1 UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA FORT PIERCE DIVISION Case No: 12-Civ-14333-MARTINEZ-LYNCH In re Digital Domain Media Group, Inc. Securities Litigation ____________________________________/ STIPULATION OF SETTLEMENT Subject to the approval of the Court, the Settlement contained herein is made and entered into by and between the following Settling Parties to the Action: Lead Plaintiffs on behalf of themselves and the Settlement Class, by and through their counsel of record in the Action; and Defendants, by and through their counsel of record in the Action. The Settlement is intended to fully, finally and forever resolve, discharge and settle the Action and the Released Claims (including Unknown Claims, as defined below) upon and subject to the terms and conditions set forth herein. All terms with initial capitalization shall have the meanings ascribed to them in Section 1 (“Definitions”) below. NOW THEREFORE, it is hereby STIPULATED AND AGREED by and among Lead Plaintiffs (for themselves and the Settlement Class Members) and Defendants, by and through their respective attorneys of record, being fully authorized to enter into this Stipulation, as follows: 1. Definitions As used in this Stipulation, the following terms shall have the meanings specified below. In the event of any inconsistency between any definition set forth below and any definition set Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 1 of 88
88
Embed
SOUTHERN DISTRICT OF FLORIDA FORT PIERCE DIVISION ...securities.stanford.edu/filings-documents/1049/...1.27 “Individual Defendants” means John C. Textor, Jonathan F. Teaford, John
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
1
UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF FLORIDA FORT PIERCE DIVISION
Case No: 12-Civ-14333-MARTINEZ-LYNCH
In re Digital Domain Media Group, Inc. Securities Litigation ____________________________________/
STIPULATION OF SETTLEMENT
Subject to the approval of the Court, the Settlement contained herein is made and entered
into by and between the following Settling Parties to the Action: Lead Plaintiffs on behalf of
themselves and the Settlement Class, by and through their counsel of record in the Action; and
Defendants, by and through their counsel of record in the Action. The Settlement is intended to
fully, finally and forever resolve, discharge and settle the Action and the Released Claims
(including Unknown Claims, as defined below) upon and subject to the terms and conditions set
forth herein. All terms with initial capitalization shall have the meanings ascribed to them in
Section 1 (“Definitions”) below.
NOW THEREFORE, it is hereby STIPULATED AND AGREED by and among Lead
Plaintiffs (for themselves and the Settlement Class Members) and Defendants, by and through
their respective attorneys of record, being fully authorized to enter into this Stipulation, as
follows:
1. Definitions
As used in this Stipulation, the following terms shall have the meanings specified below.
In the event of any inconsistency between any definition set forth below and any definition set
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 1 of 88
2
forth in this document or in any other document related to the Settlement set forth in this
Stipulation, the definition set forth below shall control.
1.1 “Action” means the above-captioned consolidated class action.
1.2 “Authorized Claimant” means any Settlement Class Member who has submitted a
timely and valid Claim to the Claims Administrator (in accordance with the requirements
established by the Court), whose claim for recovery has been approved for payment from the Net
Settlement Fund pursuant to the terms of this Stipulation, and who is entitled to a distribution
from the Net Settlement Fund pursuant to the Plan of Allocation or any order of the Court.
1.3 “Bounty Gain” means Bounty Gain Enterprises, Inc.
1.4 “Claim” means a completed and executed Claim Form that has been submitted to
the Claims Administrator in accordance with the instructions on the Claim Form.
1.5 “Claim Form” means the Proof of Claim and Release Form (substantially in the
form attached hereto as Exhibit A-2) that a putative Settlement Class Member must complete and
timely submit to the Claims Administrator if that Settlement Class Member seeks to be eligible
to share in a distribution of the Net Settlement Fund.
1.6 “Claimant” means a Person who has submitted a Claim to the Claims
Administrator seeking to be eligible to share in the proceeds of the Net Settlement Fund.
1.7 “Claims Administrator” means KCC Class Action Services LLC, or other claims
administrator selected by Lead Counsel, subject to Court approval, to provide all notices approved
by the Court to potential Settlement Class Members and to administer the Settlement.
1.8 “Complaint” or “Consolidated Complaint” means the Consolidated Amended
Class Action Complaint [DE 57], filed in this Action on July 31, 2013.
1.9 “Court” means the United States District Court for the Southern District of Florida.
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 2 of 88
3
1.10 “Creditors’ Committee” means the Official Committee of Unsecured Creditors of
Digital Domain Media Group and its Subsidiaries.
1.11 “D&O Policies” means National Union Fire Insurance Company of Pittsburgh, Pa
policy number 01-357-01-17, AXIS Insurance Company policy number MLN764111/01/2011,
Allied World National Assurance Company policy number 0307-1280, Hudson Insurance
Company policy number HN-0303-3192, and ACE - Illinois Union Insurance Company policy
number DOX G24592546 001.
1.12 “DD CA Directors and Officers” means Rafael Fogel, Mark Miller, Cliff Plumer,
John Sculley, and Carl Stork.
1.13 “DDMG” means D2 Software, Inc., DDH Land Holdings, LLC, DDH Land
Company, Gotham Insurance Company, and Ironshore Specialty Insurance Company.
1.54 “Stipulation” means this Stipulation of Settlement.
1.55 “Summary Notice” means the Summary Notice (substantially in the form attached
hereto as Exhibit A-3) to be published as set forth in the Preliminary Approval Order.
1.56 “Supplemental Agreement” means the Supplemental Agreement between Lead
Plaintiffs and Defendants as set forth in paragraph 12.2 hereunder.
1.57 “Taxes” means: (i) all federal, state and/or local taxes of any kind (including
estimated taxes, interest or penalties) on any income earned by the Settlement Fund; and (ii) the
reasonable expenses and costs incurred by Lead Counsel in connection with determining the
amount of, and paying, any taxes owed by the Settlement Fund (including, without limitation,
reasonable expenses of tax attorneys and accountants).
1.58 “Underwriters” means Roth Capital Partners, LLC, Morgan Joseph TriArtisan,
LLC, and Maxim Group LLC.
1.59 “Unknown Claims” means, collectively, any and all Released Claims that the Lead
Plaintiffs or any other Settlement Class Member does not know or suspect to exist in his, her or
its favor at the time of the release of the Released Persons, and any Released Persons’ Claims that
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 10 of 88
11
any Defendant does not know or suspect to exist in his, her or its favor at the time of the release
of the Released Persons which, if known by him, her or it, might have affected his, her or its
decision to enter into this Settlement with and release of the Released Persons (or Lead Plaintiffs,
their counsel or other Settlement Class Members, as appropriate), or might have affected his, her
or its decision not to object to this Settlement or not exclude himself, herself or itself from the
Settlement Class. Unknown Claims include, without limitation, those Released Claims in which
some or all of the facts composing the claim may be unsuspected, undisclosed, concealed or
hidden. With respect to any and all Released Claims and Released Persons’ Claims, the Settling
Parties stipulate and agree that, upon the Effective Date, Lead Plaintiffs and Defendants shall
expressly waive and relinquish, and each Settlement Class Member and Released Person shall be
deemed to have and by operation of law and of the Judgment shall have expressly waived and
relinquished, to the fullest extent permitted by law, any and all provisions, rights and benefits
conferred by California Civil Code § 1542, which provides:
A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.
Lead Plaintiffs and Defendants shall further expressly waive and relinquish, and each
Settlement Class Member and each Released Person shall be deemed to have and by operation of
law and of the Judgment shall have expressly waived and relinquished, to the fullest extent
permitted by law, 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 or of international or foreign law, that
is similar, comparable or equivalent in effect to California Civil Code § 1542. It is understood
that Lead Plaintiffs and the other Settlement Class Members, or any of them, may hereafter
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 11 of 88
12
discover facts in addition to or different from those that he, she or it now knows or believes to be
true with respect to the subject matter of the Released Claims (including Unknown Claims), but
Lead Plaintiffs shall expressly fully, finally and forever discharge, settle and release, and each
Settlement Class Member, upon the Effective Date, shall be deemed to have, and by operation of
law and of the Judgment shall have, expressly fully, finally and forever discharged, settled and
released any and all Released Claims against the Released Persons, known or unknown, suspected
or unsuspected, contingent or non-contingent, whether or not concealed or hidden, that now exist
or heretofore have existed, upon any theory of law or equity now existing or coming into existence
in the future, including, but not limited to, conduct that is negligent, grossly negligent, reckless,
deliberately reckless or intentional, with or without malice, or a breach of any duty, law or rule,
without regard to the subsequent discovery or existence of such different or additional facts. Lead
Plaintiffs and Defendants acknowledge, and the Settlement Class Members by operation of law
and of the Judgment shall be deemed to have acknowledged, that the foregoing waiver of Released
Claims that are Unknown Claims, including the provisions, rights and benefits of §1542 of the
California Civil Code (and the inclusion of “Unknown Claims” in the definition of Released
Claims and Released Persons’ Claims) was separately bargained for and is a material element of
the Settlement.
2. Certification of Settlement Class
2.1 The Settling Parties agree that certification of a class, for settlement purposes only,
is appropriate in the Action. For purposes of this Stipulation and Settlement only, the Settling
Parties stipulate to: (i) the certification, for settlement purposes only, of a Settlement Class (as
defined in ¶1.32 herein), pursuant to Rules 23(a) and (b)(3) of the Federal Rules of Civil Procedure;
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 12 of 88
13
(ii) the appointment of Lead Plaintiffs as the class representatives for the Settlement Class; and
(iii) the appointment of Lead Counsel as counsel to the Settlement Class.
2.2 The certification of the Settlement Class shall be binding only with respect to the
Settlement of the Action and only if the Judgment contemplated by this Stipulation becomes Final
and the Effective Date occurs. Nothing in this Stipulation shall serve in any fashion, either directly
or indirectly, as evidence of or support for certification of a class other than for settlement purposes,
and the Settling Parties intend that the provisions herein concerning certification of the Settlement
Class shall have no effect whatsoever in the event the Settlement does not become Final.
Defendants expressly reserve the right to contest class certification in the event the Settlement is
terminated or the Effective Date does not occur for any other reason.
3. Releases and Bar Order
3.1 The obligations incurred pursuant to this Stipulation shall be in full and final
disposition of the Action and any and all Released Claims (including Unknown Claims) as against
any and all Released Persons.
3.2 Upon the Effective Date, Lead Plaintiffs and each of the other Settlement Class
Members, for themselves and on behalf of each of their past or present heirs, executors,
14.2 The Settling Parties intend this Settlement to be a final and complete resolution of
all Released Claims by Lead Plaintiffs and all Settlement Class Members against all Released
Persons. Except as otherwise provided herein, each Settling Party shall bear its own costs.
14.3 Lead Plaintiffs and Defendants, and their respective attorneys, agree not to assert
in any forum that this Action was brought by Lead Plaintiffs or Lead Counsel, or defended by
Defendants or Defendants’ Counsel, in bad faith or without a reasonable basis. For the purpose of
the Court’s findings and conclusions pursuant to Section 21D(c)(1) of the Exchange Act, as
amended by the Private Securities Litigation Reform Act of 1995, 15 U.S.C. § 78u-4(c), and
Section 27 of the Securities Act, as amended by the Private Securities Litigation Reform Act of
1995, 15 U.S.C. §77z-1(c), Lead Plaintiffs and Defendants shall assert no claims of any violation
of Rule 11 of the Federal Rules of Civil Procedure relating to the prosecution, defense or settlement
of this Action. The Settling Parties agree that the amount paid and the other terms of this
Settlement were negotiated at arm’s length and in good faith, including in connection with a
mediation conducted by a professional mediator, and reflect a settlement that was reached
voluntarily after consultation with experienced legal counsel.
14.4 This Stipulation, including the exhibits attached to this Stipulation and the
Supplemental Agreement referred to in ¶12.2 herein, may not be modified or amended, nor may
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 35 of 88
36
any of its provisions be waived, except by a writing signed by or on behalf of all Settling Parties
hereto or their successors-in-interest. Any condition in this Stipulation may be waived by the party
entitled to enforce the condition in a writing signed by that party or its counsel. The waiver by any
party of any breach of this Stipulation by any other party shall not be deemed a waiver of the
breach by any other party, or a waiver of any other prior or subsequent breach of this Stipulation
by that party or any other party. Without further order of the Court, the Settling Parties may agree
to reasonable extensions of time to carry out any of the provisions of this Stipulation.
14.5 The headings herein are used for the purpose of convenience only and are not meant
to have any legal effect upon the construction or interpretation of any part of this Stipulation.
14.6 The administration and consummation of this Settlement as embodied in this
Stipulation shall be under the authority of the Court, and the Court shall retain jurisdiction for the
purpose of, inter alia, entering orders providing for the implementation and enforcement of the
terms of this Stipulation, including, without limitation, the releases provided for herein, and any
awards of attorneys’ fees and Litigation Expenses to Lead Counsel.
14.7 The Settling Parties submit to the jurisdiction of the Court for purposes of
implementing and enforcing the Settlement embodied in the Stipulation.
14.8 This Stipulation, its attached exhibits and the Supplemental Agreement constitute
the entire agreement among the Settling Parties concerning this Settlement, and no representations,
warranties or inducements have been made by or to any Settling Party concerning this Stipulation,
its attached exhibits or the Supplemental Agreement other than those contained and memorialized
in such documents. This Stipulation and the Supplemental Agreement supersede any and all prior
statements, representations, promises or other agreements, written or oral, with respect to the
subject matter of this Stipulation and the Supplemental Agreement.
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 36 of 88
37
14.9 It is understood by the Settling Parties that, except for the matters expressly
represented herein, the facts or law with respect to which this Stipulation is entered into may turn
out to be other than or different from the facts and law now known to each Settling Party or
believed by such party to be true; each party therefore expressly assumes the risk of the facts or
law turning out to be so different, and agrees that this Stipulation shall be in all respects effective
and not subject to termination by reason of any such different facts or law.
