts (Month/Day/Year) (Month/Day/Year) Unexercised
IF YOU NEED ADDITIONAL SPACE TO LIST YOUR TRANSACTIONS PHOTOCOPY THIS PAGE
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Case 1:99-cv-01002 Document 241-5 Filed 02/13/2008 Page 50 of 56
OTHER SECURITIES PURCHASED DURING THE CLASS PERIOD
29. At the close of trading on September 7, 1998, 1 owned the followingIridium securities (OTHER THAN COMMON STOCK, CALL OPTIONS OR PUR OPTIONS):
Describe Security Face amount Stated Maturity Date
30. I purchased the following debt instruments issued by Iridium during theperiod September 8, 1998 to May 13, 1999, inclusive, as follows:
Date ofPurchase (List Describe Security Face Amount Stated Maturity Date Total Price PaidChronologically) (Month/Day/Year)(Month/Day/Year)
$
$
31. I sold the following debt instruments issued by Iridium during the periodSeptember 8, 1998 to May 13, 1999, inclusive, as follows:
Date of Sale (List Describe Security Face Amount Stated Maturity Date Total Sales ProceedsChronologically) (Month/Day/Year)(Month/Day/Year)
/ $
securities:32. At the close of trading on May 13, 1999, I owned the following Iridium
Descnbe Security Face amount Stated Maturity Date
$ / /
NOTE: Only publicly traded securities will be considered. The Claims Administrator mayrequest additional information about the nature of the purchase of the securities reported herein.
IF YOU NEED ADDITIONAL SPACE TO LIST YOUR TRANSACTIONS PHOTOCOPY THIS PAGE
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Case 1:99-cv-01002 Document 241-5 Filed 02/13/2008 Page 51 of 56
Request for Taxpayer Identification Number:
Enter [last four digits of] taxpayer identification number below for the BeneficialOwner(s). For most individuals, this is your Social Security Number. The Internal RevenueService ("I.R.S.") requires such taxpayer identification number. Ifyou fail to provide thisinformation, your claim may be rejected.
[last four digits of] Social Security Number (for individuals) or
[last four digits of] Taxpayer Identification Number(for estates, trusts, corporations, etc.)
33. Certification
I (We) certify that I am (we are) NOT subject to backup withholding under the provisionsof Section 3406 (a)(l)(c) of the Internal Revenue Code because: (a) I am (We are) exempt frombackup withholding, or (b) I (We) have not been notified by the I.R.S. that I am (we are) subjectto 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 certificationabove.
UNDER THE PENALTIES OF PERJURY, I (WE) CERTIFY THAT ALL OF THE
INFORMATION I (WE) PROVIDED ON THIS PROOF OF CLAIM FORM IS TRUE,
CORRECT AND COMPLETE.
Signature of Claimant (If this claim is beingmade on behalf of Joint Claimants, theneach must sign)
(Signature)
(Signature)
(Capacity of person(s) signing, e.g.beneficial purchaser(s), executor,administrator, trustee, etc.)
Date: 2008
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Case 1:99-cv-01002 Document 241-5 Filed 02/13/2008 Page 52 of 56
THIS PROOF OF CLAIM MUST BE SUBMITTED NO LATER THAN
2008 , AND MUST BE MAILED TO:
In re Iridium Securities Litigation
c/o The Garden City Group, Inc., Claims AdministratorP.O. Box 9000 #6401
Merrick, NY 11566-9000
A Proof of Claim received by the Claims Administrator before the motion for the Class
Distribution Order is filed shall be deemed to have been submitted when posted, if mailed by
2008, 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.
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.
REMINDER CHECKLIST
1. 0 Please be sure to sign this Proof of Claim on page [_]. If this Proof of Claim is
submitted on behalf ofjoint claimants, then both claimants must sign.
2. 0 Please remember to attach supporting documents . Do NOT send any stock
certificates. Keep copies of everything you submit.
3. 0 Do NOT use highlighter on the Proof ofClaim or any supporting documents.
4. 0 If you move after submitting this Proof of Claim, please notify the ClaimsAdministrator of the change in your address.
