IF - Robbins Arroyo LLP Stipulation of Settlement, dated December 4, 2013 (the "Stipulation"), is...
Transcript of IF - Robbins Arroyo LLP Stipulation of Settlement, dated December 4, 2013 (the "Stipulation"), is...
IF 0 L IE DEC 0 4 2013 0
In re FCSTONE GROUP, INC. ) Lead Case No. 08AE-CV02785 SHAREHOLDER DERIVATIVE & CLASS ) ACTION LITIGATION ) )
) This Document Related To: ) All Actions )
) ) )
)
STIPULATION OF SETTLEMENT
IN THE CIRCUIT COURT OF PLATTE COUNTY, MISSOURI
SANDRA L. DOWD Clerk of the Circuit Court Platte County, MO
Judge. Honorable Thomas Fincham
This Stipulation of Settlement, dated December 4, 2013 (the "Stipulation"), is made and
entered into by and among the following Settling Parties,' by and through their respective
counsel of record: (i) Stuart Krantz, Sewak Singh, and Michael Bogart (collectively,
"Plaintiffs"), individually and derivatively on behalf of the Settlement Class and nominal
defendant INTL FCStone Inc. ("INTL" or the "Company");2 (ii) Paul G. Anderson, Jeffrey
Soman, Stephan Gutierrez, Robert Mortenson, William J. Dunaway, Bruce Krehbiel, Jack
Friedman, Eric Parthemore, David Reinders, Brent Bunte, David Andresen, Douglas Derscheid,
Rolland Svoboda, Kenneth Hahn, Tom Leiting, Daryl Henze, and Robert V. Johnson
(collectively, the "individual Defendants"); (111) the Settlement Class, and (iv) nominal defendant
FCStone Group, Inc. ("FCStone"). This Stipulation is intended by the Settling Parties to fully,
finally, and forever resolve, discharge, and settle the Released Claims, subject to the terms and
conditions set forth herein.
I. BACKGROUND
A. Litigation History
FCStone was an integrated commodity risk management company providing risk
management consulting and transaction execution services to commercial commodity
intermediaries, end-users, and producers. The Company operated in three reportable segments:
(i) Clearing and Execution Services ("CBS"); (ii) Financial Services; and (iii) Commodity and
Risk Management Services ("C&RM").
On July 15, 2008, the Securities Class Action was filed against FCStone and certain
officers of it alleging they violated the federal securities laws by making alleged false statements
in its Second and Third Quarter 2008 quarterly reports filed on Form 10-Q which statements
1 All capitalized terms not otherwise defined are defined in section IV.1, infra.
2 The Action was initially filed on behalf of FCStone Group, Inc., which was subsequently acquired by, and became a wholly owned subsidiary of, International Assets Holding Corporation. In February 2011, pursuant to the approval of International Assets Holding Corporation's shareholders, the Company's name was changed to INTL FCStone Inc.
allegedly related to losses the Company suffered on a customer cotton trading account and the
Company's early termination of a LIBOR hedge. On August 5, 2008, plaintiff Krantz filed a
shareholder derivative action on behalf of FCStone and against certain officers and directors of
FCStone alleging breaches of fiduciary duties, waste of corporate assets, and unjust enrichment
arising from the same facts and circumstances alleged in the Securities Class Action. On May 6,
2009, plaintiff Krantz filed an amended complaint which added allegations related to FCStone's
November 3, 2008 and February 24, 2009 disclosures relating to losses it suffered which arose
from a single professional customer's energy trading account (the "Amended Complaint"). On
July 2, 2009, Defendants moved to dismiss Krantz's Amended Complaint.
That day, FCStone announced it had entered into a stock-for-stock merger agreement
with International Assets Holding Corporation and International Assets Acquisition Corporation
(collectively, "International Assets") pursuant to which upon closing, FCStone's former common
shareholders would own 47.5% of the combined entity. The transaction was valued at
approximately $130 million (the "Acquisition"). On July 7, 2009, plaintiff Krantz filed a motion
with the Court for leave to amend the Amended Complaint and the next day, he filed a derivative
and class action complaint for breach of fiduciary duty containing additional allegations that the
Individual Defendants failed to both properly inform shareholders about material information
and to maximize stockholder value in connection with the proposed acquisition. These filings
mooted Defendants' July 2, 2009 motion to dismiss the Amended Complaint.
On July 8, 2009, plaintiffs Singh and Bogart filed a class action complaint against
FCStone, its Board of Directors, and certain executives seeking equitable relief for their alleged
breaches of fiduciary duty and other violations of state law arising out of their alleged attempt to
sell FCStone to International Assets at an allegedly unfair price and by means of an allegedly
unfair process.
On September 3 and September 9, 2009, the Court heard oral argument on the two
separate motions for expedited proceedings in anticipation of their filing a motion to
preliminarily enjoin the shareholder vote on the Acquisition which counsel for Krantz and
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counsel for Singh and Bogart had previously filed. The Court preliminarily denied the motions
on September 3, 2009 and after full hearing on September 9, 2009, the Court issued its written
order denying these motions. On September 25, 2009, FCStone shareholders voted in favor of
the Acquisition, and the Acquisition was consummated on October 1, 2009. In connection with
the Acquisition, FCStone shareholders received 0.29650 shares of International Assets' common
stock for each share of FCStone common stock, and FCStone became a wholly-owned subsidiary
of International Assets.
Counsel for plaintiffs Krantz, Singh, and Bogart and counsel for Defendants thereafter
stipulated to consolidation of the shareholder actions and the appointment of lead counsel, and
the Court entered the consolidation and lead structure order on November 13, 2009. Thereafter,
on January 8, 2010, Plaintiffs filed their third complaint in this action, a Verified Consolidated
Shareholder Derivative and Class Action Complaint for Breach of Fiduciary Duty, Waste of
Corporate Assets, and Unjust Enrichment ("CAC").
On February 23, 2010, the Defendants filed separate motions to dismiss the CAC, the
third complaint filed in this action. Plaintiffs filed an omnibus opposition to the motions to
dismiss on April 8, 2010, and filed a supplemental opposition to the Individual Defendants'
motion to dismiss on September 30, 2010. Defendants replied on October 29, 2010 and
November 1, 2010. While these motions were pending, the Delaware Supreme Court accepted
certification of a question from the U.S. District Court for the Southern District of New York
which the parties to this action believed would likely resolve a potentially dispositive issue in
this Action. Accordingly, at the parties' request, this Court stayed the Action until after the
Delaware Supreme Court issued its ruling. Following the Delaware Supreme Court's ruling, the
parties submitted supplemental briefing on its impact in this Action.
On November 16, 2010, the Federal Court granted and denied in part defendants' motion
to dismiss the Securities Class Action, finding that the only one of the three alleged
misrepresentations. The alleged misrepresentation that survived dismissal was related to
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FCStone's November 3, 2008 public disclosure of its estimated losses on the energy trading
account.
On July 26, 2011, Plaintiffs filed a notice of supplemental fact and authority in support of
the omnibus opposition to Defendants' motions to dismiss to inform the Court of the creation of a
special committee by INTL to conduct an investigation into losses associated with the energy
trading account. On March 14, 2012, INTL announced that the SEC had determined to close its
previously disclosed formal investigation of FCStone's statements regarding the energy trading
account and to not file charges against FCStone or any other person. INTL's Special Committee
also concluded its investigation finding no wrong doing by FCStone or any of its former
directors and officers (some of whom were then current officers and/or directors of the
Company).
The Court has not ruled on the pending motions to dismiss the CAC.
B. Settlement Efforts
On February 10, 2012, the Federal Court granted in part the plaintiffs' motion for
certification of a class in the Securities Class Action which was limited to persons who
purchased FCStone securities between November 3, 2008 through and including February 24,
2009. The parties to the Securities Class Action and this Action thereafter agreed to engage in a
joint mediation of both actions.
On April 13, 2012, the parties to the Securities Class Action and this Action attended an
all-day, in-person formal mediation at the offices of Irell & Manella, LLP in Newport Beach,
California, presided over by former United States District Judge Layn R. Phillips ("Judge
Phillips"). Shortly after the joint mediation session, the parties in the Securities Class Action
agreed to a settlement of the claims raised. While the Settling Parties to this Action were unable
to reach a satisfactory resolution at the mediation session, they did make substantial progress in
negotiating reforms. Following the mediation, the Settling Parties continued arm's-length
settlement negotiations over the following several months with the assistance of Judge Phillips,
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and reached an agreement in principle to resolve the Action on the terms and conditions set forth
herein.
II. PLAINTIFFS' CLAIMS AND THE BENEFITS OF SETTLEMENT
Plaintiffs have engaged in substantial and thorough fact investigation, careful analysis of
applicable law, and extensive motions practice, including: (i) reviewing FCStone's press releases,
public statements, SEC filings, and securities analysts' reports and advisories about the
Company; (ii) reviewing media reports about the Company; (iii) researching the applicable law
with respect to the claims alleged in the Action and the potential defenses thereto; (iv) preparing
and filing complaints, including the Amended Complaint and controlling CAC; (v) conducting
comprehensive damages analyses; (vi) drafting and filing the omnibus opposition to the
Individual Defendants' and nominal defendants, FCStone's and INTL's motions to dismiss the
CAC, as well as a supplemental opposition to the Individual Defendants' motion to dismiss;
(vii) reviewing and analyzing the relevant pleadings in the Securities Class Action, including
briefing related to the defendants' motion to dismiss, the Federal Court's order partially granting
the motion to dismiss, and the Federal Court's order certifying a class beginning on November 3,
2008 instead of the earlier April 14, 2008 date plaintiffs sought, the result of which was a
substantial limiting of plaintiffs' potential damages; (viii) drafting requests for production of
documents and interrogatories; (ix) researching relevant corporate governance best practices and
critically evaluating FCStone and INTL's governance structures and policies, and (x) negotiating
the Settlement with Defendants, including participating in a day-long, in-person formal
mediation, and several follow-up settlement negotiations.
Based on their investigation, Plaintiffs believe that the Action has substantial merit, and
Plaintiffs' entry into this Stipulation is not intended to be and shall not be construed as an
admission or concession concerning the relative strength or merit of the claims alleged in the
Action. However, Plaintiffs and Plaintiffs' Counsel recognize and acknowledge the significant
risk, expense, and length of continued proceedings necessary to prosecute the Action against the
Individual Defendants through trial and through possible appeals. Plaintiffs' Counsel also have
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taken into account the results of the SEC's investigation, the Special Committee's investigation
and the uncertain outcome and the risk of any litigation, especially in complex cases such as the
Action, as well as the difficulties and delays inherent in such litigation. Plaintiffs' Counsel are
also mindful of the inherent problems of establishing demand futility, personal jurisdiction over
INTL, and the possible defenses to the claims alleged in the Action.
Based on Plaintiffs' Counsel's thorough review and analysis of the relevant facts,
allegations, defenses, and controlling legal principles, Plaintiffs' Counsel believe that the
Settlement set forth in this Stipulation is fair, reasonable, and adequate, and confers substantial
benefits upon INTL and its shareholders. Based upon Plaintiffs Counsel's evaluation, Plaintiffs
have determined that the Settlement is in the best interests of INTL, Current INTL Shareholders,
and the Settlement Class, and have agreed to settle the Action upon the terms and subject to the
conditions set forth herein.
III. DEFENDANTS' DENIALS OF WRONGDOING AND LIABILITY
The Individual Defendants have denied and continue to deny that they have committed,
threatened, or attempted to commit, any violations of law or breached any duty owed to
Plaintiffs, the Settlement Class, FCStone, INTL, or its shareholders. Nominal defendant INTL
has moved to dismiss the Action, arguing the Court does not possess personal jurisdiction over it,
and it continues to maintain this position, and nominal defendants FCStone and INTL also have
denied and continue to deny that the respective board of directors of each were incapable of
deciding impartially a pre-suit demand, if Plaintiffs had made one, i.e., the nominal defendants
deny that a demand made upon them would have been futile. Without admitting the validity of
any allegations made in the Action, or any liability with respect thereto, the nominal defendants
and the Individual Defendants have concluded that it is desirable that the claims asserted in the
Action be settled on the terms reflected in this Stipulation. The Individual Defendants, FCStone,
and INTL are entering into this Stipulation because it will eliminate the uncertainty, distraction,
disruption, burden, risk, and expense of further litigation. Entering into this Stipulation,
however, shall not be construed as an admission or concession concerning the relative strength or
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merits of the Defendants' multiple factual and legal defenses to the claims alleged in the Action.
