Document:

10.1 - 5.29.13 FDML Rights Offering Investment Agreement

EXHIBIT 10.1

INVESTMENT AGREEMENT
BY AND BETWEEN
FEDERAL-MOGUL CORPORATION
AND
IEH FM HOLDINGS LLC
DATED AS OF MAY 28, 2013

TABLE OF CONTENTS
 
	
		
	   
	Page

	 
	 

	ARTICLE I DEFINITIONS AND INTERPRETATION
	1

	 
	 

	Section 1.1. Definitions
	1

	Section 1.2. Interpretation
	5

	 
	 

	ARTICLE II THE RIGHTS OFFERING
	6

	 
	 

	Section 2.1. The Rights Offering
	6

	 
	 

	ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY
	7

	 
	 

	Section 3.1. Organization
	7

	Section 3.2. Authorization
	8

	Section 3.3. Valid Issuance of Shares
	8

	Section 3.4. Non-Contravention; Authorizations
	8

	Section 3.5. Registration Statement; Prospectus
	8

	Section 3.6. No Further Reliance
	9

	 
	 

	ARTICLE IV REPRESENTATIONS AND WARRANTIES OF INVESTOR
	9

	 
	 

	Section 4.1. Organization
	9

	Section 4.2. Non-Contravention; Governmental Authorization
	9

	Section 4.3. Securities Act Compliance
	10

	Section 4.4. Ownership
	10

	Section 4.5. Financial Capability
	10

	Section 4.6. No Further Reliance
	11

	 
	 

	ARTICLE V COVENANTS
	11

	 
	 

	Section 5.1. Securities to be Issued
	11

	Section 5.2. Share Listing
	11

	Section 5.3. Minority Stockholder Protection
	11

	Section 5.4. ERISA Indemnity
	11

	Section 5.5. Tax Allocation Agreement
	12

	 
	 

	ARTICLE VI TERMINATION
	12

	 
	 

	Section 6.1. Termination
	12

	 
	 

	ARTICLE VII MISCELLANEOUS
	12

	 
	 

	Section 7.1. Survival
	12

	Section 7.2. Indemnification
	12

	Section 7.3. Notices
	14

	Section 7.4. Further Assurances .
	15

	Section 7.5. Amendments and Waivers
	15

	Section 7.6. Fees and Expenses
	15

 
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	Section 7.7.    Successors and Assigns
	 

	Section 7.8.    Governing Law
	 

	Section 7.9.    Waiver of Jury Trial
	15

	Section 7.10. Entire Agreement
	 

	Section 7.11. Effect of Headings and Table of Contents
	16

	Section 7.12. Severability
	16

	Section 7.13. Counterparts; No Third Party Beneficiaries
	 

	Section 7.14. Specific Performance
	16

	Section 7.15. Guaranty of Performance
	 

 
	
			
	Exhibits
	  
	 

	 
	 

	Exhibit A
	  
	Form of Amendment and Joinder to Registration Rights Agreement

	Exhibit B
	  
	Form of Tax Allocation Agreement

	Exhibit C
	  
	Schedule

 
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INVESTMENT AGREEMENT
This INVESTMENT AGREEMENT, dated as of May 28, 2013 (this “ Agreement ”), is by and between Federal-Mogul Corporation, a Delaware corporation (the “ Company ”), and IEH FM Holdings LLC, a Delaware limited liability company (the “ Investor ”).
BACKGROUND
WHEREAS, the Company has proposed to offer and sell certain shares of Common Stock (as defined below) pursuant to a Rights Offering (as defined below), on the terms and subject to the conditions set forth herein; and
WHEREAS, the Company desires that the Investor provide, and the Investor has agreed to exercise its rights under the Basic Subscription Privilege (as defined below) in the Rights Offering, on the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement, the receipt and sufficiency of which are hereby acknowledged, the parties to this Agreement hereby agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1. Definitions . As used in this Agreement, the following terms have the respective meanings set forth below:
“ 10b-5 Representation ” shall have the meaning set forth in Section 3.5 .
“ Acquired Shares ” means the Common Stock acquired pursuant to the Basic Subscription Privilege and the Oversubscription Privilege.
“ Affiliate ” of any Person means any other Person directly or indirectly Controlling, Controlled by or under direct or indirect common Control with such Person, provided that for purposes of this Agreement, the Company and its Subsidiaries shall not be deemed to be Affiliates of the Investor.
“ Aggregate Offered Shares ” shall have the meaning set forth in Section 2.1(b) .
“ Agreement ” shall have the meaning set forth in the Preamble.
“ Ancillary Agreements ” means the Registration Rights Agreement and the Tax Allocation Agreement.
“ Basic Subscription Privilege ” shall have the meaning set forth in Section 2.1(b) .
 
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“ Beneficially Own ,” “ Beneficially Owned ,” “ Beneficial Ownership ” and “ Beneficial Owner ” with respect to any securities means a holder who is deemed to be the beneficial owner, or ownership that is deemed to be beneficial ownership, of such securities under Rule 13d-3 or Rule 13d-5 of the Exchange Act, and shall include such securities Beneficially Owned by all other persons with whom a holder would constitute a “group” within the meaning of Section 13(d) of the Exchange Act with respect to such securities.
“ Board ” means the Board of Directors of the Company.
“ Business Day ” means any day other than a Saturday, Sunday or one on which banks in New York, New York are authorized or required to close.
“ Capital Stock ” of any Person means any and all shares, interests, participations or other equivalents however designated of corporate stock or other equity participations, including partnership interests, whether general or limited, of such Person and any rights (other than debt securities convertible or exchangeable into an equity interest), warrants or options to acquire an equity interest in such Person.
“ Closing Date ” means the closing of the Rights Offering.
“ Common Stock ” means the common stock, par value $0.01 per share, of the Company.
“ Company ” shall have the meaning set forth in the Preamble.
“ Company Indemnified Parties ” shall have the meaning set forth in Section 7.2(b) .
“ Control ” has the meaning specified in Rule 12b-2 under the Exchange Act.
“ DGCL ” means the General Corporation Law of the State of Delaware.
“ Effect ” shall have the meaning set forth in the definition of “Material Adverse Effect.”
“ ERISA ” shall have the meaning set forth in Section 5.4 .
“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.
“ GAAP ” means generally accepted accounting principles in the United States of America as in effect from time to time.
“ Governmental Entity ” means any national, state, local, county, parish or municipal government, domestic or foreign, any agency, board, bureau, commission, court, tribunal, subdivision, department or other governmental or regulatory authority or instrumentality that has jurisdiction over any of the Company or any of its properties or assets or any matter relating to the transactions contemplated by this Agreement.
“ Group ” has the meaning set forth in Section 13(d) of the Exchange Act as in effect on the date of this Agreement.
“ Holdings ” shall have the meaning set forth in Section 5.4 .
 
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“ HSR Act ” shall have the meaning set forth in Section 4.2(c) .
“ Indemnified Party ” means an Investor Indemnified Party or a Company Indemnified Party, as the case may be.
“ Indemnifying Party ” means the Company or the Investor, as the case may be.
“ Investor ” shall have the meaning set forth in the Preamble.
“ Investor Indemnified Parties ” shall have the meaning set forth in Section 7.2(a) .
“ Law ” means any federal, state, local or foreign law, statute or ordinance, common law, or any rule, regulation, judgment, order, writ, injunction, decree, arbitration award, license or permit of any Governmental Entity.
“ Losses ” shall have the meaning set forth in Section 7.2(a) .
“ Material Adverse Effect ” means any fact, circumstance, event, change, effect or occurrence (an “ Effect ”) that, individually or in the aggregate with all other Effects, (x) would reasonably be expected to prevent, materially delay or materially impair the ability of the Company to consummate the transactions contemplated hereby in the timeframe contemplated hereby or (y) has had or caused, or would have or cause, a material adverse effect on the assets, properties, business, results of operations, or financial condition of the Company and its Subsidiaries, taken as a whole, but, in the case of this clause (y) shall not include (a) Effects generally affecting (i) the industry in which the Company and its Subsidiaries operate or (ii) economic, political or regulatory conditions or the financial, securities or credit markets in the U.S. or elsewhere in the world, including natural disasters, any regulatory or political developments, or any outbreak or escalation of hostilities or declared or undeclared acts of war, terrorism or insurrection, whether occurring before or after the date hereof, unless any such Effects disproportionately affect the assets, properties, business, results of operations or financial condition of the Company and its Subsidiaries, taken as a whole, relative to other industry participants; (b) Effects to the extent resulting from the announcement of the execution of this Agreement or the pendency of the transactions contemplated hereby (including, without limitation, and solely by way of example of such Effects, the Effects of the public announcement of this Agreement or the transactions contemplated hereby on the relationships of the Company or any of its Subsidiaries with customers, suppliers, distributors or employees); (c) Effects resulting from compliance by the Company and its Subsidiaries with the terms of this Agreement; (d) declines in the price or trading volume of shares of any Capital Stock of the Company; (e) Effects to the extent resulting from any changes in Law or in GAAP (or the interpretation thereof) after the date hereof, unless any such Effects disproportionately affect the assets, properties, business, results of operations or financial condition of the Company and its Subsidiaries, taken as a whole, relative to other industry participants; (f) any failure by the Company to meet any published analyst estimates or expectations regarding the Company's revenue, earnings or other financial performance or results of operations for any period, or any failure by the Company to meet its internal budgets, plans or forecasts regarding its revenues, earnings or other financial performance or results of operations; or (g) any change or proposed
 
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change in the debt ratings of the Company or any of its Subsidiaries or any debt securities of the Company or any of its Subsidiaries; provided that the exception in clauses (d), (f), (g) shall not prevent or otherwise affect a determination that any Effect underlying such failure has resulted in, or contributed to, a Material Adverse Effect.
“ Nasdaq ” means the NASDAQ Global Select Market.
“ Oversubscription Privilege ” shall have the meaning set forth in Section 2.1(b) .
“ Parent ” means American Entertainment Properties Corp.
“ Person ” means an individual, a corporation, a partnership, a limited liability company, limited partnership, an association, a trust or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.
“ Previously Disclosed ” means information set forth in or incorporated by reference into the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2012 or its other reports and forms filed with the SEC under Sections 13(a), 14(a) or 15(d) of the Exchange Act on or after January 1, 2013 (except for risks and forward looking information set forth in the “Risk Factors” section of such annual report or in any forward looking statement disclaimers or similar statements that are similarly non-specific and are predictive or forward looking in nature).
“ Prospectus ” means the prospectus, dated May 1, 2013, that forms a part of the Registration Statement, including all documents incorporated therein by reference, as from time to time amended or supplemented pursuant to the Securities Act or the Exchange Act, including by the Prospectus Supplement.
“ Prospectus Supplement ” means the prospectus supplement relating to the Rights and the Common Stock to be issued in the Rights Offering to be filed pursuant to Rule 424 under the Securities Act.
“ Record Date ” means the date as of which each record holder of Common Stock will be entitled to receive one (1) Right for each share of Common Stock held as of such date, which date shall be a date selected by the Board in accordance with the DGCL and the requirements of Nasdaq.
“ Registration Rights Agreement ” means the Registration Rights Agreement between the Company and the Investor in substantially the form set forth in Exhibit A .
“ Registration Statement ” the registration statement on Form S-3 (Registration No. 333-187424), which became effective on May 1, 2013, including all documents incorporated therein by reference, as from time to time amended or supplemented pursuant to the Securities Act or the Exchange Act, including by any information contained in any prospectus or prospectus supplement that is deemed to be a part of the Registration Statement pursuant to Rule 430B under the Securities Act.
 
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“ Representatives ” means, with respect to a Person, such Person's directors, officers, investment bankers, attorneys, accountants and other advisors or representatives.
“ Rights ” shall have the meaning set forth in Section 2.1(b) .
“ Rights Offering ” shall have the meaning set forth in Section 2.1(b) .
“ SEC ” means the Securities and Exchange Commission.
“ Securities Act ” means the Securities Act of 1933, as amended.
“ Special Committee ” means a special committee of the Board comprised solely of directors who are independent for purposes of Nasdaq rules.
“ Subscription Period ” shall have the meaning set forth in Section 2.1(b) .
“ Subscription Price ” means the volume-weighted average price of the Common Stock as reported by Nasdaq, obtained from Bloomberg L.P., for the trading hours from 9:30 a.m. to 4:00 p.m., Eastern Standard Time on the date of the public announcement of the Rights Offering and the four trading days immediately preceding the date of the public announcement of the Rights Offering.
“ Subsidiary ” means, with respect to any specified Person, (a) any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency and after giving effect to any voting agreement or stockholders' agreement that effectively transfers voting power) to vote in the election of directors, managers or trustees of the corporation, association or other business entity is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); (b) any partnership a general partner or a managing general partner of which is such Person or a Subsidiary of such Person; and (c) any limited liability company a managing member or manager of which is such Person or a Subsidiary of such Person. 
“ Tax Allocation Agreement ” shall have the meaning set forth in Section 5.5 .
Section 1.2. Interpretation . When a reference is made in this Agreement to “Preamble,” “Articles,” “Sections” or “Annexes,” such reference shall be to a Preamble, Article or Section of, or Annex to, this Agreement, unless otherwise indicated. The terms defined in the singular have a comparable meaning when used in the plural, and vice versa, and words importing any gender include the other gender. The table of contents and headings contained in this Agreement are for reference purposes only and are not part of this Agreement. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed followed by the words “without limitation.” No rule of construction against the draftsperson shall be applied in connection with the interpretation or enforcement of this Agreement, as this Agreement is the product of negotiation between sophisticated parties advised by counsel. All references to “$” or “dollars” mean the lawful currency of the United States of America. Except as expressly stated in this Agreement, all references to any statute, rule or regulation are to the statute, rule or regulation as amended, modified, supplemented or replaced from time to time
 