NOTE: RECEIPT ACKNOWLEDGMENT NEEDED
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Case 1:99-cv-01002 Document 241-5 Filed 02/13/2008 Page 53 of 56
The Claims Administrator will send a written confirmation of its receipt ofyour Proof of
Claim. Do not assume your claim is submitted until you receive written confirmation of its
receipt . Your claim is not deemed fully filed until the Claims Administrator sends you written
confirmation of its receipt of your Proof of Claim. If you do not receive an acknowledgement
postcard within thirty (30) days of your mailing the Proof of Claim, then please call the Claims
Administrator toll free at 1 (866) 825-2465.
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Case 1:99-cv-01002 Document 241-5 Filed 02/13/2008 Page 54 of 56
Exhibit 3
Case 1:99-cv-01002 Document 241-5 Filed 02/13/2008 Page 55 of 56
UNITED STATES DISTRICT COURT, FOR THE DISTRICT OF COLUMBIAx
PARKER FREELAND, etc,Plaintiff, : Civil Action Nos. 99-1002 , et al.,
vs. : (consolidated) (NKL)IRIDIUM WORLD COMMUNICATIONS, LTD.,et. al.,
Defendants.x
SUMMARY NOTICE OF PROPOSEDSETTLEMENTS WITH CERTAIN DEFENDANTS
TO: All Persons or Entities who Purchased Securities , Purchased Call Options, and/orSold Iridium Put Options of Iridium World Communications Ltd., Iridium LLC,and Iridium Operating LLC ("Iridium") During the Period from September 9, 1999to May 13, 1999 Inclusive (the "Class Period") who Suffered Damages Thereby (the"Class").
AndAll Persons or Entities who Purchased Iridium Class A Common Stock Pursuant to,or Traceable to, a Registration Statement Filed by Iridium on or About October 13,1998, Amended November 13,1998, (that Became Effective on or About January 25,1999) who Suffered Damages Thereby (the "Sub-Class")
YOU ARE HEREBY NOTIFIED, pursuant to Rule 23 of the Federal Rules of Civil Procedureand an Order of the Court, in the above-captioned certified class action, that a settlement with theIndividual Defendants for $14.85 million for the Class , and a settlement with the UnderwriterDefendants for $8 .25 million for the benefit of the Sub-Class, have been proposed . A hearingwill be held before the Honorable Nanette K. Laughrey, at the United States District Court forthe District of Columbia, 1225 E. Barrett Prettyman United States Courthouse, 333 ConstitutionAvenue, N.W., Washington, DC 20001 at_ _m., on 2008 todetermine whether the proposed settlements should be approved by the Court as fair, reasonable,and adequate, and to consider the application ofPlaintiffs ' Counsel for attorneys ' fees andreimbursement of expenses.
IF YOU ARE A MEMBER OF THE CLASS OR SUB-CLASS DESCRIBED ABOVE,YOUR RIGHTS WILL BE AFFECTED AND YOU MAY BE ENTITLED TO SHARE IN THESETTLEMENT FUNDS. If you have not yet received the full printed Notice ofProposedSettlements with Individual Defendants and Underwriter Defendants, Motion for Attorneys' Feesand Settlement Fairness Hearing (the "Notice of Settlement") and a Proof of Claim form, youmay obtain copies ofthese documents by contacting the Claims Administrator.
In re Iridium Securities Litigationc/o The Garden City Group, Inc., Claims Administrator
P.O. Box 9000 #6401Merrick, NY 11566-9000
1 (866) 825-2465
www.gardencitj7group.com
Case 1:99-cv-01002 Document 241-5 Filed 02/13/2008 Page 56 of 56
Inquiries, other than requests for the forms of the Notice of Settlement and Proof of Claim, maybe made to Plaintiffs' Co-Lead Counsel:
Robert A. Wallner, Esq., Fred Taylor Isquith, Esq.Milberg Weiss LLP Wolf Haldenstein Adler Freeman & Herz LLPOne Pennsylvania Plaza 270 Madison AvenueNew York, New York 10119 New York, New York 10016(212) 594-5300 (212) 545-4600
To participate in the Settlements , you must submit a ProofofClaim no later than, 2008. Any objections to either or both of the Settlements must be filed by, 2008. Ifyou are a Class Member and do not submit a proper Proof of Claim,
you will not share in the Settlements but you nevertheless will be bound by the Orders and FinalJudgments of the Court.