Further, the Individual Defendants, and nominal defendants FCStone and INTL acknowledge
that the Settlement confers substantial benefits on INTL and is fair, reasonable, adequate, and in
the best interests of INTL and its shareholders.
Neither this Stipulation, nor any of its terms or provisions, nor entry of the Judgment, nor
any document or exhibit referred or attached to this Stipulation, nor any action taken to carry out
this Stipulation, is, may be construed as, or may be used as evidence of the validity of any of the
Released Claims or an admission by or against the Individual Defendants of any fault,
wrongdoing, or concession of liability.
IV. TERMS OF STIPULATION AND AGREEMENT OF SETTLEMENT
NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED by and among
the Settling Parties herein, in consideration of the benefits flowing to the Settling Parties from
the Settlement, and subject to the approval of the Court pursuant to Missouri Supreme Court
Rules 52.08 and 52.09, that the claims asserted in the Action, shall be finally and fully
compromised, settled, and released, and the Action shall be dismissed with prejudice, upon and
subject to the terms and conditions of this Stipulation, as set forth below.
1. Definitions
As used in this Stipulation, the following terms have the meanings specified below:
1.1 "Action" means the consolidated shareholder derivative and putative class action,
captioned In re FCStone Group, Inc. Shareholder Derivative & Class Action Litigation, Lead
Case No. 08AE-CV02785 (Circuit Court of Platte County, Missouri).
1.2 "Court" means the Circuit Court of Platte County, Missouri.
1.3 "Current INTL Shareholders" means any Persons who owned INTL common
stock as of the date of the execution of the Stipulation and who continue to hold their INTL
common stock as of the date of the final settlement approval hearing, excluding the Individual
Defendants, the officers and directors of INTL, members of their immediate families, and their
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legal representatives, heirs, successors, or assigns, and any entity in which Individual Defendants
have or had a controlling interest.
1.4 "Defendants" means, collectively, nominal defendants INTL and FCStone and the
Individual Defendants.
1.5 "Derivative Claims" means the claims asserted in Counts I through IV of the CAC
filed in the Action, including but not limited to (i) the CAC allegations that beginning in
November 2007, each of the Individual Defendants breached their fiduciary duties to FCStone
and (ii) the CAC prayers for relief relating to Counts I through IV and the derivative allegations.
1.6 "Direct Claims" means the claims asserted in Counts V and VI of the CAC,
including, but not limited to, the CAC prayers for relief relating to Counts V and VI.
1.7 "Effective Date" means the date by which the events and conditions specified in
paragraph 6.1 of this Stipulation have been met and have occurred.
1.8 "FCStone" means nominal defendant FCStone Group, Inc. which became a
wholly owned subsidiary of INTL on October 1, 2009, the date on which the Acquisition became
effective.
1.9 "Federal Court" means the U.S. District Court in the Western District of Missouri.
1.10 "Final" means the date upon which the last of the following shall occur with
respect to the Judgment approving this Stipulation, substantially in the form of Exhibit D
attached hereto: (1) the expiration of the time to file a notice of appeal from the Judgment; (2) if
an appeal has been filed, the court of appeals has either affirmed the Judgment or dismissed that
appeal and the time for any reconsideration or further appellate review has passed; or (3) if a
higher court has granted further appellate review, that court has either affirmed the underlying
Judgment or affirmed the court of appeal's decision affirming the Judgment or dismissing the
appeal. An "appeal" shall not include any appeal that concerns only the issue of attorneys' fees
and expenses or the incentive awards. Any proceeding or order, or any appeal or petition for a
writ of certiorari pertaining solely to the application for attorneys' fees and expenses, or the
incentive awards shall not in any way delay or preclude the Judgment from becoming Final.
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1.11 "Individual Defendants" means Paul G. Anderson, Jeffrey Soman, Stephan
Gutierrez, Robert Mortenson, William J. Dunaway, Bruce ICrehbiel, Jack Friedman, Eric
Parthemore, David Reinders, Brent Bunte, David Andresen, Douglas Derscheid, Rolland
Svoboda, Kenneth Hahn, Tom Leiting, Daryl Henze, and Robert V. Johnson.
1.12 "INTL" or the "Company" means nominal defendant INTL FCStone Inc., a
Delaware corporation, and its affiliates, subsidiaries, predecessors, successors, and assigns.
1.13 "Judgment" means the Order of Dismissal with Prejudice and Final Judgment to
be rendered by the Court, substantially in the form attached hereto as Exhibit D.
1.14 "Person" means an individual, corporation, limited liability corporation,
professional corporation, partnership, limited partnership, limited liability partnership,
association, joint stock company, estate, legal representative, trust, unincorporated association,
government, or any political subdivision or agency thereof and any business or legal entity and
their spouses, heirs, predecessors, successors, representatives, or assignees.
1.15 "Plaintiffs" means, collectively, Stuart Krantz, Sewak Singh, and Michael Bogart,
on behalf of themselves, directly on behalf of the Settlement Class, and derivatively on behalf of
nominal defendants FCStone and INTL.
1.16 "Plaintiffs' Counsel" means Robbins Arroyo LLP, Steuve Siegal Hanson LLP,
Levi & Korsinsky, LLP, and Troppito + Miller, LLC.
1.17 "Related Persons" means each of the Individual Defendants and their past or
present agents, officers, directors, attorneys, accountants, auditors, advisors, insurers, co-
insurers, reinsurers, spouses, immediate family members, heirs, executors, personal
representatives, estates, administrators, trusts, predecessors, successors, and assigns or other
individual or entity in which any Individual Defendant or INTL has a controlling interest, and
each and all of their respective past and present officers, directors, employees, agents, affiliates,
parents, subsidiaries, divisions, attorneys, accountants, auditors, advisors, insurers, co-insurers,
re-insurers, heirs, executors, personal representatives, estates, administrators, trusts,
predecessors, successors, and assigns.
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1.18 "Released Claims" shall collectively mean any and all claims, demands, rights,
actions, causes of action, liabilities, damages, losses, obligations, judgments, duties, suits,
attorneys' fees, costs, expenses, matters and issues known or unknown, contingent or absolute,
suspected or unsuspected, disclosed or undisclosed, liquidated or unliquidated, matured or
unmatured, accrued or unaccrued, apparent or unapparent, whether or not concealed or hidden,
through the Effective Date under any law governing the Action, or for any remedy whether at
equity or law (collectively, the "Claims"), whether factual or legal, that were, or could have been
asserted against any one or more of the Released Persons in the Action, including but not limited
to any such Claims:
(i) that were or could have been asserted against any of the Released Persons
in the Derivative Claims or by any INTL shareholder (claiming in the right of, or on behalf of,
the Company) or by INTL and, by operation of the Judgment, INTL and any such INTL
shareholder (claiming in the right of, or on behalf of, the Company) shall have waived any and
all provisions, rights and benefits conferred by any law of any state or territory of the United
States, or principle of common law, which is similar, comparable or equivalent to California
Civil Code section 1542 (see paragraph 1.26 below), and/or
(ii) that were or could have been asserted against any of the Released Persons
in the Direct Claims by Plaintiffs or any Settlement Class Member and, by operation of the
Judgment, Plaintiffs and each Settlement Class Member shall have waived any and all
provisions, rights and benefits conferred by any law of any state or territory of the United States,
or principle of common law, which is similar, comparable or equivalent to California Civil Code
section 1542 (see paragraph 1.26 below). Excluded from the term "Released Claims" are all
claims alleged in the Securities Class Action and claims to enforce the Settlement.
1.19 "Released Persons" means collectively, FCStone, INTL, and each of the
Individual Defendants and each of their Related Persons. "Released Person" means,
individually, any of the Released Persons.
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1.20 "Releasing Parties" means Plaintiffs (individually, directly, and derivatively on
behalf of INTL and/or FCStone), any other Person who (i) is a Settlement Class Member, or (ii)
owned or acquired shares of INTL common stock on or before January 8, 2010 and who has held
such shares continuously through and including the date of the Judgment, and (iii) Plaintiffs'
Counsel. "Releasing Party" means, individually, any of the Releasing Parties.
1.21 "Securities Class Action" means the securities class action, filed in the Federal
Court, captioned Luman v. Anderson, No. 4:08-cv-514 (W.D. Mo. filed July 15, 2008).
1.22 "Settlement" means the settlement and compromise of the Action as provided for
herein.
1.23 "Settlement Class" means, collectively, a non-opt-out, Court certified settlement
class consisting of all record and beneficial holders of the common stock of FCStone and their
successors in interest and transferees, immediate and remote, at any time during the period
beginning on and including July 2, 2009 through and including October 1, 2009, the date of the
consummation of the merger; provided, however, that Defendants, their immediate family
members, their directors or partners, their direct or indirect parent or subsidiary entities, or any
person or entity over whom or which any Defendant exercises sole or exclusive control shall be
excluded from the Settlement Class. "Settlement Class Member" means an individual member
of the Settlement Class.
1.24 "Settlement Hearing" means the hearing or hearings at which the Court will
review the adequacy, fairness, and reasonableness of the Settlement.
1.25 "Settling Parties" means, collectively, each and all of the Plaintiffs (on behalf of
themselves, directly on behalf of the Settlement Class, and derivatively on behalf of FCStone and
INTL) and Defendants. "Settling Party" means, individually, any of the Settling Parties.
1.26 "Unknown Claims" means any Released Claim(s) which any of the Settling
Patties (Plaintiffs or Defendants) do not know of or suspect to exist in his, her, or its favor at the
time of the release of the Released Persons. With respect to any and all Released Claims, the
Settling Parties agree that upon the Effective Date, the Settling Parties expressly waive the
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provisions, rights, and benefits conferred by or under California Civil Code section 1542, or any
other law of the United States or any state or territory of the United States, or principle of
common law, which is similar, comparable, or equivalent to section 1542, which provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
The Settling Parties acknowledge that they may hereafter discover facts in addition to, or
different from, those now known or believed to be true by them, with respect to the subject
matter of the Released Claims, but it is the intention of the Settling Parties to completely, fully,
finally, and forever compromise, settle, release, discharge, and extinguish any and all Released
Claims, known or unknown, suspected or unsuspected, contingent or absolute, accrued or
unaccrued, apparent or unapparent, whether or not concealed or hidden, and for any remedy
whether at equity or law, which do now exist, or heretofore existed, or may hereafter exist, and
without regard to the subsequent discovery of additional or different facts. The Settling Parties
acknowledge that the foregoing waiver was separately bargained for and is a key element of this
Stipulation of which this release is a part.
2. Terms of the Settlement
2.1 Within five (5) business days before final approval is submitted to the Court,
Plaintiffs' Counsel shall provide counsel to the Individual Defendants with declarations from
Plaintiffs attesting that each Plaintiff has continuously owned the INTL stock he held on January
8, 2010, the date they filed the verified CAC and that at least one Plaintiff is a member of the
Settlement Class as defined in ¶1.23.
2.2 As a result of the filing, prosecution, and settlement of the Action, INTL shall,
within thirty (30) calendar days after the Judgment becomes final, formally express and/or
implement and maintain in substance the corporate governance reforms, additions, amendments,
or formalizations identified in Exhibit A (the "Corporate Governance Policies") attached hereto
for a period of no less than four (4) years. INTL acknowledges and agrees that the Corporate
Governance Policies are significant and extensive and confer significant benefits upon INTL and
its shareholders. INTL and the Individual Defendants also acknowledge that the prosecution and
settlement of the Action was a factor in their decision to adopt and/or implement and maintain
the Corporate Governance Policies set forth in Exhibit A.
