James Elliott, et al. v. ESB Financial, Inc., et al. 14-CV-01689...

Case 2:14-cv-01689-MRH Document 18 Filed 04/28/15 of 24

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA

JAMES ELLIOTT, on behalf of himself

Case No.: 2:14-cv-01689-MRH and all others similarly situated,

Plaintiff,

V.

ESB FINANCIAL, INC., HERBERT S. SKUBA, CHARLOTTE A. ZUSCHLAG, JAMES P. WETZEL, JR., MARIO J. MANNA, WILLIAM B. SALSGIVER AND WESBANCO, INC.,

Defendants.

STIPULATION OF SETTLEMENT

This Stipulation of Settlement (the "Stipulation" or "Settlement"), dated April 28, 2015,

which is entered into between: (i) Plaintiff James Elliott ("Elliott"), plaintiff in the above-

captioned action Elliott v. ESB Financial, Inc., et al., Case No.: 2:14-ev-01689-MRH (the

"Federal Court Action"), pending before the United States District Court for the Western District

of Pennsylvania (the "Court"); (ii) Plaintiff Randall Kress ("Kress" and together with Elliott,

"Plaintiffs"), plaintiff in Kress v. ESB Financial, Inc., et al,, Case No.: 111 85/14CA (the "State

Court Action" and together with the Federal Court Action, the "Actions"), pending before the

Court of Common Pleas for.Lawrence County (the "State Court"); and (iii) defendants Herbert S.

Skuba, Charlotte A. Zusehiag, James P. Wetzel, Jr., Mario J. Manna, and William B. Saisgiver

(the "ESB Director Defendants"), ESB Bank and ESB Financial, Inc. (also named as ESB

Financial Corporation) (collectively "ESB"), and WesBanco, Inc. and Wesbanco Bank, Inc.

(collectively "WesBanco") (the ESB Director Defendants, ESB, and WesBanco are collectively

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referred to as the "Defendants") (all persons and entities identified above in subsections (i)-(iii)

are collectively referred to herein as the "Parties"), all by and through their undersigned

attorneys, states all of the terms of the settlement and resolution of the Actions and is intended by

the Parties to fully and finally compromise, resolve, discharge, and settle the Released Claims (as

defined below), subject to the approval of the Court in the Federal Court Action.

Background of the Settlement

A. On October 29, 2014, ESB announced that it had entered into an Agreement and

Plan of Merger (the "Merger Agreement") with WesBanco to combine in a transaction in which

each share of ESB common stock will be converted into the right to receive cash in the amount

of $1.76 per share and 0.502 shares of WesBanco Common Stock (the "Merger Transaction").

B. In letters dated November 17, 2014 and November 24, 2014 (the "Demand

Letters"), Plaintiffs made demands upon the ESB Board of Directors, (i) describing the factual

basis for their allegations of wrongdoing by officers and directors of ESB and how such

wrongdoing is harmful to ESB and its shareholders, and (ii) requesting that the ESB Board take

remedial action, including without limitation, insuring that the Merger Transaction consideration

is fair to ESB and its shareholders.

C. On December 3, 2014, Babst, Calland, Clements & Zonmir, P.C. ("Babst

Calland"), sent a letter to counsel for Plaintiff Kress on behalf of ESB, stating that the ESB

Board of Directors would be reviewing and responding to the Demand Letters.

D. On December 11, 2014, Babst Calland, after investigation and consultation with

ESB's Director Defendants, sent a letter to counsel for Plaintiff Elliott rejecting Elliott's

demands.

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E. On November 21, 2014, Plaintiff Kress filed a Verified Shareholder Derivative

and Class Action Complaint in the State Court, alleging direct and derivative claims that the ESB

Director Defendants had breached and were breaching their fiduciary duties to ESB shareholders

in connection with the Merger Transaction, and that ESB and WesBanco aided and abetted those

breaches of fiduciary duties,

F. On November 21, 2014, WesBanco filed with the Securities and Exchange

Commission ("SEC") the Form S-4 (the "Registration Statement"), which contained a

preliminary joint proxy statement/prospectus. The Registration Statement was declared effective

on December 11, 2014 and a final prospectus was filed by WesBanco on that same date.

G. On or about December 15, 2014, ESB commenced mailing of the definitive joint

proxy statement/prospectus ("Joint Proxy Statement") to shareholders of ESB informing its

shareholders that they would be entitled to vote on the Merger Transaction at a special meeting

of ESB shareholders scheduled for January 22, 2015 (the "ESB Shareholders' Meeting")

H. On or about December 15, 2014, WesBanco commenced mailing of the Joint

Proxy Statement to shareholders of WesBanco informing those shareholders that they would be

entitled to vote on the issuance of shares of WesBanco common stock in connection with the

Merger Transaction at a special meeting of WesBanco shareholders scheduled for January 22,

2015 (the "WesBanco Shareholders' Meeting").