Further information may be obtained by contacting the Claims Administrator.
By Order of The Court
2
Case 1:99-cv-01002 Document 241-6 Filed 02/13/2008 Page 1 of 13
Exhibit B
Case 1:99-cv-01002 Document 241-6 Filed 02/13/2008 Page 2 of 13
UNITED STATES DISTRICT COURTFOR THE DISTRICT OF COLUMBIA
PARKER FREELAND, individually and on behalfof all others similarly situated,
Plaintiff,
vs.
Civil Action No. 99-1002 (consolidated): (NKL)
IRIDIUM WORLD COMMUNICATIONS, LTD.,et. al.,
Defendants.
x
ORDER AND FINAL JUDGMENT (UNDERWRITER DEFENDANTS SETTLEMENT)
On the day of , 2008, a hearing having been held before this
Court to determine: whether the terms and conditions of the Stipulation and Agreement of
Settlement Between PlaintiffMandelbaum, the Sub-Class and the Underwriter Defendants, dated
January _, 2008 (the "Stipulation") are fair, reasonable, and adequate for the settlement of all
claims asserted by the Sub-Class herein against the Underwriter Defendants in the Complaint
now pending in this Court under the above caption, including the release of the Underwriter
Defendants and the Released Parties, and should be approved; (2) whether judgment should be
entered dismissing the Complaint on the merits and with prejudice in favor of the Underwriter
Defendants only and as against all persons or entities who are members of the Sub-Class herein
who have not requested exclusion therefrom; (3) whether to approve the Plan of Allocation as a
fair and reasonable method to allocate the settlement proceeds among the members of the Sub-
Class; and (4) whether and in what amount to award Plaintiffs' Counsel fees and reimbursement
of expenses. The Court having considered all matters submitted to it at the hearing and
Case 1:99-cv-01002 Document 241-6 Filed 02/13/2008 Page 3 of 13
otherwise; and the Court having, by Order dated January 9, 2006, previously certified the Class
and Sub-Class finding that the prerequisites for a class action under Federal Rules of Civil
Procedure 23(a) and (b)(3) have been satisfied; and a notice of the pendency of this Action as a
class action dated May 18, 2006 (the "Notice ofPendency") having previously been
disseminated to the members of the Class and Sub-Class by individual mail notices and by
publication notice; and it appearing that the Notice of Proposed Settlements with Individual
Defendants and Underwriter Defendants, Motion for Attorneys' Fees and Settlement Fairness
Hearing (the "Notice of Settlement"), substantially in the form approved by the Court by Order
dated 2008 was mailed to all Class and Sub-Class members that were reasonably
identifiable; and it appearing that a summary notice of the hearing substantially in the form
approved by the Court by Order dated 2008 was published in the national edition of
The Wall Street Journal; and the Court having considered and determined the fairness and
reasonableness of the award of attorneys' fees and expenses requested; and all capitalized terms
used herein having the meanings as set forth and defined in the Stipulation,
NOW, THEREFORE, IT IS HEREBY ORDERED THAT:
1. The Court has jurisdiction over the subject matter of the Action, Plaintiff
Mandelbaum, all Sub-Class Members and the Underwriter Defendants.
2. Notice of the pendency of this Action as a class action, and of the proposed partial
Settlement were given to all Sub-Class Members who could be identified with reasonable effort.
The form and method of notifying the Sub-Class of the pendency of the action as a class action
and of the terms and conditions of the proposed partial Settlement met the requirements ofRule
23 of the Federal Rules of Civil Procedure, Section 27 of The Securities Act of 1933, 15 U.S.C. §
77z- I (a)(7) as amended by the Private Securities Litigation Reform Act of 1995, due process,
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Case 1:99-cv-01002 Document 241-6 Filed 02/13/2008 Page 4 of 13
and any other applicable law, constituted the best notice practicable under the circumstances, and
constituted due and sufficient notice to all persons and entities entitled thereto.