3. Class Certification, Approval, and Notice
3.1 Promptly after execution of this Stipulation, the Settling Parties shall submit this
Stipulation together with its exhibits to the Court and Plaintiffs shall apply for entry of an order
(the "Preliminary Approval Order"), substantially in the form of Exhibit B attached hereto,
requesting: (i) preliminary approval of the Settlement set forth in this Stipulation; (n)
certification of the Settlement Class, for settlement purposes only; (iii) approval of the form,
content, and manner of providing notice of the Settlement; and (iv) a date for the Settlement
Hearing.
3.2 Notice to the Settlement Class shall consist of the Notice of Pendency and
Proposed Settlement of Shareholder Derivative and Class Action ("Notice"), which includes the
general terms of the Settlement set forth in this Stipulation and the date of the final Settlement
Hearing, substantially in the form attached hereto as Exhibit C.
3.3 The Settling Parties shall jointly undertake the administrative responsibility for
giving notice to the Settlement Class. Defendants shall be responsible for paying the costs and
expenses related to providing such notice to its shareholders for the first $20,000 in incurred
costs and expenses. Plaintiffs shall be responsible for paying the costs and expenses amount
above the first $20,000 in incurred costs and expenses. Within ten (10) calendar days after entry
of the Preliminary Approval Order, Robbins Arroyo LLP shall post copies of the Notice and
Stipulation on its website. If additional notice is required by the Court, then the cost and
administration of such additional notice will be borne by Plaintiffs. The Settling Parties believe
the content and manner of the Notice, as set forth in Exhibit C and this paragraph, constitutes
adequate and reasonable notice to INTL shareholders pursuant to applicable law and due process.
At least seven (7) calendar days prior to the Settlement Hearing, Plaintiffs' Counsel shall serve
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on counsel in the Action and file with the Court an appropriate affidavit or declaration with
respect to filing and posting the Notice.
3.4 Pending the Court's determination as to final approval of the Settlement, Plaintiffs
are barred and enjoined from commencing, prosecuting, instigating, or in any way participating
in the commencement or prosecution of any action asserting any Released Claim against any of
the Released Persons.
4. Attorneys' Fees and Reimbursement of Expenses
4.1 In recognition of the benefits conferred upon INTL as a direct result of the
prosecution and Settlement of the Action, IN It's board of directors has agreed to pay and/or
cause their insurers to pay Plaintiffs' attorneys' fees and expenses in the agreed-to amount of
$500,000, subject to Court approval (the "Fee and Expense Amount"). The Fee and Expense
Amount shall constitute final and complete payment for Plaintiffs' attorneys' fees and expenses
that have been incurred or will be incurred in connection with the Action. The Fee and Expense
Amount shall be funded to Robbins Arroyo LLP as receiving agent for Plaintiffs' Counsel within
twenty (20) business days of the entry of the Preliminary Approval Order and shall be
immediately releasable upon the entry of the Judgment.
4.2 The Settling Parties further stipulate that Plaintiffs' Counsel may apply to the
Court for Incentive Awards of up to $10,000 for each of the Plaintiffs, only to be paid upon
Court approval, in recognition of Plaintiffs' participation and effort in the prosecution of the
Action (the "Incentive Awards"). The failure of the Court to approve any requested incentive
award, in whole or in part, shall have no effect on the Settlement set forth in this Stipulation.
The Incentive Awards, if approved by the Court, shall be paid to Plaintiffs from the Fee and
Expense Amount. Defendants shall not be liable for any portion of the Incentive Awards.
4.3 In the event that the Judgment fails to become Final as defined in paragraph 1.10
herein, then it shall be the obligation of Plaintiffs' Counsel to make appropriate refunds or
repayments of the Fee and Expense Amount previously paid, proportionately to the entities that
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paid such amount(s), within fifteen business days from receiving notice from Defendants'
counsel or from a court of appropriate jurisdiction.
5. Releases and Bar
5.1 Upon the Effective Date, the Releasing Parties shall be deemed to have, and by
operation of the Judgment shall have, fully, finally, and forever released, relinquished, and
discharged the Released Claims (including Unknown Claims) against the Released Persons and
any and all claims arising out of, relating to, or in connection with the defense, settlement, or
resolution of the Action against the Released Persons. Nothing herein shall in any way impair or
restrict the rights of any Settling Party to enforce the terms of this Stipulation.
5.2 Upon the Effective Date, each of the Defendants shall be deemed to have, and by
operation of the Judgment shall have, fully, finally, and forever released, relinquished, and
discharged the Released Claims (including Unknown Claims) against the Plaintiffs, Plaintiffs'
Counsel, and any and all claims arising out of, relating to, or in connection with the institution,
prosecution, assertion, settlement, or resolution of the Action against Plaintiffs and Plaintiffs'
Counsel. Nothing herein shall in any way impair or restrict the rights of any Settling Party to
enforce the terms of this Stipulation.
5.3 Upon the Effective Date, INTL and INTL shareholders, on behalf of themselves
and/or itself and each of their/its predecessors, successors, parents, subsidiaries, affiliates,
custodians, agents, assigns, representatives, heirs, estates, executors, trusts, trustees, trust
beneficiaries, administrators, spouses, marital communities, and immediate family members,
shall be deemed to have, and by operation of the Judgment shall have, fully, finally, and forever
released, relinquished, and discharged all Released Claims and will be forever barred and
enjoined from commencing, instituting, or prosecuting any of the Released Claims. Nothing
herein shall in any way impair or restrict the rights of any Settling Party to enforce the terms of
this Stipulation.
5.4 Upon the Effective Date, each of the Individual Defendants shall be deemed to
have, and by operation of the Judgment shall have, fully, finally, and forever released,
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relinquished, and discharged INTL and INTL shareholders from all claims or demands relating
to or arising out of, or connected with the institution, prosecution, assertion, settlement, or
resolution of the Derivative Claims, Direct Claims, and/or the Released Claims. Nothing herein
shall in any way impair or restrict the rights of any Settling Party to enforce the terms of this
Stipulation.
6. Conditions of Settlement; Effect of Disapproval, Cancellation, or Termination
6.1 The Effective Date of this Stipulation shall be conditioned on the occurrence of
all of the following events:
a. The Court has entered the Preliminary Approval Order, as required by
paragraph 3.1 hereof, substantially in the form of Exhibit B attached hereto;
b. approval of the Settlement and approval of the method of providing the
Notice to Current INTL Shareholders and the Settlement Class, and following the dissemination
of the Notice to the Settlement Class, as set forth in paragraphs 3.2 and 3.3;
c. entry of the Judgment, in all material respects in the form set forth as
Exhibit D annexed hereto, approving the Settlement without awarding costs to any party, except
as provided herein;
d. the payment of the Fee and Expense Amount in accordance with
paragraph 4; and
e. the passing of the date upon which the Judgment becomes Final.
6.2 If any of the conditions specified above in paragraph 6.1 are not met, then this
Stipulation shall be canceled and terminated in accordance with the conditions set forth in
paragraph 6.3, unless counsel for the Settling Parties mutually agree in writing to proceed with
this Stipulation.
6.3 If for any reason the Effective Date of this Stipulation does not occur, or if this
Stipulation is in any way canceled, terminated, or fails to become Final in accordance with its
terms: (a) all Settling Parties and Released Persons shall be restored to their respective positions
-16-
in the Action as of the date of execution of this Stipulation, including but not limited to INTL's
limited consent to the Court's personal jurisdiction over it to effectuate the Settlement; (b) all
releases delivered in connection with this Stipulation shall be null and void, except as otherwise
provided for in this Stipulation; (c) the Fee and Expense Amount paid to Plaintiffs' Counsel shall
be refunded and returned as provided for above in paragraph 4.3; and (d) all negotiations,
proceedings, documents prepared, and statements made in connection herewith shall be without
prejudice to the Settling Parties, shall not be deemed or construed to be an admission by any
Settling Party of any act, matter, or proposition, and shall not be used in any manner for any
purpose in the Action, any subsequent proceeding or in any other action or proceeding. In such
event, the terms and provisions of this Stipulation shall have no further force and effect with
respect to the Settling Parties and shall not be used in the Action or in any other proceeding for
any purpose.
7. Bankruptcy
7.1 In the event any proceedings by or on behalf of INTL, whether voluntary or
involuntary, are initiated under any chapter of the United States Bankruptcy Code, including any
act of receivership, asset seizure, or similar federal or state law action ("Bankruptcy
Proceedings"), the Settling Parties agree to use their reasonable best efforts to obtain all
necessary orders, consents, releases, and approvals for effectuation of this Stipulation and Court
approval of the Settlement in a timely and expeditious manner. By way of example only, the
Settling Parties agree to cooperate in making applications and motions to the bankruptcy court
for relief from any stay, approval of the Settlement, authority to release funds, authority for the
Defendants' insurer(s) to disburse insurance proceeds consistent with this Stipulation, authority
to release claims and indemnify officers and directors, and authority for the Court to enter all
necessary orders and judgments, and any other actions reasonably necessary to effectuate the
terms of the Settlement.
7.2 If any Bankruptcy Proceedings by or on behalf of INTL are initiated prior to the
payment of the Fee and Expense Amount, the Settling Parties shall agree to seek an order from
- 17-
the bankruptcy court presiding over such Bankruptcy Proceedings: (i) either lifting the automatic
stay for the limited purpose of authorizing such payment, or finding that the payment of the Fee
and Expense Amount by the Defendants and/or their insurers under their respective policies or
related compromise of coverage does not violate the automatic stay; and (ii) finding that the
payment of the Fee and Expense Amount by the Defendants and/or their insurers under their
respective policies or related compromise of coverage does not constitute a preference, voidable
transfer, fraudulent transfer, or similar transaction. In addition, in the event of any Bankruptcy
Proceedings by or on behalf of INTL, the Settling Parties agree that all dates and deadlines in the
Action, if any, or any dates and deadlines associated with the appeal of the Action, if any, will be
extended for such periods of time as are necessary to obtain necessary orders, consents, releases,
and approvals from the bankruptcy court to carry out the terms and conditions of the Settlement.
8. Miscellaneous Provisions
8.1 The Settling Parties: (a) acknowledge that it is their intent to consummate this
Stipulation; and (b) agree to act in good faith and cooperate to take all reasonable and necessary
steps to expeditiously implement the terms and conditions of this Stipulation.
8.2 In the event that any part of the Settlement is found to be unlawful, void,
unconscionable, or against public policy by a court of competent jurisdiction, the remaining
terms and conditions of the Settlement shall remain intact.
8.3 The Settling Parties intend this Settlement to be a final and complete resolution of
all disputes between them with respect to the Action. The Settlement comprises claims that are
contested and shall not be deemed an admission by any Settling Party as to the merits of any
claim, allegation, or defense. The Settling Parties and their respective counsel agree that at all
times during the course of the litigation, each has complied with the requirements of the
applicable laws and rules of the Court, including, without limitation, Missouri Rule of Civil
Procedure 55.03 and Federal Rule of Civil Procedure 11.
8.4 This Stipulation may be modified or amended only by a writing signed by the
Settling Parties.
- 18 -
8.5 This Stipulation shall be deemed drafted equally by all the Settling Parties hereto.
8.6 No representations, warranties, or inducements have been made to any of the
Settling Parties concerning this Stipulation or its exhibits other than the representations,
warranties, and covenants contained and memorialized in such documents.
8.7 This Stipulation and the exhibits attached hereto constitute the entire agreement
among the Settling Parties with respect to the subject matter hereof and supersede all prior and
contemporaneous oral and written agreements and discussions.
8.8 Each counsel or other individual executing this Stipulation or its exhibits on
behalf of any of the Settling Parties hereby warrants that such individual has the full authority to
do so.
8.9 The exhibits to this Stipulation are material and integral parts hereof and are fully
incorporated herein by this reference.