14.10 This Stipulation may be executed in one or more original, e-mailed and/or faxed
counterparts. All executed counterparts and each of them shall be deemed to be one and the same
instrument. Counsel for each of the Settling Parties will maintain their own respective original
signature pages. No Settling Party shall raise the use of email to deliver or transmit a signature as
a defense to the formation or enforceability of this Stipulation, and each Settling Party forever
waives any such defense. A complete set of executed counterparts shall be filed with the Court.
14.11 This Stipulation shall be binding upon, and inure to the benefit of, the heirs,
successors and assigns of the Settling Parties and the Released Persons, including any corporation
or other entity into or with which any Settling Party or Released Person merges, consolidates or
reorganizes.
14.12 Pending approval of the Court of the Stipulation and its attached exhibits, all
proceedings in the Action shall be stayed.
14.13 All agreements made and orders entered during the course of the Action relating to
the confidentiality of information shall survive this Stipulation.
14.14 The construction, interpretation, operation, effect and validity of this Stipulation,
the exhibits attached hereto and the Supplemental Agreement, and all documents necessary to
effectuate them, shall be governed by the laws of the State of Florida without regard to conflicts
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 37 of 88
38
of laws, except to the extent that federal law requires that federal law govern. The rights and
obligations of the Settling Parties with respect to this Stipulation shall be construed and enforced
in accordance with, and governed by, the internal, substantive laws of the State of Florida without
giving effect to that State’s choice-of-law principles.
14.15 This Stipulation shall not be construed more strictly against one Settling Party than
another merely by virtue of the fact that it, or any part of it, may have been prepared by counsel
for one of the Settling Parties, it being recognized that it is the result of arm’s-length negotiations
among the Settling Parties and all Settling Parties have contributed substantially and materially to
the preparation of this Stipulation.
14.16 All counsel and any other Person executing this Stipulation and any of the exhibits
attached hereto, or the Supplemental Agreement or any related Settlement documents, warrant and
represent that they have the full authority to do so and that they have the authority to take
appropriate action required or permitted to be taken pursuant to the Stipulation to effectuate its
terms.
14.17 Lead Counsel and Defendants’ Counsel agree to cooperate fully in seeking Court
approval of the Preliminary Approval Order and the Settlement, and to use reasonable efforts to
promptly agree upon and execute all such other documentation as may be reasonably required to
obtain final approval by the Court of the Settlement. Lead Counsel and Defendants’ Counsel agree
to cooperate to the extent reasonably necessary to effectuate, implement and accomplish all of the
terms and conditions of this Stipulation.
14.18 If any party is required to give notice to the other parties under this Stipulation,
such notice shall be in writing and shall be deemed to have been duly given upon receipt by hand
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 38 of 88
June 17
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 39 of 88
delivery, electronic mail, facsimile transmission. Notice shall be provided to the counsel indicated
on the signature block below.
IN WITNESS WHEREOF, the Settling Parties hereto have caused this Stipulation to be
executed by their duly authorized attorneys, dated ,2016.
BERMAN DEVALERIO
Patrick T. Egan, Esq. Admitted Pro Hac Vice Email: [email protected] Berman DeValerio One Liberty Square Boston, MA 02109 Telephone: (617) 542-8300 Facsimile: (617) 542-1194
Jay W. Eng, Esq. Fla. Bar No. 146676 Email: [email protected] 3507 Kyoto Gardens Drive, Suite 200 Palm Beach Gardens, FL 33410 Telephone: (561) 835-9400 Facsimile: (561) 835-0322
WOLF POPPER LLP
Marian P. Rosner, Es Email: mrosnerlfpper.com Patricia I. Avery, Email: [email protected] Admitted Pro Hac Vice Joshua W. Ruthizer, Esq. Fla. Bar No. 92528 Email: [email protected] 845 Third Avenue New York, NY 10022 Telephone: (212) 759-4600 Facsimile: (212) 486-2093
39
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 40 of 88
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 41 of 88
LEVI & KORSINSKY LLP
Nicholas I. Porritt, Esq. Admitted Pro Hac Vice Email: [email protected] 1101 30th Street, NW, Suite 115 Washington, DC 20007 Telephone: (202) 524-4290 Facsimile: (202) 333-2121
Lead Counsel for Court-Appointed Lead Plaintiffs
AKERMAN LLP
Brian Miller, Esq. Email: [email protected] Three Brickell City Centre 98 Southeast Seventh Street, Suite 1100 Miami, FL 33131 Telephone: (305) 374-5600 Facsimile: (305) 374-5095
Email: sbrodi~carltonfields.comMiami Tower100 S.E. Second Street, Suite 4200Miami, FL 33131-2113Telephone: (305) 530-0050Facsimile: (305) 530-0055
Counsel for De, fendant Jonathan Teaford
STROOCK & STROOCK& LAVAN LLP
John R. Loftus, Esq.Admitted Pro Hac ViceEmail: [email protected] B. Strickland, Esq.Email: [email protected] Pro Hac Vice2029 Century Park EastLos Angeles, CA 90067Telephone: (310) 556-5954Facsimile: (310) 407-6454
Brian C. Frontino, Esq.Email: [email protected] S. Everman, Esq.Email: [email protected] & Stroock & Lavan LLP200 South Biscayne Blvd. Suite 3100Miami, FL 33131-5323Tel: (305) 358-9900Fax: (305) 789-9302
Counsel for Maxim Group LLC and DefendantsRoth Capital Partners, LLC and Morgan JosephTriArtisan, LLC
41
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 43 of 88
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 44 of 88
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 45 of 88
EXHIBIT A TO STIPULATION OF SETTLEMENT
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA
FORT PIERCE DIVISION
Case No: 12-Civ-14333-MARTINEZ-LYNCH In re Digital Domain Media Group, Inc. Securities Litigation ____________________________________/
ORDER PRELIMINARILY APPROVING SETTLEMENT AND PROVIDING FOR NOTICE
WHEREAS a consolidated class action is currently pending before the Court entitled In
re Digital Domain Media Group, Inc. Securities Litigation, No. 12-Civ-14333-MARTINEZ-
LYNCH (the “Action”);
WHEREAS, the Court has received the Lead Plaintiffs’ Unopposed Motion for
Preliminary Approval of Proposed Class Action Settlement (the “Preliminary Approval Motion”)
and the Stipulation of Settlement, dated June __, 2016 (the “Stipulation”), that was entered into
by Lead Plaintiffs Patricof Family Limited Partnership, Edward Nussblat, and Robert Dziedzic
and Defendants John C. Textor, Jonathan F. Teaford, John M. Nichols, Roth Capital Partners,
LLC and Morgan Joseph TriArtisan, LLC, and SingerLewak LLP (collectively “Defendants”),
and the Court has reviewed the Stipulation and its attached Exhibits;
WHEREAS, Lead Plaintiffs having made the Preliminary Approval Motion, pursuant to
Federal Rules of Civil Procedure 23(e), for an order preliminarily approving the settlement of
this Action, in accordance with the Stipulation which, together with the exhibits annexed thereto,
sets forth the terms and conditions for a proposed Settlement of the Action and for dismissal of
the Action with prejudice upon the terms and conditions set forth therein; and
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 46 of 88
2
WHEREAS, all defined terms contained herein shall have the same meanings as set forth
in the Stipulation;
NOW, THEREFORE, IT IS HEREBY ORDERED:
1. For purposes of this Settlement only, the Court will certify a Settlement Class
defined as all persons and entities who purchased the common stock of Digital Domain Media
Group, Inc. in an initial public offering completed on November 21, 2011 and/or on the public
market during the Settlement Class Period and who were damaged thereby. Excluded from the
Class are Defendants, Released Persons, the officers and directors of the Company, at all relevant
times, members of their immediate families and their legal representatives, heirs, successors or
assigns, any entity in which defendants have or had a controlling interest, employees of the
Company, and any Company employee stock purchase or retirement plan. Also excluded from
the Settlement Class are any persons who otherwise satisfy the above requirements for
membership in the Settlement Class, but who exclude themselves by submitting a valid request
for exclusion in accordance with the requirements set forth in the Notice.
2. Pursuant to Rule 23 of the Federal Rules of Civil Procedure, the Court hereby
appoints Lead Plaintiffs Patricof Family Limited Partnership, Edward Nusblatt, and Robert
Dziedzic as “Class Representatives.”
3. Pursuant to Rule 23 of the Federal Rules of Civil Procedure, Lead Counsel,
Berman DeValerio, Wolf Popper LLP, and Levi & Korsinsky LLP are appointed as “Class
Counsel” and are authorized to act on behalf of the Class Representative and other Settlement
Class Members, with respect to all acts or consents required by or that may be given pursuant to
the Stipulation, including all acts that are reasonably necessary to consummate the Settlement.
4. The Court finds that certification of the Settlement Class for settlement purposes
only is appropriate because:
(a) The Settlement Class is so numerous that joinder of all members is
impracticable, satisfying the requirements of Rule 23(a)(1);
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 47 of 88
3
(b) There are questions of law or fact common to the Settlement Class,
satisfying the requirement of Rule 23(a)(2);
(c) The claims of the Lead Plaintiffs are typical of the claims of the Settlement
Class, satisfying the requirement of Rule 23(a)(3);
(d) The representative party will fairly and adequately protect the interests of
the Settlement Class, satisfying the requirement of Rule 23(a)(4); and
(e) Questions of law and fact common to the Settlement Class Members
predominate over questions affecting only individual members and a class action is superior to
other methods available for the fair and efficient adjudication of the controversy, satisfying the
requirements of Rule 23(b)(3).
The findings in Paragraph 4 are for purposes of this Settlement only, and shall have no
force or effect for any other purpose or if the Settlement does not become effective. The Court
does hereby preliminarily approve the Stipulation and the Settlement set forth therein, subject to
further consideration at the Final Approval Hearing described below.
5. A hearing (the “Final Approval Hearing”) shall be held before this Court on
__________, 2016, at __________ __.m., at the Wilkie D. Ferguson, Jr. United States
Courthouse, 400 North Miami Avenue, Room 10-1, Miami, FL 33128, to determine whether the
proposed Settlement of the Action on the terms and conditions provided for in the Stipulation is
fair, just, reasonable and adequate to the Settlement Class and should be approved by the Court;
whether a Judgment as provided in the Stipulation should be entered herein; whether the
proposed Plan of Allocation should be approved; and to determine the amount of fees and
expenses that should be awarded to Lead Counsel. The Court may adjourn the Final Approval
Hearing without further notice to Settlement Class Members.
6. The Court approves, as to form and content, the Notice of Pendency of Class
Action and Proposed Settlement, Final Approval Hearing, and Motion for Attorneys’ Fees and
Reimbursement of Litigation Expenses (the “Notice”); the Proof of Claim and Release form (the
“Claim Form”); and Summary Notice for publication annexed as Exhibits A-1, A-2 and A-3
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 48 of 88
4
hereto and finds that the mailing and distribution of the Notice and publishing of the Summary
Notice substantially in the manner and form set forth in ¶7 of this Order meet the requirements
of Federal Rules of Civil Procedure 23, 15 U.S.C. § 77z-1(a)(7), 15 U.S.C. § 78u-4(a)(7) and
due process, and is the best notice practicable under the circumstances and shall constitute due
and sufficient notice to all Persons entitled thereto.
7. The firm of KCC Class Action Services LLC (“Claims Administrator”) is hereby
appointed to supervise and administer the notice procedure as well as the processing of claims
as more fully set forth below:
(a) Not later than thirty (30) days after entry of this order (the “Notice Date”),
the Claims Administrator shall cause a copy of the Notice and the Claim Form, substantially in
the forms annexed as Exhibits A-1 and A-2 hereto, to be mailed by first-class mail to all
Settlement Class Members who can be identified with reasonable effort;
(b) No later than the Notice Date, the Summary Notice, substantially in the
form annexed as Exhibits A-3 hereto, shall be published once in Investor’s Business Daily and
once on Business Wire; and
(c) At least ten (10) calendar days prior to the Final Approval Hearing, Lead
Counsel shall cause to be served on Defendants’ Counsel and filed with the Court proof, by
affidavit or declaration, of such mailing and publishing.
8. Defendants shall complete service on the appropriate federal and state
government officials of all notices required under the Class Action Fairness Act, 28 U.S.C.
§1715, no later than ten days from the date of this order.
9. Nominees who purchased DDMG common stock for the beneficial ownership of
Settlement Class Members during the Settlement Class Period shall send the Notice and the
Claim Form to all beneficial owners of such DDMG common stock within ten (10) days after
receipt thereof, or send a list of the names and addresses of such beneficial owners to the Claims
Administrator within ten (10) days of receipt thereof, in which event the Claims Administrator
shall promptly mail the Notice and Claim Form to such beneficial owners. Such holders of record
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 49 of 88
5
shall be reimbursed from the Settlement Fund, upon receipt by the Claims Administrator of
proper documentation, for the reasonable expense of providing notice to beneficial owners who
are Settlement Class Members out of the Settlement Fund, which expenses would not have been
incurred except for the sending of such Notice, subject to further order of this Court with respect
to any dispute concerning such compensation.
10. All Settlement Class Members who do not exclude themselves by the deadline set
forth below shall be bound by all determinations and judgments in the Action concerning the
Settlement, whether favorable or unfavorable to the Settlement Class.
11. All Settlement Class Members who wish to participate in the Settlement shall
complete and submit Claim Forms in accordance with the instructions contained therein to obtain
a payment. Unless the Court orders otherwise, all Claim Forms must be postmarked no later
than thirty (30) days after the Settlement Hearing Date. Any Settlement Class Member who does
not submit a Claim Form within the time provided for shall be barred from sharing in the
distribution of the proceeds of the Settlement Fund, unless otherwise ordered by the Court.
Notwithstanding the foregoing, Lead Counsel shall have discretion to accept late-submitted
claims for processing by the Claims Administrator so long as the distribution of the Settlement
Fund is not materially delayed thereby.
12. Any Settlement Class Member may enter an appearance in the Action, at their
own expense, individually or through counsel of their own choice, in which case such counsel
must file with the Clerk of the Court a notice of such appearance. If they do not enter an
appearance, they will be represented by Lead Counsel.