3. The Settlement with the Underwriter Defendants is approved as fair, reasonable,
and adequate, and the Sub-Class Members and the parties are directed to consummate the
Settlement in accordance with the terms and provisions of the Stipulation.
4. The Complaint, which the Court finds was filed on a good faith basis in
accordance with the Private Securities Litigation Reform Act and Rule 11 of the Federal Rules of
Civil Procedure based upon all publicly available information, is hereby dismissed with
prejudice and without costs, except as provided in the Stipulation, as against the Underwriter
Defendants only.
5. Plaintiff Richard Mandelbaum and members of the Sub-Class, on behalf of
themselves, their heirs, executors, administrators, successors and assigns, are hereby
permanently barred and enjoined from instituting, commencing or prosecuting any and all ofthe
Released Claims against any and all of the Released Parties. Released Parties does not include
Motorola or the Individual Defendants. The Released Claims are hereby compromised, settled,
released, discharged and dismissed as against the Released Parties on the merits and with
prejudice by virtue of the proceedings herein and this Order and Final Judgment.
6. The Underwriter Defendants and the successors and assigns of any of them, are
hereby permanently barred and enjoined from instituting, commencing or prosecuting any and all
of the Underwriter Defendants' Claims against Plaintiff Mandelbaum, any of the Sub-Class
Members or their attorneys. The Underwriter Defendants' Claims are hereby compromised,
settled, released, discharged and dismissed as against Plaintiff Mandelbaum, any of the Sub-
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Case 1:99-cv-01002 Document 241-6 Filed 02/13/2008 Page 5 of 13
Class Members or their attorneys on the merits and with prejudice by virtue of the proceedings
herein and this Order and Final Judgment.
7. (a) The Released Parties are hereby discharged from all claims, whether
arising under state, federal or foreign law as claims, cross-claims, counterclaims, or third-party
claims, in the nature of indemnity or contribution, that arise out of or are in any way related to
the allegations in the Action, whether such claims are asserted in the Action, in any state or
federal court, or in any other court, arbitration or administrative proceeding, or any other forum
in the United States or elsewhere, where the alleged injury to the claimant is the claimant's
actual or threatened liability to the Sub-Class or a member of the Sub-Class ("Claims for
Indemnity or Contribution"), to the fullest extent permitted by any applicable law or regulation.
Accordingly, the Court hereby bars, enjoins and restrains all such Claims for Indemnity or
Contribution: (i) against the Released Parties; and (ii) by the Released Parties against any person
or entity (the "Bar Order').
(b) Any final verdict or judgment that maybe obtained on the claims made in
this Action by or on behalf of the Sub-Class or a member of the Sub-Class against Motorola,
Staiano and/or Grant shall be reduced by the greater of: (i) an amount that corresponds to the
percentage of responsibility of the Underwriter Defendants for common damages; or (ii) the
amount paid by or on behalf of the Underwriter Defendants to the Sub-Class for common
damages.
(c) Notwithstanding anything to the contrary in this Bar Order, the obligations
to one another of the parties under the Agreements Among Underwriters governing the
underwriting disputed in the Complaint remain unaffected, and are not released or discharged,
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Case 1:99-cv-01002 Document 241-6 Filed 02/13/2008 Page 6 of 13
and continue in full force and effect. Similarly, any contractual claims the Underwriter
Defendants may have against non-parties to the Action are not affected, and are not released or
discharged.
(d) If any provision of this Bar Order is subsequently held to be
unenforceable, such provision shall be replaced with such other provision as may be necessary to
afford all of the Released Parties the fullest protection permitted by law.