8.10 In the event that there exists a conflict or inconsistency between the terms of this
Stipulation and the terms of any exhibit hereto, the terms of this Stipulation shall prevail.
8.11 This Stipulation may be executed in one or more counterparts, including by
signature transmitted by facsimile or e-mailed PDF files. Each counterpart, when so executed,
shall be deemed to be an original, and all such counterparts together shall constitute the same
instrument.
8.12 This Stipulation shall be considered to have been negotiated, executed and
delivered, and to be wholly performed, in the State of Missouri, and the rights and obligations of
the parties to this Stipulation shall be construed and enforced in accordance with, and governed
by, the internal, substantive laws of the State of Missouri without giving effect to that State's
choice of law principles.
8.13 The Court shall retain jurisdiction with respect to implementation and
enforcement of the terms of this Stipulation, and the Settling Parties and their counsel submit to
the jurisdiction of the Court solely for purposes of implementing and enforcing the Settlement
embodied in this Stipulation.
-19-
IN WITNESS WHEREOF, the Settling Parties have caused this Stipulation to be
executed by their duly authorized attorneys.
Dated: ,2013 TROPPITO + MILLER, LLC TONY R. ER
TONY '.MILLER (Mo Bar # 50896)
105 East Fifth Street, Suite 500 Kansas City, MO 64106 Telephone: (816) 221-6006 Facsimile: (816) 221-6446
iaison Counsel fOr Plaintit1s
ROBBINS ARROYO LLP BRIAN J. ROBBINS GEORGE C. AGUILAR 600 B Street, Suite 1900 San Diego, CA 92101 Telephone: (619) 525-3990 Facsimile- (619) 525-3991
Lead Counsel for Plaintiffs
STUEVE SIEGEL HANSON LLP NORMAN E. SIEGEL 460 Nichols Road, Suite 200 Kansas City, MO 64112 Telephone: (816) 714-7110 Facsimile. (816) 714-7101
LEVI & KORSINSKY, LLP JOSEPH E. LEVI SHANE T. ROWLEY 30 Broad Street, 24th Floor New York, NY 10004 Telephone: (212) 363-7500 Facsimile: (212) 367-2510
Co-Counsel for Plaintiffs
Dated: , 2013 STINSON MORRISON HECKER LLP DOUGLAS Y. CURRAN
(— DOUGLAS . CU N (Mo Bar #28118)
-20 -
1201 Walnut Street, Suite 2900 Kansas City, MO 64106 Telephone: (818) 691-3384 Facsimile: (816) 412-1079
GREENBERG TRAURIG LLP PAMELA G. SMITH 77 West Wacker Drive, Suite 3100 Chicago, IL 60661 Telephone: (312) 456-8400 Facsimile: (312) 456-8435
Attorneys for Defendants Paul G. Anderson, Jeffrey Soman, Stephan Gutierrez, Robert Mortenson, William J. Dunaway, Bruce Krehbiel, Jack Friedman, Eric Parthemore, David Reinders, Brent Bunte, David Andresen, Douglas Derscheid, Rolland Svoboda, Kenneth Hahn, Tom Leiting, Daryl Henze and Robert V. Johnson
Dated:
, 2013 SHANK & HAMILTON, P.C. DAVID L. HEINEMANN
DAVID L. HEINEMANN (Mo Bar # 37622)
2345 Grand Blvd., Suite 1600 Kansas City, MO 64108 Telephone: (816) 471-0909 Facsimile: (816) 471-3888
Attorneys for Nominal Defendant FCStone Group, Inc.
Dated:
, 2013 ROUSE HENDRICKS GERMAN MAY PC CHARLES W. GERMAN BRANDON BOUL WARE
CHARLES W. GERMAN (Mo Bar #26534)
1201 Walnut Street, 20th Floor Kansas City, MO 64106 Telephone: (816) 471-7700 Facsimile. (816) 471-2221
- 21 -
SHUTTS & BOWEN LLP JONATHAN COHEN 201 South Biscayne Blvd, Suite 1500 Miami, FL 33131 Telephone: (305) 379-9173 Facsimile: (305) 347-7873
Attorneys for Nominal Defendant International Assets Holding Corporation, n/Ida INTL FCStone Inc.
815937
-22 -
1201 Walnut Street, Suite 2900 Kansas City, MO 64106 Telephone: (818) 691-3384 Facsimile: (816) 412-1079
GREENBERG TRAURIG LLP PAMELA G. SMITH 77 West Wacker Drive, Suite 3100 Chicago, IL 60661 Telephone: (312) 456-8400 Facsimile: (312) 456-8435
Attorneys for Defendants Paul G. Anderson, Jeffrey Soman, Stephan Gutierrez, Robert Mortenson, William J. Dunaway, Bruce
-Krchbi , , '-e-Partbemor , David Reinders, Brent Bunte, David Andresen, Douglas Derscheid, Rolland Svoboda, Kenneth Hahn, Tom Leiting, Daryl Henze and Robert V. Johnson
Dated: , 2013 SHANK & HAMILTON, P.C. DAVID L. HEINEMANN
DAVID L. HEINEMANN (Mo Bar # 37622)
2345 Grand Blvd., Suite 1600 Kansas City, MO 64108 Telephone: (816) 471-0909 Facsimile: (816) 471-3888
DICKINSON, MACKAMAN, TYLER & HAGEN P.C.
DAVID M. REPP 699 Walnut Street, Suite 1600 Des Moines, IA 50309 Telephone: (515) 246-4556 Facsimile: (515) 244-2600
Attorneys for Nominal Defendant FCStone Group, Inc.
Dated: 11/ ;( , 2013
ROUSE HENDRICKS GERMAN MAY PC CHARLES W. GERMAN BRANDON BOULWA E
CHARLES W. GERMAN (Mo Bar #26534)
- 21 -
PLAINTIFF'S EXHIBIT
CONFIDENTIAL SETTLEMENT PROPOSAL PROTECTED PURSUANT TO F.R.E. 408
CORPORATE GOVERNANCE TERM SHEET
In re FCStone Group, Inc. Shareholder Derivative & Class Action Litigation, Lead Case No. 08AE-CV02785 (Mo. Cir. Court, Platte County)
Within thirty days of the issuance of an order approving the settlement of the above-captioned action, or before, the Board of Directors (the "Board) of INTL FCStone ("INTL" or the "Company") shall adopt resolutions and amend appropriate committee charters to ensure adherence to the following Corporate Governance Policies. The following Corporate Governance Policies shall be maintained for a period of not less than four years:
I. ESTABLISHMENT OF RISK EVALUATION POLICIES
A. Board Oversight of Risk: The Audit Committee of the Company's Board of • e--to-retairi-illti c Company's risk " C
management policies.
B. Risk Committee Oversight: The Company shall maintain its Risk Committee with the following requirements:
1. Purpose and Responsibilities of the Committee
a. The primary function of the Risk Committee is to bear oversight responsibility with regard to (a) the assessment and review of trading, credit, hedging, market, and liquidity risk, and (b) the risk management activities of the Company and its subsidiaries.
b. In carrying out its oversight responsibilities, each Committee member shall be entitled to rely on the integrity and expertise of those persons providing information to the Committee and on the accuracy and completeness of such information, absent actual knowledge of inaccuracy.
C. Risk Committee Membership
1. The Risk Committee Chairman shall be the Head of Risk, who is appointed by and reports to the Chief Operating Officer ("COO"). Members of the Committee shall be appointed by the Chairman in consultation with the COO.
D. Risk Committee Organization
1. The Committee shall meet as frequently as necessary to fulfill its duties and responsibilities, but not less frequently than quarterly. A meeting of the Committee may be called by its chairman or any member.
2. The Committee may request any officer or employee of the Company, or any special counsel or advisor, to attend a meeting of the Committee or to meet with any members of, or consultant to, the Committee.
CONFIDENTIAL SETTLEMENT PROPOSAL PROTECTED PURSUANT TO F.R.E. 408
3. Minutes of its meetings will be approved by the Committee and maintained on behalf of the Committee. The Committee shall, through the COO, report its activities to the Board on a regular basis and make such recommendations as it deems necessary or appropriate.
E. Head of Risk
1. The Company shall continue to maintain its Head of Risk position, reporting to the COO, neither of whom have responsibility for the Company's revenue generation or accounting functions. The Head of Risk shall be ex officio Chairman of the Risk Committee. The duties of the Head of Risk shall include:
a. Designing, implementing, and monitoring of risks referred to in I.B.1 a above.
b. Coordinating and implementing training for all employees regarding these processes and procedures.
c. Reviewing and addressing complaints and inquiries from employees regarding the Company's risks.
d. Reporting to the COO, who shall report to the Board Audit Committee on the activities of the Risk Committee on a quarterly basis.
II. DIRECTOR EVALUATION AND REPORTING, AND ANNUAL SELF-ASSESSMENT
A. The Nominating & Governance Committee of the Board shall conduct an annual evaluation of the performance of the Board and communicate this evaluation to the full Board. The performance evaluation shall be conducted in such manner as the Committee deems appropriate..
833427
IN THE CIRCUIT COURT OF PLATTE COUNTY, MISSOURI
In re FCSTONE GROUP, INC. ) Lead Case No. 08AE-CV02785 SHAREHOLDER DERIVATIVE & CLASS ) ACTION LITIGATION ) )
) This Document Related To: ) All Actions )
) ) )
)
Judge: Honorable Thomas Fincham
[PROPOSED] ORDER PRELIMINARILY APPROVING SETTLEMENT AND PROVIDING NOTICE
PLAINTIFF'S EXK BIT
Lat
WHEREAS, a consolidated shareholder derivative and putative class action action is pending
before the Court captioned In re FCStone Group, Inc. Shareholder Derivative & Class Action
Litigation, Lead Case No. 08AE-CV02785 (the "Action");
WHEREAS, Plaintiffsl have made an application for an order preliminarily approving the
proposed settlement (the "Settlement") of the Action in accordance with the Stipulation, which
together with the exhibits annexed thereto, sets forth the terms and conditions for the proposed
Settlement of the Action, and for dismissal of the Action with prejudice;
WHEREAS, the Court having. (i) read and considered Plaintiffs' Unopposed Motion for
Preliminary Approval of Settlement together with the accompanying Memorandum of Law; and (ii)
read and considered the Stipulation, as well as all the exhibits attached thereto;
WHEREAS, the Court finds, upon a preliminary evaluation, that the proposed Settlement
falls within the range of possible approval criteria, as it provides a beneficial result for INTL,
Current INTL Shareholders, and Settlement Class Members, and appears to be the product of good
faith, informed, and non-collusive negotiations between experienced and able counsel for the
Settling Parties;
WHEREAS, the Court also finds, upon a preliminary evaluation, that Current INTL
Shareholders and Settlement Class Members should be apprised of the Settlement through the
proposed form of notice, allowed to file objections, if any, thereto, and appear at the Settlement
Hearing; and
WHEREAS, except as otherwise expressly provided herein, all capitalized terms shall have
the same meanings and/or definitions as set forth in the Stipulation.
1 Except as otherwise expressly provided, all capitalized terms shall have the same meanings and/or definitions as set forth in the Stipulation of Settlement dated November , 2013 (the "Stipulation").
NOW, THEREFORE, UPON GOOD CAUSE SHOWN, IT IS HEREBY ORDERED as
follows:
1. Pursuant to Missouri Supreme Court Rule 52.08, the Court preliminarily certifies, for
purposes of effectuating the Settlement only, a non-opt-out Settlement Class consisting of
collectively, all record and beneficial holders of the common stock of FCStone and their successors
in interest and transferees, immediate and remote, at any time during the period beginning on and
including July 2, 2009 through and including October 1, 2009, the date of the consummation of the
merger; provided, however, that Defendants, their immediate family members, their directors or
partners, their direct or indirect parent or subsidiary entities, or any person or entity over whom or
which any Defendant exercises sole or exclusive control shall be excluded from the Settlement
Class.