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(and, in the case of statutes, include any rules and regulations promulgated under the statute) and all references to any section of any statute, rule or regulation include any successor to the section. References to “words of similar import” with respect to Material Adverse Effect or materiality, does not include knowledge qualifiers.
ARTICLE II
THE RIGHTS OFFERING
Section 2.1. The Rights Offering .
(a) As promptly as practicable after the date of this Agreement, the Company shall use its reasonable best efforts to prepare the Prospectus Supplement. The Prospectus Supplement and any amendment or supplement to the Prospectus in connection with the Rights Offering shall be provided to the Investor and its counsel prior to its filing with the SEC, and the Investor and its counsel shall be given a reasonable opportunity to review and comment thereon.
(b) As soon as practicable following the Record Date, the Company shall file with the SEC and print the Prospectus Supplement, distribute copies of the Prospectus Supplement to the holders of record of Common Stock as of the Record Date, and thereafter, promptly commence a rights offering on the following terms: (i) the Company shall distribute, one transferable right (“ Rights ”) to each holder of record of Common Stock for each share of Common Stock held by such holder as of the Record Date; (ii) each Right shall entitle the holder thereof to subscribe to purchase, at the election of such holder, a number of shares of Common Stock at the Subscription Price (the “ Basic Subscription Privilege ”), equal to such stockholder's pro rata portion of shares of Common Stock with an aggregate value of $500,000,000 calculated at the Subscription Price (the actual aggregate number of shares of Common Stock, the “ Aggregate Offered Shares ”) where such pro rata portion is calculated based upon the number of shares of Common Stock owned of record (as reflected in the stock ledger maintained by the Company's transfer agent) by a stockholder on the Record Date relative to the number of shares of Common Stock outstanding on the Record Date; (iii) the offering shall remain open until June 27, 2013, but in no event shall be open for less than 20 days inclusive of June 27, 2013, which timing shall take into account the closing of the contemplated refinancing of the Company's debt (or such longer period as may be required by Law) (the “ Subscription Period ”); and (iv) each holder who fully exercises its Basic Subscription Privilege shall be entitled to subscribe for additional shares of Common Stock at the Subscription Price pursuant to the instructions set forth in the Prospectus Supplement and related materials to the extent that other holders elect not to exercise all of their respective Rights under the Basic Subscription Privilege (the “ Oversubscription Privilege ”); provided that if insufficient shares of Common Stock are available to satisfy all oversubscription requests, such requests shall be honored on a pro rata basis based upon the number of shares of Common Stock each holder subscribed for in the Basic Subscription Privilege (such rights offering, the “ Rights Offering ”). No fractional shares of Common Stock shall be issued in connection with the Rights Offering. The number of shares of Common Stock to be issued upon exercise by a holder of Rights will be rounded down to the next lowest whole number of shares of Common Stock. The Company shall use reasonable best efforts to engage in and complete the transactions contemplated in Sections 2.1(a) and 2.1(b) as promptly as practicable.
 
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(c) The Investor hereby agrees that it will exercise all of its Rights under its Basic Subscription Privilege. The Investor agrees to purchase and the Company agrees to issue and sell to the Investor such shares pursuant to this Section 2.1 at the Subscription Price.
(d) The Company shall not amend any of the terms of the Rights Offering described in Section 2.1(b) or waive any conditions to the closing of the Rights Offering without the prior written consent of the Investor and a Special Committee. Subject to the terms and conditions of the Rights Offering, the Company shall effect the closing of the Rights Offering as promptly as practicable following the end of the Subscription Period.
(e) The Company shall pay all of its expenses associated with the Registration Statement, the Prospectus, the Rights Offering and the other transactions contemplated hereby, including filing and printing fees, the fees and expenses of any subscription and information agents, the fees and expenses of its counsel, accounting fees and expenses and costs associated with clearing the Common Stock offered for sale under applicable state securities Laws.
(f) The Investor shall provide to the Company such information as the Company may reasonably require in connection with the preparation and filing of the Prospectus Supplement and any amendment or supplement to the Prospectus. No such information provided by the Investor shall contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading (i) at the time the Registration Statement became effective under the Securities Act and as of the “new effective date” with respect to the Rights Offering pursuant to, and within the meaning of, Rule 430B(f)(2) under the Securities Act, and (ii) as of the date of the Prospectus Supplement and the closing date of the Rights Offering and the Closing Date.
(g) On the Closing Date the Company shall deliver to the Investor evidence of the issuance of the Acquired Shares in the name of the Investor against payment by or on behalf of the Investor of the purchase price therefore by wire transfer of immediately available funds to the account designated by the Company in writing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as Previously Disclosed, the Company represents and warrants to the Investor that:
Section 3.1. Organization . The Company is duly incorporated and validly existing as a corporation in good standing under the Laws of the State of Delaware and has all corporate power and authority to own its property and assets and conduct its business in all material respects as currently conducted. The Company is duly qualified as a foreign corporation for the transaction of business and is in good standing under the Laws of each other jurisdiction in which that nature of the business conducts or the property owned by it makes such qualification necessary, except, in each case, as would not, individually or in the aggregate, have or reasonably be expected to have a Material Adverse Effect.
 
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Section 3.2. Authorization . The Company has the requisite corporate power and authority to execute and deliver this Agreement and each Ancillary Agreement to which it is a party and to perform its obligations hereunder and thereunder. The execution, delivery and performance by the Company of this Agreement and each Ancillary Agreement to which it is a party and the consummation of the transactions contemplated hereby and thereby have been (or will be when delivered) duly authorized by all necessary corporate action on the part of the Company, and no further approval or authorization is required on the part of the Company, its board of directors or stockholders (except as expressly contemplated by this Agreement). This Agreement and each Ancillary Agreement to which the Company is a party constitute (or will constitute when delivered) the valid and binding obligation of the Company, enforceable against the Company in accordance with their terms, except as such may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization or other similar Laws affecting creditors' rights generally and by general equitable principles, and except as may be limited by applicable Law and public policy.
Section 3.3. Valid Issuance of Shares . The Acquired Shares will be, as of the date or dates of their issuance, duly authorized by all necessary corporate action on the part of the Company and, when issued and delivered by the Company against payment therefor as provided in this Agreement, (a) will be validly issued, fully paid and non-assessable and (b) will not be subject to any statutory or contractual preemptive rights or other similar rights of stockholders.
Section 3.4. Non-Contravention; Authorizations . The Company's execution, delivery and performance of this Agreement and the Ancillary Agreements, issuance and delivery of the Acquired Shares, and consummation of the transactions contemplated hereby and thereby will not: (i) result in any violation of the provisions of the charter or bylaws of the Company, (ii) conflict with or constitute a breach of or default (or, with the giving of notice or lapse of time, would be in default) under, result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company pursuant to, or require the consent of any other party to, any indenture, mortgage, loan or credit agreement, note, contract, franchise, lease or other instrument to which the Company is a party or bound or to which any of the property or assets of the Company is subject or (iii) result in any violation of any Law applicable to the Company or any Subsidiary, except, in the case of clauses (ii) and (iii), as would not, individually or in the aggregate, have a Material Adverse Effect. Except for any application or other filing to be filed with Nasdaq and assuming the accuracy of the Investor's representations and warranties in Section 4.2(c) , no consent, approval, authorization or other order of, or registration or filing with, any Governmental Entity or Nasdaq is required for the Company's execution, delivery and performance of this Agreement and the Ancillary Agreements, the issuance and delivery of the Acquired Shares or the consummation of the transactions contemplated hereby and thereby, except such as have been obtained or made by the Company.
Section 3.5. Registration Statement; Prospectus . The Registration Statement and the Prospectus, at the time the Registration Statement became effective and as of the closing date of the Rights Offering and the Closing Date, will comply as to form in all material respects with the
 
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applicable requirements of the Securities Act and the Exchange Act and the rules and regulations of the SEC thereunder. The Registration Statement, at the time it became effective under the Securities Act and as of the “new effective date” with respect to the Rights Offering pursuant to, and within the meaning of, Rule 430B(f)(2) under the Securities Act, shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and the Prospectus, at the time the Registration Statement became effective and as of its date and the closing date of the Rights Offering and the Closing Date, shall not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, in each case, the Company makes no such representation with respect to information provided to it by the Investor pursuant to Section 2.1(f) . The previous sentence is referred to as the “ 10b-5 Representation .”
Section 3.6. No Further Reliance . The Company acknowledges that it is not relying upon any representation or warranty made by the Investor not set forth in this Agreement or in an Ancillary Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF INVESTOR
The Investor represents and warrants to the Company that:
Section 4.1. Organization . The Investor is duly organized and validly existing as a limited liability company in good standing under the Laws of the State of Delaware.
(a) Authorization . The Investor has the requisite power and authority to execute and deliver this Agreement and each Ancillary Agreement to which it is a party and to perform its obligations hereunder and thereunder. The execution, delivery and performance by the Investor of this Agreement and each such Ancillary Agreement and consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Investor, and no further approval or authorization is required on the part of the Investor, its managers or members. This Agreement and each Ancillary Agreement to which the Investor is a party constitute (or will constitute when delivered) the valid and binding obligation of the Company, enforceable against the Investor in accordance with their terms, except as such may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization or other similar Laws affecting creditors' rights generally and by general equitable principles, and except as may be limited by applicable Law and public policy.
Section 4.2. Non-Contravention; Governmental Authorization .
(a) The execution, delivery and performance by the Investor of this Agreement and the consummation of the transactions contemplated hereby will not: (i) conflict with or violate any provision of its charter, bylaws or similar governing documents, (ii) conflict with or result in any breach of, or constitute a default (or, with the giving of notice or lapse of time, would be in default) under, or give rise to any right to termination, acceleration or
 
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cancellation under, any agreement, lease, mortgage, license, indenture or any other contract to which the Investor is a party or by which its properties may be bound or affected and (iii) conflict with or violate any Law applicable to the Investor, except, in the case of clauses (ii) and (iii), as would not, individually or in the aggregate, reasonably be expected to materially and adversely affect the Investor's ability to perform its obligations under this Agreement or consummate the transactions contemplated hereby on a timely basis.
(b) Each approval, consent, order, authorization, designation, declaration or filing by or with any regulatory, administrative or other Governmental Entity necessary in connection with the execution and delivery by the Investor of this Agreement and the consummation of the transactions contemplated herein (except for such additional steps as may be required by Nasdaq or such additional steps as may be necessary to qualify the Acquired Shares under federal securities, state securities or blue sky Laws) has been obtained or made and is in full force and effect, except as would not, individually or in the aggregate, reasonably be expected to materially and adversely affect the Investor's ability to perform its obligations under this Agreement or consummate the transactions contemplated hereby on a timely basis.
(c) In connection with the Investor's prior acquisition of control of the Company, Investor and all other Affiliates of Investor required to do so made a timely filing pursuant to the Hart-Scott-Rodino Antitrust Improvements Act (“ HSR Act ”) on February 2, 2007. The waiting periods under the act expired and, accordingly, Investor obtained control of the Company. Pursuant to Code of Federal Regulations 802.21, no further HSR Act filing will be required in connection with Investor's purchase of any additional shares of the Company either in any private placement or public offering.
Section 4.3. Securities Act Compliance . The Acquired Shares being acquired by the Investor hereunder are being acquired for its own account, for the purpose of investment and not with a view to or for sale in connection with any public resale or distribution thereof in violation of applicable securities Laws. The Investor is an “accredited investor” within the meaning of Rule 501(a) promulgated under the Securities Act and is knowledgeable, sophisticated and experienced in business and financial matters, and it fully understands the limitations on the ownership and sale, transfer or other disposition of the Acquired Shares. The Investor is able to bear the financial risk of its investment in the Acquired Shares and is able to afford the complete loss of such investment. The Investor has been afforded access to information about the Company and its financial condition and business, sufficient to enable the Investor to evaluate its investment in the Acquired Shares. The Investor understands that the Acquired Shares may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available, except under circumstances where neither such registration nor such an exemption is required by Law.
Section 4.4. Ownership . As of the date of this Agreement, Investor and its Affiliates are the Beneficial Owners of 76,697,804 shares of Common Stock.
Section 4.5. Financial Capability . As of the date hereof and at all relevant times under this Agreement, the Investor will have available funds necessary to purchase the Acquired Shares on the terms and conditions contemplated by this Agreement.
 