I. On December 15, 2014, Plaintiff Elliott filed a Class Action Complaint in the

Court, alleging that the ESB Director Defendants had breached and were breaching their

fiduciary duties to ESB's shareholders, that WesBanco had aided and abetted those breaches of

fiduciary duties, and that the Registration Statement failed to disclose certain material facts and

information in alleged violation of Rule 14(a) of the Securities and Exchange Act of 1934.

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J. Plaintiff Elliott and Defendants entered into a Stipulated Confidentiality

Agreement on or about December 23, 2014, which was entered as a Protective Order in the

Federal Court Action on December 23, 2014 (the "Protective Order")

K. Pursuant to the terms of the Protective Order and in response to requests for

expedited discovery submitted to Defendants on December 22, 2014, ESB and the ESB Director

Defendants produced over 3,800 pages of non-public documents to Plaintiffs and their counsel.

L. On January 9, 2015, Plaintiff Elliott, with the consent of Defendants, took the

depositions of ESB Director Defendant and Chief Executive Officer, Charlotte Zuschlag, and

Mufson Howe Hunter Managing Director, Edward Losty, in Pittsburgh, Pennsylvania.

M. Shortly after the depositions were concluded, Plaintiffs' counsel and counsel for

ESB and WesBanco engaged in arm's-length settlement discussions with a view toward

resolving the Shareholder Actions by making supplemental disclosures (the "Supplemental

Disclosures") regarding the Merger Transaction.

N. On January 15, 2015, the Parties, through their respective counsel, reached an

agreement on the structure of a settlement (the "Settlement") and entered into a Memorandum of

Settlement (the "MOS") outlining the basic terms of the Settlement and attaching the

Supplemental Disclosures regarding the Merger Transaction.

0. On January 15, 2015, ESB included the Supplemental Disclosures in a current

report on Form 8-K filed with the SEC;

P. On January 22, 2015, the ESB shareholders approved the Merger Transaction at

the ESB Shareholders' Meeting.

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Q. On January 22, 2015, the WesBanco shareholders approved the issuance of the

shares of WesBanco common stock necessary to complete the Merger Transaction at the

WesBanco Shareholders' Meeting.

R. On February 10, 2015, Wesbanco completed its merger with ESB.

S. Defendants acknowledge that the pendency and prosecution of the Actions and

the negotiations between the Parties' counsel, caused the decision to make the Supplemental

Disclosures.

T. Plaintiffs believe that their claims have substantial merit and were brought in

good faith, are settling in order to provide a benefit to the ESB shareholders through the

Supplemental Disclosures so as to allow for a fully informed shareholder vote on the Merger

Transaction and to avoid the uncertainty of continued litigation, particularly in view of the

limited time available before the scheduled consummation of the Merger Transaction, which

closed on February 10, 2015.

U. All the Defendants have denied, and continue to deny, that they have committed,

or aided and abetted in the commission of, any violation of law or duty or engaged in any

wrongful acts whatsoever; deny that any Supplemental Disclosures are required under any

applicable state or federal law, statute, rule, or regulation; expressly maintain that they diligently

and scrupulously complied with all applicable fiduciary, disclosure, and all other legal duties,

and are settling the Shareholder Actions solely to avoid the expense, burden and uncertainty of

continued litigation.

V. In negotiating and evaluating the terms of this Stipulation, Plaintiffs' counsel

considered the significant legal and factual defenses to Plaintiffs' claims that Defendants raised

and might have raised throughout the pendency of the Shareholder Actions, and the entry by

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Plaintiffs into this Stipulation is not an admission as to the hack of merit of any claims asserted in

the Shareholder Actions. In addition, Plaintiffs considered the benefits provided to the Class

members through the provision of the Supplemental Disclosures, and have agreed to the

Settlement because they believe the Supplemental Disclosures provided substantial benefits to

the ESB shareholders. Based upon their evaluation, Plaintiffs' counsel has determined that the

Settlement is fair, reasonable, and adequate and in the best interests of Plaintiffs and all Class

members.

W. Defendants have concluded that it is desirable that the claims against them be

settled on the terms reflected in this Stipulation in order to avoid the costs, disruption, risks and

distraction of further litigation and without admitting the validity of any allegations made in the

Shareholder Actions or any liability with respect thereto or that any further supplemental

disclosure is required under any applicable rule, statute, regulation or law.

X. The Parties recognize that substantial time and expense would be incurred by

engaging in further litigation, and that further litigation is inherently uncertain.