2. With respect to the Settlement Class, and for purposes of this Settlement only, this
Court preliminarily finds and concludes pursuant to Missouri Supreme Court Rule 52.08(b) that: (i)
the Settlement Class is so numerous that joinder of all members is impracticable; (ii) Defendants
have acted or refused to act on grounds generally applicable to the Settlement Class; (iii) the claims
of the Plaintiffs are typical of the claims of the Settlement Class; (iv) the Plaintiffs and Plaintiffs'
Counsel have fairly and adequately represented and protected the interests of all Settlement Class
Members; and (v) the prosecution of separate actions by or against individual Settlement Class
Members would create a risk of inconsistent or varying adjudications with respect to the Settlement
Class Members, which would establish incompatible standards of conduct for Defendants.
3. The Court does hereby preliminarily approve the Settlement as set forth in the
Stipulation, subject to further consideration at the Settlement Hearing described below.
4. Pending the Court's determination as to final approval of the Settlement, Current
INTL Shareholder and/or Settlement Class Members, or any of them, are barred and enjoined from
2
commencing, prosecuting, instigating, or in any way participating in the commencement or
prosecution of any action asserting any Released Claim against any of the Released Persons.
5. The Settlement Hearing shall be held before this Court on , 2014,
at : .m., before the Honorable Thomas C. Fincham, Judge of the Circuit Court of Platte County,
Missouri, Platte County, Courthouse, Division III, 328 Main Street, Suite 5-CH, Platte City,
Missouri 64079, to determine whether: (i) the Settlement of the Action upon the terms and subject to
the conditions set forth in the Stipulation is fair, reasonable, and adequate and should be approved by
the Court; (ii) the Settlement Class should he finally certified for settlement purposes; (ii) the Action
should be dismissed with prejudice; and (iii) the Fee and Expense Amount and the Incentive Awards
should be approved. The Court may adjourn the Settlement Hearing without further notice to
Current INTL Shareholders and Settlement Class Members.
6. The Court approves, as to form and content, the Notice of Pendency and Proposed
Settlement of Shareholder Derivative and Class Action (the "Notice") attached to the Stipulation as
Exhibit C, and finds that the provisions of the Notice meet the requirements of Missouri law and due
process, and provides the best notice practicable under the circumstances, and shall constitute due
and sufficient notice to all Persons entitled thereto. Non-material changes to the form of the Notice
may be made without further approval of the Court.
7. The Settling Parties shall jointly undertake the administrative responsibility of
mailing Notice of the Settlement to the Settlement Class, and shall bear financial responsibility for
providing the Notice to the Settlement Class as set forth in the Stipulation. The Notice shall be
mailed by first class mail to all Settlement Class Members who can be identified with reasonable
effort and Current INTL Shareholders within fourteen calendar days following entry of this Order.
8. Nominees who purchased FCStone common stock for the benefit of another Person
during the period of July 2, 2009 through October 1, 2009, inclusive, shall be requested to send the
3
Notice to all such beneficial owners of FCStone common stock within ten days after receipt thereof,
or send a list of the names and addresses of such beneficial owners to the Notice Administrator
within ten days of receipt thereof, in which event the Notice Administrator shall promptly mail the
Notice to such beneficial owners.
9. Within ten calendar days after entry of this Order, Robbins Arroyo LLP shall cause
copies of the Notice and the Stipulation to be posted on each of its website.
10. At least seven calendar days prior to the Settlement Hearing, Plaintiffs' Counsel shall
file with the Court proof by affidavit or declaration, of the mailing of the Notice to Settlement Class
Members, and the posting of the Notice and Stipulation on the website of Robbins Arroyo LLP.
11. Any Current INTL Shareholder and Settlement Class Member may, but is not
required to, enter an appearance in the Action, at his, her, or its own expense, individually or through
counsel of his, her, or its own choice.
12. Current INTL Shareholder and Settlement Class Member may object and/or appear
and show cause, if he, she, or it has any concern why the Settlement should not be approved as fair,
reasonable, and adequate, or why the Judgment should not be entered thereon, or why the Fee and
Expense Amount or the Incentive Awards should not be approved; provided however, unless
otherwise ordered by the Court, no Current INTL Shareholder or Settlement Class Member shall be
heard or entitled to contest the approval of the terms and conditions of the Settlement, or, if
approved, the Judgment to be entered thereon approving the same, or the approval of the Fee and
Expense Amount and Incentive Awards, unless that shareholder has, at leastfourteen calendar days
prior to the Settlement Hearing: (1) filed with the Clerk of the Court a written objection to the
settlement setting forth: (a) the nature of the objection; (b) proof of ownership, including the number
of shares and the date of purchase, of INTL common stock through the date of the Settlement
Hearing and/or proof of ownership, including the number of shares and the date of purchase, of
4
FCStone common stock from and including July 2, 2009 through and including October 1, 2009; and
(c) any documentation in support of such objection; and (2) if a Current INTL Shareholder and/or
Settlement Class Member intends to appear and requests to be heard at the Settlement Hearing, such
shareholder must have, in addition to the requirements of (1) above, filed with the Clerk of the
Court: (a) a written notice of such shareholder's intention to appear; (b) a statement that indicates the
basis for such appearance; and (c) the identities of any witnesses the shareholder intends to call at the
Settlement Hearing and a statement as to the subject of their testimony. If a Current INTL
Shareholder and/or Settlement Class Member files a written objection and/or written notice of intent
to appear, such shareholder must also simultaneously serve copies of such notice, proof, statement,
and documentation, together with copies of any other papers or briefs such shareholder files with the
Court (either by hand delivery or by first class mail) upon each of the following:
The Court:
Clerk of the Court Platte County Courthouse 328 Main Street, Suite 5-CH Platte City, MO 64079
Lead Counsel for Plaintiffs:
ROBBINS ARROYO LLP Attn: George C. Aguilar, Esq. 600 B Street, Suite 1900 San Diego, CA 92101 Telephone: (619) 525-3990
Counsel for Nominal Defendant FCStone Group, Inc.:
DICKINSON, MACKAMAN, TYLER & HAGEN P.C.
Attn: David M. Repp, Esq. 699 Walnut Street, Suite 1600 Des Moines, IA 50309 Telephone: (515) 246-4556
Counsel for the Individual Defendants:
Greenberg Traurig LLP Attn: Pamela G. Smith 77 West Wacker Drive, Suite 3100 Chicago, IL 60661 Telephone: (312) 456-8400
Counselfor Nominal Defendant INTL FCStone Inc.:
SHUTTS & BOWEN LLP Attn: Jonathan Cohen, Esq. 201 South Biscayne Blvd, Suite 1500 Miami, FL 33131 Telephone: (305) 379-9173
5
13. Any Current INTL Shareholder and/or Settlement Class Member who does not make
his, her, or its objection in the manner provided herein shall be deemed to have waived such
objection and shall forever be foreclosed from making any objection to the fairness, reasonableness,
or adequacy of the Settlement as set forth in the Stipulation, unless otherwise ordered by the Court,
but shall otherwise be bound by the Judgment to be entered and the releases to be given.
14. No later than seven calendar days before the Settlement Hearing, all briefs supporting
the Settlement, including responses to shareholder objections, if any, shall be served and filed.
1 5_ All Current -INTL Shareholders and Settlement Class Members (and his, hers, or its
successors, predecessors, and assigns) shall be bound by all determinations and judgments in the
Action concerning the Settlement, whether favorable or unfavorable to Current INTL Shareholders
and Settlement Class Members.
16. If Court approval of the Settlement does not occur for any reason, the Settlement and
the Stipulation shall be null and void and of no force and effect. In such event, the Settling Parties
shall return to their respective litigation positions in the Action as of the time immediately prior to
the date of the execution of the Stipulation, as though it were never executed or agreed to (and the
Settling Parties shall meet and confer in good faith to discuss the resumption and schedule of further
proceedings).
17. The Stipulation shall not be deemed: (i) to prejudice in any way the positions of the
Settling Parties with respect to the Action, (ii) to constitute an admission of fact by any Settling
Party, or (iii) to entitle any Settling Party to recover any costs or expenses incurred in connection
with the implementation of the Stipulation or the Settlement. Neither the existence of the Stipulation
nor its contents shall be admissible in evidence or be referred to for any purposes in the Action, or in
any litigation or judicial proceeding, other than to enforce the terms therein.
6
1 8 . All proceedings in the Action, except for those proceedings related to the Settlement,
shall be stayed until the resolution of all such settlement-related proceedings.
* * *
ORDER
IT IS SO ORDERED.
DATED:
THE HONORABLE THOMAS C. FINCHAM CIRCUIT COURT JUDGE
820808
-7
I2_ PLAINTIFF'S i EXHIBIT 2 C,
IN THE CIRCUIT COURT OF PLATTE COUNTY, MISSOURI 11 L E
In re FCSTONE GROUP, INC. ) Lead Case No. 08AE-CV02785 U DEC 0 4 2013
SANDRA L. DOWD ACTION LITIGATION SHAREHOLDER DERIVATIVE & CLASS )
) Clerk of the Circuit Court Platte County, Itt( )
) ) Judge: Honorable Thomas Fincham
This Document Related To: ) )
All Actions ) )
)
NOTICE OF PENDENCY AND PROPOSED SETTLEMENT OF SHAREHOLDER DERIVATIVE AND CLASS ACTION
TO: ALL RECORD HOLDERS AND BENEFICIAL OWNERS OF FCSTONE GROUP, INC. COMMON STOCK DURING THE PERIOD FROM AND INCLUDING JULY 2, 2009 THROUGH AND INCLUDING OCTOBER 1, 2009, THE DATE OF THE CLOSING OF THE MERGER WHEREBY INTERNATIONAL ASSETS HOLDING CORPORATION ACQUIRED ALL OUTSTANDING SHARES OF FCSTONE COMMON STOCK PURSUANT TO A MERGER AGREEMENT, AND ALL OWNERS OF INTL FCSTONE, INC. ("INTL" OR THE "COMPANY")' COMMON STOCK AS OF DECEMBER_, 2013 ("CURRENT INTL SHAREHOLDERS").
PLEASE READ THIS NOTICE CAREFULLY AND IN ITS ENTIRETY. YOUR RIGHTS MAY BE AFFECTED.
YOU ARE HEREBY NOTIFIED that the parties to the above-captioned shareholder
action have entered into a Stipulation of Settlement dated December /, 2013 (the "Stipulation") to
resolve the claims raised in the Action.2
This notice is being provided to you, pursuant to an Order of the Circuit Court of Platte
County, Missouri (the "Court"). Please be advised that pursuant to an Order of the Court, a hearing
(the "Settlement Hearing") will be held on 4:\I\Cti-c\r\ \CA, 2014 at : 00%., before the
Honorable Thomas C. Fincham, Judge of the Circuit Court of Platte County, Missouri, Platte
County, Courthouse, Division III, 3287 Main Street, Suite 5-CH, Platte City, Missouri 64079, for
the prupose of determining whether: (a) the Settlement by way of adoption of certain corporation
governance policies (as set forth in more detail in the Stipulation on file with the Court and
available on the website of Robbins Arroyo LLP at wvvw.robbinsarroyo.com/notices) should be
finally approved by the Court as fair, reasonable, and adequate to INTL, Current INTL
Shareholders, and Settlement Class Members; (b) the Settlement Class should be finally certified
for settlement purposes; (c) the Action should be dismissed with prejudice; (d) the Settling Parties'
agreed-to Fee and Expense Amount in the amount of $500,000 to compensate Plaintiffs' for their
attorneys' fees and reimbursement of expenses should be approved; and (d) the Incentive Awards
in the amount of $10,000 each to Plaintiffs should be approved.
1 The Action was initially filed on behalf of FCStone Group Inc., which was subsequently acquired by, and became a wholly owned subsidiary of, International Assets Holding Corporation. Following the acquisition, International Assets Holding Corporation changed its name to INTL FCStone Inc.