13. Any Person falling within the definition of the Settlement Class may, upon
request, be excluded from the Settlement Class. Any such Person must submit to the Claims
Administrator a request for exclusion (“Request for Exclusion”), signed by such Person and post-
marked no later than seventy (70) days from the Notice Date. A Request for Exclusion must:
(a) state the name, address, and telephone number of the Person requesting exclusion; (b) identify
each of the Person’s purchases or other acquisitions of DDMG common stock made during the
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 50 of 88
6
Settlement Class Period, including the dates of each purchase or acquisition, the number of shares
purchased or otherwise acquired, and the price or consideration paid per share for each such
purchase or acquisition; (c) identify each of the Person’s sales or other disposals of DDMG
common stock made during the Settlement Class Period, including the dates of each sale or
disposal, the number of shares sold or disposed, and the price or consideration received per share
for each such sale or disposal; (d) state the number of shares of DDMG common stock held
immediately before the commencement of the Settlement Class Period; and (e) state that the
Person wishes to be excluded from the Settlement Class. All Persons who submit valid and
timely Requests for Exclusion in the manner set forth in this paragraph shall have no rights under
the Stipulation, shall not share in the distribution of the Net Settlement Fund, and shall not be
bound by the Stipulation or the Judgment entered in the Action.
14. Any Settlement Class Member may appear and show cause, if he, she or it has
any reasons why the proposed Settlement of the Action should or should not be approved as fair,
reasonable and adequate, why a judgment should or should not be entered thereon, why the Plan
of Allocation should or should not be approved, or why attorneys’ fees and expenses should or
should not be awarded to Lead Counsel. Settlement Class Members may not ask the Court to
order a larger settlement or otherwise modify the settlement; the Court may only approve or deny
the settlement. No Settlement Class Member or any other Person shall be heard or entitled to
contest such matters, unless that Settlement Class Member has sent by first-class mail written
objections and copies of any papers and briefs to the Class Action Clerk of the United States
District Court for the Southern District of Florida, Wilkie D. Ferguson, Jr. United States
Courthouse, 400 North Miami Avenue, Miami, FL 33128, or by filing them in person at any
location of the United States District Court for the Southern District of Florida, so that they are
received or postmarked no later than seventy (70) days from the Notice Date. Any objection
must: (a) clearly identify the case name and number, In re Digital Domain Media Group, Inc.
Securities Litigation, No. 12-Civ-14333-MARTINEZ-LYNCH; (b) include the full name,
address, and phone number of the objecting Settlement Class Member; (c) include a list of all of
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 51 of 88
7
the Settlement Class Member’s Settlement Class Period transactions in DDMG common stock;
(d) include a written statement of all grounds for the objection; (e) copies of any legal support
for the objection and any papers, briefs, or other documents upon which the objection is based,
which you wish to bring to the Court’s attention in support of your objection; and (f) be signed
by the objector or his or her counsel. A copy of the objector’s entire filing must also be served
on Jay Eng, Esq., Berman DeValerio, Garden Pointe, 3507 Kyoto Gardens Drive, Suite 200,
Palm Beach Gardens, Florida 33410, Co-Lead Counsel for Plaintiffs, and Steven J. Brodie, Esq.,
Carlton Fields, 100 S.E. Second Street, Suite 4200, Miami Florida, 33131, Co-Lead Counsel for
Defendants. If the objector wishes to appear in person at the Final Approval Hearing, the objector
must submit to the Court with his or her objection a Notice of Intention to Appear. If the objector
intends to appear at the Final Approval Hearing through counsel, the objection must also state
the identity of all attorneys who will appear at the Final Approval Hearing and the objector’s
counsel must submit a Notice of Intention to Appear with the objection. Any Settlement Class
Member who does not make his, her or its objection in the manner provided shall be deemed to
have waived such objection and shall forever be foreclosed from making any objection to the
fairness or adequacy of the proposed Settlement as set forth in the Stipulation, to the Plan of
Allocation, or to the award of attorneys’ fees and reimbursement of litigation expenses to Lead
Counsel, unless otherwise ordered by the Court.
15. Copies of all requests for exclusion and all Settlement Class Member objections
received by Lead Counsel shall be delivered to Defendants’ Counsel within three (3) business
days of receipt by Lead Counsel.
16. All funds held by the Escrow Agent shall be deemed and considered to be in
custodia legis of the Court, and shall remain subject to the jurisdiction of the Court, until such
time as such funds shall be distributed pursuant to the Stipulation and/or further order(s) of the
Court.
17. Lead Counsel shall be entitled to withdraw up to $250,000 (two hundred fifty
thousand dollars) from the Settlement Fund pursuant to paragraph 5.5 of the Stipulation to pay
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 52 of 88
8
reasonable expenses of notice and administration of the settlement upon the execution of this
Order, subject to the provisions of the Stipulation and any order of the Court.
18. All papers in support of the Settlement, the Plan of Allocation, and any motion
by Lead Counsel for attorneys’ fees or reimbursement of expenses shall be filed and served.
19. Defendants and their counsel shall have no responsibility for the Plan of
Allocation or any motion for attorneys’ fees or reimbursement of expenses submitted by Lead
Counsel, and such matters will be considered separately from the fairness, reasonableness and
adequacy of the Settlement.
20. At or after the Final Approval Hearing, the Court shall determine whether the
Plan of Allocation proposed by Lead Counsel and any motion for attorneys’ fees or
reimbursement of expenses shall be approved.
21. All reasonable expenses incurred in identifying and notifying Settlement Class
Members, as well as administering the Settlement Fund, shall be paid as set forth in the
Stipulation. In the event the Settlement is not approved by the Court, or otherwise fails to become
effective, neither the Lead Plaintiffs nor Co-Lead Counsel (nor the Claims Administrator nor any
other person) shall have any obligation to repay any amounts incurred or properly disbursed
pursuant to ¶¶5.5 or 6.2 of the Stipulation.
22. Neither the Stipulation, nor any of its terms or provisions, nor any of the
negotiations or proceedings connected with it, shall be construed as an admission or concession
by Defendants of the truth of any of the allegations in the Action, or of any liability, fault, or
wrongdoing of any kind.
23. Neither the Stipulation, nor any of its terms or provisions, nor any of the
negotiations or proceedings connected with it, shall be construed as an admission or concession
by Lead Plaintiff of any liability, fault, or wrongdoing of any kind.
24. Pending final determination of whether the Settlement should be approved, Lead
Plaintiffs, all Settlement Class Members, and anyone who acts or purports to act on their behalf,
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 53 of 88
9
shall not institute, commence or prosecute any action which asserts Released Claims against any
Released Person.
25. Pending final determination of whether the Settlement should be approved, all
proceedings in the Action are stayed pending further order of the Court.
26. The Court reserves the right to adjourn the date of the Final Approval Hearing
without further notice to the Settlement Class Members, and retains jurisdiction to consider all
further motions arising out of or connected with the proposed Settlement. The Court may
approve the Settlement, with such modifications as may be agreed to by the Settling Parties, if
appropriate, without further notice to the Settlement Class.
IT IS SO ORDERED.
Dated: ___________________, 2016
JOSE E. MARTINEZ UNITED STATES DISTRICT JUDGE
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 54 of 88
NOTICE OF SETTLEMENT MASTER FILE NO. 4:13-CV-05486-YGR
EXHIBIT A-1 TO STIPULATION OF SETTLEMENT
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA
FORT PIERCE DIVISION
Case No: 12-Civ-14333-MARTINEZ-LYNCH In re Digital Domain Media Group, Inc. Securities Litigation ____________________________________/
NOTICE OF PENDENCY OF CLASS ACTION AND PROPOSED SETTLEMENT, FINAL APPROVAL HEARING, AND MOTION FOR ATTORNEYS’ FEES AND REIMBURSEMENT OF LITIGATION EXPENSES
If you purchased or otherwise acquired shares of Digital Domain Media Group, Inc. (“DDMG” or the “Company”) common stock: (i) in DDMG’s initial public offering completed on November 18, 2011; and/or (ii) on the public market between November 18, 2011 and September 6, 2012, inclusive (the “Settlement Class”), then you could receive a payment from the proposed settlement of the above-captioned securities class action.
A federal court authorized this notice. This is not a solicitation from a lawyer.
The Proposed Settlement: This Notice contains summary information with respect to the proposed settlement. The terms and conditions of the proposed settlement (the “Settlement”) are set forth in the Stipulation of Settlement (the “Stipulation”), dated June 10, 2016 between and among the following parties in the Action (defined below): (i) Patricof Family Limited Partnership, Edward Nusblatt, and Robert Dziedzic (collectively, “Lead Plaintiffs”), and (ii) defendants John C. Textor, Jonathan F. Teaford, John M. Nichols (collectively “DDMG Defendants”), Roth Capital Partners, LLC, Morgan Joseph TriArtisan, LLC (collectively (“Underwriter Defendants”), and SingerLewak LLP, by and through their undersigned counsel. The DDMG Defendants together with the Underwriter Defendants and SingerLewak LLP are collectively referred to as the “Defendants”, and with Lead Plaintiffs, each a “Party”, are collectively referred to as the “Parties”. Stipulation are available at www.DDMGSecuritiesLitigation.com or from Lead Counsel at the addresses provided below. Additional information concerning this Litigation and the Settlement is also available by contacting Lead Counsel. Securities, Class and Class Period: The Settlement class (the “Class” or “Settlement Class”) is comprised of all Persons who purchased or otherwise acquired shares of DDMG common stock: (i) in DDMG’s initial public offering completed on November 18, 2011; and/or (ii) on the public market between November 18, 2011 and September 6, 2012, inclusive. Excluded from the Class are Defendants John C. Textor, Jonathan F. Teaford, John M. Nichols, Roth Capital Partners, LLC and Morgan Joseph TriArtisan, LLC, and SingerLewak LLP, Released Persons (defined below), the officers and directors of the Company, at all relevant times, members of their immediate families and their legal representatives, heirs, successors or assigns, any entity in which defendants have or had a controlling interest, employees of the Company, and any Company employee stock purchase or retirement plan. Also excluded from the Settlement Class are those Persons who timely and validly file a request for exclusion from the Settlement Class as explained below. Settlement Payment: $5,500,000 in cash (the “Settlement Payment”). The “Settlement Fund” refers to the Settlement Payment plus any and all interest earned thereon. The Lawsuit: As discussed further, the Settlement resolves a lawsuit concerning allegations that certain investors who purchased or otherwise acquired DDMG shares during the Settlement Class Period and were damaged as a result of Defendants’ alleged dissemination of materially false and misleading statements and omissions regarding (i) DDMG’s financial conditions, (ii) the Company’s failure to disclose a loan agreement by which Textor borrowed $10 million to
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 55 of 88
NOTICE OF SETTLEMENT CASE NO. 12-CV-14333-MARTINEZ-LYNCH -2-
purchase 1,176,471 shares of DDMG common stock in DDMG’s IPO, and (iii) the Company’s failure to disclose certain information required by 17 C.F.R. §229.401. Attorneys’ Fees and Expenses: Lead Counsel has litigated this Action on a contingent basis and has conducted this litigation and advanced the expenses of litigation with the expectation that if it were successful in recovering money for the Class, it would receive fees and be reimbursed for its expenses from the settlement fund, as is customary in this type of litigation. Plaintiffs’ Counsel will apply to the Court for an award of attorneys’ fees not to exceed $1,800,000 or thirty-three percent (33%) of the Settlement Fund plus interest, and for reimbursement of out-of-pocket expenses not to exceed $[XXXXXX], plus interest (the “Fee Application”) incurred in connection with the prosecution of the case. Lead Counsel may make an application for service awards, in amounts not to exceed $5,000 each, for the Lead Plaintiffs to compensate them for their efforts and commitment on behalf of the Class. The Court may award Plaintiffs’ Counsel attorneys’ fees consisting of less than thirty-three percent (33%) of the Settlement Fund, in which case the difference will remain with the Settlement Fund. Plaintiffs’ Counsel have expended considerable time and effort in the prosecution of the case on a contingent-fee basis, and have advanced the expenses of the Litigation, in the expectation that if they were successful in obtaining a recovery for the Settlement Class, they would be paid from such recovery. In this type of litigation, counsel are typically awarded a percentage of the common fund recovery as their attorneys’ fees. Lead Counsel’s Fee Application will be filed with the Court on or before DATE. Deadlines:
To Submit a Proof of Claim: DATE To Submit a Request for Exclusion: DATE To File and Serve an Objection: DATE Court Settlement Hearing:
DATE
More Information: Contact Information for Co-Lead Counsel for Lead Plaintiffs and the Class: .
Jay W. Eng, Esq. BERMAN DEVALERIO
3507 Kyoto Gardens Drive, Suite 200
Palm Beach Gardens, FL 33410 (561) 835-9400
Joshua W. Ruthizer, Esq. WOLF POPPER LLP
845 Third Avenue New York, NY 10022
(212) 759-4600
Nicholas I, Porritt, Esq. LEVI & KORSINSKY LLP
1101 30th Street NW Washington, DC 20007
(202) 524-4290
Additional information about the Settlement can be found at: www.DDMGSecuritiesLitigation.com. Your legal rights are affected whether you act or do not act. Please read this notice carefully.
Statement of Recovery
Your individual recovery from the Settlement Fund will depend on numerous factors. Lead Counsel estimates that approximately 8.9 million shares of DDMG common stock were purchased or otherwise acquired and potentially damaged during the Class Period. Based on this, the average recovery per share of DDMG securities under the Settlement will be approximately $0.62 per share before the deduction of attorneys’ fees, costs, and expenses, as approved by the Court. The actual recovery per share will depend on: (1) the number of claims filed; (2) when members of the Class purchased and/or acquired their shares during the Class Period; (3) whether members of the Class either sold their shares during the Class Period or held their shares past the end of the Class Period; (4) administrative costs, including the costs of notice, for the Action, and (5) the amount awarded by the Court for attorneys’ fees and expenses. As noted above, Lead Counsel will submit a Fee Application, seeking an award of attorneys’ fees not to exceed $1,800,000 or thirty-three percent (33%) of the Settlement Fund plus interest, and for reimbursement of out-of-pocket expenses not to exceed $[XXXXXX], plus interest. These payments, if approved, will come out of the $5.5 million Settlement Fund, and are estimated to be an average of [$#.##] per damaged share purchased in the Settlement Class Period.