Y. The Settlement of the Shareholder Actions on the terms and conditions set forth

herein includes but is not limited to a release of all claims asserted in the Shareholder Actions

and will have the effect of releasing all claims asserted, or that could have been asserted, by any

ESB shareholder, either directly or derivatively, relating to the Merger Transaction.

Settlement Terms

NOW, THEREFORE, IT IS HEREBY STIPULATED, CONSENTED TO AND

AGREED, by Plaintiffs, for themselves, and on behalf of the Class, and the Defendants that,

subject to the approval of the Court and pursuant to Fed.R.Civ.P. 23(a), (b), (e) & (Ii), and the

other conditions set forth herein, for good and valuable consideration set forth herein and

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conferred on Plaintiffs and the Class, the Shareholder Actions shall be finally and fully settled,

compromised, and dismissed with prejudice, and that the Settled Claims shall be finally and fully

compromised, settled, released, and dismissed with prejudice as to Defendants and as to the

Released Persons, in the manner and upon the terms and conditions hereafter set forth.

I. Definitions

(a) In addition to the terms already defined above, the following

capitalized terms, used in this Stipulation of Settlement, shall have the meanings specified

below:

(1) "Class" means a conditionally certified non-opt out class,

pursuant to Fed.R.Civ.P. 23(a) & (b)(l), (2) & (3), that includes any and all persons or entities

who held ESB common shares at any time between October 29, 2014 and February 10, 2015,

either of record or beneficially, including any and all of their respective successors-in-interest,

predecessors, representatives, trustees, executors, administrators, heirs, assigns, or transferees,

whether immediate and remote, and any person or entity acting for or on behalf of, or claiming

under any of them, and specifically including Plaintiffs, but excluding Defendants, their

subsidiary companies, affiliates, assigns, and members of their immediate families, as the case

maybe.

(2) "Class Counsel" or "Plaintiffs Counsel" means the law

firms of Brodsky & Smith, LLC and the Law Office of Alfred G. Yates, Jr., PC.

(3) "Class Member" means a member of the Class.

(4) "Court Approval" means entry of the Judgment (as defined

below).

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(5) "Effective Date" means the first business day following the

date the Judgment becomes final and unappealable, whether by affirmance on appeal or

exhaustion of any possible appeal or review, lapse of time or otherwise. The finality of the

Judgment shall not be affected by any appeal or other proceeding solely regarding an application

for attorneys' fees and expenses.

(6) "Judgment" means the Order and Final Judgment to be

entered in the Federal Court Action substantially in the form attached as Exhibit A hereto.

(7) "Released Persons" means, whether or not any or all of the

following persons or entities were named, served with process, or appeared in the Shareholder

Actions, Defendants and any of their respective families, parent entities, controlling persons,

associates, predecessors, successors, affiliates or subsidiaries, and each and all of their respective

past or present officers, directors, shareholders, stockholders, principals, representatives,

employees, attorneys, financial or investment advisors, consultants, accountants, investment

bankers, commercial bankers, entities providing fairness opinions, underwriters, brokers, dealers,

advisors or agents, insurers, heirs, executors, trustees, general or limited partners or partnerships,

limited liability companies, members, managers, joint ventures, personal or legal representatives,

estates, administrators, predecessors, successors and assigns, and any alleged or potential aiders

or abettors,

(8) "Releasing Persons" means Plaintiffs or any member of the

Class, whether individual, direct, class, derivative, representative, legal, equitable, or any other

type or in any other capacity.

(9) "Settled Claims" means any and all manner of claims

(known claims and "Unknown Claims" (defined below), demands, rights, causes of action,

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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, compensatory or punitive, matured or unmatured,

accrued or unacerued, apparent or unapparent, that have been, could have been, or in the future

can or might be asserted in any court, tribunal or proceeding (including but not limited to any

claims arising under federal, state, foreign or common law, including the federal securities laws

and any state disclosure law), by or on behalf of Plaintiffs or any member of the Class, whether

direct, derivative, individual, class, representative, legal, equitable, or of any other type, or in any

other capacity, against any of the Released Persons, which have arisen, could have arisen, arise

now or hereafter may arise out of, or relate in any manner to, the acts, events, facts, matters,

transactions, occurrences, statements, representations, misrepresentations or omissions or any

other matter whatsoever set forth in or otherwise related, directly or indirectly, to (i) the

allegations that were asserted in the Shareholder Actions, (ii) the Merger Transaction or any

deliberations or negotiations in connection therewith, (iii) the consideration to be provided in the

Merger Transaction, (iv) the Merger Agreement (and the transactions and governance

arrangements and employment arrangements contemplated therein or in connection therewith),

(v) any fiduciary or related alleged wrongful acts or obligations of the Released Persons in

connection with the Merger Transaction or any alternatives thereto, (vi) other than as provided in

this Stipulation, the fees, expenses, or costs incurred in prosecuting, defending, or settling the

Shareholder Actions, or (vii) any disclosures or alleged omissions made in connection with the

Merger Transaction, including any disclosures in or claimed omissions from the Registration

Statement or the Definitive Proxy Statement (and/or any supplements, amendments or revisions

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thereto); provided, however, that the Settled Claims shall not include any claims to enforce the

Settlement.