2 All capitalized terms are defined in Section I below, unless otherwise noted.
The Settlement will fully resolve the Action on the terms set forth in the Stipulation and
summarized in this Notice, including the dismissal of the derivative and class claims in the Action
with prejudice. As detailed below, the Settling Parties believe that the proposed Settlement
provides substantial benefits to the Company, and is in the best interests of the Company and its
shareholders. For a more detailed statement of the matters involved in the Action, the Settlement,
and the terms discussed in this Notice, the Stipulation may be viewed on the website of Robbins
Arroyo LLP at wwvv.robbinsarroyo.com/notices. The Stipulation may also be inspected at the
Office of the Clerk of the Circuit Court of Platte County, Missouri, located at Platte County
Courthouse, 328 Main Street, Suite 5-CH, Platte City, Missouri 64079, during regular business
hours of each business day.
You may have the right to object to the Settlement, including to Fee and Expense Amount
and the Incentive Awards, in the manner provided herein. If you fail to object in the manner
provided herein at least fourteen calendar days prior to the Settlement Hearing, you will be deemed
to have waived your objections and will be bound by the Judgment to be entered and the release of
claims to be given, unless otherwise ordered by the Court.
This Notice is not intended to be and should not be construed as an expression of any opinion
by the Court with respect to the merits of the claims made in the Action, but is merely to advise you of
the pendency of Settlement of the Action and your rights as a Current INTL Shareholder and/or a
Settlement Class Member.
I. DEFINITIONS USED IN THIS NOTICE
As used in the Stipulation, the following terms have the meanings specified below:
1. "Action" means the consolidated shareholder derivative and putative class action,
captioned In re FCStone Group, Inc. Shareholder Derivative & Class Action Litigation, Lead Case
No. 08AE-CV02785 (Circuit Court of Platte County, Missouri).
2. "Court" means the Circuit Court of Platte County, Missouri.
2
3. "Current INTL Shareholders" means any Persons who owned INTL common stock
as of the date of the execution of the Stipulation and who continue to hold their INTL common
stock as of the date of the final settlement approval hearing, excluding the Individual Defendants,
the officers and directors of INTL, members of their immediate families, and their legal
representatives, heirs, successors, or assigns, and any entity in which Individual Defendants have
or had a controlling interest.
4. "Defendants" means, collectively, nominal defendants INTL and FCStone and the
Individual Defendants.
5. "Derivative Claims" means the claims asserted in Counts I through IV of th
filed in the Action, including but not limited to (i) the CAC allegations that beginning in
November 2007, each of the Individual Defendants breached their fiduciary duties to FCStone and
(ii) the CAC prayers for relief relating to Counts I through IV and the derivative allegations.
6. "Direct Claims" means the claims asserted in Counts V and VI of the CAC,
including, but not limited to, the CAC prayers for relief relating to Counts V and VI.
7. "Effective Date" means the date by which the events and conditions specified in
paragraph 6.1 of the Stipulation have been met and have occurred.
8. "FCStone" means nominal defendant FCStone Group, Inc. which became a wholly
owned subsidiary of INTL on October 1, 2009, the date on which the Acquisition became
effective.
9. "Federal Court" means the U.S. District Court in the Western District of Missouri.
10. "Final" means the date upon which the last of the following shall occur with respect
to the Judgment approving the Stipulation, substantially in the form of Exhibit D attached to the
Stipulation: (1) the expiration of the time to file a notice of appeal from the Judgment; (2) if an
appeal has been filed, the court of appeals has either affirmed the Judgment or dismissed that
appeal and the time for any reconsideration or further appellate review has passed; or (3) if a
higher court has granted further appellate review, that court has either affirmed the underlying
Judgment or affirmed the court of appeal's decision affirming the Judgment or dismissing the
3
appeal. An "appeal" shall not include any appeal that concerns only the issue of attorneys' fees and
expenses or the incentive awards. Any proceeding or order, or any appeal or petition for a writ of
certiorari pertaining solely to the application for attorneys' fees and expenses, or the incentive
award shall not in any way delay or preclude the Judgment from becoming Final.
11. "Individual Defendants" means Paul G. Anderson, Jeffrey Soman, Stephan
Gutierrez, Robert Mortenson, William J. Dunaway, Bruce Krehbiel, Jack Friedman, Eric
Parthemore, David Reinders, Brent Bunte, David Andresen, Douglas Derscheid, Rolland
Svoboda, Kenneth Hahn, Tom Leiting, Daryl Henze, and Robert V. Johnson.
12. "INTL" or the "Company means nominal defendant INTL FCStone Inc., a
Delaware corporation, and its affiliates, subsidiaries, predecessors, successors, and assigns.
13. "Judgment" means the Order of Dismissal with Prejudice and Final Judgment to be
rendered by the Court, substantially in the form attached to the Stipulation as Exhibit D.
14. "Person" means an individual, corporation, limited liability corporation,
professional corporation, partnership, limited partnership, limited liability partnership,
association, joint stock company, estate, legal representative, trust, unincorporated association,
government, or any political subdivision or agency thereof and any business or legal entity and
their spouses, heirs, predecessors, successors, representatives, or assignees.
15. "Plaintiffs" means, collectively, Stuart Krantz, Sewak Singh, and Michael Bogart,
on behalf of themselves, directly on behalf of the Settlement Class, and derivatively on behalf of
nominal defendants FCStone and INTL.
16. "Plaintiffs' Counsel" means Robbins Arroyo LLP, Steuve Siegal Hanson LLP, Levi
& Korsinsky, LLP, and Troppito + Miller, LLC.
17. "Related Persons" means each of the Individual Defendants and their past or
present agents, officers, directors, attorneys, accountants, auditors, advisors, insurers, co-insurers,
reinsurers, spouses, immediate family members, heirs, executors, personal representatives, estates,
administrators, trusts, predecessors, successors, and assigns or other individual or entity in which
any Individual Defendant or INTL has a controlling interest, and each and all of their respective
4
past and present officers, directors, employees, agents, affiliates, parents, subsidiaries, divisions,
attorneys, accountants, auditors, advisors, insurers, co-insurers, re-insurers, heirs, executors,
personal representatives, estates, administrators, trusts, predecessors, successors, and assigns.
18. "Released Claims" shall collectively mean any and all claims, demands, rights,
actions, causes of action, liabilities, damages, losses, obligations, judgments, duties, suits, costs,
expenses, matters and issues known or unknown, contingent or absolute, suspected or
unsuspected, disclosed or undisclosed, liquidated or unliquidated, matured or unmatured, accrued
or unaccrued, apparent or unapparent, whether or not concealed or hidden, through the Effective
Date under any law governing the Action, or for any remedy whether a equity or law (collectively,
the "Claims"), whether factual or legal, that were, or could have been asserted against any one or
more of the Released Persons in the Action, including but not limited to any such Claims:
(i) that were or could have been asserted against any of the Released Persons in
the Derivative Claims or by any INTL shareholder (claiming in the right of, or on behalf of, the
Company) or by INTL and, by operation of the Judgment, INTL and any such INTL shareholder
(claiming in the right of, or on behalf of, the Company) shall have waived any and all provisions,
rights and benefits conferred by any law of any state or territory of the United States, or principle
of common law, which is similar, comparable or equivalent to California Civil Code section 1542
(see paragraph 26 below), and/or
(ii) that were or could have been asserted against any of the Released Persons in
the Direct Claims by Plaintiffs or any Settlement Class Member and, by operation of the Judgment,
Plaintiffs and each Settlement Class Member shall have waived any and all provisions, rights and
benefits conferred by any law of any state or territory of the United States, or principle of common
law, which is similar, comparable or equivalent to California Civil Code section 1542 (see
paragraph 26 below). Excluded from the term "Released Claims" are all claims alleged in the
Securities Class Action and claims to enforce the Settlement.
5 -
19. "Released Persons" means collectively, FCStone, INTL, and each of the Individual
Defendants and each of their Related Persons. "Released Person" means, individually, any of the
Released Persons.
20. "Releasing Parties" means Plaintiffs (individually, directly, and derivatively on
behalf of INTL and/or FCStone), any other Person who (i) is a Settlement Class Member, or (ii)
owned or acquired shares of INTL common stock on or before January 8, 2010 and who has held
such shares continuously through and including the date of the Judgment, and (iii) Plaintiffs'
Counsel. "Releasing Party" means, individually, any of the Releasing Parties.
21. "Securities Class Action" means the securities class action, filed in the Federal
Court, captioned Luman v. Anderson, No. 4:08-cv-514 (W.D. Mo. filed July 15, 2008).
22. "Settlement" means the settlement and compromise of the Action as provided for in
the Stipulation.
23. "Settlement Class" means, collectively, a non-opt-out, Court certified settlement
class consisting of all record and beneficial holders of the common stock of FCStone and their
successors in interest and transferees, immediate and remote, at any time during the period
beginning on and including July 2, 2009 through and including October 1, 2009, the date of the
consummation of the merger; provided, however, that Defendants, their immediate family
members, their directors or partners, their direct or indirect parent or subsidiary entities, or any
person or entity over whom or which any Defendant exercises sole or exclusive control shall be
excluded from the Settlement Class. "Settlement Class Member" means an individual member of
the Settlement Class.
24. "Settlement Hearing" means the hearing or hearings at which the Court will review
the adequacy, fairness, and reasonableness of the Settlement.
25. "Settling Parties" means, collectively, each and all of the Plaintiffs (on behalf of
themselves, directly on behalf of the Settlement Class, and derivatively on behalf of FCStone and
INTL) and Defendants. "Settling Party" means, individually, any of the Settling Parties.
6
26. "Unknown Claims" means any Released Claim(s) which any of the Settling Parties
(Plaintiffs or Defendants) do not know of or suspect to exist in his, her, or its favor at the time of
the release of the Released Persons. With respect to any and all Released Claims, the Settling
Parties agree that upon the Effective Date, the Settling Parties expressly waive the provisions,
rights, and benefits conferred by or under California Civil Code section 1542, or any other law of
the United States or any state or territory of the United States, or principle of common law, which
is similar, comparable, or equivalent to section 1542, which provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
The Settling Parties acknowledge that they may hereafter discover facts in addition to, or different
from, those now known or believed to be true by them, with respect to the subject matter of the
Released Claims, but it is the intention of the Settling Parties to completely, fully, finally, and
forever compromise, settle, release, discharge, and extinguish any and all Released Claims, known
or unknown, suspected or unsuspected, contingent or absolute, accrued or unaccrued, apparent or
unapparent, whether or not concealed or hidden, and for any remedy whether at equity or law,
which do now exist, or heretofore existed, or may hereafter exist, and without regard to the
subsequent discovery of additional or different facts. The Settling Parties acknowledge that the
foregoing waiver was separately bargained for and is a key element of the Stipulation of which this
release is a part.
II. LITIGATION HISTORY
A. The Action
On August 5, 2008, plaintiff Krantz filed a shareholder derivative action on behalf of
FCStone and against certain of the Company's officers and directors alleging breaches of fiduciary
duties, waste of corporate assets, and unjust enrichment by undertaking a hedging strategy based
on a highly risky bet which caused the hedge to wipe out any and all previous gains and to miss the
7
Company's earnings projections. On May 6, 2009 plaintiff Krantz filed an amended complaint
which included allegations relating to the Adams energy trading account (the "Amended
Complaint").
On July 2, 2009, FCStone announced it had entered into a merger agreement with
International Assets Holding Corporation and International Assets Acquisition Corporation
(collectively, "International Assets") for the acquisition of FCStone (the "Acquisition"). On July
7, 2009, plaintiff Krantz filed a motion for leave to amend the existing complaint and, the next day,
filed a derivative and class action complaint containing additional allegations that the Individual
Defendants failed to both properly inform shareho ders about material information and to
maximize stockholder value in connection with the proposed acquisition.