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Section 4.6. No Further Reliance . The Investor acknowledges that it is not relying upon any representation or warranty made by the Company not set forth in this Agreement or in an Ancillary Agreement. The Investor acknowledges that it has conducted such review and analysis of the business, assets, condition, operations and prospects of the Company that the Investor considers sufficient for purposes of the purchase of the Acquired Shares.
ARTICLE V
COVENANTS
Section 5.1. Securities to be Issued . The Acquired Shares to be issued to the Investor pursuant to this Agreement shall be subject to the terms and provisions of the Company's certificate of incorporation.
Section 5.2. Share Listing . The Company shall use its reasonable best efforts to cause the Common Stock to be issued in the Rights Offering to be issued and approved for listing on Nasdaq, subject to official notice of issuance.
Section 5.3. Minority Stockholder Protection . Except for the Acquired Shares as specifically contemplated by this Agreement, the Investor (together with all Affiliates of the Investor) shall not, until the Closing Date acquire any additional shares of Common Stock. For a period of at least one (1) year from the Closing Date, the Investor and its Affiliates shall not effectuate a merger involving the Company in which any of the Company's stockholders is converted into the right to receive cash or other property other than stock of a surviving or resulting company at a one-for-one exchange ratio so as to create a holding company structure whereby immediately following the implementation of that structure, the Corporation and each of its businesses will be held through a public holding company having the same stockholders as the Corporation had immediately prior to the implementation of such structure (and shall not be permitted to effect any merger pursuant to Sections 253 or 267 of the General Corporation Law of the State of Delaware involving the Company). For purposes of this provision, the Company shall include any successor in interest to the Company or any holding company of the Company. For the avoidance of doubt , the Investor and its Affiliates shall have no obligation to engage in any such transaction following such one year period and the Company shall have no obligation to consent to or approve any such transaction at any time.
Section 5.4. ERISA Indemnity . Icahn Enterprises Holdings L.P. (“ Holdings ”) and Investor shall indemnify the members of the FMC Group (as defined in the Tax Allocation Agreement (as defined below)) for any and all liability imposed upon any member of the FMC Group pursuant to the Employee Retirement Income Security Act of 1974, as amended, or any regulation thereunder (hereinafter “ ERISA ”) resulting from such member of the FMC Group being considered a member of a controlled group within the meaning of ERISA § 4001(a)(14) of which Parent is a member, except with respect to liability in respect to any employee benefit plan, as defined by ERISA § 3(3), maintained by any member of the FMC Group or any other Person (as defined in the Tax Allocation Agreement) in which FMC (as defined in the Tax Allocation Agreement) has any direct or indirect investment constituting a 5% or greater interest in such person. Holdings and Investor hereby represent that, except as disclosed on Exhibit C to
 
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this Agreement, to the best of their knowledge, there are no material unfunded liabilities with respect to any employee benefit plan maintained by any member of the controlled group within the meaning of ERISA § 4001(a)(14) of which Parent is a member, other than with respect to employee benefit plans maintained by members of the FMC Group.
Section 5.5. Tax Allocation Agreement . If and solely to the extent that the Investor's purchase of the Acquired Shares would cause the Company to become part of an affiliated group of corporations as defined in Section 1504 of the Internal Revenue Code of 1986, as amended, of which Parent is the common parent, the Company and Parent shall enter into a tax allocation agreement (the “ Tax Allocation Agreement ”) in the form attached hereto as Exhibit B .
ARTICLE VI
TERMINATION
Section 6.1. Termination . This Agreement may be terminated at any time prior to the occurrence of the Closing Date by mutual agreement of a Special Committee, acting on behalf of the Company, and the Investor. This Agreement shall be terminated by either a Special Committee, acting on behalf of the Company, or the Investor upon written notice to the other party to this Agreement if the Rights Offering is not consummated by August 15, 2013.
Section 6.2. Effects of Termination . In the event of the termination of this Agreement as provided in Section 6.1 , this Agreement shall forthwith become wholly void and of no further force and effect, except as expressly provided in Section 7.1 ; provided that nothing herein shall relieve any party from liability for any intentional and willful breach of this Agreement occurring prior to such termination. In determining losses or damages recoverable upon termination by a party hereto for the other party's breach, the parties hereto acknowledge and agree that such losses and damages shall not be limited to reimbursement of expenses or out-of-pocket costs, and shall include the benefit of the bargain lost by such party.
ARTICLE VII
MISCELLANEOUS
Section 7.1. Survival . Each of the representations and warranties set forth in Section 3 and Section 4 shall survive the Closing Date. In addition, Section 5.3 , Section 5.4 , Section 7.2 and Section 7.7 shall survive the Closing Date.
Section 7.2. Indemnification .
(a) Notwithstanding anything in this Agreement to the contrary, from and after the date hereof, the Company agrees to indemnify and hold harmless the Investor, its Affiliates and each of their respective officers, directors, partners, employees, agents and Representatives (the “ Investor Indemnified Parties ”), to the fullest extent lawful, from and against any and all actions, suits, claims, proceedings, costs, losses, liabilities, damages, expenses (including reasonable and documented fees of counsel), amounts paid in settlement and
 
12

other costs (collectively, “ Losses ”) arising out of or relating to (i) any inaccuracy in or breach of the Company's representations or warranties contained in this Agreement or (ii) the Company's breach of any agreement or covenant made by the Company in this Agreement. Notwithstanding the above, there shall be no indemnity hereunder in respect of any Losses resulting from any action, suit, claim, matter or proceeding initiated by or on behalf of a stockholder of the Company (other than the Investor, with respect to its rights under this Agreement against the Company) relating to the transactions contemplated by this Agreement.
(b) Notwithstanding anything in this Agreement to the contrary, from and after the date hereof the Investor, agrees to indemnify and hold harmless the Company, its Affiliates and each of their respective officers, directors, partners, employees, agents and Representatives (the “ Company Indemnified Parties ”), to the fullest extent lawful, from and against any and all Losses arising out of or relating to (i) any inaccuracy in or breach of the Investor's representations or warranties contained in this Agreement, or (ii) the Investor's breach of any agreement or covenant made by the Investor in this Agreement.
(c) An Indemnified Party shall give written notice to the Indemnifying Party of any claim with respect to which it seeks indemnification promptly after the discovery by such Indemnified Party of any matters giving rise to a claim for indemnification pursuant to Section 7.2(a) or Section 7.2(b) , and the Indemnifying Party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in connection with defense thereof; provided that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Section 7.2 unless and to the extent that the Indemnifying Party shall have been actually prejudiced by the failure of such Indemnified Party to so notify the Indemnifying Party. Such notice shall describe in reasonable detail such claim. An Indemnified Party shall have the right to employ separate counsel in any such proceeding and to participate in the defense thereof, provided that the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless: (i) the Indemnifying Party has agreed in writing to pay such fees and expenses; (ii) the Indemnifying Party shall have failed promptly to assume the defense of such proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such proceeding; or (iii) the named parties to any such proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such Indemnified Party shall have been advised by counsel that a conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense thereof and shall be liable for the reasonable and documented legal fees and expenses of one law firm retained by the Indemnified Party). The Indemnifying Party shall not be liable for any settlement of any action, suit, claim or proceeding effected without its written consent. The Indemnifying Party will not, without the Indemnified Party's prior written consent, settle or compromise any claim or consent to entry of any judgment in respect thereof in any pending or threatened action, suit, claim or proceeding in respect of which indemnification has been sought hereunder unless such settlement or compromise includes an unconditional release of such Indemnified Party from all liability arising out of such action, suit, claim or proceeding.
 
13

Section 7.3. Notices . All notices and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given (a) on the date of delivery, if delivered personally or by facsimile, upon confirmation of receipt, (b) on the first Business Day following the date of dispatch if delivered by a recognized next-day courier services, (c) upon receipt, if delivered by facsimile or other electronic transmission (provided confirmation of transmission and deliver is electronically generated and kept on file by the sending party) or (d) on the third Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid, to the parties to this Agreement at the following address or to such other address either party to this Agreement shall specify by notice to the other party:
If to the Company:
Federal-Mogul Corporation
2655 Northwestern Highway
Southfield, Michigan
Attention: General Counsel
Facsimile: (248) 354-7727
With a copy to (which shall not constitute notice):
Winston & Strawn LLP
35 West Wacker Drive
Chicago, Illinois 60601
Attention: Bruce A. Toth
                 Erin G. Stone
Facsimile: (312) 558-5700
If to the Investor:
IEH FM Holdings LLC
c/o Icahn Enterprises L.P.
767 Fifth Avenue, 46 th Floor
New York, New York 10153
Attention: Daniel A. Ninivaggi
Facsimile: (212) 658-9371
With a copy to (which shall not constitute notice):
Icahn Enterprises L.P.
767 Fifth Avenue, 47 th Floor
New York, New York 10153
Attention: Keith L. Schaitkin
                 Jesse A. Lynn
Facsimile: (212) 688-1158
 
14

Section 7.4. Further Assurances . Each party hereto shall do and perform or cause to be done and performed all further acts and shall execute and deliver all other agreements, certificates, instruments and documents as the other party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
Section 7.5. Amendments and Waivers . Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is duly executed and delivered: (x) by a Special Committee, acting on behalf of the Company; and (y) by the Investor. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by Law.
Section 7.6. Fees and Expenses . Each party hereto shall pay all of its own fees and expenses (including attorneys' fees) incurred in connection with this Agreement and the transactions contemplated hereby.
Section 7.7. Successors and Assigns . This Agreement shall not be assignable or otherwise transferable (by operation of law or otherwise) by any party hereto without the prior written consent of the other party hereto. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.
Section 7.8. Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of New York. The parties hereby irrevocably submit to the exclusive jurisdiction of the Court of Chancery of the state of Delaware, or to the extent such court does not have subject matter jurisdiction, the Superior Court of the State of Delaware or the United States District Court of the State of Delaware, and hereby waive, and agree not to assert, as a defense in any action, suit or proceeding for the interpretation or enforcement hereof, that it is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in said courts or that the venue thereof may not be appropriate or that this Agreement may not be enforced in or by said courts, and the parties hereto irrevocably agree that all claims with respect to such action or proceeding shall be heard and determined in the Court of Chancery of the state of Delaware, or to the extent such court does not have subject matter jurisdiction, the Superior Court of the State of Delaware or the United States District Court of the State of Delaware. The parties hereby consent to and grant any such court jurisdiction over the person of such parties and over the subject matter of any such dispute and agree that mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 7.3 , or in such other manner as may be permitted by applicable Law, shall be valid and sufficient service thereof.
Section 7.9. Waiver of Jury Trial . Each party acknowledges and agrees that any controversy that may arise under this agreement is likely to involve complicated and difficult issues, and therefore each such party hereby irrevocably and unconditionally waives any right such party may have to a trial by jury in respect of any litigation directly or indirectly arising out of or relating to this agreement or the transactions contemplated by this agreement.
 
15

Section 7.10. Entire Agreement . This Agreement, together with the Ancillary Agreements, constitutes the entire agreement between the parties with respect to the subject matter of this Agreement and supersedes all prior agreements and understandings, both oral and written, between the parties and/or their Affiliates with respect to the subject matter of this Agreement.
Section 7.11. Effect of Headings and Table of Contents . The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.
Section 7.12. Severability . If one or more provisions of this Agreement are held to be unenforceable under applicable Law, such provision shall be deemed to be excluded from this Agreement and the balance of this Agreement shall be interpreted as if such provision were so excluded and shall be enforced in accordance with its terms to the maximum extent permitted by Law.
Section 7.13. Counterparts; No Third Party Beneficiaries . This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures were upon the same instrument. No provision of this Agreement shall confer upon any Person other than the parties hereto any rights or remedies hereunder.
Section 7.14. Specific Performance . The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof in the Court of Chancery of the State of Delaware or, to the extent such courts does not have subject matter jurisdiction, the United States District Court for the District of Delaware, and each party hereto agrees to waive in any action for such enforcement the defense that a remedy at law would be adequate.
Section 7.15. Guaranty of Performance . Holdings hereby unconditionally and irrevocably guarantees the full and punctual payment (x) by Investor and Parent of each of their obligations under this Agreement and (y) by Parent of each of its obligations under the Tax Allocation Agreement.
( Signature page follows )
 
16

IN WITNESS WHEREOF, the parties hereto have caused this Investment Agreement to be duly executed by their respective authorized officers as of the date first written above.
 	
			
	FEDERAL-MOGUL CORPORATION

	 
	 

	By:
	 
	/s/ Rainer Jueckstock

	Name:
	 
	Rainer Jueckstock

	Title:
	 
	Co-CEO

	 

	IEH FM HOLDINGS LLC
By: ICAHN ENTERPRISES HOLDINGS
L.P., its sole member
By: ICAHN ENTERPRISES G.P., INC.,
its general partner

	 
	 

	By:
	 
	/s/ Sung Hwan Cho

	Name:
	 
	Sung Hwan Cho

	Title:
	 
	CFO

 	
			
	For Purposes of Section 7.15
 
ICAHN ENTERPRISES HOLDINGS L.P.
By: ICAHN ENTERPRISES G.P., INC.,
its general partner

	 
	 

	By:
	 
	/s/ Sung Hwan Cho

	Name:
	 
	Sung Hwan Cho

	Title:
	 
	CFO

 
17

EXHIBIT A
FORM OF AMENDMENT AND JOINDER TO REGISTRATION RIGHTS AGREEMENT
 
A-1

FORM OF AMENDMENT AND JOINDER TO
FEDERAL-MOGUL CORPORATION
REGISTRATION RIGHTS AGREEMENT
This Amendment and Joinder to the Federal-Mogul Registration Rights Agreement is dated as of             , 2013 (this “ Joinder ”), among Federal-Mogul Corporation, a Delaware corporation (the “ Company ”), and IEH FM Holdings LLC, a Delaware limited liability company (the “ Investor ”). Capitalized terms used but not defined herein have the meaning ascribed to them in the Registration Rights Agreement (as defined below).
R E C I T A L S
WHEREAS, the Company is party to that certain Registration Rights Agreement dated as of December 27, 2007 (the “ Registration Rights Agreement ”);
WHEREAS, reference is hereby made to that certain Investment Agreement, dated as of             , 2013, between the Company and the Investor (the “ Investment Agreement ”), pursuant to which the Investor will acquire from the Company shares of common stock, par value $0.01 per share, of the Company (the “ Shares ”), in one or more transactions;
WHEREAS, the execution and delivery of this Joinder is a condition precedent to the consummation of the transactions contemplated under the Investment Agreement;
WHEREAS, pursuant to Section 3(g) of the Registration Rights Agreement, certain amendments to the Registration Rights Agreement may be effected with the written consent of the Company and the Holders holding a Majority in Interest of the then Outstanding Registrable Securities;
WHEREAS, the Investor currently owns a Majority in Interest in the Outstanding Registrable Securities;
WHEREAS, the Company desires to join the Investor as a party to the Registration Rights Agreement and amend the Registration Rights Agreement as set forth below.
NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration, the parties hereby agree as follows:
1. Amendment of Registration Rights Agreement
(a) The introductory paragraph of the Registration Rights Agreement is hereby amended to delete “(the “Major Holders”)”.
(b) Section 1 of the Registration Rights Agreement is hereby amended to add the following definitions:
 