(10) "Settlement" means the settlement of the Shareholder

Actions between and among Plaintiffs, on behalf of themselves and the Class, as well as

derivatively on behalf of ESB, and the Defendants, as set forth in this Stipulation.

(11) "Settlement Hearing" means the hearings(s) to be held

before the Court to determine (i) whether to certify the Class for settlement purposes,

(ii) whether to certify Plaintiff Elliott and Class Counsel as Class representatives, (iii) whether

the Settlement should be approved as fair, reasonable, and adequate, (iv) whether Judgment

approving the Settlement should be entered, (v) whether and in what amount any attorneys' fees

and expenses should be paid to Class Counsel by ESB, its successor-in-interest, or their

respective insurer(s).

(12) "Unknown Claims" means any claim that a Releasing

Person does not know or suspect exists in his, her or its favor at the time of the release of the

Settled Claims as against the Released Persons, including without limitation those that, if known,

might have affected the decision to enter into the Settlement. The Settlement is intended to

extinguish all Settled Claims and, consistent with such intentions, the Releasing Persons shall

waive their rights to the extent permitted by state law, federal law, foreign law or principle of

common law, which may have the effect of limiting the release set forth above. This shall

include a waiver by the Releasing Persons of any rights pursuant to § 1542 of the California

Civil Code (or any similar, comparable or equivalent provision) 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,

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WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

The Releasing Persons acknowledge that members of the Class and/or other ESB shareholders

may discover facts in addition to or different from those that they now know or believe to be true

with respect to the subject matter of this release, but the Plaintiffs on behalf of themselves and on

behalf of the Class intend to fully, finally and forever settle and release any and all claims

whether known claims or unknown claims, suspected or unsuspected, that now exist, or

heretofore existed, or may hereafter exist, and without regard to the subsequent discovery or

existence of such additional or different facts. Plaintiffs and the other Parties hereto

acknowledge, and the members of the Class by operation of the judgment shall be deemed to

have acknowledged, that the inclusion of "Unknown Claims" in the definition of "Settled

Claims" was separately bargained for and was a key element of the Settlement and was relied

upon by each and all of the Defendants in entering into the Stipulation.

2. Conditional Certification of Class

(a) The Parties agree to the certification of the Class and the

certification of Plaintiff James Elliott as class representative ("Class Representative") for the

purposes of this Settlement only.

(b) The certification of the Class shall be binding only with respect to

this Stipulation. In the event that this Stipulation is terminated pursuant to its terms or is not

approved in all material respects by the Court, the Effective Date does not occur, the Settlement

otherwise does not become final for any reason, or the Judgment entered pursuant hereto is

reversed, vacated, or modified in any material respect by the Court or any other court, the

certification of the Class shall, except as provided in Paragraph 8(a), be deemed vacated, the

Shareholder Actions shall proceed as though the Class had never been certified, and no reference

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to certification of the Class, or to the Stipulation or any documents related thereto, shall be made

by the Parties for any purpose, except as expressly authorized by the terms of this Stipulation. If

any of the forgoing events occur, Defendants reserve the right to oppose certification of any

plaintiff class and assert any and all defenses and objections they may have in any future

proceedings.

3. Submission of the Settlement to the Court

As soon as practicable after this Stipulation has been executed, the Parties

shall jointly apply to the Court for entry of an Order in the form attached hereto as Exhibit B (the

"Scheduling Order"), providing for, among other things: (i) the mailing to the Class Members of

the Notice of Proposed Settlement of Class Action, Settlement Hearing, and Right to Appear (the

"Notice"), substantially in the form attached hereto as Exhibit C, as soon as practicable, and (ii)

the scheduling of a Settlement Hearing to consider final approval of the Settlement. ESB (or its

successor(s) in interest) shall be responsible for providing notice of the Settlement to the Class in

a form to be negotiated with counsel for Plaintiffs and approved by the Court, and ESB (or its

successor(s) in interest) shall pay all reasonable costs and expenses incurred in providing notice

of the Settlement to the members of the Class or for any other costs of administering the

Settlement.