On July 8, 2009, plaintiffs Singh and Bogart filed a class action complaint against
FCStone, its Board of Directors, and certain executives seeking equitable relief for their alleged
breaches of fiduciary duty and other violations of state law arising out of their attempt to sell
FCStone to International Assets at an unfair price and by means of an unfair process. The Court
consolidated the actions on November 13, 2009. Thereafter, on January 8, 2010, Plaintiffs filed a
Verified Consolidated Shareholder Derivative and Class Action Complaint for Breach of
Fiduciary Duty, Waste of Corporate Assets, and Unjust Enrichment ("CAC").
On September 25, 2009, FCStone shareholders voted in favor of the Acquisition. On
October 1, 2009, the Acquisition was consummated and FCStone became a wholly-owned
subsidiary of International Assets. In December of 2010, International Assets Holding
Corporation changed its name to INTL FCStone Inc.
On February 23, 2010, the Individual Defendants and nominal defendant International
Assets filed separate motions to dismiss the CAC. The Court has not ruled on the motions to
dismiss.
B. The Securities Class Action
The Securities Class Action was filed in Federal Court against the Company and
defendants Anderson and Dunaway alleging the issuance of false and misleading statement
8
regarding the Company's business and financial results. Luman v. Anderson, et al., No.
4:08-cv-514 (W.D. Mo. filed July 15, 2008) (the "Securities Class Action"). On November 16,
2010, the Federal Court granted and denied in part defendants' motion to dismiss the Securities
Class Action. On February 10, 2012, the Federal Court certified the class for the period of
November 3, 2008, to February 24, 2009. Following a joint mediation session with the parties in
this Action, the parties in the Securities Class Action agreed to a settlement of the claims raised.
The Federal Court ordered final approval of the settlement on July 23, 2013.
C. Settlement Efforts
On April 13, 2012, the parties to the Action attended an all-day, in-person formal
mediation at the offices of Irell & Manella, LLP in Newport Beach, presided over by former
United States District Judge Layn R. Phillips ("Judge Phillips"). While unable to reach a
satisfactory resolution of the Action at the mediation session, the parties did make substantial
headway in negotiating reforms Plaintiffs believed were necessary and beneficial for the Company
to address Plaintiffs' allegations. Following the mediation, the parties continued settlement
negotiations with the assistance of Judge Phillips, and reached an agreement in principle to resolve
the Action on the terms and conditions set forth in the Settlement.
III. PLAINTIFFS' CLAIMS AND THE BENEFITS OF SETTLEMENT
Based on their investigation, Plaintiffs believe that the Action has substantial merit, and
Plaintiffs' entry into the Stipulation is not intended to be and shall not be construed as an admission
or concession concerning the relative strength or merit of the claims alleged in the Action.
However, Plaintiffs and Plaintiffs' Counsel recognize and acknowledge the significant risk,
expense, and length of continued proceedings necessary to prosecute the Action against the
Individual Defendants through trial and through possible appeals. Plaintiffs' Counsel also have
taken into account the uncertain outcome and the risk of any litigation, especially in complex cases
such as the Action, as well as the difficulties and delays inherent in such litigation. Plaintiffs'
Counsel are also mindful of the inherent problems of establishing demand futility, derivative
-9
standing following a corporate merger, and the possible defenses to the claims alleged in the
Action.
Based on Plaintiffs' Counsel's thorough review and analysis of the relevant facts,
allegations, defenses, and controlling legal principles, Plaintiffs' Counsel believe that the
Settlement set forth in the Stipulation is fair, reasonable, and adequate, and confers substantial
benefits upon INTL and its shareholders. Based upon Plaintiffs' Counsel's evaluation, Plaintiffs
have determined that the Settlement is in the best interests of INTL, Current INTL Shareholders
and the Settlement Class, and have agreed to settle the Action upon the terms and subject to the
conditions set forth in the Settlement.
IV. DEFENDANTS' DENIALS OF WRONGDOING AND LIABILITY
The Individual Defendants have denied and continue to deny that they have committed,
threatened, or attempted to commit, any violations of law, or breached any duty owed to Plaintiffs,
the Settlement Class, FCStone, INTL, or its shareholders. Without admitting the validity of any
allegations made in the Action, or any liability with respect thereto, the nominal defendants and the
Individual Defendants have concluded that it is desirable that the claims asserted in the Action be
settled on the terms reflected in the Stipulation. The Individual Defendants, FCStone, and INTL
are entering into the Stipulation because it will eliminate the uncertainty, distraction, disruption,
burden, risk, and expense of further litigation. Further, the Individual Defendants, and nominal
defendants FCStone and INTL acknowledge that the Settlement confers substantial benefits on
INTL and is fair, reasonable, adequate, and in the best interests of INTL and its shareholders.
Neither the Stipulation, nor any of its terms or provisions, nor entry of the Judgment, nor
any document or exhibit referred or attached to this Stipulation, nor any action taken to carry out
this Stipulation, is, may be construed as, or may be used as evidence of the validity of any of the
Released Claims or an admission by or against the Individual Defendants of any fault,
wrongdoing, or concession of liability.
-10-
V. THE SETTLEMENT HEARING
The Settlement Hearing will be held before the Honorable Thomas C. Fincham on
, 2013 at a./p.m. at the Circuit Court of Platte County, Missouri, Platte
County Courthouse, Division III, 328 Main Street, Suite 5-CH, Platte City, Missouri 64079, to
determine whether: (i) the Settlement of the Action upon the terms and subject to the conditions set
forth in the Stipulation is fair, reasonable, and adequate and should be approved by the Court; (ii)
the Settlement Class should be finally certified for settlement purposes; (ii) the Action should be
dismissed with prejudice; and (iii) the Fee and Expense Amount and the Incentive Awards should
be approved. The Settlement Hearing may be continued by the Court at the Settlement Hearing,
or at any adjourned session thereof without further notice.
VI. TERMS OF THE THE SETTLEMENT
The terms and conditions of the proposed Settlement are set forth in the Stipulation
described above. The Stipulation has been filed with the Court and is also available for viewing on
the websites of Robbins Arroyo LLP at www.robbinsarroyo.com/notices. The following is only a
summary of its terms.
The Settling Parties and their respective counsel have conducted extensive negotiations
and have reached agreement regarding corporate governance issues, including certain corporate
governance additions, modifications, and/or formalizations, which measures have been reviewed
and agreed upon by Plaintiffs' Counsel (the "Corporate Governance Policies"). Within thirty
calendar days after Court approval of a settlement of the Action, INTL shall more formally express
and/or implement and maintain in substance the Corporate Governance Policies identified in
Section I of Exhibit A attached to the Stipulation for a period of no less than four years.
VII. DISMISSAL AND RELEASES
Upon the Effective Date, the Releasing Parties shall be deemed to have, and by operation
of the Judgment shall have, fully, fmally, and forever released, relinquished, and discharged the
Released Claims (including Unknown Claims) against the Released Persons and any and all claims
-11-
arising out of, relating to, or in connection with the defense, settlement, or resolution of the Action
against the Released Persons
Also, upon the Effective Date, each of the Defendants shall be deemed to have, and by
operation of the Judgment shall have, fully, finally, and forever released, relinquished, and
discharged the Released Claims (including Unknown Claims) against the Plaintiffs, Plaintiffs'
Counsel and any and all claims arising out of, relating to, or in connection with the institution,
prosecution, assertion, settlement, or resolution of the Action against Plaintiffs and Plaintiffs'
Counsel.
Further, upon the Effective Date, INTL and IN are o a ers, on e a o emse yes
and/or itself and each of their/its predecessors, successors, parents, subsidiaries, affiliates,
custodians, agents, assigns, representatives, heirs, estates, executors, trusts, trustees, trust
beneficiaries, administrators, spouses, marital communities, and immediate family members, shall
be deemed to have, and by operation of the Judgment shall have, fully, finally and forever released,
relinquished and discharged all Released Claims and will be forever barred and enjoined from
commencing, instituting or prosecuting any of the Released Claims.
Finally, upon the Effective Date, each of the Individual Defendants shall be deemed to
have, and by operation of the Judgment shall have, fully, finally and forever released, relinquished
and discharged INTL and INTL shareholders from all claims or demands relating to or arising out
of, or connected with the institution, prosecution, assertion, settlement or resolution of the
Derivative Claims, Direct Claims, and/or the Released Claims.
Nothing herein shall in any way impair or restrict the rights of any Settling Party to enforce
the terms of the Stipulation.
VIII. PLAINTIFF'S ATTORNEYS' FEES AND EXPENSES
After negotiating the substantive terms of the settlement, the Settling Parties discussed a
fair and reasonable sum to be paid to Plaintiffs' Counsel for their attorneys' fees and expenses.
Subject to Court approval, the Settling Parties agreed that the INTL shall, or shall cause their
insurers to pay Plaintiffs's attorneys' fees and expenses in the amount of $500,000 (the "Fee and
- 12 -
Expense Amount"). To date, Plaintiffs' Counsel have neither received any payment for their
services in prosecuting the Action, nor have counsel been reimbursed for their out-of-pocket
expenses incurred. Further, Plaintiffs' Counsel may apply to the Court for an incentive award of up
to $10,000 for each of the Plaintiffs, only to be paid upon Court approval, in recognition of
Plaintiffs' participation and effort in the prosecution of the Action (the "Incentive Awards"). The
failure of the Court to approve any requested Incentive Award, in whole or in part, shall have no
effect on the Settlement set forth in the Stipulation. The Incentive Awards, if approved by the
Court, shall be paid to Plaintiffs from the Fee and Expense Amount. Defendants shall not be liable
for any portion of any Incentive Award. The Settling Parties believe that the Fee and Expense
Amount is within the range of attorneys' fees and expenses approved by courts under similar
circumstances in litigation of this type.
IX. THE RIGHT TO OBJECT AND/OR BE HEARD AT THE HEARING
Any Current INTL Shareholder and Settlement Class Member may object and/or appear
and show cause, if he, she, or it has any concern, why the Settlement should not be approved as
fair, reasonable, and adequate, or why the Judgment should not be entered thereon, or why the Fee
and Expense Amount or the Incentive Awards should not be approved; provided however, unless
otherwise ordered by the Court, no Current INTL Shareholder or Settlement Class Member shall
be heard or entitled to contest the approval of the terms and conditions of the Settlement, or, if
approved, the Judgment to be entered thereon approving the same, or the approval of the Fee and
Expense Amount and Incentive Awards, unless that shareholder has, at least fourteen calendar
days prior to the Settlement Hearing: (1) filed with the Clerk of the Court a written objection to
the settlement setting forth: (a) the nature of the objection; (b) proof of ownership, including the
number of shares and the date of purchase, of INTL common stock through the date of the
Settlement Hearing and/or proof of ownership, including the number of shares and the date of
purchase, of FCStone common stock from and including July 2, 2009 through and including
October 1, 2009; and (c) any documentation in support of such objection; and (2) if a Current
INTL Shareholder and/or Settlement Class Member intends to appear and requests to be heard at
- 13 -
the Settlement Hearing, such shareholder must have, in addition to the requirements of (1) above,
filed with the Clerk of the Court: (a) a written notice of such shareholder's intention to appear; (b)
a statement that indicates the basis for such appearance; and (c) the identities of any witnesses the
shareholder intends to call at the Settlement Hearing and a statement as to the subject of their
testimony. If a Current INTL Shareholder and/or Settlement Class Member files a written
objection and/or written notice of intent to appear, such shareholder must also simultaneously
serve copies of such notice, proof, statement, and documentation, together with copies of any other
papers or briefs such shareholder files with the Court (either by hand delivery or by first class mail)
upon each of the following:
The Court:
Clerk of the Court Platte County Courthouse 328 Main Street, Suite 5-CH Platte City, MO 64079
Lead Counsel for Plaintiffs:
ROBBINS ARROYO LLP Attn: George C. Aguilar, Esq. 600 B Street, Suite 1900 San Diego, CA 92101 Telephone: (619) 525-3990
Counsel for the Individual Defendants:
Greenberg Traurig LLP Attn: Pamela G. Smith 77 West Wacker Drive, Suite 3100 Chicago, IL 60661 Telephone: (312) 456-8400
Counsel for Nominal Defendant INTL FCStone Inc.:
SHUTTS & BOWEN LLP Attn: Jonathan Cohen, Esq. 201 South Biscayne Blvd, Suite 1500 Miami, FL 33131 Telephone: (305) 379-9173
Counsel for Nominal Defendant FCStone Group, Inc.:
SHANK & HAMILTON, P.C. Attn: David L. Heinemann, Esq. 2345 Grand Blvd., Suite 1600 Kansas City, MO 64108 Telephone: (816) 471-0909
Any Current INTL Shareholder and/or Settlement Class Member who does not make his,
her, or its objection in the manner provided herein shall be deemed to have waived such objection
and shall forever be foreclosed from making any objection to the fairness, reasonableness, or
- 14 -
adequacy of the Settlement as incorporated in the Stipulation, unless otherwise ordered by the
Court, but shall otherwise be bound by the Judgment to be entered and the releases to be given
X. CONDITIONS FOR SETTLEMENT
The Settlement is conditioned upon the occurrence of certain events described in the
Stipulation, which requires, among other things: (i) entry of the requested Judgment by the Court;
and (ii) expiration of the time to appeal from, or alter or amend, the Judgment. If, for any reason,
any one of the conditions described in the Stipulation is not met and the entry of the Judgment does
not occur, the Stipulation may be terminated and, if terminated, will become null and void; and the
Setting Parties to the Stipulation will be restored to their respective positions as of the execution
date of the Stipulation (and the Settling Parties shall meet and confer in good faith to discuss the
resumption and schedule of further proceedings).