A-2

“ Investor Common Shares : shall mean the shares of common stock of the Company acquired by IEH FM Holdings LLC pursuant to (i) that certain Investment Agreement dated as of             , 2013, between the Company and IEH FM Holdings LLC (the “Investment Agreement”), including IEH FM Holdings LLC's obligation to backstop the Company's rights offering under Section 2.2(a) of the Investment Agreement and (ii) any shareholder rights offering conducted by the Company in accordance with the Investment Agreement.”
“ Major Holders : shall mean the parties listed on Schedule I to the Registration Rights Agreement and IEH FM Holdings LLC.”
(c) The definition of “Initiating Holder” set forth in Section 1 of the Registration Rights Agreement is hereby amended and restated in its entirety to read as follows:
“ Initiating Holder : shall mean with respect to (i) Reorganization Common Stock, any Major Holder or Major Holders who in the aggregate are holders of more than 20% of the then outstanding Reorganization Common Stock, (ii) PIK Debt, any Major Holder or Major Holders who in the aggregate are holders of more than 20% of the then outstanding principal amount of PIK Debt, and (iii) Investor Common Shares, any Major Holder or Major Holders who in the aggregate are holders of more than 20% of the then outstanding Investor Common Shares.”
(d) The definition of “Registrable Securities” set forth in Section 1 of the Registration Rights Agreement is hereby amended and restated in its entirety to read as follows:
“ Registrable Securities : shall mean the PIK Debt, the shares of Reorganization Common Stock and the Warrants (together with any securities issued or issuable in respect thereof by way of a dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise) issued or issuable to the Holders pursuant to the Plan; the Investor Common Shares (together with any securities issued or issuable in respect thereof by way of a dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise); and any Reorganization Common Stock or Investor Common Shares that may be purchased from time to time by a Major Holder or its affiliates after the Effective Date, provided , however , that any shares of Reorganization Common Stock or Investor Common Shares that cease to be owned by a Holder or any of its affiliates shall cease to be Registrable Securities; provided further , however , that Registrable Securities shall not include any Securities acquired by any Person (other than a Major Holder) in the market or otherwise (other than directly from a Major Holder in a transaction that includes a contractual assignment to such Person of such Major Holder's registration rights under this Agreement) subsequent to the Effective Date or acquired in any other manner other than pursuant to the terms of the Plan. For the purpose of determining whether one is a Holder, the record and beneficial owner of Class B Common Stock shall be deemed to hold the Class A Common Stock into which
 
A-3

the Class B Common Stock would convert if it were transferred by such record and beneficial owner. Any Holder who may offer and sell all of its Reorganization Common Stock, its PIK Debt or its Investor Common Shares to the public in a transaction that (i) does not involve a registration under the Securities Act or (ii) is pursuant to an exemption from registration in which the volume of sales is not required to be limited shall no longer be deemed to hold Registrable Securities that would enable it to require the Company to include such securities in a registration statement pursuant hereto.”
(e) The first clause of the first sentence of Section 2(a)(i) is hereby amended as follows:
“ Request for Registration . If the Company shall receive from an Initiating Holder, at any time after the Effective Date, subject to Section (2)(i), if applicable, a written request that the Company effect any registration with respect to more than 10% of the Reorganization Common Stock, more than 10% of the outstanding principal amount of the PIK Debt or more than 10% of the Investor Common Shares, the Company will:”
2. Joinder
(a) Investor acknowledges receipt of a copy of the Registration Rights Agreement and, after review and examination thereof, by execution of this Joinder does hereby agree to be bound by the terms, conditions and agreements contained therein in its capacity as a Holder there under. By execution hereof, the Investor hereby consents to the amendment of the Registration Rights Agreement in accordance with Section 3(g) thereof.
(b) By execution hereof, the Company hereby (i) accepts Investor's agreement to be bound by the Registration Rights Agreement, (ii) covenants and agrees that the Registration Rights Agreement is hereby amended to include Investor as a party in a capacity as Holder and (iii) agrees that Investor shall have all rights provided to a Holder under the Registration Rights Agreement.
3. Miscellaneous
(a) Interpretation; Headings . From and after the date hereof, each reference in the Registration Rights Agreement to “this Agreement,” “hereunder,” “hereof,” “herein,” or words of like import, shall mean and be a reference to the Registration Rights Agreement as amended hereby. The headings of the sections and subsections of this Joinder are inserted for convenience only and shall not be deemed to constitute a part thereof.
(b) Registration Rights Agreement Otherwise Unaltered . Except as specifically set forth above, the Registration Rights Agreement shall remain unaltered and in full force and effect and the respective terms, conditions or covenants thereof are hereby in all respects ratified and confirmed.
 
A-4

(c) Governing Law . This Joinder shall be governed by and construed in accordance with the laws of the State of New York without regard to the principles of conflicts of law.
(d) Severability . In the event that any part or parts of this Joinder shall be held illegal or unenforceable by any court or administrative body of competent jurisdiction, such determination shall not affect the remaining provisions of this Joinder which shall remain in full force and effect.
(e) No Third Party Beneficiaries . The parties hereto acknowledge and agree that there are no intended third party beneficiaries to this Joinder and no third parties have any rights under or relating to this Joinder
(f) Counterparts . This Joinder may be executed in two or more counterparts (including by facsimile), each of which shall be deemed an original and all of which together shall be considered one and the same agreement.
[Signature page follows]
 
A-5

IN WITNESS WHEREOF, the undersigned have executed this Joinder as of the date first set forth above.
 	
			
	FEDERAL-MOGUL CORPORATION

	 
	 

	By:
	 
	 

	Name:
Title:
	 
	 

 	
			
	IEH FM HOLDINGS LLC

	 
	 

	By:
	 
	 

	Name:
Title:
	 
	 

 
A-6

EXHIBIT B
FORM OF TAX ALLOCATION AGREEMENT
 
B-1

FORM OF TAX ALLOCATION AGREEMENT
Agreement (the “Agreement”) as of             , 2013 (the “Effective Date”) by and among American Entertainment Properties Corp. (“Parent”), a Delaware corporation, having offices at 9017 S. Pecos Road, Suite 4350, Henderson, Nevada 89074 and Federal-Mogul Corporation, a Delaware corporation (“FMC”), having offices at 26555 Northwestern Highway, Southfield, Michigan 48033 and the FMC Subsidiaries (as defined below).
WHEREAS, Parent is the common parent of an affiliated group (as such term is defined in the Internal Revenue Code of 1986, as amended, or any succeeding law (the “Code”)) of corporations for federal income tax purposes which, as of             , 2013, includes the FMC Group (as defined below):
WHEREAS, Parent and its subsidiaries have been filing U.S. consolidated federal income tax returns (“Consolidated Federal Returns”) and will continue to file Consolidated Federal Returns for all periods in which Parent and FMC are members of an affiliated group (as defined in the Code);
WHEREAS, it is contemplated that the FMC Group will continue to file separate state income or franchise tax returns unless Parent elects to file such returns on a consolidated or combined basis with the FMC Group (“Consolidated State Returns”);
WHEREAS, FMC has minority shareholders; and
WHEREAS, Parent and FMC believe it is desirable to provide for the allocation and payment of federal and state income tax liabilities and certain related matters.
NOW, THEREFORE, in consideration of the foregoing and of the covenants set forth below, the parties hereto have agreed as follows:
 
	
		
	1.
	Definitions .

 
	
			
	 
	(i)
	“Consolidated Returns” mean all Consolidated Federal Returns and Consolidated State Returns.

 
	
			
	 
	(ii)
	“Federal Income Taxes” means any income tax imposed under the Code including, without limitation, the corporate income tax, the minimum tax imposed on corporations, and the personal holding company tax.

 
B-2

	
			
	 
	(iii)
	“FMC Group” means FMC together with the FMC Subsidiaries. “FMC Subsidiaries” means all direct and indirect subsidiaries of FMC that are eligible to be included in a Consolidated Return (as defined below) with FMC. “FMC” means FMC and any corporation that becomes the owner of 100% of the stock of FMC as a result of any transaction (whether by merger or otherwise) and such corporation shall be treated as a member of the FMC Group.

 
	
			
	 
	(iv)
	“State Income Taxes” means any income or franchise tax imposed under the tax law of any state (or political subdivision thereof) including, without limitation, corporate income taxes and minimum taxes.

 
	
			
	 
	(v)
	“Net Operating Loss” means the amount of any net operating loss as defined in the Code or under any similar provision of the tax law of any state.

 
	
			
	 
	(vi)
	“Net Capital Loss” means the amount of any net capital loss as defined in the Code or under any similar provision of the tax law of any state.

 
	
			
	 
	(vii)
	“Credit” means the amount of any tax credit allowed under the Code or under any similar provision of the tax law of any state including, without limitation, investment tax credits and foreign tax credits.

 
	
			
	 
	(viii)
	The “Regulations” means final, temporary and proposed regulations issued by the U.S. Secretary of the Treasury interpreting the Code.

 
	
			
	 
	(ix)
	The “Consolidated Group” means the affiliated group (as defined in the Code) of which Parent (or its successor) is the common parent, for so long as such affiliated group files a Consolidated Return.

 
	
			
	 
	(x)
	“Tax Benefits” as to any entity (or group of entities) means the Net Operating Loss, Net Capital Loss, and Credits generated by or available to such entity (or group of entities) and any carryforwards thereof.

 
	
			
	 
	(xi)
	“Final Determination” shall mean the final resolution of liability for any Tax for a taxable period, (i) by IRS Form 870 or 870-AD (or any successor form thereto), on the date of the final acceptance by or on behalf

 
B-3

	
		
	 
	of a party thereto, or by a comparable form under the laws of another jurisdiction; except that a Form 870 or 870-AD or comparable form that reserves (whether by its terms or by operation of law) the right of the taxpayer to file a claim for refund and/or the right of taxing authority to assert a further deficiency shall not constitute a Final Determination; (ii) by a decision, judgment, decree, or other order by a court of competent jurisdiction, which has become final and unappealable; (iii) by a closing agreement or accepted offer in compromise under Section 7121 or 7122 of the Code, or comparable agreement under the laws of another jurisdiction; (iv) by any allowance of a refund or credit in respect of an overpayment of Tax, but only after the expiration of all periods during which such refund may be recovered (including by way of offset) by the Tax imposing jurisdiction; or (v) by any other final disposition, including by reason of the expiration of the applicable statute of limitations or by mutual agreement of the parties.

 
	
			
	 
	(xii)
	“Excess FMC Tax Benefit” means any Tax Benefit of the FMC Group (determined as if the FMC Group had always filed separate Consolidated Returns with respect to the FMC Group) that reduces the liability of the Consolidated Group for Federal Income Taxes or Consolidated State Income Taxes for any year ending after the date hereof in excess of the Section 4(d) Reimbursed Tax Benefits.

 
	
		
	2.
	Joinder in Consolidated Returns.

 
	
			
	 
	(a)
	FMC hereby agrees and consents to (i) join with the Consolidated Group in the filing of Consolidated Returns with respect to any fiscal year in which Parent elects to file such returns, (ii) use its best efforts to cause each of the FMC Subsidiaries to consent to the filing of Consolidated Returns for such years, (iii) furnish to Parent at its expense all information relating to members of the FMC Group as may be necessary or appropriate for the preparation of Consolidated Returns, (iv) execute and deliver to Parent, and use its best efforts to cause the FMC Subsidiaries to execute and deliver to Parent, all consents, directors'

 
B-4

	
		
	 
	resolutions and other documentation which Parent may reasonably require to evidence Parent's authority to file Consolidated Returns, and (v) maintain the same fiscal year as Parent and use its best efforts to cause the FMC Subsidiaries to maintain the same fiscal year as Parent for all periods in which Parent and FMC are members of an affiliated group (as defined in the Code).

 
	
			
	 
	(b)
	Parent hereby consents to join with the Consolidated Group in the filing of Consolidated Returns; provided, however, that Parent is not precluded from taking any action which would require Parent to discontinue the filing of Consolidated Returns including, without limitation, a sale or other disposition of all or a portion of its stock ownership in FMC and/or the filing of an application with the Commissioner of Internal Revenue, or other appropriate authorities, including tax authorities of any state (or political subdivision thereof) (“Taxing Authorities”) on behalf of the Consolidated Group, requesting permission to discontinue the filing of Consolidated Returns.

 
	
			
	 
	(c)
	Parent shall prepare and file Consolidated Returns on behalf of the Consolidated Group. Parent shall make all decisions regarding any elections or other matters relating to the preparation and filing of Consolidated Returns.

 
	
			
	 
	(d)
	FMC will promptly pay to Parent a reasonable and appropriate amount for all out-of-pocket expenses (including legal and accounting expenses) incurred by Parent in connection with any administrative or judicial proceedings with respect to such Consolidated Returns to the extent that such proceedings are reasonably allocable to the FMC Group.