4. Settlement Consideration and Scope of the Settlement

(a) The Supplemental Disclosures having been agreed to and provided

in consideration for the full and final settlement and dismissal with prejudice of the Shareholder

Actions and the release of the Settled Claims, no Released Person shall have any obligation to

pay or bear any additional amounts, expenses, costs, damages, or fees to or for the benefit of

Plaintiffs, in either their individual capacity or derivatively on behalf of ESB, or any Class

B1957034.1} 12


Members in connection with the Settlement, except that ESB (or its successor or insurer) shall (i)

be responsible for providing the Notice of the Settlement to the Class Members and shall pay all

reasonable, documented costs and expenses incurred in providing the Notice of the Settlement to

the Class Members as provided in Paragraph 3 hereof, and (ii) be obligated to pay attorneys' fees

and expenses to Class Counsel upon an award, if any, of attorneys' fees and expenses by the

Court solely as provided in Paragraph 6 hereof.

(b) At the Settlement Hearing, the Parties shall jointly request that the

Judgment be entered substantially in the form attached hereto as Exhibit A, which shall provide

that:

(1) The Federal Court Action and the Settled Claims are

dismissed with prejudice, on the merits and without costs (except as provided by Paragraphs 3

and 6);

(2) Plaintiffs and all Class Members, and their respective heirs,

executors, administrators, estates, predecessors-in-interest, predecessors, successors-in-interest,

successors, and assigns, agree to release and forever discharge, and by operation of the Judgment

release and forever discharge, all Settled Claims as against the Released Persons; provided,

however, that the Settled Claims shall not include any claims to enforce this Stipulation or the

Settlement;

(3) The Released Persons shall be deemed to be released and

forever discharged from all of the Settled Claims;

(4) Plaintiffs and all Class Members, and their respective heirs,

executors, administrators, estates, predecessors-in-interest, predecessors, successors-in-interest,

successors, and assigns, are forever barred and enjoined from commencing, instituting, or

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prosecuting any Settled Claims against any of the Released Persons in any forum whatsoever;

provided, however, that the Settled Claims shall not include any claims to enforce this

Stipulation or the Settlement; and

(5) Defendants and the Released Persons agree to release and

forever discharge, and by operation of the Judgment forever release and discharge, Plaintiffs,

each Class Member, Class Counsel, and counsel for Plaintiff Kress from all claims arising out of,

relating to, or in connection with, the institution, prosecution, assertion, settlement, or resolution

of the Shareholder Actions and Settled Claims (including Unknown Claims).

5, Conditions of Settlement

This Stipulation shall be subject to the following conditions and, except as

provided in Paragraph 8(a), shall be cancelled and terminated unless:

(a) The Court approves the certification of a settlement class and the

dissemination of a Notice of Settlement substantially in the form attached hereto as Exhibit C;

(b) The Court enters the Judgment substantially in the form attached

hereto as Exhibit A;

(c) The Merger Transaction has been consummated;

(d) The Effective Date shall have occurred; and

(e) The State Court Action is voluntarily dismissed with prejudice.

6. Attorneys' Fees and Expenses

Class Counsel intend to petition the Court for an award of fees and

expenses in connection with the prosecution and benefits obtained in the Actions (the "Fee

Application"). Defendants acknowledge that Class Counsel is entitled to seek a reasonable

award on their Fee Application, subject to the Court's approval, but reserve all rights to contest

(B1957034.I) 14


and oppose the Fee Application. The Fee Application shall be Class Counsel's sole application

for an award of fees or expenses in connection with any litigation concerning the Merger

Transaction. Final resolution by the Court of the Fee Application shall not be a precondition to

the settlement of the Shareholder Actions or the entry of final judgment herein. Upon entry of an

order regarding the Fee Application, ESB or its successor or insurer shall pay fees and expenses

in the amount awarded as described above and in the manner directed by the Court. Any amount

awarded by the Court shall be paid to Class Counsel by ESB or its successor or insurer within

twenty (20) days of the entry of the Federal Court's Order awarding such fees, and which

obligation shall be subject to the joint and several obligation of Plaintiffs' counsel to refund,

within twenty (20) days, all amounts received, if and when, as a result of any appeal and/or

further proceeding on remand, or successful collateral attack, the award of fees, costs, and

expenses is reduced or reversed or if the award order does not become final, if the Settlement

itself is voided by any Party as provided herein, or if the Settlement is later reversed by any

court. Plaintiffs and their counsel further reserve their rights to seek an award of attorneys' fees

and costs if the Merger Transaction is not consummated or if the Settlement is not approved by

the Court. Defendants reserve their rights to oppose any such fee application.