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 56 of 88
NOTICE OF SETTLEMENT CASE NO. 12-CV-14333-MARTINEZ-LYNCH -3-
Lead Plaintiffs and Defendants do not agree on the average amount of damages per share that would be recoverable if the Lead Plaintiffs were to have prevailed on each claim alleged. The issues on which the parties disagree include: (1) the extent to which the various matters that Lead Plaintiffs allege were materially false or misleading influenced (if at all) the trading price of DDMG’s common stock at various times during the Settlement Class Period; (2) the extent to which the various allegedly adverse material facts were omitted influenced (if at all) the trading price of DDMG’s common stock at various times during the Settlement Class Period; (3) whether the statements made or facts allegedly omitted were material, false, misleading or otherwise actionable under the securities laws; (4) whether any of the Defendants acted with the wrongful intent alleged by Lead Plaintiffs; and (5) whether, even if liability could be proven, total damages would be more than $0 per damaged share. DDMG and the Individual Defendants deny all liability and believe they would win the case at trial. The Circumstances of the Settlement For the Settlement Class, the principal reason for the Settlement is the benefit to be provided to the Settlement Class. This benefit must be compared to the risk that no recovery might be achieved after a contested trial and likely appeals, possibly years into the future. For the settling Defendants, who deny all allegations of wrongdoing or liability whatsoever, the principal reason for the Settlement is to eliminate the expense, risks and uncertain outcome of the litigation. The Settlement therefore enables the Class to recover a substantial amount without incurring any additional risk or costs.
YOUR LEGAL RIGHTS AND OPTIONS IN THIS SETTLEMENT
SUBMIT A CLAIM FORM POSTMARKED NO LATER THAN DATE
The only way to get a payment if you have a Recognized Claim.
EXCLUDE YOURSELF BY SUBMITTING A WRITTEN REQUEST FOR EXCLUSION POSTMARKED BY NO LATER THAN DATE
Get no payment. This is the only option that allows you to ever be part of any other lawsuit against DDMG and the other Released Persons about the Released Claims.
OBJECT BY SUBMITTING A WRITTEN OBJECTION POSTMARKED NO LATER THAN DATE
Write to the Court about why you do not like the Settlement. You may, but are not required to, appear at the Final Approval Hearing.
GO TO A HEARING You may ask to speak in Court about the fairness of the Settlement.
DO NOTHING Get no payment. Give up rights.
These rights and options – and the deadlines to exercise them – are explained in this notice. The Court in charge must still decide whether to approve the Settlement. Payments will be made to Settlement Class
Members who submit timely and valid Proofs of Claim if the Court approves the Settlement and after any appeals are resolved. Please be patient.
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 57 of 88
NOTICE OF SETTLEMENT CASE NO. 12-CV-14333-MARTINEZ-LYNCH -4-
WHAT THIS NOTICE CONTAINS
Table of Contents
Page BASIC INFORMATION ................................................................................................................................
1. Why did I get this notice package? .......................................................................... 2. What is this lawsuit about? ...................................................................................... 3. Why is this a class action? ....................................................................................... 4. Why is there a settlement? ....................................................................................... 5. How do I know if I am part of the Settlement? ........................................................ 6. Are there exceptions to being included? .................................................................. 7. What if I am still not sure if I am included? ............................................................ 8. What does the Settlement provide? .......................................................................... 9. How much will my payment be? ............................................................................. 10. How can I get a payment? ........................................................................................ 11. When would I get my payment? .............................................................................. 12. What am I giving up to get a payment or stay in the Settlement Class? .................. 13. How do I get out of the proposed Settlement? ......................................................... 14. If I do not exclude myself, can I sue DDMG and the other Released Persons for the same
thing later? ............................................................................................................... 15. If I exclude myself, can I get money from the proposed Settlement? ...................... 16. Do I have a lawyer in this case? ............................................................................... 17. How will the lawyers be paid? ................................................................................. 18. How do I tell the Court that I do not like the proposed Settlement? ........................ 19. What is the difference between objecting and excluding? ....................................... 20. When and where will the Court decide whether to approve the proposed Settlement? 21. Do I have to come to the hearing? ........................................................................... 22. May I speak at the hearing? ..................................................................................... 23. What happens if I do nothing at all? ........................................................................ 24. Are there more details about the proposed Settlement? ........................................... 25. How do I get more information? ..............................................................................
BASIC INFORMATION
1. Why did I get this notice package?
You or someone in your family may have purchased or otherwise acquired shares of DDMG common stock between November 18, 2011 and September 6, 2012, inclusive. The Court directed that this Notice be sent to potential Settlement Class Members because they have a right to know about a proposed settlement of a class action lawsuit, and about all of their options, before the Court decides whether to approve the Settlement. If the Court approves the Settlement and any appeals are resolved, an administrator appointed by the Court will make the payments that the Settlement allows. This package explains the Litigation, the Settlement, Settlement Class Members’ legal rights, what benefits are available, who is eligible for them, and how to get them.
2. What is this lawsuit about?
This lawsuit consolidates three class actions filed in the United States District Court for the Southern District of Florida against John C. Textor (“Textor”), Jonathan F. Teaford (“Teaford”), and John M. Nichols (“Nichols”) alleging violations
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 58 of 88
NOTICE OF SETTLEMENT CASE NO. 12-CV-14333-MARTINEZ-LYNCH -5-
of the federal securities laws. On March 12, 2013, the Court consolidated those three actions under the caption In re Digital Domain Media Group, Inc. Securities Litigation, and appointed the Patricof Family Limited Partnership, Edward Nusblatt, and Robert Dziedzic to serve as Lead Plaintiffs, and Levi & Korsinsky, Wolf Popper, and Berman DeValerio as Co-Lead Counsel. On July 31, 2013, the Class Action Plaintiffs filed the Consolidated Amended Class Action Complaint (the “Complaint”). The Complaint alleges claims under the Securities Act, the Exchange Act, and United States Securities and Exchange Commission (“SEC”) Rule 10b-5 promulgated under the Exchange Act, 17 C.F.R. §240.10b-5. The Securities Act Claims are brought against Textor, Teaford, SingerLewak LLP (the Auditor Defendant), and Roth Capital Partners, LLC, and Morgan Joseph TriArtisan, LLC (the Underwriter Defendants. The Exchange Act claims are brought against Textor, Teaford, and Nichols. The Complaint alleges that Textor and Teaford are liable for untrue statements of material fact and omissions in the registration statement, six amendments thereto, and a prospectus (collectively, the “Offering Documents”) that the Company issued in connection with its initial public offering (“IPO”) completed on November 18, 2011. Specifically the Complaint alleges misstatements or omissions in the Offering Documents regarding (i) DDMG’s financial conditions, (ii) the Company’s failure to disclose a loan agreement by which Textor borrowed $10 million to purchase 1,176,471 shares of DDMG common stock in DDMG’s IPO, and (iii) the Company’s failure to disclose certain information required by 17 C.F.R. §229.401. When this information became public, the Complaint alleges that the share price fell and shareholders were damaged. The lawsuit seeks money damages against Defendants for alleged violations of the federal securities laws. Defendants have denied and continue to deny each and all of the claims and contentions alleged by the Plaintiffs in the Litigation. Defendants continue to assert that they did not violate Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 or Sections 10 and 20(a) of the Securities Exchange Act of 1934, that they did not engage in any conduct that could give rise to any liability to Lead Plaintiffs or the Settlement Class, that they did not make any of the claimed misstatements or omissions, that none of the claimed misstatements of omissions caused damages to Plaintiffs or the Settlement Class, and that none of the claimed misstatements or omissions were material.
3. Why is this a class action?
In a class action, one or more people called Class Representatives sue on behalf of people who have similar claims. All persons with similar claims are Settlement Class Members, who together constitute the class. Bringing a case, such as this one, as a class action allows the collective adjudication of many similar claims that might be economically too small to bring in individual actions. One court resolves the issues for all class members, except for those who exclude themselves from the class. Judge Jose E. Martinez of the Southern District of Florida is overseeing this class action.
4. Why is there a settlement?
The Court did not decide in favor of Lead Plaintiffs or Defendants. Instead, both sides agree to the Settlement. That way, they avoid the costs and risks of further litigation and trial. As explained above, Lead Plaintiffs and their attorneys think the Settlement is best for all members of the Class. Lead Plaintiffs believe that the proposed Settlement is fair, reasonable, adequate, and in the best interests of the Settlement Class. Throughout the litigation, Defendants raised a number of arguments and defenses (which they would continue to do through summary judgment and trial) including that none of the challenged misrepresentations were false or misleading when made, that Defendants did not act with the requisite fraudulent intent and that any losses suffered by Lead Plaintiffs and the Settlement Class Members were not caused by the misconduct alleged in the Complaint. Defendants would also likely argue that, even if Lead Plaintiffs could establish liability, they would have trouble showing what part of the stock-price decline is attributable to the alleged fraud rather than other company-specific bad news. While Lead Plaintiffs believe that these arguments lack merit, there is no guarantee that Defendants would not prevail on one or more of these arguments. In the absence of a Settlement, the Settling Parties would present factual and expert testimony on each of these issues, and there is considerable risk that the Court or jury would resolve these issues against Lead Plaintiffs and the Settlement Class. Lead Plaintiffs and Lead Counsel have also considered the benefits of a Settlement now, in light of the risks that the Settling Defendants or their insurers could not satisfy a judgment materially larger than the Settlement Amount, and of their evaluation of the reduced amount of insurance that may be available after trial. Lead Counsel have thoroughly investigated and litigated the case prior to and since filing it in 2012. Based upon their extensive investigation, their consultation with experts, and their evaluation of the claims asserted against the Defendants
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 59 of 88
NOTICE OF SETTLEMENT CASE NO. 12-CV-14333-MARTINEZ-LYNCH -6-
and defenses that might be asserted, Lead Counsel believe that the Settlement is fair, reasonable, adequate and in the best interests of the Settlement Class. Digital Domain filed for bankruptcy on September 11, 2012. Lead Plaintiffs and Lead Counsel have considered the benefits of a settlement now, in light of the risks that the Settling Defendants or their insurers could not satisfy a judgment materially larger that the Settlement Amount, and of their evaluation of the reduced amount of insurance that may be available after trial. The Settlement provides an immediate and certain monetary recovery. By settling, Lead Plaintiffs and Defendants avoid the cost, uncertainty and delay of continued litigation. The parties engaged in extensive negotiations that led to the Settlement described in this Notice. Lead Counsel believe the Settlement is fair because there is no guarantee the Settlement Class would win on any of the claims and even if they did win, they might not be awarded any more money than the $5.5 million plus interest, as provided for in the Stipulation, that Defendants have agreed to in order to settle the Action. Defendants’ lawyers believe the Settlement is fair because even though Defendants deny Lead Plaintiff’s claims, Defendants avoid the cost of continued litigation and risk of losing at trial.
WHO IS IN THE SETTLEMENT To see if you will get money from this Settlement, you must be a Settlement Class Member.
5. How do I know if I am part of the Settlement?
The Court directed that, for the purposes of the proposed Settlement, everyone who fits this description is a Settlement Class Member: all Persons who purchased or otherwise acquired shares of DDMG common stock: (i) in DDMG’s initial public offering completed on November 18, 2011; and/or (ii) on the public market between November 18, 2011 and September 6, 2012, inclusive.
6. Are there exceptions to being included?
Excluded from the Class are Defendants John C. Textor, Jonathan F. Teaford, John M. Nichols, Roth Capital Partners, LLC and Morgan Joseph TriArtisan, LLC, and SingerLewak LLP, Released Persons (defined below), the officers and directors of the Company, at all relevant times, members of their immediate families and their legal representatives, heirs, successors or assigns, any entity in which defendants have or had a controlling interest, employees of the Company, and any Company employee stock purchase or retirement plan. Also excluded from the Settlement Class are those Persons who timely and validly file a request for exclusion. If one of the mutual funds in which you are invested purchased or otherwise acquired DDMG common stock during the Settlement Class Period, that does not make you a Settlement Class Member. You are a Settlement Class Member only if you directly purchased or otherwise acquired DDMG common stock during the Settlement Class Period. Contact your broker to see if you purchased or otherwise acquired DDMG common stock during the Settlement Class Period. If you sold but did not purchase DDMG common stock during the Settlement Class Period, you are not a Settlement Class Member. You are a Settlement Class Member only if you purchased or otherwise acquired your shares during the Settlement Class Period.
7. What if I am still not sure if I am included?
If you are still not sure whether you are included, you can ask for free help. You can contact the Claims Administrator by writing to KCC Class Action Services LLC, P.O. Box 43417, Providence, RI 02940-3417 for more information; or, you can fill out and return the Proof of Claim form described in Question 10 on page 7 to see if you qualify.
THE SETTLEMENT BENEFITS — WHAT YOU GET
8. What does the Settlement provide?
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 60 of 88
NOTICE OF SETTLEMENT CASE NO. 12-CV-14333-MARTINEZ-LYNCH -7-
Defendants have agreed to create a $5.5 million fund to be distributed, after the payment of claims administration and notice costs and Plaintiffs’ Counsel’s attorneys’ fees and expenses as awarded by the Court, to all Settlement Class Members who send in a valid and timely Proof of Claim form. In return, the Parties will agree to dismiss the Action and Lead Plaintiffs and all Settlement Class Members who do not opt out agree to release, relinquish and discharge all Released Claims against the Defendants and their respective Related Persons, whether or not these Settlement Class Members execute and deliver the Proof of Claim and Release.