8. Neither this Order and Final Judgment, the Stipulation, nor any of its terms and
provisions, nor any of the negotiations or proceedings connected with it, nor any of the
documents or statements referred to therein shall be:
(a) offered or received against the Underwriter Defendants as evidence of or
construed as or deemed to be evidence of any presumption, concession, or admission by any of
the Underwriter Defendants 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
Underwriter Defendants;
(b) offered or received against the Underwriter 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 Underwriter Defendant;
(c) offered or received against the Underwriter Defendants as evidence of a
presumption, concession or admission with respect to any liability, negligence, fault or
-5-
Case 1:99-cv-01002 Document 241-6 Filed 02/13/2008 Page 7 of 13
wrongdoing, or in any way referred to for any other reason as against any of the Underwriter
Defendants, 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 the Underwriter Defendants may refer to it to effectuate the liability protection
granted them hereunder;
(d) construed against the Underwriter Defendants 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 Plaintiff Richard Mandelbaum or any of the Sub-Class Members that any of
their claims are without merit, or that any defenses asserted by the Underwriter Defendants have
any merit, or that damages recoverable under the Complaint would not have exceeded the Gross
Settlement Fund.
9. The Plan of Allocation is approved as fair and reasonable, and Plaintiffs' Counsel
and the Claims Administrator are directed to administer the Stipulation in accordance with its
terms and provisions.
10. The Court finds that all parties and their counsel have complied with each
requirement ofRule 11 of the Federal Rules of Civil Procedure as to all proceedings herein.
11. Plaintiffs' Counsel are hereby awarded [ % of the Gross Settlement
Fund] [the sum of $ j in fees, which sum the Court finds to be fair and reasonable,
and $ in reimbursement of expenses, which [expenses] [amounts] shall be paid to
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Case 1:99-cv-01002 Document 241-6 Filed 02/13/2008 Page 8 of 13
Plaintiffs' Co-Lead Counsel from the Gross Settlement Fund with interest from the date such
Settlement Fund is funded to the date ofpayment at the same net rate that the Settlement Fund
earns. The award of attorneys' fees shall be allocated among Plaintiffs' Counsel in a fashion
which, in the opinion of Plaintiffs' Co-Lead Counsel, fairly compensates Plaintiffs' Counsel for
their respective contributions in the prosecution of the Action.
12. PlaintiffRichard Mandelbaum is hereby awarded $. Such
award is for reimbursement of his reasonable costs and expenses (including lost wages) directly
related to his representation of the Sub-Class.
13. In making this award of attorneys' fees and reimbursement of expenses to be paid
from the Gross Settlement Fund, the Court has considered and found that:
(a) the Settlement has created a fund of $8,250,000 in cash, and that
numerous Sub-Class Members who submit acceptable Proofs of Claim will benefit from the
Settlement created by Plaintiffs' Counsel;
(b) Over copies ofthe Notice of Settlement were disseminated to
putative Sub-Class Members indicating that Plaintiffs' Counsel were moving for attorneys' fees
in the amount of up to % of the Gross Settlement Fund and for reimbursement of
expenses in an amount of approximately $ and [ ^ objections were
filed against the terms of the proposed Settlement or the ceiling on the fees and expenses
requested by Plaintiffs' Counsel contained in the Notice of Settlement;
(c) Plaintiffs' Counsel have conducted the litigation and achieved the
Settlement with skil], perseverance and diligent advocacy;
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Case 1:99-cv-01002 Document 241-6 Filed 02/13/2008 Page 9 of 13
(d) The action involves complex factual and legal issues and was actively
prosecuted over eight years and, in the absence of a settlement, would involve further lengthy
proceedings with uncertain resolution of the complex factual and legal issues;
(e) Had Plaintiffs' Counsel not achieved the Settlement there would remain a
significant risk that Plaintiff and the Sub-Class may have recovered less or nothing from the
Underwriter Defendants; and
(f) Plaintiffs' Counsel have devoted over hours, with a lodestar
value of $ , to achieve the Settlement.
14. Exclusive jurisdiction is hereby retained over the parties and the Sub-Class
Members for all matters relating to this Action, including the administration, interpretation,
effectuation or enforcement of the Stipulation and this Order and Final Judgment, and including
any application for fees and expenses incurred in connection with administering and distributing
the settlement proceeds to the members of the Sub-Class.
15. 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.