 
	
		
	3.
	Payment of Tax and Refunds .

Subject to the provisions of this Agreement and compliance with the terms hereof, Parent shall be obligated to and shall make all payments and be entitled to all refunds of Federal Income Taxes and estimated Federal Income Taxes on behalf of any and all members of the Consolidated Group, and shall indemnify and hold the members of the FMC Group harmless against all such Taxes (including penalties and interest) provided, however, that the FMC Group shall be entitled to any refunds of the FMC Group for taxable periods ended prior to FMC joining the Consolidated Group. Further, subject to the provisions of this Agreement and
 
B-5

compliance with the terms hereof, whenever Parent elects to file state or local income or franchise tax returns on a consolidated or combined basis, Parent shall be obligated to and shall make all payments and be entitled to all refunds of such State Income Taxes and estimated State Income Taxes (such actual and estimated State Income Taxes are referred to herein as “Consolidated State Income Taxes”) on behalf of all members of the Consolidated Group, and shall indemnify and hold the members of the FMC Group harmless against all such Taxes (including penalties and interest), provided, however, that the FMC Group shall be entitled to any refunds of the FMC Group for taxable periods ended prior to FMC joining the Consolidated Group. Subject to the provisions of Section 5(a) of this Agreement, (and to the extent not indemnified pursuant to the two immediately preceding sentences) for all periods on or after the date hereof, Parent shall indemnify and hold FMC and the other members of the FMC Group harmless against all Federal Income Taxes, Consolidated State Income Taxes, and State Income Taxes and local income taxes payable by or with respect to any member of the Consolidated Group other than the members of the FMC Group, including any interest and penalties with respect thereto and reasonable out-of-pocket expenses (including legal and accounting expenses) incurred by the FMC Group in connection with an administrative or judicial proceeding initiated by a governmental authority relating to any such tax.
 
	
		
	4.
	Payments by FMC to Parent .

 
	
			
	 
	(a)
	FMC shall pay to Parent, for the Consolidated Group's taxable year (or portion thereof) commencing on or after the Effective Date and subsequent taxable years or periods during which FMC is included in a Consolidated Return with the Consolidated Group, an amount equal to the amount of Federal Income Taxes and Consolidated State Income Taxes that the FMC Group would have been required to pay to the Internal Revenue Service and the taxing authorities of any state (or political subdivision thereof) (“Taxing Authorities”) if it were not part of the Consolidated Group and if the FMC Group had filed separate Consolidated Returns for federal, state and/or local tax purposes, as the case may be, with respect to the FMC Group (the “FMC Group Taxes”). The above calculation shall give effect to any federal, state or local Net Operating Loss, Net Capital Loss and Credit carryforwards which would have been available to the FMC Group if it had never been included in a Consolidated Return with the

 
B-6

	
		
	 
	Consolidated Group (which shall include, without limitation, FMC Group Tax Benefits existing when FMC joined the Consolidated Group), but such calculation shall be subject to (i) any reduction pursuant to Section 4(d) of this Agreement and (ii) any audit adjustments and any limitations on the utilization of tax attributes (including, without limitation, such carryforwards and any limitations on the utilization of interest, depreciation, amortization or other similar deductions) of the FMC Group imposed by law. For 2013, the taxable year of the FMC Group shall be the period commencing on the Effective Date and ending on December 31, 2013.

 
	
			
	 
	(b)
	FMC shall pay to Parent any amount (including amounts in respect of estimated tax) that would be due on the basis of the foregoing calculations within three (3) business days after Parent notifies FMC of the calculated amount, but in no event earlier than the times such payments are, or would be required, to be made to the applicable Taxing Authorities. The excess of any amounts paid to Parent, with respect to estimated tax payments under Section 4(a) of this Agreement for a taxable year, over the liability of the FMC Group to Parent under this Section 4(b) for such year, shall be refunded by Parent to FMC within three (3) business days after FMC notifies Parent that it has made such an excess payment. At FMC's election, such refund may be applied as a credit against any future estimated tax payment of the FMC Group under this Agreement.

 
	
			
	 
	(c)
	FMC shall indemnify and hold Parent harmless against any liability for any interest and penalties with respect thereto imposed upon Parent by reason of any false or fraudulent information supplied by any member of the FMC Group to Parent in connection with the determination of the federal, state, or local income tax liability payable by any member of the Consolidated Group.

 
	
			
	 
	(d)
	If, for any taxable year ending after the date hereof during which FMC is included in a Consolidated Return with the Consolidated Group, a Tax Benefit of the FMC Group that it would have had had it filed a separate Consolidated Return for federal, state and/or local taxes, as the case may be, reduces the liability of the Consolidated Group for Federal Income Taxes or Consolidated State Income

 
B-7

	
		
	 
	Taxes (with such reduction in liability being measured as the excess, if any, of (x) such liability computed as though the FMC Group had never been included in a Consolidated Return with the Consolidated Group over (y) such liability), then Parent shall pay to FMC an amount equal to twenty percent (20%) of the amount of such reduction within thirty (30) days after the filing of such Consolidated Return; provided that such calculation shall be subject to any Final Determination affecting computation of any item included in such calculation and any limitations on the utilization of tax attributes (including, without limitation, such carryforwards and any limitations on the utilization of depreciation, amortization or other similar deductions) of the FMC Group imposed by law. For purposes of calculating any Net Operating Loss, Net Capital Loss and Credit carryforwards of the FMC Group pursuant to Section 4(a) of this Agreement, twenty percent (20%) of any Tax Benefits taken into account in the calculation of a payment made by Parent pursuant to the preceding sentence (the “Section 4(d) Reimbursed Tax Benefits”) shall be deemed to have been used by the FMC Group. It is intended that payments under this Section 4(d) shall be characterized for tax purposes as contributions to capital by Parent to FMC, and the parties shall not take any position inconsistent with such characterization.

 
	
		
	5.
	Further Provisions .

 
	
			
	 
	(a)
	In the event of a Final Determination with respect to the tax liability of the Consolidated Group, appropriate adjustments (including, without limitation, adjustments to FMC's payment obligation under Section 4(a) of this Agreement) shall, except as inconsistent with this Agreement, be made hereunder consistent with such Final Determination. Further, FMC shall pay to Parent any interest, penalties and additions to tax imposed in connection with a Final Determination to the extent that such amounts are attributable to items of FMC or its subsidiaries. Similarly, Parent shall pay FMC any interest received from a governmental authority in connection with a Final Determination that there has been an overpayment, together with the amount of any refund received, to the extent attributable to items of FMC or its subsidiaries (except to the extent attributable to any Section 4(d) Reimbursed Tax Benefits).

 
B-8

	
			
	 
	(b)
	Payments under this Section 5 shall be made promptly after the amounts thereof are determined. For purposes of this Agreement, any Net Operating Loss, Net Capital Loss, or Credit shall be carried forward.

 
	
			
	 
	(c)
	Except as specifically provided in this Agreement, neither Parent nor FMC shall be obligated to make any payments to the other with respect to Federal Income Taxes or State Income Taxes for any taxable year or period (including any taxable year or period occurring after FMC is no longer included in a Consolidated Return with the Consolidated Group).

 
	
		
	6.
	Adjustments After Deconsolidation .

 
	
			
	 
	(a)
	If there is a change in the ownership of the stock of FMC (a “Deconsolidation Event”) and FMC ceases to join in the filing of Consolidated Federal Returns and where applicable, Consolidated State Returns with Parent, and any member of the FMC Group would have been entitled, if FMC had never joined in the filing of such Consolidated Returns, to carry forward to a taxable year (“Post-Consolidation Year”) which is not a taxable year for which FMC joined in the filing of such Consolidated Returns, an Excess FMC Tax Benefit (“Non-Available FMC Carryforward Items”), then no later than April 15 following each Post-Consolidation Year, Parent shall be obligated to pay to FMC an amount equal to the excess of (i) the FMC Group's actual Federal Income Taxes and, where applicable, actual State Income Taxes for such Post-Consolidation Year over (ii) such Federal Income Taxes and, where applicable, State Income Taxes for such Post-Consolidation Year computed as if such Non-Available FMC Carryforward Items were available to the FMC Group. The calculation in Section 6(a)(ii) above shall be subject to any audit adjustments and any limitations on the utilization of the Non-Available FMC Carryforward Items imposed by law (including, without limitation, any such limitation imposed or which would have been imposed as a result of the Deconsolidation Event). It is intended that payments under this Section 6(a) shall be characterized for tax purposes as contributions to capital by Parent to FMC, and the parties shall not take any position inconsistent with such characterization.

 
B-9

	
			
	 
	(b)
	Parent shall not be required to make payments to FMC under Section 6(a) of this Agreement to the extent that such payments would cause cumulative payments made by Parent to FMC under Section 6(a) of this Agreement to exceed the cumulative reductions in Federal Income Taxes and, where applicable, Consolidated State Income Taxes, of the Consolidated Group which resulted from the Consolidated Group's use of Excess FMC Tax Benefits. Such cumulative reductions shall be determined (i) by deeming the reduction in State Income Taxes (if any) to be reduced by any corresponding increase in Federal Income Taxes; (ii) without any adjustment for an increase or reduction in Federal Income Taxes (and, where applicable, Consolidated State Income Taxes) resulting from the Deconsolidation Event; and (iii) by apportioning the reduction in Federal Income Taxes and, where applicable, Consolidated State Income Taxes, resulting from the use of Tax Benefits of members of the FMC Group and non-members in accordance with the principles of the federal income tax consolidated return regulations (and similar provisions of applicable state tax law) that determine the Tax Benefits that would be attributed to a member in the event such member ceases to be a member of the consolidated group.

 
	
		
	7.
	Late Filing .

Notwithstanding any other provisions of this agreement, Parent shall indemnify and hold harmless the FMC Group against any interest or penalties incurred by reason of late filing of any Consolidated Return for the Consolidated Group, or by reason of late payment of any tax or estimated tax for the Consolidated Group, unless such late filing or late payment is due to the fault of FMC or any other member of the FMC Group.
 
	
		
	8.
	State Taxes .

FMC and each of the FMC Subsidiaries shall continue to prepare and file all applicable state tax returns, at their own expense, and to pay, or cause its subsidiaries to so prepare, file and pay, all amounts shown to be due thereunder unless Parent elects to have FMC and/or members of the FMC Group file state and/or local tax returns on a consolidated or combined basis with Parent.
 
B-10

	
		
	9.
	Accounting .

 
	
			
	 
	(a)
	For the purpose of the computation of assumed tax liabilities herein, all payments made (i) by Parent to FMC and (ii) by FMC to Parent, pursuant to the provisions thereof shall not be considered income to the recipient of the payment or an expense of the payor, but rather shall be considered the payment of a tax. Any difference between a Consolidated Group member's tax liability under this Agreement and such member's liability under Treasury Regulation Sections 1.1502-33 and 1.1552-1 shall be treated as a distribution with respect to its stock or as a contribution to its capital, as the case may be.

 
	
			
	 
	(b)
	The calculation of the amounts hereunder shall be determined by Parent; provided, however, that if FMC disputes such determination, KPMG LLP or another mutually acceptable nationally recognized accounting firm shall determine such amounts.

 
	
		
	10.
	Certain Transactions .

Notwithstanding anything in this Agreement to the contrary, in the event of the occurrence of any transaction the result of which is that there are no longer any holders (other than Parent and its Affiliates or any other single person or “group” as such term is used in Rule 13D under the Securities Exchange Act of 1934) of equity securities of FMC, all of Parent's payment obligations under this Agreement shall terminate immediately prior to the transaction and for purposes of Section 4(a) of this Agreement, the computation of the FMC Group Taxes shall not give effect to any Net Operating Loss, Net Capital Loss or Credits carryforwards referred to in the second sentence thereof. For the purpose of determining holders of equity securities pursuant to this Section 10, neither (x) warrantholders who have no right to receive equity securities of FMC on exercise thereof nor (y) the holders of equity securities of the acquiring company, shall be considered holders of equity securities.
 
B-11

	
		
	11.
	Parties .

Any corporation which is a FMC Group member on the date hereof or which becomes a FMC Group member at any time subsequent to such date shall automatically be subject to the terms and conditions of this Agreement. If any entity other than Parent shall become the common parent of the affiliated group of corporations for federal income tax purposes which includes members of the FMC Group, Parent shall cause such entity to enter into an agreement substantially identical to this Agreement with FMC.
 
	
		
	12.
	Notices .

All notices, requests, consents and other communications hereunder shall be in writing and shall be deemed to have been duly and properly given or sent (a) on the date when such notice, request, consent or other communication is personally delivered with receipt acknowledged, or (b) if mailed, three (3) days after the date on which the same is deposited in a post office box and sent by certified or registered mail, return receipt requested, postage prepared and addressed to the party for whom intended at its address set forth below or to such other address or addresses as any of the parties hereto shall theretofore designated by notice hereunder.
If to Parent, at:
American Entertainment Properties Corp.
9017 S. Pecos Road - Suite 4350
Henderson, Nevada 89074
If to FMC or the FMC Subsidiaries, at:
Federal-Mogul Corporation
26555 Northwestern Highway
Southfield, Michigan 48033
 
	
		
	13.
	Entire Agreement .

This agreement (a) contains the entire understanding of the parties hereto with respect to the subject matter hereof, (b) shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and performed therein, and (c) shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
 
B-12

	
		
	14.
	Amendments .

This Agreement may not be modified, changed or amended except by a writing signed by all parties hereto.
 
	
		
	15.
	Further Assurances .

Each of the parties hereto agrees to execute, acknowledge, deliver, file, record and publish such further certificates, instruments, agreements and other documents, and to take all such further actions as may be required by law or deemed necessary or useful in furtherance of the objectives and intentions underlying this Agreement and not inconsistent with the terms hereof.
 