9. How much will my payment be?
The Settling Defendants have agreed to pay $5,500,000 in cash for the benefit of the Settlement Class. At this time, it is not possible to make any determination as to how much individual members of the Settlement Class may receive from the Settlement. Lead Plaintiffs have proposed a plan for allocating the Net Settlement Funds to Settlement Class Members (the “Plan of Allocation”). The objective of the Plan of Allocation will be to equitably distribute funds to Settlement Class Members who submit timely and valid Proof of Claim Forms. The Plan of Allocation reflects Lead Plaintiffs’ damages expert’s analysis, which has included a review of publicly available information regarding DDMG and statistical analyses of the price movement of DDMG common stock and the price performance of relevant market and industry indices during the Settlement Class Period, as well as the statutory provision for recovery under a claim for violation of Section 11 of the Securities Act. The Plan of Allocation is the proposed plan submitted by Lead Plaintiffs and Co-Lead Counsel for the Court’s approval. The Court may approve this plan as proposed or it may modify it without further notice to the Settlement Class. The Court has reserved jurisdiction to allow, disallow or adjust on equitable grounds the claim of any Settlement Class Member. Each Settlement Class Member will be deemed to have submitted to the jurisdiction of the U.S. District Court for the Southern District of Florida with respect to his, her, or its Proof of Claim. Persons that exclude themselves from the Settlement Class will not be eligible to receive a distribution from the Settlement Fund and should not submit Proof of Claim Forms. If approved by the Court, the plan of allocation set forth below (the “Plan of Allocation”) will determine how the net proceeds of the Settlement will be distributed to Settlement Class Members who submit timely and valid Claim Forms.
PLAN OF ALLOCATION
General Provisions To the extent the Settlement is approved by the Court, and upon the satisfaction of the other conditions to the Settlement, the Net Settlement Funds will be distributed to Settlement Class Members who submit valid claims that are accepted by the Court (“Authorized Claimants”) in accordance with the provisions of this proposed Plan of Allocation, or such other plan of allocation as the Court may approve. Approval of the Settlement is independent from approval of a plan of allocation. Payments pursuant to the Plan of Allocation will be conclusive against Authorized Claimants. No person will have any claim against Lead Plaintiffs, Co-Lead Counsel, the Settling Defendants, the Released Parties and their counsel, or the Claims Administrator or other agent designated by Co-Lead Counsel arising from the distribution made substantially in accordance with the Stipulation of Settlement, the Plan of Allocation, or further orders of the Court. Lead Plaintiffs, Co-Lead Counsel, the Settling Defendants, the Released Parties and their counsel will have no responsibility or liability whatsoever for the investment or distribution of the Settlement Fund, the Plan of Allocation or the determination, administration, calculation or payment of any Proof of Claim Form, nor nonperformance of the Claims Administrator, the payment or withholding of Taxes of Tax Expenses owed by the Settlement Fund or any losses incurred in connection therewith. Settling Defendants are not entitled to get back any portion of the Settlement Fund once the Court’s Order approving the Settlement becomes final. Settling Defendants shall not have any liability, obligation, or responsibility for the
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 61 of 88
NOTICE OF SETTLEMENT CASE NO. 12-CV-14333-MARTINEZ-LYNCH -8-
administration of the Settlement or disbursement of the Net Settlement Funds or the Plan of Allocation or such other plan of allocation as may be approved by the Court. Only Authorized Claimants will be eligible to share in the distribution of the Net Settlement Funds, as further described below. Each person and entity wishing to participate in the distribution must timely submit a valid Proof of Claim form establishing membership in the Settlement Class, and including all required documentation, postmarked no later than [DATE] to the address set forth in the Claim Form. Unless the Court otherwise orders, any Settlement Class Member who fails to submit a Claim Form postmarked no later than [DATE] shall be forever barred from receiving payments pursuant to the Settlement, but will in all other respects remain a member of the Settlement Class in which he, she or it is a member and be subject to the provisions of the Stipulation, including the terms of any Judgements entered and releases given. Each Claim Form must provide all of the information requested therein and provide sufficient supporting documentation as set forth therein. The Plan of Allocation generally measures the amount of loss that a Settlement Class Member can claim for purposes of making pro rata allocations of the cash in the Net Settlement Fund to Authorized Claimants. The Plan of Allocation is not a formal damages analysis. The calculations made pursuant the Plan of Allocation are not intended to be estimates of, nor indicative of, the amounts that Settlement Class members might have been able to recover after a trial. Nor are the calculations pursuant to the Plan of Allocation intended to be estimates of the amounts that will be paid to Authorized Claimants pursuant to the Settlement. The computations under the Plan of Allocation are only a method to weigh the claims of Authorized Claimants against one another for the purposes of making allocations of the Net Settlement Funds. In this Action, there are claims asserted under both the Securities Act and the Exchange Act. All Settlement Class Members have claims under the Exchange Act. However, not all Settlement Class Members have claims under the Securities Act and not all Defendants were alleged to have violated both acts, e.g., there are no allegations that any of the Underwriter Defendants violated the Exchange Act. The Plan of Allocation properly recognizes these facts and the requirements imposed by law as to who is eligible to recover from each Defendant. Accordingly, the proceeds of the Settlement will be distributed to Authorized Claimants based on the claims they have and, to that end, the proceeds are divided into two separate funds:
a. Fund 1: Representing 87% of the Settlement Fund (net of attorneys’ fees, expenses, and administration costs), this fund applies to claims asserted under the Exchange Act. As a result, all Authorized Claimants, to the extent they have Recognized Loss Amounts under the formula set forth below, will be eligible to receive a pro rata distribution from Fund 1, subject to their satisfying the other conditions for receiving a distribution.
b. Fund 2: Representing 13% of the Settlement Fund (net of attorneys’ fees, expenses, and administration costs) Fund 2 applies to claims asserted only under the Securities Act and shall be paid to Authorized Claimants who purchased shares in or traceable to DDMG’s November 18, 2011 offering, based on their Recognized Loss Amounts under the formula set forth below, and subject to their satisfying the other conditions for receiving a distribution..
Calculation of Recognized Loss Amounts and Recognized Claims
For each Settlement Class Period purchase of DDMG common stock that is properly documented, a “Recognized Loss Amount” will be calculated for that security according to the formulas described below. Such “Recognized Loss Amounts” will be aggregated across all purchases relevant for each Fund to determine the “Fund Recognized Claim” that each Authorized Claimant has against each Fund.
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 62 of 88
NOTICE OF SETTLEMENT CASE NO. 12-CV-14333-MARTINEZ-LYNCH -9-
The calculations of the Recognized Loss Amounts reflect Lead Plaintiffs’ allegations that the price of DDMG’s common stock was artificially inflated during the Settlement Class Period due to Defendants’ alleged misrepresentations and/or omissions. Lead Plaintiffs’ damages expert has estimated the artificial inflation in the DDMG Securities during the Settlement Class Period. Under this analysis, each Recognized Loss Amounts will be based on the difference between the price of DDMG common stock prior to and after the corrective disclosures and/or drops on September 4, 2012, September, 5, 2012, and September 7, 2012. The following table demonstrates how a Recognized Loss Amount is calculated:
Date Shares Sold
Dat
e S
hare
s P
urch
ased
Prior to Sept. 4, 2012
Sept. 4, 2012 through Sept. 5, 2012
Sept. 6, 2012 through Sept. 7, 2012
After Sept. 7, 2012
Prior to Sept. 4, 2012
$0/share $0.66/share $1.09/share $1.47/share
Sept. 4, 2012 to Sept. 5, 2012
N/A $0/share $0.43/share $0.81/share
Sept. 5, 2012 to Sept. 7, 2012
N/A N/A $0/share $0.38/share
After Sept. 7, 2012
N/A N/A N/A $0/share
Depending upon when an Authorized Claimant purchased and sold shares of DDMG common stock, the Recognized Loss Amount will be equal to the amount of shares held on the date of a corrective disclosure multiplied by the decline in DDMG’s common stock price caused by the corrective disclosure.
An Authorized Claimant’s “Distribution Amount” shall be the sum of its pro rata share of each Fund. The pro rata share in each Fund shall be calculated by dividing the Authorized Claimant’s Recognized Loss Amount by the total of Recognized Loss Amounts for all Authorized Claimants entitled to a distribution from that Fund. If the Authorized Claimant’s Distribution Amount is calculated to be less than $10.00, it will not be included in the calculation and it will not be distributed. If an Authorized Claimant has more than one purchase/acquisition or sale of DDMG common stock during the Settlement Period, all purchases/acquisitions and sales shall be matched on a First-In-First-Out (“FIFO”) basis. Purchases or acquisitions and sales of DDMG common stock are deemed to have occurred on the “trade” date as opposed to the “settlement” date. To the extent that any amount of the Settlement Fund remains after the Claims Administrator has caused distributions to be made to all Authorized Claimants, whether by reason of uncashed distributions or otherwise, then, after the Claims Administrator has made reasonable and diligent efforts to have Authorized Claimants cash their distributions, any balance remaining in the Settlement Fund one (1) year after the initial distribution of such funds shall be redistributed to Authorized Claimants who have cashed their initial distributions, after payment of any unpaid costs or fees incurred in administering the Settlement Fund for such redistribution if Co-Lead Counsel, in consultation with the Claims Administrator, determines that additional redistributions, after deduction of any additional fees and expenses that would be incurred with respect to such redistribution, would be cost-effective. Additional redistributions to Authorized Claimants who have cashed their prior distribution checks may occur thereafter if Co-Lead Counsel, in consultation with the Claims Administrator, determines that additional redistributions, after the deduction of any additional fees and expenses that would be incurred with respect to such redistributions, would be cost effective. At such time as it is determined that the redistribution of funds remaining in the Settlement Fund is not cost-effective, the remaining balance in the Settlement Fund shall be contributed to non-sectarian, not-for-profit 501(c)(3) organization(s), to be recommended by Co-Lead Counsel and approved by the Court.
10. How can I get a payment?
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 63 of 88
NOTICE OF SETTLEMENT CASE NO. 12-CV-14333-MARTINEZ-LYNCH -10-
To qualify for a payment, you must send in a Proof of Claim form. A Proof of Claim form accompanies this Notice. You may also download a Proof of Claim form from the Claims Administrator’s website, www.DDMGSecuritiesLitigation.com. Read the instructions carefully, fill out the Proof of Claim form, include all the documents the form asks for, sign it, and mail it postmarked no later than [insert date]. Any Class member who fails to submit a Proof of Claim by such date shall be forever barred from receiving any distribution from the Settlement Fund (unless by order of the Court the deadline to submit a Proof of Claim is extended or such Class member’s Proof of Claim is accepted), but otherwise shall be bound by all of the terms of the Stipulation and the Settlement, including the releases in the Stipulation, and will be permanently barred and enjoined from bringing any action against any and all Defendants and released persons concerning any and all of Lead Plaintiffs’ Released Claims.
11. When would I get my payment?
The Court will hold a hearing on [insert date], to decide whether to approve the Settlement. If the Court approves the Settlement, one or more appeals may follow. It is always uncertain how any such appeal will be resolved, and resolving them can take time, perhaps more than a year. It also takes time for all the Proofs of Claim to be processed. Please be patient.
12. What am I giving up to get a payment or stay in the Settlement Class?
Unless you exclude yourself, you will remain a member of the Settlement Class, and that means that, upon the “Effective Date,” you will release all “Released Claims” (as defined below) against the “Released Persons” (as defined below). The “Effective Date” will occur when an Order entered by the Court approving the Settlement becomes final and not subject to appeal and when all conditions of the Stipulation have been met. “Released Claims” means all and every manner of direct and derivative actions, causes of action, claims, counterclaims, cross-claims, third-party claims, suits, proceedings, damages, punitive damages, costs, expenses and attorneys’ fees, demands and liabilities whatsoever of every kind and nature, whether known or unknown, suspected or unsuspected, accrued or unaccrued, in law, equity or otherwise, which Lead Plaintiffs or any other Member of the Settlement Class (i) asserted in the Action; (ii) could have or might have asserted in the Action and/or in any other litigation, action or forum that arise out of, are based upon or are related in any way, directly or indirectly, in whole or in part, to (a) both: (1) the allegations, transactions, facts, matters, occurrences, representations or omissions involved, set forth or referred to in the Action, and (2) any purchase, sale or acquisition of, or decision to hold DDMG common stock during the Settlement Class Period; and/or (b) Defendants’ defense or settlement of the Action and/or Defendants’ defense or settlement of the Released Claims. Notwithstanding the foregoing, “Released Claims” does not include claims relating to the enforcement of the Settlement. “Released Persons” means DDMG, the DDMG Directors and Officers, the DD CA Directors and Officers, the Underwriter Defendants (including Maxim Group LLC), SingerLewak, SL Insurers, Falcon, the Florida DEO, the Senior Lenders, the Creditors Committee, PSL, the Foreign Investors, Bounty Gain, PBC, every “Insured” (as the term is defined in the D&O Policies), and the Insurers, and their spouses, heirs, executors, beneficiaries, administrators, agents, trustees, attorneys, accountants, auditors, representatives, principals, officers, directors, employees, contractors, partners, owners, subsidiaries, affiliates, predecessors-in-interest, successors-in-interest, and assigns, including all subsidiaries’, affiliates’, predecessors-in-interest’s, successors-in-interest’s, and assigns’ past or present spouses, heirs, executors, beneficiaries, administrators, agents, trustees, attorneys, accountants, auditors, representatives, principals, officers, directors, employees, contractors, partners, owners, subsidiaries, affiliates, predecessors-in-interest, successors-in-interest, and assigns, and each is a “Released Party.” If you remain a member of the Settlement Class, all of the Court’s orders will apply to you and legally bind you.
EXCLUDING YOURSELF FROM THE SETTLEMENT
If you do not want a payment from this Settlement, but you want to keep any right you may have to sue or continue to sue Defendants on your own about the Released Claims, then you must take steps to exclude yourself—or as it is sometimes
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 64 of 88
NOTICE OF SETTLEMENT CASE NO. 12-CV-14333-MARTINEZ-LYNCH -11-
referred to, you must “opt out” of the Settlement Class.