7. Stay Pending Court Approval

Subject to the Court's approval, the Parties agree that the Federal Court

Action shall remain administratively closed pending the occurrence of the Effective Date, except

for such acts as may be necessary or appropriate to effectuate the Settlement. The Parties also

agree to use their best efforts to prevent, stay, and seek the dismissal of, and oppose entry of any

interim or final relief in favor of any Class Member in, any proceeding against any of the

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Released Persons which challenges the Settlement, the Merger Agreement (including any

transactions contemplated thereby), or otherwise involves, directly or indirectly, a Settled Claim.

8. Effect of Disapproval. Cancellation, or Termination

(a) If either (1) the Court does not enter the Judgment in substantially

the form of Exhibit A hereto, (ii) the Court enters the Judgment but on or following appellate

review the Judgment is modified or reversed in any material respect, or (iii) any other condition

of Paragraph 5 hereof is not satisfied, this Stipulation shall be cancelled and terminated unless

counsel for each of the Parties to this Stipulation, within (10) business days from receipt of such

ruling or event, agrees in writing with counsel for the other Parties hereto to proceed with this

Stipulation and Settlement, including only with such modifications, if any, as to which all other

Parties in their sole judgment and discretion may agree. For purposes of this Paragraph, an intent

to proceed shall not be valid unless it is expressed in a signed writing. Neither a modification

nor a reversal on appeal of the amount of attorneys' fees and expenses awarded by the Court to

Class Counsel shall be deemed a material modification of the Judgment or this Stipulation.

(b) If the Effective Date does not occur, if this Stipulation is

disapproved, canceled, or terminated pursuant to its terms, all the Parties to this Stipulation shall

be deemed to have reverted to their respective litigation status immediately prior to the execution

of the MOS, and they shall proceed in all respects as if the MOS and this Stipulation had not

been executed (except for Paragraphs 2(b), 8(a), 8(b), 9(b), 9(f)-9(k), 9(p) and 9(q) hereof, which

shall survive the occurrence of any such event) and the related orders had not been entered, and

in that event all of their respective claims and defenses as to any issue in the Shareholder Actions

shall be preserved without prejudice in any way whatsoever. Furthermore, if any such event

occurs, Plaintiffs and Class Counsel agree that neither the MOS nor this Stipulation, not any

(B1957034.1) 16


communications between the Parties, or their counsel, made in connection with the negotiation

of the MOS or this Stipulation, entitle any Party to recover any attorneys' fees or expenses

incurred in connection with the Shareholder Actions or in connection with any other litigation or

judicial proceeding. Notwithstanding the foregoing, if the Settlement is terminated, for any

reason whatsoever, Plaintiffs reserve the right to pursue a mootness petition or petitions for

attorneys' fees and expenses in connection with any benefits that may have been afforded to

ESB's shareholders as a result of the Actions. Defendants reserve the right to oppose such

petition(s). Further, Plaintiffs and their counsel may use the Stipulation or the MOS in

connection with such an application for an award of attorneys' fees and expenses but

Defendants' agreement to allow use of the Stipulation or MOS shall not be treated as a waiver or

limitation of any of the provisions of this paragraph of the Stipulation. This provision shall

remain in force in the event that the Settlement is terminated,

9. Miscellaneous Provisions

(a) All of the Exhibits referred to herein shall be incorporated by

reference as though fully set forth herein.

(b) This Stipulation may be amended or modified only by a written

instrument signed by counsel for each of the Parties hereto or their successors.

(c) The Parties represent and agree that the terms of the Settlement

were negotiated at arm's length and in good faith by the Parties, and reflect a resolution that was

reached voluntarily based upon adequate information and sufficient discovery and after

consultation with experienced legal counsel.

(8195034.1} 17


(d) If any deadline set forth in this Stipulation or the Exhibits hereto

fails on a Saturday, Sunday, or legal holiday, that deadline will be continued to the next business

day.

(e) The headings in the Stipulation are solely for the convenience of

the attorneys for the Parties and the Court. The headings shall not be deemed to be part of this

Stipulation and shall not be considered in construing or interpreting this Stipulation.

(f) Neither the MO S nor this Stipulation, nor the fact or any terms of

the Settlement, is evidence, or an admission or concession by any Party in the Shareholder

Actions, any signatory hereto, or any Released Person, of any fault, liability, or wrongdoing

whatsoever, as to any facts or claims alleged or asserted in the Shareholder Actions, or any other

actions or proceedings. Neither the MOS nor this Stipulation is a finding or evidence of the

validity or invalidity of any claims or defense in the Shareholder Actions, any wrongdoing by

any Released Person, or any damages or injury to any Class Member. Neither the MOS nor this

Stipulation or any negotiations, statements, or proceedings in connection therewith be construed

as a presumption, concession, or admission by any Party, any member of the Class, or any