	
		
	16.
	Captions .

Captions are inserted for convenience only and shall not be given any legal effect.
IN WITNESS WHEREOF, the parties have executed this Agreement as of June             , 2013.
 	
			
	American Entertainment Properties Corp.

	 
	 

	By:
	 
	 

	Name:
	 
	Craig Pettit

	Title:
	 
	Vice President - Tax Administration

	 

	Federal-Mogul Corporation
(on behalf of itself and the FMC Subsidiaries)

	 
	 

	By:
	 
	 

	Name:
	 
	 

	Title:
	 
	 

 
B-13

EXHIBIT C
ACF Industries LLC (“ACF”) is the sponsor of several pension plans. All the minimum funding requirements for these plans have been met as of March 31, 2013 and December 31, 2012. If the plans were voluntarily terminated, they would be underfunded by approximately $127 million and $130 million as of March 31, 2013 and December 31, 2012, respectively. These results are based on the most recent information provided by the plans' actuaries. These liabilities could increase or decrease, depending on a number of factors, including future changes in benefits, investment returns, and the assumptions used to calculate the liability.
 
C-1Exhibit 10.5 Settlement Agreement

	
	
	Bill Lann Lee (SBN 108452) 
blee@lewisfeinberg.com
Julie Wilensky (SBN 271765) 
jwilensky@lewisfeinberg.com
Shira Wakschlag (SBN 273548)
swakschlag@lewisfeinberg.com
LEWIS, FEINBERG, LEE, 
RENAKER & JACKSON, P.C.
476 9th Street 
Oakland, CA  94607
Telephone:  (510) 839-6824
Facsimile:  (510) 839-7839

Nancy DeMis* (SBN (inactive) 114770)ncd@gsscd.com 
Susan R. Fiorentino*
sfiorentino@gsscd.comGALLAGHER, SCHOENFELD, SURKIN, CHUPEIN & DEMIS, P.C.
25 West Second Street
Media, PA 19053
Telephone:  (610) 565-4600
Facsimile:  (610) 566-8257

Elise Boddie*
eboddie@naacpldf.orgReNika C. Moore*
rmoore@naacpldf.orgRia Tabacco Mar*
rtabacco@naacpldf.orgNAACP LEGAL DEFENSE & EDUCATIONAL FUND, INC.
99 Hudson Street, Suite 1600
New York, NY 10013
Telephone:  (212) 965-2200
Facsimile:  (202) 226-7592

* Admitted Pro Hac Vice

Attorneys for Plaintiffs and the Proposed Class

UNITED STATES DISTRICT COURT 
CENTRAL DISTRICT OF CALIFORNIA
	
		
	NICOLE COGDELL, et al.,
Plaintiffs,
   v.
THE WET SEAL, INC., et al.,
Defendants.
	CASE NO. SACV 12-01138 AG (ANx)
SETTLEMENT AGREEMENT AND JOINT STIPULATION
Complaint filed:  July 12, 2012 
Judge:  Hon. Andrew J. Guilford
Hearing Date:  June 10, 2013
Time:  10:00 a.m.
Courtroom:  10D – Judge Guilford

	
			
	CASE NO. SACV 12-01138 AG (ANx)
	 
	SETTLEMENT AGREEMENT AND  
JOINT STIPULATION

NANCY L. ABELL (SB# 088785) 
nancyabell@paulhastings.com 
LISA M. PAEZ (SB# 269164) 
lisapaez@paulhastings.com 
HILLARY J. BACA (SB# 288068) 
hillarybaca@paulhastings.com 
PAUL HASTINGS LLP 
515 South Flower Street 
Twenty-Fifth Floor 
Los Angeles, CA  90071-2228 
Telephone:  (213) 683-6000 
Facsimile:  (213) 627-0705

JAMES P. CARTER (SB# 150052) 
jamescarter@paulhastings.com 
PAUL HASTINGS LLP 
695 Town Center Drive 
Seventeenth Floor 
Costa Mesa, CA 92626 
Telephone:  (714) 668-6200 
Facsimile:  (714) 979-1921

Attorneys for Defendants 
The Wet Seal, Inc., The Wet Seal Retail, Inc.,  
Wet Seal GC, Inc., and Wet Seal GC, LLC

	
			
	CASE NO. SACV 12-01138 AG (ANx)
	 
	SETTLEMENT AGREEMENT AND  
JOINT STIPULATION

Plaintiffs Nicole Cogdell, Kai Hawkins, Myriam Saint-Hilaire, and Michelle Guider, individually and on behalf of all others similarly situated (“Plaintiffs”), and Defendants The Wet Seal, Inc., The Wet Seal Retail, Inc., Wet Seal GC, Inc., and Wet Seal GC, LLC (“Defendants,” “Wet Seal,” or “the Company”), by and through their respective Counsel of record, agree to resolve the above-captioned case on a class basis through this Settlement Agreement and Joint Stipulation (“Settlement Agreement”).  The proposal was negotiated at arm’s length by experienced Counsel, and, in the opinion of the Parties’ Counsel, fairly and adequately addresses the claims of systemic employment discrimination raised by Plaintiffs’ Complaint and Amended Complaint.  The injunctive provisions contain many best practices that will benefit the Class and future African-American employees for years to come.  The monetary relief represents a reasonable compromise under all the circumstances.   It should also be noted that this Settlement Agreement has been negotiated under the leadership of Wet Seal’s new Board of Directors and new Chief Executive Officer to resolve matters whose genesis preceded his arrival and the constitution of the new Board.  The proposed Settlement Agreement reflects Wet Seal’s commitment to its updated policies and practices that promote equal employment opportunity, prohibit discrimination and harassment based upon race and color in all employment practices, and prohibit retaliation against any current or former employee of Wet Seal. 

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
	1
	SETTLEMENT AGREEMENT AND  
JOINT STIPULATION

I. 
DEFINITIONS
1.“Action” means the civil action entitled Nicole Cogdell et al. v. The Wet Seal, Inc. et al., Case No. SACV 12-01138 AG (ANx), pending before the United States District Court for the Central District of California.
2.    “Claims Administrator” shall mean Settlement Services, Inc. (“SSI”), a division of Garden City Group, Inc. (or an administrator mutually agreed to by the Parties and approved by the Court if SSI for some reason cannot serve), which shall perform the duties of:  (i) using the data provided by Wet Seal to prepare the Claim Forms with the dates and number of Work Weeks for each Class Member in each Covered Position during the Covered Time Frame; (ii) mailing to Class Members the Notice attached as Exhibit “1,” Claim Form attached as Exhibit “2,” and Wet Seal Letter attached as Exhibit “3”; (iii) tracking returned Claim Forms, Exclusion Statements and Objections; (iv) establishing and operating a website designed to provide information to and communication with Class Members; (v) maintaining a toll-free number for communicating with Class Members and responding to questions from Class Members; (vi) providing timely reminder postcards to Class Members who have not submitted Claim Forms or Exclusion Statements; (vii) receiving and evaluating Claim Forms for timeliness and validity and notifying the Parties of untimely and/or invalid claims; 

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
	2
	SETTLEMENT AGREEMENT AND  
JOINT STIPULATION

(viii) considering the evidence submitted by Class Members and Class Counsel in support of their claims, and considering the evidence of Wet Seal in support and in opposition to claims in implementing the allocation plan set forth in Paragraphs 38(d) and 39(b) to determine whether and how much each Participating Class Member should recover from the Settlement Fund; (ix) calculating the amounts due to each Class Member pursuant to the Settlement; (x) notifying the Parties of and resolving any disputes regarding claims by Class Members; (ix) providing payments, along with IRS Forms W-2 and 1099-MISC, to the Class Members who submit timely and valid Claim Forms; (x) utilizing the National Change of Address Database maintained by the United States Postal Service and/or mail forwarding information and/or skip tracing methods as reasonable to update the mailing list and take steps to send notice to current mailing addresses; (xi) filing tax returns and paying all required taxes on the settlement; and (xii) performing any other duties as are described herein or necessary to carry out its responsibilities set forth in this Settlement Agreement.
3.    “Claim Form” shall mean Exhibit “2,” the form approved by the Parties and subject to Court approval that each Class Member must submit to recover a portion of the Settlement proceeds.  
4.     “Class” or “Class Members” shall mean all African-American and/or Black persons who worked in Wet Seal and Arden B. stores in a Covered Position at any time from May 8, 2008 through the date of Preliminary Approval of 

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
	3
	SETTLEMENT AGREEMENT AND  
JOINT STIPULATION

the Settlement by the Court (“Class Members”), except those individuals who previously signed a general release of claims.  The names of those individuals will be provided to Class Counsel and the Claims Administrator with a request that they be kept confidential. 
5.    “Class Counsel” shall mean Bill Lann Lee, Julie Wilensky, Shira Wakschlag, and Lewis, Feinberg, Lee, Renaker & Jackson, P.C.; Nancy C. DeMis, Susan R. Fiorentino, and Gallagher, Schoenfeld, Surkin, Chupein & DeMis, P.C.; Elise Boddie, ReNika C. Moore, Ria Tabacco Mar, and NAACP Legal Defense & Educational Fund, Inc.
6.    “Court” shall mean the United States District Court for the Central District of California.
7.    “Covered Position” shall mean Store Assistant Manager, Co-Manager, Acting Store Manager and Store Manager in a Wet Seal or Arden B. store.
8.    “Covered Time Frame” shall mean May 8, 2008 through the date of Preliminary Approval of the Settlement.  
9.    “Enhanced Pay Fund,” “Enhanced Promotion Fund” and “Discretionary Termination/Other Fund” shall mean the funds associated with the Enhanced Pay Fund, the Enhanced Promotion Fund and the Discretionary Termination/Other Fund, as described in Paragraphs 39(b)(i)(2), (b)(ii)(2) and (b)(iii)(3), respectively.

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
	4
	SETTLEMENT AGREEMENT AND  
JOINT STIPULATION

10.    “Employer Payroll Taxes” shall mean the legally required employer contributions to Social Security taxes, Medicare taxes, Federal unemployment taxes and State unemployment taxes.
11.    “Exclusion Statement” refers to the statement specified in Paragraph 66 that a Class Member must submit to exclude himself or herself from the release of claims pursuant to this Settlement.  
12.    “Final” means that the Settlement has been finally approved by the District Court without material modification unless a Class Member objects or Class Counsel appeals a reduction in their fees or costs awarded, in which case “Final” means (i) the applicable date for seeking appellate review of the Court’s final approval of the Settlement has passed without a timely appeal or request for review having been made; or (ii) the United States Court of Appeals for the Ninth Circuit or the United States Supreme Court has rendered a final judgment affirming the District Court’s final approval without material modification, and the time for any further appeal has expired.  
13.    “Final Approval Hearing” means the hearing to be conducted by the Court to determine whether to finally approve and implement the terms of this Settlement.  
14.    “Maximum Payment” shall mean the Seven Million Five Hundred Thousand Dollars ($7,500,000) amount to be paid by The Wet Seal on behalf of itself and all Defendants pursuant to this Settlement.

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
	5
	SETTLEMENT AGREEMENT AND  
JOINT STIPULATION

15.    “Notice” shall mean the Notice of Pendency of Class Action Settlement attached as Exhibit “1.”  It is the Notice approved by the Parties and subject to Court approval which the Claims Administrator shall mail to each Class Member explaining the terms of the Settlement and the claims process.
16.    “Participating Class Members” shall mean those eligible Class Members who submit timely and valid Claim Forms. 
17.    “Parties” shall mean Plaintiffs and Defendants.
18.    “Pay Fund” shall mean a total of One Million Dollars ($1,000,000), which sum shall include Employer Payroll Taxes, allocated for the settlement of pay claims.
19.    “Plaintiffs” and “Class Representatives” shall mean Plaintiffs Nicole Cogdell, Kai Hawkins, Myriam Saint-Hilaire and Michelle Guider.  
20.    “Preliminary Approval” shall mean the order issued by the Court granting preliminary approval of the Settlement, Notice, Claim Form and Wet Seal Letter.
21.    “Promotion Fund” shall a mean a total of One Million Dollars ($1,000,000), which sum shall include Employer Payroll Taxes, allocated for the settlement of promotion and job assignment claims.
22.    “Settlement” shall mean the settlement of this Action as embodied in this Settlement Agreement and Joint Stipulation between Plaintiffs and Defendants.

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
	6
	SETTLEMENT AGREEMENT AND  
JOINT STIPULATION

23.    “Settlement Fund” shall mean the fund created by SSI from the Maximum Payment to provide individual monetary awards to eligible Class Members and fund settlement administration expenses and Class Counsel’s reasonable attorneys’ fees and costs, in accordance with the provisions of this Settlement Agreement. 
24.    “Settlement Fund Account” shall mean the interest-bearing account into which the Claims Administrator shall deposit the Settlement Fund.
25.    “Termination/Other Fund” shall mean a total of Three Million Five Hundred Eighty Thousand Dollars ($3,580,000), which sum shall include Employer Payroll Taxes, allocated to settle claims of discriminatory termination, demotion, or discipline (resulting in loss of pay) based upon race or color; hostile work environment based upon race or color; retaliation for complaining of race or color discrimination or for complaining of harassment/hostile work environment based upon race or color; and emotional distress and damage to reputation resulting from the foregoing.  
26.    “The Wet Seal” or “Defendants” shall mean The Wet Seal, Inc., The Wet Seal Retail, Inc., Wet Seal GC, Inc., and Wet Seal GC, LLC.
27.    “Wet Seal Letter” shall mean the letter attached as Exhibit “3” from the Chief Executive Officer of The Wet Seal that the Claims Administrator shall mail to Class Members with the Notice and Claim Form to reflect the fact that the Company encourages Class Members to file Claim Forms.