13. How do I exclude myself from the proposed Settlement?
To exclude yourself from the Settlement Class, you must send a letter by mail stating that you “request exclusion from the Settlement Class in In re Digital Domain Media Group, Inc., Securities Litigation, Case No. 12-Civ-14333-MARTINEZ-LYNCH (S.D. Fla.).” Your letter must state the date(s), price(s) and number(s) of shares of all your purchases, acquisitions and sales of DDMG shares during the Settlement Class Period. In addition, be sure to include your name, address, daytime telephone number and your signature. You must mail your exclusion request postmarked no later than DATE to the Claims Administrator at: Digital Domain Media Group, Inc. Securities Litigation EXCLUSIONS, c/o KCC Class Action Services LLC, 3301 Kerner Boulevard, San Rafael, CA 94901. You cannot exclude yourself by telephone, by fax or by e-mail. If you ask to be excluded, you will not get any settlement payment, and you cannot object to the Settlement. You will not be legally bound by anything that happens in this lawsuit, and you may be able to sue DDMG and the other Released Persons about the Released Claims in the future.
14. If I do not exclude myself, can I sue DDMG, Defendants or the other Released Persons later for the Released Claims?
No. Unless you exclude yourself, you give up any rights to sue DDMG and the other Released Persons, or to enforce any existing judgments against any of the Released Persons, for any and all Released Claims. If you have a pending lawsuit against DDMG or the other Released Persons, speak to your lawyer in that case immediately, to determine if you have to exclude yourself from this Settlement Class to continue your own lawsuit. Remember, the exclusion deadline is DATE.
15. If I exclude myself, can I get money from the proposed Settlement?
No. If you exclude yourself, do not send in a Proof of Claim form to ask for any money. But, you may exercise any right you may have to sue, continue to sue, or be part of a different lawsuit against Defendants and the other Released Persons.
THE LAWYERS REPRESENTING YOU
16. Do I have a lawyer in this case?
The Court appointed the law firms Levi & Korsinsky, Wolf Popper, and Berman DeValerio as Co-Lead Counsel to represent all class members. These lawyers are called Plaintiffs’ Counsel. You will not be separately charged for these lawyers. If you want to be represented by your own lawyer, you may hire one at your own expense.
17. How will the lawyers be paid?
Plaintiffs’ Counsel are moving the Court to award attorneys’ fees and for reimbursement of their expenses of not to exceed $[AMOUNT] from the Settlement Fund, plus interest on such fees and expenses at the same rate as earned by the Settlement Fund. Plaintiffs’ Counsel, without further notice to the Settlement Class, may subsequently apply to the Court for fees and expenses incurred in connection with administering and distributing the Settlement proceeds to the members of the Settlement Class and any proceedings subsequent to the Final Approval Hearing. The attorneys’ fees and expenses requested will be the only payment to Lead Counsel for its efforts in achieving the Settlement and for their risk in undertaking this representation on a wholly contingent basis. To date, Lead Counsel has not been paid for its services for conducting this litigation on behalf of Lead Plaintiffs and the Class nor for its substantial out-of-pocket expenses. The fee requested will compensate Lead Counsel for its work in achieving the Settlement Fund. The Court may, however, award less than this amount. In that case, the difference will remain with the Settlement Fund. Lead Counsel may make an application for service awards, in amounts not to exceed $____ each, for the Lead Plaintiffs to compensate them for their efforts and commitment on behalf of the Class. The Court may, however, award less than this amount. In that case, the difference will remain with the Settlement Fund.
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 65 of 88
NOTICE OF SETTLEMENT CASE NO. 12-CV-14333-MARTINEZ-LYNCH -12-
OBJECTING TO THE SETTLEMENT You can tell the Court that you do not agree with the Settlement or some part of it.
18. How do I tell the Court that I do not like the proposed Settlement?
If you are a Settlement Class Member, you can object to the Settlement or any of its terms, the proposed Plan of Allocation, or the application by Plaintiffs’ Counsel for an award of fees and reimbursement of expenses. You may write to the Court setting out your objections. You may give reasons why you think the Court should not approve any or all of the settlement terms or arrangements and submit any documentation you believe is appropriate. The Court will only consider your views if you file a proper objection within the deadline identified and according to the following procedures. To object, you must send a signed letter or other court submission stating that you object to the proposed Settlement in In re Digital Domain Media Group, Inc., Securities Litigation, Case No. 12-Civ-14333-MARTINEZ-LYNCH (S.D. Fla.). You must include your name, address, telephone number, and your signature, identify the date(s), price(s) and number(s) of shares of all purchases and sales of the DDMG shares you made during the Settlement Class Period, and state the reasons why you object to the Settlement. Your objection must be filed with the Court and served on all the following counsel so that it is actually received, not merely postmarked, on or before DATE:
COURT:
Clerk of the Court United States District Court for the Southern District of Florida,
Wilkie D. Ferguson, Jr. United States Courthouse, 400 North Miami Avenue,
You do not need to go to the Final Approval Hearing to have your written objection considered by the Court. At the Final Approval Hearing, any Settlement Class Member who has not previously submitted a request for exclusion from the Settlement Class and who has complied with the procedures set out in this Question 18 and in Questions 20 and 22 below for filing with the Court and providing to the counsel for the Settlement Class and settling Defendants a statement of an intention to appear at the Final Approval Hearing may also appear and be heard, to the extent allowed by the Court, to state any objection to the Settlement, the Plan of Allocation or Plaintiff’s Counsel’s motion for an award of attorneys’ fees and reimbursement of expenses. Any such objector may appear in person or arrange, at that objector’s expense, for a lawyer to represent the objector at the Final Approval Hearing. Any person or entity objecting to the Settlement shall submit to the Court’s jurisdiction and agrees that the Parties may depose the person or entity with regard to their objection. Unless the Court otherwise directs, no person or entity shall be
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 66 of 88
NOTICE OF SETTLEMENT CASE NO. 12-CV-14333-MARTINEZ-LYNCH -13-
entitled to object to the approval of the Settlement, any judgment entered thereon, the adequacy of representation of the Class by Lead Plaintiffs and Lead Counsel, any award of attorneys’ fees and expenses, the allocation of the Settlement Fund, or otherwise be heard, except by serving and filing a written objection and supporting papers and documents as described above. Failing to do so will forever bar such person or entity from raising such objection in the Action or any other proceeding. Any member of the Class who does not object to the Settlement or the attorneys’ fees and expenses request need not do anything.
19. What is the difference between objecting and excluding?
Objecting is simply telling the Court that you do not like something about the proposed Settlement. You can object only if you stay in the Settlement Class. Excluding yourself is telling the Court that you do not want to be part of the Settlement Class. If you exclude yourself, you have no basis to object because the case no longer affects you.
THE COURT’S FINAL APPROVAL HEARING The Court will hold a hearing to decide whether to approve the proposed Settlement. You may attend and you may ask to speak, but you do not have to.
20. When and where will the Court decide whether to approve the proposed Settlement?
The Court will hold a Final Approval Hearing at [TIME] on [DATE], at the United States District Court for the Southern District of Florida, Wilkie D. Ferguson, Jr. United States Courthouse, 400 North Miami Avenue, Miami, FL 33128. At this hearing, the Court will consider whether the Settlement is fair, reasonable and adequate. At the Final Approval Hearing, the Court also will consider the proposed Plan of Allocation for the proceeds of the Settlement and the application of Plaintiffs’ Counsel for attorneys’ fees and reimbursement of expenses. The Court will take into consideration any written objections filed in accordance with the instructions at Question 18. The Court also may listen to people who have properly indicated, within the deadline identified above, an intention to speak at the hearing; but decisions regarding the conduct of the hearing will be made by the Court. (Please refer to Question 22 for more information about speaking at the hearing.) The Court will also decide the amount of attorneys’ fees and expenses to award Plaintiffs’ Counsel. After the hearing, the Court will decide whether to approve the Settlement and to enter the Judgment dismissing the Litigation with prejudice. We do not know how long these decisions will take. You should be aware that the Court may change the date and time of the Final Approval Hearing. Thus, if you want to come to the hearing, you should check with Lead Counsel before coming to be sure that the date and/or time has not changed.
21. Do I have to come to the hearing?
No. Lead Counsel will answer questions the Court may have, but you are welcome to come at your own expense. If you send an objection, you do not have to come to Court to talk about it. As long as you filed your written objection on time, the Court will consider it. You may also pay your own lawyer to attend, but attendance is not mandatory. Settlement Class Members do not need to appear at the hearing or take any other action to indicate their approval.
22. May I speak at the hearing?
If you object to the Settlement, you may ask the Court for permission to speak at the Final Approval Hearing. To do so, you must include with your objection (see Question 18 above) a statement stating that it is your “Notice of Intention to Appear in In re Digital Domain Media Group, Inc., Securities Litigation, Case No. 12-Civ-14333-MARTINEZ-LYNCH (S.D. Fla).” Settlement Class Members who intend to object to the Settlement, the Plan of Allocation, or Plaintiffs’ Counsel’s application for an award of attorneys’ fees and reimbursement of expenses and desire to present evidence at the Final Approval Hearing must include in their written objections the identity of any witnesses they propose to call to testify and any exhibits they intend to offer into evidence at the Final Approval Hearing. You cannot speak at the hearing if you excluded yourself from the Settlement Class or if you have not provided written notice of your intention to speak at the Final Approval Hearing by the deadline identified, and in accordance with the procedures described in Question 18 above.
IF YOU DO NOTHING
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 67 of 88
NOTICE OF SETTLEMENT CASE NO. 12-CV-14333-MARTINEZ-LYNCH -14-
23. What happens if I do nothing at all?
If you do nothing, you will get no money from this Settlement and, unless you exclude yourself, you will not be able to start a lawsuit, continue with a lawsuit or be part of any other lawsuit against Defendants or the Released Persons about the claims being released in the Settlement. All members of the Class who do not submit valid and timely Proof of Claim forms shall be forever barred from receiving any payments from the Settlement, but will in all other respects be subject to and bound by the provisions of the Stipulation and any Order and Final Judgment entered.
GETTING MORE INFORMATION
24. Are there more details about the proposed Settlement?
This notice summarizes the proposed Settlement. More details are in a Stipulation of Settlement dated as of DATE (the “Stipulation”). You may obtain a copy of the Stipulation, the Proof of Claim form, and other information by visiting the website www.DDMGSecuritiesLitigation.com or by contacting the Claims Administrator by mail at KCC Class Action Services LLC, P.O. Box 43417, Providence, RI 02940-3417; by toll free phone at 855-730-8650. You may also contact any of Plaintiffs’ Lead Counsel at the addresses on Page ___, above..
25. How do I get more information?
For even more detailed information concerning the matters involved in this Action, reference is made to the pleadings, to the Stipulation, to the Orders entered by the Court and to the other papers filed in the Action, which may be inspected at the Office of the Clerk of the United States District Court for the Southern District of Florida, Wilkie D. Ferguson, Jr. United States Courthouse, 400 North Miami Avenue, Miami, FL 33128, during regular business hours.
DO NOT TELEPHONE THE COURT REGARDING THIS NOTICE.
SPECIAL NOTICE TO NOMINEES If you hold DDMG common stock pursuant to a transaction that took place within the United States within the Class Period, as nominee for a beneficial owner, then you must either: (1) send a copy of this Notice by first-class mail to all such persons or entities: or (2) provide a list of the names and addresses of such persons or entities to the Claims Administrator at KCC Class Action Services LLC, P.O. Box 43417, Providence, RI 02940-3417. If you choose to mail this Notice and the Proof of Claim yourself, you may obtain from the Claims Administrator (without cost to you) as many additional copies of these documents as you will need to complete the mailing. Regardless of whether you choose to complete the mailing yourself or elect to have the mailing performed for you, you may obtain reimbursement for or advancement of reasonable administrative costs actually incurred or expected to be incurred in connection with forwarding this Notice, and which would not have been incurred but for the obligation to forward this Notice, upon submission of appropriate documentation to the Claims Administrator. Dated: DATE BY ORDER OF THE COURT UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA FORT PIERCE DIVISION
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 68 of 88
EXHIBIT A-2
TO STIPULATION OF SETTLEMENT
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA
FORT PIERCE DIVISION
Case No: 12-Civ-14333-MARTINEZ-LYNCH In re Digital Domain Media Group, Inc. Securities Litigation ____________________________________/
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 69 of 88
PROOF OF CLAIM AND RELEASE
DEADLINE FOR SUBMISSION DATE: _________________
IF YOU PURCHASED DIGITAL DOMAIN MEDIA GROUP, INC. (“DDMG” OR
THE “COMPANY”) COMMON STOCK IN DDMG’S INITIAL PUBLIC OFFERING ON
NOVEMBER 18, 2011 AND/OR ON THE PUBLIC MARKET BETWEEN NOVEMBER
18, 2011 AND SEPTEMBER 6, 2012, INCLUSIVE, YOU ARE A SETTLEMENT CLASS
MEMBER.
Excluded from the Class are Defendants John C. Textor, Jonathan F. Teaford, John
M. Nichols, Roth Capital Partners, LLC and Morgan Joseph TriArtisan, LLC, and
SingerLewak LLP, Released Persons (defined below), the officers and directors of the
Company, at all relevant times, members of their immediate families and their legal
representatives, heirs, successors or assigns, any entity in which defendants have or had a
controlling interest, employees of the Company, and any Company employee stock
purchase or retirement plan.
Also excluded from the Settlement Class are those Persons who timely and validly
request exclusion from the class pursuant to the Notice of Pendency and Proposed
Settlement of Class Action accompanying this Proof of Claim and Release.
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 70 of 88
Proof of Claim and Release Case No: 12-Civ-14333-MARTINEZ-LYNCH
2
GENERAL INSTRUCTIONS
A. To recover as a Member of the Settlement Class based on your claims in the action
entitled In re Digital Domain Media Group, Inc.,, Securities Litigation, Case No. 12-Civ-14333-
MARTINEZ-LYNCH (S.D. Fla.) (the “Action”), you must complete and, on page 10 hereof, sign
this Proof of Claim and Release. If you fail to file a properly addressed Proof of Claim and Release
(as set forth in paragraph C below), your claim may be rejected and you may be precluded from
any recovery from the Net Settlement Fund created in connection with the proposed settlement of
the Action.