XI. EXAMINATION OF PAPERS AND INQUIRIES
There is additional information concerning the Settlement available in the Stipulation and
Agreement of Settlement which may be viewed on the website of Robbins Arroyo LLP at
www.robbinsarroyo.com/notices. You may also inspect the Stipulation during business hours at
the office of the Clerk of the Circuit Court of Platte County, Missouri located at Platte County
Courthouse, 328 Main Street, Suite 5-CH, Platte City, Missouri 64079. Or you can call or write
Robbins Arroyo LLP, 600 B Street, Suite 1900, San Diego, California 92101, telephone: (619)
525-3990, for additional information concerning the Settlement.
PLEASE DO NOT TELEPHONE THE COURT OR INTL REGARDING THIS NOTICE.
820807
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E IN THE CIRCUIT COURT OF PLATTE COUNTY, MISSOURI
11 In re FCSTONE GROUP, INC. ) Lead Case No. 08AE-CV02785 U
DEC 0 4 2013
SHAREHOLDER DERIVATIVE & CLASS ) SANDRA L. DOWD ACTION LITIGATION ) Clerk of the Circuit Court Platte County, MO
)
)) Judge: Honorable Thomas Fincham
This Document Related To: ) )
All Actions ) ) )
PROPOSED1 FINAL ORDER OF DISMISSAL WITH PREJUDICE AND JUDGMENT
PLAINTIFF'S EXHIBIT
112 1
This matter came before the Court for hearing pursuant to the Order Preliminarily Approving
Settlement and Providing Notice of this Court, dated 51_z.j2,,,\czap.,- , 2013 ("Preliminary
Approval Order"), on the application of the Settling Parties for preliminary approval of the Settlement
(the "Settlement") of the above captioned consolidated shareholder derivative and putative class action
(the "Action"), as set forth in the Stipulation of Settlement dated December if, 2013 (the
"Stipulation"). Due and adequate notice having been given to Current INTL Shareholders and the
Settlement Class as required in the Preliminary Approval Order, and the Court having considered all
papers filed and proceedings and otherwise being fully informed in the premises and good cause
appearing therefore, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that:
1. This Judgment incorporates by reference the definitions in the Stipulation, and all
capitalized terms used herein shall have the same meanings and/or definitions as set forth in the
Stipulation.
2. Pursuant to Missouri Supreme Court Rule 52.08, the Court hereby certifies, for the
purpose of effectuating the Settlement only, a non-opt-out Settlement Class consisting of collectively,
all record and beneficial holders of the common stock of FCStone and their successors in interest and
transferees, immediate and remote, at any time during the period beginning on and including July 2,
2009 through and including October 1, 2009, the date of the consummation of the merger; provided,
however, that Defendants, their immediate family members, their directors or partners, their direct or
indirect parent or subsidiary entities, or any person or entity over whom or which any Defendant
exercises sole or exclusive control shall be excluded from the Settlement Class.
3. For purposes of the Settlement and with respect to the Settlement Class, the Court finds
and concludes that: (i) the Settlement Class is so numerous that joinder of all members is
impracticable; (ii) Defendants have acted or refused to act on grounds generally applicable to the
Settlement Class; (iii) the claims of the Plaintiffs are typical of the claims of the Settlement Class; (iv)
the Plaintiffs and Plaintiffs' Counsel have fairly and adequately represented and protected the interests
of all Settlement Class Members; and (v) the prosecution of separate actions by or against individual
Settlement Class Members would create a risk of inconsistent or varying adjudications with respect to
the Settlement Class Members, which would establish incompatible standards of conduct for
Defendants.
4. This Court has jurisdiction over the subject matter of the Action, including all matters
necessary to effectuate the Settlement, and over all parties to the Action, including Plaintiffs, Current
'NTT Shareholders, the Settlement Class, nominal defendant INTL FCStone Inc. ("INTL" or the
"Company"), the Individual Defendants, and nominal defendant FCStone Group, Inc. ("FCStone").
5. The Court finds that the Settlement is fair, reasonable, and adequate as to each of the
Settling Parties. The Court hereby finally approves the Settlement in all respects and orders the
Settling Parties to perform its terms to the extent the Settling Parties have not already done so.
6. The Action and all claims contained therein, as well as all of the Released Claims, are
dismissed with prejudice. As between Plaintiffs, INTL, and the Individual Defendants, the Settling
Parties are to bear their own costs, except as otherwise provided herein and in the Stipulation.
7. Upon the Effective Date, the Releasing Parties shall be deemed to have, and by
operation of the Judgment shall have, fully, finally, and forever released, relinquished, and discharged
the Released Claims (including Unknown Claims) against the Released Persons and any and all claims
arising out of, relating to, or in connection with the defense, settlement, or resolution of the Action
against the Released Persons. Nothing herein shall in any way impair or restrict the rights of any
Settling Party to enforce the terms of the Stipulation.
8. Upon the Effective Date, each of the Defendants shall be deemed to have, and by
operation of the Judgment shall have, fully, finally, and forever released, relinquished, and discharged
the Released Claims (including Unknown Claims) against the Plaintiffs, Plaintiffs' Counsel, and any
2
and all claims arising out of, relating to, or in connection with the institution, prosecution, assertion,
settlement, or resolution of the Action against Plaintiffs and Plaintiffs' Counsel. Nothing herein shall
in any way impair or restrict the rights of any Settling Party to enforce the terms of the Stipulation.
9. Upon the Effective Date, INTL and INTL shareholders, on behalf of themselves and/or
itself and each of their/its predecessors, successors, parents, subsidiaries, affiliates, custodians, agents,
assigns, representatives, heirs, estates, executors, trusts, trustees, trust beneficiaries, administrators,
spouses, marital communities, and immediate family members, shall be deemed to have, and by
operation of the Judgment shall have, fully, finally, and forever released, relinquished, and discharged
all Released Claims and will be forever barred and enjoined from commencing, instituting, or
prosecuting any of the Released Claims. Nothing herein shall in any way impair or restrict the rights
of any Settling Party to enforce the terms of the Stipulation.
10. Upon the Effective Date, each of the Individual Defendants shall be deemed to have,
and by operation of the Judgment shall have, fully, finally, and forever released, relinquished, and
discharged INTL and INTL shareholders from all claims or demands relating to or arising out of, or
connected with the institution, prosecution, assertion, settlement, or resolution of the Derivative
Claims, Direct Claims, and/or the Released Claims. Nothing herein shall in any way impair or restrict
the rights of any Settling Party to enforce the terms of the Stipulation.
11. The Court finds that the Notice provided to the Current INTL Shareholders and the
Settlement Class pursuant to the Preliminary Approval Order, provides the best notice practicable
under the circumstances of these proceedings and of the matters set forth therein, including the
Settlement set forth in the Stipulation, to all Persons entitled to such notice, and said Notice satisfied
the requirements of Missouri law and due process.
12. The Court finds that during the course of the Action the Settling Parties and their
respective counsel at all times acted professionally and in compliance with Missouri Rule of Civil
3
Procedure 55.03 and Federal Rule of Civil Procedure 11, and all other similar statutes or court rules
with respect to any claims or defenses in the Action.
13. The sum of $500,000 for the Fee and Expense Amount including the sum of $10,000
for the Incentive Awards are hereby approved. INTL shall, or shall cause their insurers to transfer the
Fee and Expense Amount to Plaintiffs' Counsel in accordance with the terms and conditions set forth in
the Stipulation.
14. Neither the Stipulation nor the Settlement, nor any act performed or document executed
pursuant to or in furtherance of the Stipulation or the Settlement: (i) is or may be deemed to be or may
be used as an admission of, or evidence of, the validity of any Released Claim, or of any wrongdoing
or liability of the Individual Defendants; or (ii) is or may be deemed to be or may be used as an
admission of, or evidence of, any fault or omission of any of the Individual Defendants in any civil,
criminal, or administrative proceeding in any court, administrative agency, or other tribunal. The
Released Persons may file the Stipulation and/or the Judgment in any action that may be brought
against them in order to support a defense or counterclaim based on principles of res judicata,
collateral estoppel, release, good faith settlement, judgment bar or reduction, or any other theory of
claim preclusion or issue preclusion or similar defense or counterclaim.
15. Without affecting the finality of this Judgment in any way, this Court hereby retains
continuing jurisdiction over: (i) implementation of the Settlement; and (ii) the Settling Parties for the
purpose of construing, enforcing, and administering the Stipulation and the Settlement, including, if
necessary, setting aside and vacating this Judgment, on motion of a party, to the extent consistent with
and in accordance with the Stipulation if the entry of the Judgment fails to occur in accordance with
the Stipulation.
16. If for any reason any of the conditions of paragraph 6.1 of the Stipulation does not
occur, or if the Stipulation is in any way canceled, terminated, or fails to become Final in accordance
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with its terms, all Settling Parties and Released Persons shall be restored to their respective positions in
the Action on the date immediately prior to the execution date of the Stipulation (and the Settling
Parties shall meet and confer in good faith to discuss the resumption and schedule of further
proceedings). In such event, the terms and provisions of the Stipulation shall be null and void and of
no force and effect, unless the Settling Parties' counsel mutually agree in writing otherwise, and the
Stipulation shall not be deemed to constitute an admission of fact by any of the Settling Parties, and
neither the existence of the Stipulation nor its contents, shall be admissible in evidence or be referred
to for any purposes in the Action or in any litigation or judicial proceeding.
17. This Judgment is a final, appealable judgment and should be entered forthwith by the
Clerk in accordance with Missouri Supreme Court Rule 74.03.
IT IS SO ORDERED.
DATED:
THE HONORABLE THOMAS C. FINCHAM CIRCUIT COURT JUDGE
820810
5 - -
IN THE CIRCUIT COURT OF PLATTE COUNTY, MISSOURI
In re FCSTONE GROUP, INC. SHAREHOLDER DERIVATIVE & CLASS ACTION LITIGATION
Lead Case No. 08AE-CV02785
This Document Related To:
All Actions
Judge: Honorable Thomas Fincham
ENTRY OF JUDGMENT
Judgment approving the settlement in this case as fair adequate and reasonable for the reasons
stated at the hearing held on , 2014 is hereby entered for purposes of Rule 74.03 of the
Missouri Rules of Civil Procedure on , 2014.
* * *
ORDER
IT IS SO ORDERED.
DATED: THE HONORABLE THOMAS C. FINCHAM CIRCUIT COURT JUDGE
912298