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
	7
	SETTLEMENT AGREEMENT AND  
JOINT STIPULATION

28.    “Work Weeks” shall be all weeks worked by Class Members in a Covered Position at any time from May 8, 2008 through the date of Preliminary Approval of the Settlement.  Weeks worked consist of those weeks wherein The Wet Seal’s records reflect that the Class Member received pay for work performed.
II.     
RECITALS
29.    This Settlement resolves the class action Complaint against Defendants, captioned “Nicole Cogdell, et al. v. The Wet Seal, Inc., et al., United States District Court for the Central District of California, Case No. SACV 12-01138 AG (ANx),” filed on July 12, 2012.  This is a putative class action filed by Plaintiffs Cogdell, Hawkins, and Saint-Hilaire on behalf of current and former African-American retail store management employees of The Wet Seal alleging that it has a policy and practice of intentionally discriminating against African-American employees in store management positions with respect to pay, promotion, job assignments, discipline, demotion, termination (actual or constructive), and other terms and conditions of employment.  Plaintiffs Cogdell, Hawkins, and Saint-Hilaire further contend that they were retaliated against for opposing practices they believed to be unlawful, and Plaintiff Cogdell contends that she was subjected to a hostile work environment.  Plaintiffs’ First Amended Complaint contains causes of action for:  (1) violations of 42 U.S.C. § 1981; and (2) violations of Title VII of the 

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
	8
	SETTLEMENT AGREEMENT AND  
JOINT STIPULATION

Civil Rights Act of 1964 (42 U.S.C. § 2000e et seq.).  The First Amended Complaint makes similar allegations, adds another named Plaintiff Michelle Guider, and seeks an order reinstating Plaintiffs and Class Members to their rightful positions; other injunctive relief; all lost pay and benefits sustained by Plaintiffs and the Class as a result of The Wet Seal’s conduct according to proof; compensatory damages for emotional distress; front pay; punitive damages; costs incurred, including reasonable attorneys’ fees; and pre-judgment and post-judgment interest.
30.    Plaintiffs believe the allegations of violations of 42 U.S.C. § 1981 and Title VII of the Civil Rights Act of 1964 (42 U.S.C. § 2000e et seq.) are meritorious, and that the Action is appropriate for class action treatment.  
31.    Defendants deny any liability or wrongdoing of any kind associated with the claims alleged, and contend that, for any purpose other than this Settlement, this Action is not appropriate for class action treatment.  Defendants further contend that they have not violated 42 U.S.C. § 1981, Title VII of the Civil Rights Act of 1964 (42 U.S.C. § 2000e et seq.) or any other law or regulation. 
32.    The Parties exchanged disclosures required by Federal Rule of Civil Procedure 26, as well as both formal and informal discovery.  Defendants produced electronic data from its human resources information and payroll databases, as well as 100,000 pages of responsive documents, including policies, personnel records, statistical data, loss prevention documents, emails and arbitration agreements.  Class Counsel conducted an in-depth investigation of the claims, both 

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
	9
	SETTLEMENT AGREEMENT AND  
JOINT STIPULATION

before and after the filing of the Action, by interviewing numerous current and former Wet Seal managers and employees, creating a comprehensive litigation data base of tagged discovery documents; analyzing employment records of Class Members and comparator white employees, retaining expert analysts to review Wet Seal personnel and statistical data, and preparing expert statistical analyses of trends in promotions, compensation, demotions, and terminations, and damage calculations.  Class Counsel also assisted the EEOC in compiling its investigative file of documents and identifying witnesses, and reviewed the determination of the EEOC and the investigative file the EEOC compiled, including depositions of Wet Seal officials and personnel documents.  Class Counsel also investigated the suitability of the named Plaintiffs’ claims for class treatment; the adequacy of the named Plaintiffs to represent the proposed Class; and other class certification requirements.  The Parties’ Counsel exchanged their expert statistical analyses and other evidence.  Class Counsel also conducted many interviews by phone and in person with potential Class Members and witnesses, and represented individual Plaintiffs and Class Members before the EEOC.  Class Counsel therefore had an adequate basis to assess the claims advanced.   
33.    After good-faith, arm’s-length negotiations over five months, the Parties reached an agreement to settle the Action pursuant to the terms and conditions set forth below.  Lead Counsel for all Parties have decades of experience litigating employment discrimination actions and class actions.  Based on their own 

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
	10
	SETTLEMENT AGREEMENT AND  
JOINT STIPULATION

independent investigation and evaluation, Class Counsel believe that the Settlement is fair, reasonable, and adequate and is in the best interests of the Class Members in light of all known facts and circumstances, including the risk of significant delay.  It should also be noted that a substantial number of Class Members might be required to commence individual arbitrations to assert their claims in the absence of this Settlement because of Mutual Agreements to Arbitrate Claims.  The prosecution and defense of these cases might impose a substantial burden on the Parties because these arbitrations could be filed anywhere in the United States where Wet Seal operates stores.  Defendants and Defendants’ Counsel also agree that the Settlement is fair, reasonable, and adequate.
34.    The Parties agree that the Court shall certify the Class solely for the purpose of implementing the terms of this Settlement.  The Parties agree that certification for settlement purposes under the more lenient standard courts have applied to settlements (e.g., manageability is not an issue) is in no way an admission that class certification is proper under the more stringent standard applied for litigation purposes and that evidence of this limited stipulation for settlement purposes only shall not be deemed admissible in this or any other proceeding.  It is Defendants’ position that if the Action were to be litigated, class certification would be inappropriate, inter alia, because individual issues predominate.  Plaintiffs believe that the requirements of Rule 23 are met under either standard. 

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
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III.     
TERMS OF SETTLEMENT
35.    Injunctive Relief Provisions:
(a)    General Non-Discrimination Provisions: 
(i)    Wet Seal shall continue to maintain and implement non-discrimination policies and practices designed to afford equal employment opportunity.
(ii)    Wet Seal reaffirms its commitment and acknowledges its legal obligation not to retaliate against persons who participate in the Action; oppose, file a charge or assert claims of retaliation or unlawful discrimination or harassment based on race or color against Wet Seal; testify, furnish information, or participate in any manner in any investigation, proceeding or hearing in connection with any charge or complaint of discrimination on the basis of race and/or color; testify, furnish information, or participate in any manner in connection with the monitoring or implementation of this Settlement Agreement; or seek and/or receive any monetary and/or non-monetary relief pursuant to this Settlement Agreement, or assist others in doing so.  
//
(iii)    Isolated incidents or allegations of discrimination or harassment based upon race or color, or retaliation for complaints of 

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
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discrimination or harassment based upon race or color, shall not give rise to a claim for breach of this Agreement, nor shall discrimination, harassment and retaliation on which Wet Seal takes prompt corrective action. 
(b)    Communications:  
(i)    Wet Seal, Inc. shall maintain on its external website a page or pages expressing its commitment to non-discrimination, diversity, and inclusion.
(ii)    Wet Seal shall make available its non-discrimination policies to all employees upon hire and shall continuously post these policies together with a message in support thereof from its CEO, updated annually, on its intranet website and at its stores.  Wet Seal employees shall record in writing or electronically their receipt of these documents.
(iii)    Wet Seal shall incorporate its commitment to non-discrimination, diversity, and inclusion, as well as its complaint procedure, in its Employee Handbook and distribute the revised Employee Handbook to all employees no later than July 1, 2013.  The revised Employee Handbook shall be provided to new employees upon hire and shall be available continuously on the Company’s intranet website.
(c)    Marketing:  Wet Seal shall include African-Americans of various skin tones to reflect diversity in its marketing materials, provided that no 

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
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	SETTLEMENT AGREEMENT AND  
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single marketing or advertising piece need include persons of all races and skin tones.
(d)    Partnerships:  To further its commitment to diversity among its employees, Wet Seal shall consult and partner with organizations dedicated to the advancement and well-being of African Americans and other minority groups, including but not limited to the NAACP, and shall notify them that Wet Seal’s job openings are posted on its careers website.
(e)    Non-Discrimination and Diversity Training:  All training required by Paragraph 35(e)(i) through (iii) below may be delivered on an individual or group basis by computer program, live “discussion” format, video format, written materials, or any combination of these or other formats tailored to be effective in communicating the material.
(i)    Sales associates who work more than 480 hours (or 3 months) in a 12-month period shall participate in:  (1) at least one-half (1/2) hour of training on non-discrimination, diversity, and inclusion (a) within nine (9) months preceding or three (3) months following the date of Preliminary Approval, or (b) within three (3) months following the individual’s hire as a sales associate, whichever occurs later; and (2) at least one-half (1/2) hour of additional training described above every twelve (12) months after the participant last received such training.

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
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(ii)    Corporate executives; salaried employees in the departments of Store Operations, Loss Prevention, Human Resources, Merchandise, and Marketing; and Regional Directors, District Directors, Store Managers, Co-Managers, and Assistant Managers shall participate in:  (1) at least one (1) hour of training on non-discrimination, diversity, and inclusion (a) within nine (9) months preceding or three (3) months following the date of Preliminary Approval, or (b) within three (3) months following the individual’s hire into, or promotion to, one of the positions listed herein, whichever occurs later; and (2) at least one (1) hour of additional training described above every twelve (12) months after the participant last received such training.
(iii)    Corporate executives; salaried managers of people in the departments of Store Operations, Loss Prevention, Human Resources, Merchandise, and Marketing; and Regional Directors, District Directors, Store Managers, Co-Managers, and Assistant Managers shall participate in at least one (1) hour of training on Wet Seal’s job posting; hiring and promotion; compensation; performance evaluation; corrective action; and internal complaint procedure policies and practices within nine (9) months preceding or three (3) months following the date of Preliminary Approval, or within three (3) months following the individual’s hire into, or promotion to, one of the positions listed herein, whichever occurs later.

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
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(iv)    Wet Seal shall produce to Class Counsel copies of the training under this Paragraph 35(e).  
(f)    Investigations Training:  Salaried employees in the departments of Loss Prevention and Human Resources, as well as Regional Directors and Store Operations’ management in the chain of command over store personnel, shall participate in:  (1) at least one (1) hour of training on how to conduct effective and non-discriminatory investigations of suspected misconduct of employees and/or customers, including proper procedures and documentation, (a) within nine (9) months preceding or three (3) months following the date of Preliminary Approval, or (b) within three (3) months following the individual’s hire into, or promotion to, one of the positions listed herein, whichever occurs later; and (2) at least one (1) hour of additional training described above every twelve (12) months after the participant last received such training.
(g)    Diversity and Inclusion Council:  Wet Seal shall maintain a Diversity and Inclusion Council of at least twelve (12) members, who shall be responsible for advising the Company on topics including but not limited to:  non-discrimination, diversity, and inclusion; how the Company can encourage equal employment in recruiting, hiring, compensating, assigning, and promoting; succession planning including mentoring and professional development; and retention of African-American and other employees belonging to protected groups.  The Council members shall include no fewer than three (3) individuals who are 

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
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African American or Black, including at least two (2) from retail management positions.
(h)    New Human Resources Compliance Team:  Wet Seal shall employ four (4) Regional Human Resources Managers and two (2) Human Resources Coordinators (or equivalent programmatic positions) who shall be responsible for investigating complaints; compliance with hiring and promotion processes; and performance management, including corrective action measures, as further set forth below in Paragraph 35 (j) through (p). 
(i)    Equal Employment Opportunity Data:  Between May 15, 2013 and fifteen (15) calendar days following Preliminary Approval of the Settlement Agreement, Wet Seal shall issue a voluntary survey to every employee who is actively employed by Defendants on the day the survey is issued, requesting that the employee furnish his or her current home address and gender and race/ethnic group as defined on the EEO-1 form.  Thereafter, Wet Seal shall ask new employees to self-identify race/ethnic group and gender upon hire for the duration of the Settlement Agreement.  The survey shall ask respondents to list all races/ethnic groups with which the employee identifies.
(j)    Internal Complaint Procedure:
(i)    Wet Seal shall maintain an Internal Complaint Procedure to provide for the filing, investigation and, if appropriate, remedying of complaints of discrimination, retaliation, or hostile work environment by employees 

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
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	SETTLEMENT AGREEMENT AND  
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or applicants for employment.  Wet Seal shall maintain a practice of investigating such complaints through Regional Human Resources Managers, Human Resources Coordinators, corporate Human Resources personnel and/or one or more external compliance services providers or legal counsel.  Wet Seal’s policy shall provide that persons who engage in discriminatory conduct shall be subject to appropriate discipline, up to and including discharge.  
(ii)    Wet Seal shall continuously post the procedure for filing internal complaints and its policy prohibiting retaliation on Wet Seal’s intranet website.  Wet Seal shall communicate the complaint process and policy against retaliation to new employees upon hire.  In addition, on at least an annual basis, Wet Seal shall display information about its complaint process and policy against retaliation on the home page of its intranet website for at least seven (7) consecutive days.    
(iii)    Wet Seal shall maintain the files of investigations of complaints of discrimination, harassment and retaliation and shall track the filing, investigation completion, and remedying of internal complaints.
(iv)    The Vice President of Human Resources and each Regional Human Resources Manager shall have access to the case investigation files and the log reflecting the filing, investigation completion and remedying of internal complaints and shall monitor activity associated with internal complaints 