Party's Counsel of any merit or lack of merit relating to the Settled Claims. Neither the MOS

nor this Stipulation, nor any of the terms and provisions of the MOS or the Stipulation, nor any

of the negotiations or proceedings in connection therewith, nor any of the documents or

statements referred to herein or therein, nor the Settlement, nor the fact of the Settlement, nor the

settlement proceedings, nor any statements in connection therewith, (1) shall (i) be argued to be,

used or construed as, offered or received in evidence as, or otherwise constitute an admission,

concession, presumption, proof, evidence, or a finding of any liability, fault, wrongdoing, injury

or damages, or any wrongful conduct, acts or omission on the part of any of the Released

{B19570341J 18


Persons, or of any infirmity of any defense, or of any damage to any Plaintiff or Class Member,

or (ii) otherwise be used to create or give rise to any inference or presumption against any of the

Released Persons concerning any fact alleged or that could have been alleged, or any claim

asserted or that could have been asserted in the Shareholder Actions, or of any purported

liability, fault, or wrongdoing of the Released Persons or of any injury or damages to any person

or entity, or (2) otherwise be admissible, referred to or used in any proceeding of any nature, in

any forum, for any purpose whatsoever; provided, however, that the Stipulation and/or Judgment

may be introduced in any proceeding, whether before the Court or otherwise, as may be

necessary to argue that the Stipulation and/or Judgment has res judicata, collateral estoppel, or

other issue or claim preclusion effect or to otherwise consummate or enforce the Settlement or

Judgment, and provided further that Plaintiffs also may refer to and utilize the Stipulation in

connection with any application for an award of attorneys' fees and expenses as agreed herein.

This provision shall remain in force in the event that the Settlement is terminated.

(g) In the event that the Court or any other court is called upon to

interpret this Stipulation, this Stipulation will be deemed to have been mutually prepared by the

Parties and will not be construed against any of them by reason of authorship.

(h) Unless otherwise ordered by the Court, the December 23, 2014

Protective Order shall remain in effect and binding on the signatories thereto.

(i) The waiver by any Party of any breach of the Stipulation by any

other Party shall not be deemed a waiver of that or any other prior or subsequent breach of any

provision of the Stipulation by any other Party.

(j) This Stipulation and the Exhibits hereto constitute the entire

agreement among the Parties and supersede any prior agreements among the Parties with respect

BI957034,1) 19


to the subject matter hereof. No representations, warranties, or inducements have been made to

or relied upon by any Party concerning this Stipulation or its Exhibits, other than the

representations, warranties, and covenants expressly set forth in such documents. This

Stipulation may be amended or any of its provisions waived only by a writing executed by all the

Parties hereto.

(k) This Stipulation may be executed in one or more counterparts,

including by facsimile and electronic mail, and so executed shall constitute one agreement.

(1) The Parties and their respective counsel of record agree that they

will use their best efforts to obtain all necessary approvals of the Court required by this

Stipulation (including, but not limited to, using their best efforts to resolve any objections raised

to the Settlement).

(m) Plaintiffs and Class Counsel represent and warrant that Plaintiffs

have each been continuous stockholders of ESB throughout all relevant times, are Class

Members, and that none of the Plaintiffs' claims or causes of action relating to the Merger

Agreement have been assigned, encumbered, or otherwise transferred in any manner in whole or

in part.

(n) Each counsel signing this Stipulation represents and warrants that

such counsel has been duly empowered and authorized to sign this Stipulation on behalf of his or

her clients.

(o) This Stipulation shall be binding upon and shall inure to the benefit

of the Parties hereto and the Class (and, in the case of the releases, all Released Persons) and the

respective legal representatives, heirs, executors, administrators, transferees, successors and

{B19570341} 20


assigns of all such foregoing persons and upon any corporation, partnership, or other legal entity

into or with which any Party may merge, consolidate, or reorganize.

(p) Defendants have vigorously denied, and continue to deny

vigorously, any wrongdoing or liability with respect to all claims asserted in the Shareholder

Actions, including that they have committed any violations of law, that they have acted

improperly in any way, that they have any liability or owe any damages of any kind to Plaintiffs

or the Class, and that any additional disclosures (including the Supplemental Disclosures) are or

were required under any applicable rule, regulation, statute, or law, but are entering into this

Stipulation because they consider, and continue to consider, it desirable that the Shareholder

Actions be settled and dismissed with prejudice in order to, among other things, (i) eliminate the

burden, inconvenience, expense, risk, and distraction of further litigation, and (ii) finally put to

rest and terminate all the claims that were or could have been asserted against the Defendants in

the Shareholder Actions.