16. This consolidated Action has been pending since the first of the constituent
actions were filed in 1999. The Stipulation resolves all of the claims asserted by the Sub-Class
against the Underwriter Defendants (no claims against the Underwriter Defendants were asserted
by the Class) and, pursuant to the above Bar Order, all claims for contribution or indemnity by or
against the Released Parties, including the Underwriter Defendants, are (subject to ¶ 7(c))
prohibited. The claims asserted against the Underwriter Defendants and now settled raise issues
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Case 1:99-cv-01002 Document 241-6 Filed 02/13/2008 Page 10 of 13
that are separable from the remaining claims of Plaintiffs and the Class and Plaintiff
Mandelbaum and the Sub-Class against Motorola, Staiano and/or Grant. Permitting the
immediate appeal, if taken, of this Order and Final Judgment does not result in any duplication of
review by an appellate court, because if an appellate court were to vacate the Stipulation, then
the parties may reasonably continue their prosecution or defense of the claims while this Court
continues to preside over other related claims, without a waste of time or judicial resources. If
this Order and Final Judgment were not immediately appealable, once an appeal were ripe after
the conclusion of the entire coordinated litigation, and if the appellate court vacated this Order
and Final Judgment, then this Court would face re-trying the entire litigation as to the
Underwriter Defendants, wasting judicial resources.
17. By reason of the finding in the previous paragraph , 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.
None of the coordinated actions is dismissed in respect of claims against any person or entity
other than the Underwriter Defendants.
Dated: District of Columbia, 2008
Honorable Nanette K. Laughrey
UNITED STATES DISTRICT JUDGE
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Case 1:99-cv-01002 Document 241-6 Filed 02/13/2008 Page 11 of 13
Schedule 1
Case 1:99-cv-01002 Document 241-6 Filed 02/13/2008 Page 12 of 13
EXC10 Exclusion Report Page 1 of 2
EXC10005 IRIDIUM SECURITIES LITIGATION 90-Aug-06 12:49 PM
PostmarkId14o Description Name/Address Phone No Date Acct No status
2013661 ALLEN, BARBARA BARBARA V ALLEN 07/25/06 Timdy
1001 CARLOS P!.
CHICO CA 95926
Associated Claims
1000013 ALLEN, BARBARA BARBARA V ALLEN 07/06/06 Timely
1001 CARLOS PLCHICO CA 95926
Associated Claims
,1703 AUSTIN, LEONA R LEONA R AUSTIN 07/31M6 Tim*
1937 ROSE CTDELTA CO 81416
Associated Claims
2019221 CANNATA, ROBERT ROBERT CANNATA 07/31/06 Timely
1371 SABAL TRAIT.
WESTON FL 33327
Associated Claims
2016412 FMTC FMTC CUSTODIAN - ROTH IRA 07/27/06 Timely
FBO STANLEY F TURON803 GRAND CENTRAL AVE 0 ILAVALLE TE NJ 08733
Associated Claims
Case 1:99-cv-01002 Document 241-6 Filed 02/13/2008 Page 13 of 13
EXC10 Exclusion Report Page 2 of 2
EXC10005 IRIDIUM SECURITIES LITIGATION 30-Aug-06 12:49 PM
PostmarkIdNo Description Name/Address Phone Date Acct No Status
2019530 KEATHLEY.JOSEP JOSEPH D KEATHLEY& 08/01/06 Timely
INGRID H KEATHLEY JT TEN1914 STAFFORD STWOODBRIDGE VA 22191
Assodat.d Claims
2000 131 MILLER, THOMAS THOMAS W MILLER 06/28J0 Timely750 PARKWAY DRSMYRNA GA 30080
Associated Claims
100.1974 MOSES, )ULM MS. JULIE MOSES 07/10/66 Timely
425 EAST 79TH STREET
NEW YORK NY 10021
Associated Claims
2019615 PERRY, WILFORD WILFORD 0 PERRY & 08/01/06 Timely
DAWN K PERRY JTTEN2574 FRISCO DRCLEARWATER FL 33761
Associated Claim.
Total 9