B. Submission of this Proof of Claim and Release, however, does not assure that you
will share in the proceeds of settlement in the Action.
C. YOU MUST MAIL YOUR COMPLETED AND SIGNED PROOF OF CLAIM
AND RELEASE POSTMARKED ON OR BEFORE DATE, ADDRESSED TO THE CLAIMS
ADMINISTRATOR AS FOLLOWS:
Digital Domain Media Group, Inc. Securities Litigation c/o KCC Class Action Services LLC
P.O. Box 43417 Providence, RI 02940-3417
You will bear all risks of delay or non-delivery of your claim. If you are NOT a Member
of the Settlement Class (as defined in the “Notice of Pendency and Proposed Settlement of Class
Action”) DO NOT submit a Proof of Claim and Release form.
D. If you are a Member of the Class, you are bound by the terms of any judgment
entered in the litigation, WHETHER OR NOT YOU SUBMIT A PROOF OF CLAIM AND
RELEASE.
II. CLAIMANT IDENTIFICATION INSTRUCTIONS
A. If you purchased DDMG common stock and held the certificate(s) in your name,
you are the beneficial owner as well as the record owner. If, however, the certificate(s) were
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 71 of 88
Proof of Claim and Release Case No: 12-Civ-14333-MARTINEZ-LYNCH
3
registered in the name of a third party, such as a nominee or brokerage firm, you are the beneficial
owner and the third party is the record owner.
B. Use Section IV of this form entitled “Claimant Identification” to identify each
owner of record (“nominee”), if different from the beneficial owner of DDMG common stock
which forms the basis of this claim.
C. THIS CLAIM MUST BE FILED BY THE ACTUAL BENEFICIAL OWNERS,
OR THE LEGAL REPRESENTATIVE OF SUCH OWNERS, OF THE DDMG COMMON
STOCK UPON WHICH THIS CLAIM IS BASED.
D. A separate claim must be filed for each type of account or ownership (i.e.,
individual account, IRA account, joint account, custodial account, etc.). Joint tenants or UGMA
custodians should file a single claim.
E. All joint owners must sign this claim. Executors, administrators, guardians,
conservators and trustees must complete and sign this claim on behalf of persons represented by
them. Documentation establishing their authority must accompany this claim and their titles or
capacities must be stated.
F. The Social Security or Taxpayer Identification number and telephone number of
the beneficial owner may be used in verifying the claim. Failure to provide the foregoing
information could delay verification of your claim or result in rejection of the claim.
III. TRANSACTION SCHEDULE INSTRUCTIONS
A. Use Section V of this form entitled “Schedule of Transactions in DDMG Common
Stock” to supply all required details of your transaction(s) in DDMG common stock. If you need
more space or additional schedules, attach separate sheets giving all of the required information in
substantially the same form. Sign and print or type your name and Social Security or Taxpayer
Identification number on each additional sheet.
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 72 of 88
Proof of Claim and Release Case No: 12-Civ-14333-MARTINEZ-LYNCH
4
B. List each transaction in the Settlement Class Period separately and in chronological
order, by trade date (not the “settlement” date), beginning with the earliest. You must accurately
provide the month, day and year of each transaction you list.
C. The date of covering a “short sale” is deemed to be the date of purchase of DDMG
common stock. The date of a “short sale” is deemed to be the date of sale of DDMG common
stock. Shares originally sold short will have a Recognized Claim of zero.
D. The price per share, paid or received, should be exclusive of all commissions, taxes,
fees and other charges.
E. Copies of broker confirmation slips or monthly statements of your
transactions in DDMG common stock must be attached to your claim. If such documents are
not in your possession, please obtain equivalent contemporaneous documents from your broker or
financial advisor. A complete list of acceptable supporting documentation can be found at the
Claims Administrator’s website: www.[insert web address].com. Failure to provide this
documentation could delay verification of your claim or result in rejection of your claim.
F. If your trading activity during the Settlement Class Period exceeds 50 transactions,
you must provide, in electronic file, all purchase and sale information required in the Schedule of
Transactions. For a copy of instructions and parameters concerning such a submission, contact
the Claims Administrator by toll-free phone at [phone number], or via the website at www.[insert
web address].com.
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA
FORT PIERCE DIVISION
In re Digital Domain Media Group, Inc., Securities Litigation
PROOF OF CLAIM
Must be received by the Claims Administrator postmarked no later than DATE.
IV. CLAIMANT IDENTIFICATION Please Type or Print
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 73 of 88
Proof of Claim and Release Case No: 12-Civ-14333-MARTINEZ-LYNCH
5
Beneficial Owner’s Name (as it appears on your brokerage statement) Joint Beneficial Owner’s name (as it appears on your brokerage statement) Street Address City State Zip Code Foreign Province Foreign Country ______________________________ Social Security Number or OR Tax Payer Identification Number Taxpayer Identification Number Specify one of the following:
□ Partnership □ Pension Plan □ Estate □ Trust □ IRA □ Other:______________
________________________ _______________________________ Area Code & Telephone Number (day) Area Code & Telephone Number (evening) Record Owner’s Name and Address (if different from beneficial owner listed above)
V. SCHEDULE OF TRANSACTIONS IN DDMG COMMON STOCK
A. Separately list each and every purchase of DDMG common stock during the period November 18, 2011 through September 6, 2012, and provide the following information (must be documented):
Trade Date (list chronologically)
Number of Shares Purchased Price per Share
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 74 of 88
Proof of Claim and Release Case No: 12-Civ-14333-MARTINEZ-LYNCH
6
Month/Day/Year (excluding commissions, taxes and fees)
B. Separately list each and every sale of DDMG common stock during the period November 18, 2011 through September 6, 2012, and provide the following information (must be documented):
Trade Date (list chronologically)
Month/Day/Year Number of Shares Sold
Price per Share (excluding commissions,
taxes and fees)
C. State the total number of shares of DDMG common stock owned at the close of trading on September 6, 2012, long or short (if none, enter “0”; if other than zero, must be documented): _______
D. Please check applicable box:
[_] I certify that the submitting party is not an ERISA plan
[_] I/We certify that the submitting party is an ERISA plan and has complied with the applicable ERISA exemption
If you need additional space, attach the required information on separate, numbered sheets in the same format as above and print your name and Social Security or Taxpayer
Identification number at the top of each additional sheet.
YOU MUST READ THE RELEASE AND SIGN ON PAGE ________
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 75 of 88
Proof of Claim and Release Case No: 12-Civ-14333-MARTINEZ-LYNCH
7
VI. SUBMISSION TO JURISDICTION OF COURT AND ACKNOWLEDGMENTS
I/We submit this Proof of Claim and Release under the terms of the Stipulation of
Settlement described in the Notice. I/We also submit to the jurisdiction of the United States
District Court for the Southern District of Florida with respect to my/our claim as a Class Member
and for purposes of enforcing the release set forth herein. I/We further acknowledge that I/we
am/are bound by and subject to the terms of any judgment that may be entered in the Action. I
agree to furnish additional information to Lead Counsel to support this claim if required to do so.
I/we have not submitted any other claim covering the same purchases or sales of DDMG common
stock during the Settlement Class Period and know of no other person having done so on my/our
behalf.
VII. RELEASE
A. I/We hereby acknowledge full and complete satisfaction of, and do hereby fully,
finally and forever settle, release and discharge from the Released Claims (defined below) each
”Released Person” (as defined below).
B. “Released Claims” means all and every manner of direct and derivative actions,
causes of action, claims, counterclaims, cross-claims, third-party claims, suits, proceedings,
damages, punitive damages, costs, expenses and attorneys’ fees, demands and liabilities
whatsoever of every kind and nature, whether known or unknown, suspected or unsuspected,
accrued or unaccrued, in law, equity or otherwise, which Lead Plaintiffs or any other Member of
the Settlement Class (i) asserted in the Action; (ii) could have or might have asserted in the Action
and/or in any other litigation, action or forum that arise out of, are based upon or are related in any
way, directly or indirectly, in whole or in part, to (a) both: (1) the allegations, transactions, facts,
matters, occurrences, representations or omissions involved, set forth or referred to in the Action,
and (2) any purchase, sale or acquisition of, or decision to hold DDMG common stock during the
Settlement Class Period; and/or (b) Defendants’ defense or settlement of the Action and/or
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 76 of 88
Proof of Claim and Release Case No: 12-Civ-14333-MARTINEZ-LYNCH
8
Defendants’ defense or settlement of the Released Claims. Notwithstanding the foregoing,
“Released Claims” does not include claims relating to the enforcement of the Settlement.
C. “Released Persons” means (1) DDMG; (2) John C. Textor, Jonathan F. Teaford,
John M. Nichols, Kevin C. Ambler, Jeffrey W. Lunsford, Keith L. Cummings, Kaleil Isaza
Tuzman, John W. Kluge, Jr., and Edwin C. Lunsford, III (collectively, the “DDMG Directors and
Officers”); (3) Rafael Fogel, Mark Miller, Cliff Plumer, John Sculley, and Carl Stork (collectively,
the “DD CA Directors and Officers”); (4) SingerLewak LLP, (5) Crum & Forster Specialty
D. This release shall be of no force or effect unless and until the Court approves the
Stipulation of Settlement and the Stipulation becomes effective on the Effective Date (as defined
in the Stipulation).
E. I/We hereby warrant and represent that I/we have not assigned or transferred or
purported to assign or transfer, voluntarily or involuntarily, any matter released pursuant to this
release or any other part or portion thereof.
F. I/We hereby warrant and represent that I/we have included information about all of
my/our transactions in DDMG common stock which occurred during the Settlement Class Period.
VIII. CERTIFICATION UNDER THE PENALTY OF PERJURY, I/WE CERTIFY THAT:
A. The number shown on this form is my correct Social Security or Taxpayer
Identification number.
B. I/We certify that I am/we are NOT subject to backup withholding under the
provisions of Section 3406 (a)(1)(C) of the Internal Revenue Code.
NOTE: If you have been notified by the Internal Revenue Service that you are subject to
backup withholding, you must cross out the word “NOT” in the sentence above.
C. I/We declare under penalty of perjury under the laws of the United States of
America that the foregoing information supplied by the undersigned and any supporting
documents attached hereto are true, correct and complete to the best of my/our knowledge,
information and belief, and that this Proof of Claim and Release was executed this _______ day
of _______________ , in ____________________, __________________________
(Month/Year) (City) (State/Country) ___________________________________________ Signature of Claimant
_______________________________________
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 78 of 88
Proof of Claim and Release Case No: 12-Civ-14333-MARTINEZ-LYNCH
10
(Print your name here) _______________________________________ Signature of Joint Claimant, if any
_______________________________________ (Print your name here)
_______________________________________ Signature of person signing on behalf of Claimant
_______________________________________ (Print your name here)
_______________________________________ Capacity of person signing on behalf of Claimant, if other than an individual, (e.g., Executor, President, Custodian, etc.)
ACCURATE CLAIMS PROCESSING TAKES A SIGNIFICANT AMOUNT OF TIME. THANK YOU FOR YOUR PATIENCE.
Reminder Checklist: 1. Remember to sign the above release and declaration. 2. Remember to attach only copies of acceptable supporting documentation, a
complete list of which can be found on the Claims Administrator’s website: www.DDMGSecuritiesLitigation.com.
3. Do not send originals of securities certificates. 4. Keep copies of the completed claim form and documentation for your own records. 5. If you desire an acknowledgment of receipt of your claim form, please send it
Certified Mail, Return Receipt Requested, or its equivalent. You will bear all risks of delay or non-delivery of your claim.
6. If your address changes in the future, or if these documents were sent to an old or
incorrect address, please send us written notification of your new address. 7. If you have any questions or concerns regarding your claim, please contact the
Claims Administrator at: KCC Class Action Services LLC, P.O. Box 43417, Providence, RI 02940-3417.
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 79 of 88
QUESTIONS? VISIT www.DDMGSecuritiesLitigation.com OR CALL 855-730-8650 TOLL FREE. PAGE 1 OF 2
EXHIBIT A-3
TO STIPULATION OF SETTLEMENT
UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF FLORIDA FORT PIERCE DIVISION
Case No: 12-Civ-14333-MARTINEZ-LYNCH
In re Digital Domain Media Group, Inc. Securities Litigation ____________________________________/
SUMMARY NOTICE OF PENDENCY OF CLASS ACTION AND PROPOSED SETTLEMENT, FINAL APPROVAL HEARING, AND MOTION FOR ATTORNEYS’ FEES AND REIMBURSEMENT OF LITIGATION EXPENSES
TO: ALL PERSONS AND ENTITIES WHO PURCHASED THE COMMON STOCK OF DIGITAL DOMAIN MEDIA GROUP, INC. IN AN INITIAL PUBLIC OFFERING ON NOVEMBER 18, 2011 AND/OR ON THE PUBLIC MARKET DURING THE PERIOD NOVEMBER 18, 2011 TO SEPTEMBER 6, 2012 AND WHO WERE DAMAGED THEREBY (THE “SETTLEMENT CLASS”).
PLEASE READ THIS NOTICE CAREFULLY. YOUR RIGHTS MAY BE AFFECTED BY THE PROPOSED SETTLEMENT OF A CLASS ACTION LAWSUIT PENDING IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA (THE “COURT”).
PLEASE DO NOT CONTACT THE COURT, OR ANY DEFENDANT, OR THEIR COUNSEL, REGARDING THIS NOTICE.
ALL QUESTIONS ABOUT THIS NOTICE, THE PROPOSED SETTLEMENT, OR YOUR ELIGIBILITY TO PARTICIPATE IN THE PROPOSED SETTLEMENT SHOULD BE DIRECTED TO LEAD COUNSEL OR THE CLAIMS ADMINISTRATOR, WHOSE CONTACT INFORMATION IS PROVIDED BELOW. YOU ARE HEREBY NOTIFIED, pursuant to Rule 23 of the Federal Rules of Civil Procedure and an Order of the Court, that the Settlement Class in the above-captioned litigation (the “Action”) has been preliminarily certified for the purposes of the proposed Settlement only.