(q) The Settlement and Stipulation, and any and all disputes arising

out of or relating in any way to the Settlement or Stipulation, whether in contract, tort, or

otherwise, shall be governed by and construed in accordance with the laws of the

Commonwealth of Pennsylvania, without regard to conflicts of law principles. Each of the

Parties (i) irrevocably submits to the personal jurisdiction of any federal court covering

Allegheny or Lawrence County, Pennsylvania, as well as to the jurisdiction of all courts to which

an appeal may be taken from such court, in any suit, action, or proceeding arising out of or

relating in any way to the Settlement or Stipulation, (ii) agrees that all claims in connection with

such suit, action, or proceeding shall be brought, heard, and determined exclusively in this Court

(provided that, in the event that subject matter jurisdiction is unavailable in the Federal Court,

{B19570341) 21


then all such claims shall be brought, heard, and determined exclusively in the State Court), (iii)

agrees that it shall not attempt to deny or defeat personal jurisdiction. (iv) agrees not to bring any

suit, action, or proceeding arising out of or relating in any way to the Settlement or Stipulation in

any other court, and (v) expressly waives, and agrees not to plead or make any claim that any

such suit, action, or proceeding is subject (in whole or in part) to a jury trial. Each of the Parties

waives any defense of inconvenient forum to maintenance of any suit, action, or proceeding

brought in accordance with this Paragraph. Each of the Parties further agrees to waive any bond,

surety, or other security that might be required of any other party with respect to any such action

or proceeding, including an appeal thereof. Each of the Parties further consents and agrees that

process in any such suit, action, or proceeding may be served on such Party by certified mail,

return receipt requested, addressed to such Party or such Party's registered agent in the state of

its incorporation or organization, or in any other manner provided by law, and, in the case of

Plaintiffs, giving such written notice to Mare L. Ackerman, Esq., Brodsky & Smith, LLC, 2 Bala

Plaza, Suite 510, Bala Cynwyd, PA 19004,

IN WITNESS WHEREOF, the Parties, through their undersigned counsel, have executed

this Stipulation of Settlement effective as of the date first set forth above.

/s/AlfreclG. Yates. Jr. LAW OFFICE OF ALFRED G. YATES, JR.

Alfred G. Yates, Jr. (PA 17419) Gerald L. Rutledge (PA 62027) 519 Allegheny Building 429 Forbes Avenue Pittsburgh, PA 15219 (412) 391-5164 (412) 471-1033 (fax)

/s/ Mark D. Shepard Mark D. Shepard (PA 36902) BABST, CA.LLAND, CLEMENTS AND ZotviNiR,

P.C. Two Gateway Center, 6th Floor Pittsburgh, PA 15222 (412) 394-5400 (412)394-6576 (Facsimile) mshepard@babstealland. corn

(B1957034.1) 22


[email protected] Attorneys for Defendants ESB Bank and ESB Financial, Inc., Herbert S. S/tuba, Charlotte A.

OF COUNSEL: Zuschlag, James F. Wetzel, Jr., Mario I Manna and William B. Salsgiver

BRODSKY & SMITH, LLC Evan J. Smith Marc L. Ackerman Two Bala Plaza, Suite 510 Bala Cynwyd, PA 19004 (610) 667-6200

Attorneys for Plaintiff James Elliott

/s/AndrewR. Stanton Andrew R. Stanton (PA 33410) Lauren Garraux (PA 207588) K&L GATES LLP 210 Sixth Avenue Pittsburgh, PA 15222 (412) 355-6500 (412) 355-6501 (fax) andrew.stanton@kl gates. corn lauren, garraux(lUdgates. corn

Attorneys for Defendant WesBanco, Inc. and Wesbanco Bank, Inc.

Al Benjamin I Sweet CARLSON LYNCH SWEET & KJLPELA, LLP

Benjamin J. Sweet (PA 87338) Gary F. Lynch (PA 56887) 36 N. Jefferson Street New Castle, Pennsylvania 16107 Tel. (724) 656-1555

OF COUNSEL:

RIGRODSKY & LONG, P.A. Seth D. Rigrodsky Brian D. Long (PA 82370) Gina M. Serra (PA3 08207) 2 Righter Parkway, Suite 120 Wilmington, DE 19803 (302) 295-5310

THE ROSEN LAW Fm Laurence M. Rosen Phillip Kim 275 Madison Avenue, 34th Floor New York, NY 10016 (212) 686-1060

(B1952034.1) 23


Attorneys for Plaintiff-Randall Kress in Kress v. E5'B Bank, et, al., Lawrence County Court of Common Pleas, Case No. 11 185114C

[131957034.1} 24

James Elliott, et al. v. ESB Financial, Inc., et al. 14-CV-01689...

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