YOU ARE ALSO NOTIFIED that Patricof Family Limited Partnership, Edward Nussblat, and Robert Dziedzic (“Lead Plaintiff”), on behalf of himself and the proposed Settlement Class, and the Defendants have reached a proposed settlement of the Action for $5,500,000 in cash (the “Settlement Amount”), that, if approved, will resolve all claims in the Action (the “Settlement”).
A hearing (the “Final Approval Hearing”) will be held before the Honorable Jose E. Martinez, United States District Judge for the United States District Court for the Southern District of Florida, in the Wilkie D. Ferguson, Jr. United States Courthouse, 400 North Miami Avenue, Miami, FL 33128 at ___ on ____, to, among other things, determine whether: (i) the proposed Settlement should be approved by the Court as fair, reasonable and adequate; (ii) the Action should be dismissed with prejudice against the Defendants, as set forth in the Stipulation of Settlement (“Stipulation”), dated May 27, 2016; (iii) the proposed Plan of Allocation for distribution of the Settlement Fund, and any interest earned thereon, less Taxes, Notice and Administration Costs, Litigation Expenses awarded by the Court, attorneys’ fees awarded by the Court and any other costs, expenses or amounts as may be approved by the Court; (the “Net Settlement Fund”), should be approved as fair and reasonable; and (iv) the application of Lead Counsel for an award of attorneys’ fees and reimbursement of litigation expenses should be approved.1 The Court may change the date of the hearing without providing another notice. You do NOT need to attend the Final Approval Hearing in order to receive a distribution from the Net Settlement Fund.
IF YOU ARE A MEMBER OF THE SETTLEMENT CLASS, YOUR RIGHTS MAY BE AFFECTED BY THE PROPOSED SETTLEMENT AND YOU MAY BE ENTITLED TO SHARE IN THE NET SETTLEMENT FUND. If you have not yet received (i) the printed Notice of Pendency of Class Action and Proposed Settlement, Final Approval Hearing, and Motion for Attorneys’ Fees and Reimbursement of Litigation Expenses (“Notice”) or (ii) the Proof of Claim and Release form (“Claim Form”), you can obtain a copy of those documents on the website www.DDMGSecuritiesLitigation.com or by contacting the Claims Administrator:
1 The Notice and the Stipulation, available for download at www.DDMGSecuritiesLitigation.com, contain additional information concerning the Settlement and the definitions, and further explanation, of many of the defined terms used in this Notice (which are indicated by initial capital letters).
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 80 of 88
QUESTIONS? VISITwww.DDMGSecuritiesLitigation.com OR CALL 855-730-8650 TOLL FREE. PAGE 2 OF 2
In re Digital Domain Media Group, Inc. Claims Administrator c/o KCC Class Action Services LLC P.O. Box 43417 Providence, RI 02940-3417
Please refer to the website for more detailed information and to review the Settlement documents. Inquiries other than requests for information about the status of a claim may also be made to Lead Counsel:
BERMAN DEVALERIO Jay W. Eng, Esq.Gardens Pointe 3507 Kyoto Gardens Drive, Suite 200 Palm Beach Gardens, Florida 33410Telephone: (561) 835-9400
WOLF POPPER LLP Joshua W. Ruthizer, Esq. 845 Third Avenue New York, NY 10022 Telephone: (212) 759-4600
LEVI & KORSINSKY LLP Nicholas I. Porritt, Esq. 1101 30th Street, NW, Suite 115 Washington, DC 20007 Telephone: : (###) ___-___
If you are a potential Settlement Class Member, to be eligible to share in the distribution of the Net Settlement Fund, you must timely submit a valid Claim Form, which can be found on the website listed above, postmarked no later than [ ]. If you are a potential Settlement Class Member and do not submit a valid Claim Form, you will not be eligible to share in the distribution of the Net Settlement Fund, but you will nevertheless be bound by any judgments or orders entered by the Court in the Action.
If you are a potential Settlement Class Member, but wish to exclude yourself from the Settlement Class, you must submit a written request for exclusion in accordance with the instructions set forth in the Notice, which can also be found on the website, postmarked no later than [ ]. If you are a potential Settlement Class member and do not timely exclude yourself from the Settlement Class, you will be bound by any judgments or orders entered by the Court in the Action.
Any objections to the proposed Settlement, Plan of Allocation, or Lead Counsel’s application for attorneys’ fees and reimbursement of expenses must be submitted to the Court in accordance with the instructions set forth in the Notice, postmarked no later than [ ], and filed with the Court no later than [ ].
DATED: ________________ THE HONORABLE JOSE E. MARTINEZ UNITED STATES DISTRICT JUDGE
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 81 of 88
1
EXHIBIT B TO STIPULATION OF SETTLEMENT
UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF FLORIDA FORT PIERCE DIVISION
Case No: 12-Civ-14333-MARTINEZ-LYNCH
In re Digital Domain Media Group, Inc. Securities Litigation ____________________________________/
FINAL JUDGMENT AND ORDER OF DISMISSAL WITH PREJUDICE
This matter came before the Court for hearing pursuant to the Order Preliminarily
Approving Settlement and Providing for Notice (“Order”) dated _______________, on the motion
for final approval of the Settlement set forth in the Stipulation of Settlement, dated as of May 27,
2016 (“Stipulation”). Due and adequate notice having been given to the Settlement Class as
required in said Order, and the Court having considered all papers filed and proceedings had herein
and otherwise being fully informed in the premises and good cause appearing therefore, IT IS
HEREBY ORDERED, ADJUDGED AND DECREED that:
1. This Final Judgment and Order incorporates by reference the definitions in the
Stipulation, and all terms used herein shall have the same meanings as set forth in the Stipulation,
unless otherwise set forth herein.
2. This Court has jurisdiction over the subject matter of the Action and over all parties
to the Action, including all Settlement Class Members.
3. “Settlement Class” shall mean all persons and entities who purchased the common
stock of Digital Domain Media Group, Inc. in an initial public offering completed on November
18, 2011 and/or on the public market during the Settlement Class Period (from November 18, 2011
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 82 of 88
2
to September 6, 2012, inclusive) and who were damaged thereby. Excluded from the Class are
Defendants, Released Persons, the officers and directors of the Company, at all relevant times,
members of their immediate families and their legal representatives, heirs, successors or assigns,
any entity in which defendants have or had a controlling interest, employees of the Company, and
any Company employee stock purchase or retirement plan. Those persons or entities eligible for
membership in the Settlement Class who timely submitted valid requests for exclusion from the
Settlement Class are identified on Exhibit 1. Those persons or entities are not bound by this Final
Judgment and Order.
4. Pursuant to Federal Rules of Civil Procedure 23, this Court hereby approves the
Settlement set forth in the Stipulation and finds that said Settlement is, in all respects, fair, just,
reasonable and adequate to the Settlement Class. The Court finds that certification of the
Settlement Class for settlement purposes only is appropriate because:
(a) The Settlement Class is so numerous that joinder of all members is
impracticable, satisfying the requirements of Rule 23(a)(1);
(b) There are questions of law or fact common to the Settlement Class,
satisfying the requirement of Rule 23(a)(2);
(c) The claims of the Lead Plaintiffs are typical of the claims of the Settlement
Class, satisfying the requirement of Rule 23(a)(3);
(d) The representative parties will fairly and adequately protect the interests of
the Settlement Class, satisfying the requirement of Rule 23(a)(4); and
(e) Questions of law and fact common to the members of the Settlement Class
predominate over questions affecting only individual members and a class action is superior to
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 83 of 88
3
other methods available for the fair and efficient adjudication of the controversy, satisfying the
requirements of Rule 23(b)(3).
The findings in this Paragraph 4 are for purposes of this Settlement only, and shall have no
force or effect for any other purpose or if this Final Judgment and Order does not become final.
5. The Court hereby approves the Settlement set forth in the Stipulation and finds that:
(a) said Stipulation is, in all respects, fair, reasonable and adequate and in the
best interest of the Settlement Class;
(b) there was no collusion in connection with the Stipulation;
(c) the Stipulation was the product of informed, arm’s-length negotiations
among competent, able counsel; and
(d) the record is sufficiently developed and complete to have enabled the Lead
Plaintiff and Defendants to have adequately evaluated and considered their positions.
6. Accordingly, the Court authorizes and directs implementation of all the terms and
provisions of the Stipulation, as well as the terms and provisions hereof. The Court hereby
dismisses the Complaint, the Action, and all Released Claims and the Released Persons’ Claims,
without costs as to any Settling Party, except as and to the extent provided in the Stipulation, any
separate order on attorneys’ fees or reimbursement of litigation expenses, and herein.
7. The Court finds that the Stipulation and Settlement are fair, reasonable and
adequate as to each of the Settling Parties, and that the Stipulation and Settlement are hereby finally
approved in all respects, and the Settling Parties are hereby directed to perform its terms.
8. Upon the Effective Date hereof, the Lead Plaintiffs shall, and each of the Settlement
Class 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 against the Released
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 84 of 88
4
Persons, whether or not such Settlement Class Member executes and delivers the Proof of Claim
and Release, as well as any claims arising out of, relating to, or in connection with, the defense,
settlement, or resolution of the Action or the Released Claims against the Released Persons,
Plaintiffs and/or Plaintiffs' Counsel, except for claims relating to the enforcement of the
Settlement.
9. All Settlement Class Members are hereby forever barred and enjoined from
prosecuting any of the Released Claims against any of the Released Persons.
10. Upon the Effective Date hereof, Defendants and the Released Persons shall be
deemed to have, and by operation of this Judgment shall have, fully, finally, and forever released,
relinquished and discharged all Released Persons’ Claims against each and all of the Settlement
Class Members, Lead Plaintiff and Lead Counsel.
11. The Notice of Pendency of Class Action and Proposed Settlement, Final Approval
Hearing, and Motion for Attorneys’ Fees and Reimbursement of Litigation Expenses and the
published Summary Notice given to the Settlement Class was the best notice practicable under the
circumstances, including the individual notice to all Settlement Class Members who could be
identified through reasonable effort. Said notice provided the best notice practicable under the
circumstances of these proceedings and of the matters set forth therein, including the proposed
Settlement set forth in the Stipulation, to all Persons entitled to such notice, and said notice fully
satisfied the requirements of Federal Rules of Civil Procedure 23 and the requirements of due
process as well as the requirements of the Private Securities Litigation Reform Act. In addition,
the requirements of the Class Action Fairness Act, 28 U.S.C. §1715, have been satisfied.
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 85 of 88
5
12. Any Plan of Allocation submitted by Lead Counsel or any order entered regarding
any attorneys’ fee and reimbursement of expense application shall in no way disturb or affect the
Judgment and shall be considered separate from this Final Judgment and Order.
13. Neither the Stipulation nor the Settlement contained therein, nor any act performed
or document executed pursuant to or in furtherance of the Stipulation or the Settlement: (a) is or
may be deemed to be or may be used as an admission of, or evidence of, the validity of any
Released Claims, or of any wrongdoing or liability of the Defendants, any Released Person or and
Settlement Class Member or (b) is or may be deemed to be or may be used as an admission of, or
evidence of, any fault or omission of the Defendants, any of the Released Persons or any Settlement
Class Member in any civil, criminal or administrative proceeding in any court, administrative
agency or other tribunal. Defendants, Released Persons and/or Settlement Class Members may
file the Stipulation and/or the Judgment from this action in any other 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 theory of claim
preclusion or issue preclusion or similar defense or counterclaim.
14. Without affecting the finality of this Final Judgment and Order in any way, this
Court hereby retains continuing jurisdiction over: (a) implementation of this Settlement and any
award or distribution of the Settlement Fund, including interest earned thereon; (b) disposition of
the Settlement Fund; (c) hearing and determining applications for attorneys’ fees, interest and
reimbursement of litigation expenses in the Action; and (d) all parties hereto for the purpose of
construing, enforcing and administering the Stipulation.
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 86 of 88
6
15. The Court finds that, during the course of the Action, the Settling Parties and their
respective counsel at all times complied with the requirements of Rule 11 of the Federal Rules of
Civil Procedure.
16. In the event that the Settlement does not become effective in accordance with the
terms of the Stipulation, or the Effective Date does not occur, or in the event that the Settlement
Fund, or any portion thereof, is returned to Defendants, then this Final Judgment and Order shall
be rendered null and void to the extent provided by and in accordance with the Stipulation and
shall be vacated and, in such event, all orders entered and releases delivered in connection herewith
shall be null and void to the extent provided by and in accordance with the Stipulation.
17. Upon the occurrence of the Effective Date, Defendants shall not have any right to
the return of the Settlement Fund or any portion thereof irrespective of the number of Claims filed,
the collective amount of losses of Authorized Claimants, the percentage of recovery of losses or
the amounts to be paid to Authorized Claimants from the Net Settlement Fund. If any portion of
the Net Settlement Fund remains following distribution pursuant to the Plan of Allocation and is
of such an amount that in the discretion of Lead Counsel it is not cost effective or efficient to
redistribute the amount to the Settlement Class, then such remaining funds, after payment of any
further Notice and Administration Costs and Taxes, shall be donated to a non-profit charitable
organization unaffiliated with Defendants, Lead Plaintiffs or Lead Counsel, selected by Lead
Plaintiffs and subject to Court approval.
18. Without further order of the Court, the Settling Parties may agree to reasonable
extensions of time to carry out any of the provisions of the Stipulation.
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 87 of 88
7
19. There is no reason for delay in the entry of this Final Judgment and Order of
Dismissal with Prejudice and immediate entry by the Clerk of the Court is expressly directed
pursuant to Rule 54(b) of the Federal Rules of Civil Procedure.
IT IS SO ORDERED.
Dated: ___________________, 2016
JOSE E. MARTINEZ UNITED STATES DISTRICT JUDGE
Case 2:12-cv-14333-JEM Document 108-1 Entered on FLSD Docket 06/17/2016 Page 88 of 88