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
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within the scope of their respective responsibilities as complaints are made and processed.
(k)    Job Analysis and Job Criteria:
(i)    Wet Seal has retained Development Dimensions International (“DDI”), a human resource training and consulting company, to conduct and document a job analysis and to develop selection criteria for each in-store position that are job-related, reliable, and consistent with business necessity.  No later than August 1, 2013, in consultation with DDI, Wet Seal shall implement these selection criteria for store management and District Director positions.  
(ii)    Wet Seal shall permit Class Counsel to monitor Wet Seal’s compliance with its obligations under this Paragraph 35(k), including making available to Class Counsel the job analyses and job-related criteria.
(l)    Job Posting:
(i)    Commencing no later than June 1, 2013 and continuing thereafter, Wet Seal shall post all open store management and District Director positions, including promotional opportunities, through an online applicant tracking system (ATS) accessible to all Wet Seal store-level employees.  The ATS shall also be accessible to external applicants for store management and District Director positions.  Open positions shall be posted for no less than three (3) business days before being filled.  Wet Seal is not required to post:  (a) openings that must be filled on an emergency basis, (b) positions filled by a current employee 

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
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	SETTLEMENT AGREEMENT AND  
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who is being displaced due to a store closure or other reduction in work force or is returning from a leave of absence, or (c) positions filled by an internal rotation (not a promotion) of a manager from a store of the same or higher classification.
(ii)    Each job posting shall contain the open position title, location, description of the job, and job-related criteria and requirements.  While the job requirements may include time-in-position requirements before posting, no managerial sign-off shall be required for an employee to submit an internal job posting application.
(m)    Selection Procedures:
(i)    Wet Seal has retained DDI to develop selection procedures and processes, including screening and interview guides (“Selection Procedures”), that are job-related, reliable, and consistent with business necessity for the selection of personnel for all store management and District Director positions, including those filled by promotion.  Wet Seal shall require the use of the Selection Procedures in selecting individuals for store management and District Director positions.  These Selection Procedures shall reiterate Wet Seal’s commitment to diversity with respect to all protected groups, including race and color, and encourage the hiring and promotion of qualified diverse candidates.  
(ii)    Wet Seal shall conduct training for staff involved in the use of the Selection Procedures on their proper use (including the conduct of structured interviews, the selection of qualified candidates using the structured 

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
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	SETTLEMENT AGREEMENT AND  
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interviews and interview guides, and other elements of the hiring process), and on the Company’s interest in hiring and promoting qualified African-American candidates (as well as men and women of all races) into all open store management and District Director positions for which they are qualified.  This training may be included in the training provided in Paragraph 35(e)(iii).  
(iii)    Regional Human Resources Managers shall review proposed selections to District Director, Store Manager, Acting Store Manager and Co-Manager before they are finalized in order to assure compliance with the Selection Procedures.  Wet Seal shall regularly, and no less frequently than every six (6) months, monitor the impact of the Selection Procedures.  In any Region in which there is statistically significant adverse impact in selection rates, Wet Seal shall review the documentation for a sample of the decisions, evaluate the likely reasons for the impact, and implement proactive steps that it reasonably believes shall eliminate or at least reduce the impact. 
(iv)    All Wet Seal Human Resources personnel responsible for recruiting for store management and District Director openings shall be responsible for good faith efforts to source and recruit qualified African-American management candidates, among other candidates. 
(n)    Compensation:
(i)    Wet Seal shall retain an outside compensation specialist to review its compensation structure for store employees and provide 

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
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	SETTLEMENT AGREEMENT AND  
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recommendations regarding that compensation structure.  Wet Seal shall provide Class Counsel with confirmation of the professional qualifications of the compensation specialist, if DDI is not retained.  
(ii)    Wet Seal shall train its managers in how to set compensation using the tools developed by the compensation specialist. 
(iii)    Wet Seal shall annually review the compensation of store management employees by position, store, store classification, district, and tenure in the job and with Wet Seal, along with the employees’ race/ethnic group and gender, to determine whether there has been compliance with Wet Seal’s policies against discrimination.
(o)    Performance Management System and Corrective Action:
(i)    Wet Seal has retained DDI to develop a performance assessment system for store management positions that is job-related, reliable, and consistent with business necessity for the evaluation of the performance of store employees and District Directors.  
(ii)    Wet Seal shall develop and adopt criteria for taking corrective action that are job-related, reliable, and consistent with business necessity to provide for consistent and non-discriminatory application of disciplinary measures, including but not limited to demotion and termination.  
(iii)    Wet Seal shall train managers responsible for conducting performance reviews and discipline in how to conduct a performance 

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
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	SETTLEMENT AGREEMENT AND  
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assessment using the tools developed by DDI and how to apply corrective action measures in a non-discriminatory manner.
(iv)    Wet Seal shall regularly, and no less frequently than every six (6) months, monitor the impact of the performance appraisals.  In any Region, if there is statistically significant adverse impact in performance appraisals, Wet Seal shall evaluate the likely reasons for it and implement proactive steps that it reasonably believes shall eliminate or at least reduce the impact in the future.
(p)    Manager Assessment:  All Regional Directors, District Directors, Corporate executives, and salaried employees in the departments of Human Resources, Store Operations and Loss Prevention shall be evaluated annually on their ability to manage a diverse workforce, including in decisions involving hiring, compensation, promotions, demotions, and terminations.  An I/O psychologist shall advise Wet Seal on how best to conduct and weigh this evaluation.
(q)    Implementation Period:  Wet Seal shall use best efforts to implement the programmatic relief set forth in the Settlement Agreement as soon as reasonably practicable.
(r)    Monitor:
(i)    Wet Seal has designated Jennifer Ehrhardt, Vice President and Corporate Controller, to monitor and ensure implementation of this 

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
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	SETTLEMENT AGREEMENT AND  
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Settlement Agreement (“Monitor”).  If at any time Ms. Ehrhardt is unable to serve as the Monitor, Wet Seal shall designate another officer to replace her.  
(ii)    Wet Seal shall provide Class Counsel with the Monitor’s qualifications and title.  
(iii)    The Monitor shall be authorized and empowered to direct Human Resources and/or other employees with supervisory authority over store management employees to take specific actions in furtherance of the Settlement Agreement.  
(iv)    Wet Seal shall regularly provide the Monitor with available quantitative data, separated by race, on the following with respect to store management and District Director positions:  the numbers of applicants, the number considered for each job title, the number hired into each job title, the number promoted into each job title (including the number of openings filled on an emergency basis and positions filled by current employees who are displaced due to a store closure or other reduction in work force), the number of unposted positions in each job title filled by an internal rotation (not a promotion) of a manager from a store of the same or higher classification, the numbers of employees hired into full-time vs. part-time jobs in each job title, the relative placement of employees in various categories of stores by job title, the relative compensation of employees by job title, and the number voluntarily and involuntarily terminated from each job title.  

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
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(v)    The Monitor shall report at least twice annually to Wet Seal’s Board of Directors regarding the implementation of this Settlement Agreement. 
(vi)    The Monitor shall file a Certificate of Compliance with the Court six (6) months after the Effective Date of this Settlement Agreement, twelve (12) months after the Effective Date of this Settlement Agreement and annually thereafter over the term of this Settlement Agreement.  The Certificate of Compliance shall inform the Court of when Wet Seal has implemented each of the terms of the Settlement Agreement or, if some term has not been fully implemented, Wet Seal’s progress in implementing that term.  The Certificate of Compliance shall also confirm that the Monitor has conducted all audits required as set forth in Paragraphs 35(m)(iii), (n)(iii), (o)(iv), and (r)(iv) and (v) of the Settlement Agreement, the date of each audit, and either that the results of the audit were satisfactory or that corrective action is in the process of being, or has been, taken.  In addition, the Certificate of Compliance shall also confirm that the Monitor has undertaken those tasks set forth for the Monitor in this Paragraph 35(r) of the Settlement Agreement, the Monitor has investigated Wet Seal’s compliance with the Settlement Agreement, and the Monitor is satisfied that Wet Seal is complying with the Settlement Agreement and/or has taken or is in the process of taking corrective action to assure future compliance.

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
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(s)    Dispute Resolution:  The Parties shall promptly give written notice to Counsel for the other Party (at Counsel’s address of record on file with the California State Bar) if any dispute arises under the Settlement Agreement.  The notice shall set forth the facts that relate to the dispute.  Thereafter, upon the request of any Party, the Parties shall meet in a good faith effort to resolve the dispute.  If they are unsuccessful, the Parties shall mediate the dispute before any mediator to which they mutually agree at the time.  In the absence of mutual agreement, the Party against whom the dispute was asserted may select retired United States District Court Judges Lourdes Baird or Gary Taylor to mediate the dispute.  Wet Seal shall pay the cost of the mediation.
(t)    Employment Verification:   Wet Seal shall maintain a telephone line dedicated to employment verification.  In response to inquiries to the employment verification line from a prospective employer seeking a reference, Wet Seal shall provide dates of employment and last position held.  If the request is in writing and authorizes disclosure, Wet Seal also shall verify last rate of base compensation.  In response to calls to the employment verification telephone line, Wet Seal shall not provide substantive information regarding the employee’s performance, record of discipline, eligibility for rehire, or reason for separation (except to prospective employers who are inquiring about law enforcement or national security positions or as otherwise required by law).  The Wet Seal Letter shall inform Class Members of the existence and number of the employment 

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
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	SETTLEMENT AGREEMENT AND  
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verification line and the information provided upon inquiry to the employment verification line.
36.    Recordkeeping and Reporting:
(a)    Recordkeeping:
(iv)    Wet Seal shall retain the following employment-related records for the Term of the Settlement Agreement or as required by state or federal law, whichever is longer:
(1)    Final marketing documents described in Paragraph 35(c);
(2)    Employment training program content and handouts;
(3)    Internal complaint procedure;
(4)    Job analyses and job criteria;
(5)    Performance assessment system;
(6)    Corrective action process; and
(7)    Monitor’s Certificates of Compliance.
(v)    Wet Seal shall retain the following documents related to the employment of District Directors, Store Assistant Managers, Co-Managers, Acting Store Managers and Store Managers for two (2) years from the date the document is created, or as required by state or federal law, whichever is longer:

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
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	SETTLEMENT AGREEMENT AND  
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(1)    Job postings;
(2)    Job applications, including applications from both internal and external applicants;
(3)    Performance assessments;
(4)    Corrective action notices; 
(5)    Race and ethnicity data by job category required for the Employer Information Report (“EEO-1 Report”), including, for employees who identify as Two or More Races, the specific races with which the employee identifies; and
(6)    Internal complaints of discrimination.
(vi)    Wet Seal shall retain the following documents related to applicants for the positions of Assistant Store Manager, Co-Manager, Acting Store Manager, Store Manager, and District Director:  Race and ethnicity data by job category that would be required for the EEO-1 Report if the applicant were hired, including, for applicants who identify as Two or More Races, the specific races with which the applicant identifies.
(vii)    Class Counsel shall, upon reasonable notice, be entitled to review all documents, including electronic data in machine-readable form, created or maintained pursuant to the provisions of this Settlement Agreement, except, however, that Class Counsel shall not be entitled to review any 

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
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	SETTLEMENT AGREEMENT AND  
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such documents that are protected by attorney-client privilege or attorney work product doctrine (“privileged documents”).
(b)    Reporting:
(i)    At six (6)-month intervals through the Term of the Settlement Agreement, Wet Seal shall provide Semi-Annual Progress Reports to Class Counsel on Wet Seal’s compliance with the Settlement Agreement’s requirements.
(ii)    The Semi-Annual Progress Reports shall include the following information reported for African-American men (including those who report Two or More Races), African-American women (including those who report Two or More Races), white men, white women, all men other than African-American men, and all women other than African-American women:
(1)    Composition (number and percent) of incumbent employees by Covered Position in each store, district, region and company-wide, and by store classification, at the end of the six-month period;
(2)    Composition (number and percent) of persons in each store classification and in each district, region, state and company-wide, in the preceding six (6) months who were extended a good faith offer, hired, or promoted (each of which shall be separately reported) into District Director, Store Manager, Acting Store Manager, or Co-Manager;

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
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(3)     Composition (number and percent) of persons in each store classification and in each district, region, state and company-wide, in the preceding six (6) months who were demoted, involuntarily terminated or voluntarily separated (each of which shall be separately reported) from Store Manager, Acting Store Manager, Co-Manager, and Store Assistant Manager positions; and
(4)     Compensation rate paid to incumbent Store Managers, Acting Store Managers, Co-Managers, and Store Assistant Managers in each store, district, region, state, company-wide, and in each store classification, at the end of the six-month period.
37.    Maximum Payment:  The Maximum Payment under the Settlement is Seven Million Five Hundred Thousand Dollars ($7,500,000).  
38.    Establishment of a Settlement Fund:  
(a)    No later than five (5) business days after the Court’s Preliminary Approval of this Settlement Agreement, The Wet Seal, on behalf of all Defendants, shall transmit the Maximum Payment to the Claims Administrator for the formation of a Settlement Fund. 
(b)    The Claims Administrator shall deposit the Maximum Payment made by The Wet Seal into a Settlement Fund Account.  
(c)      Once the Claims Administrator receives the Maximum Payment in good standing, Wet Seal shall have no responsibilities or liabilities with 

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
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	SETTLEMENT AGREEMENT AND  
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respect to the Settlement Fund or Settlement Fund Account (or its administration or distribution), and shall have no further monetary obligation hereunder to Class Representatives, Participating Class Members, Class Counsel, the Claims Administrator or other Class Members who do not file timely and valid Exclusion Statements, with respect to this Action.  
(d)    The Settlement Fund Account shall be used for the sole purpose of paying the timely and valid claims of the eligible Class Members, including the Employer Payroll Taxes associated with those payments, Class Counsel’s reasonable attorneys’ fees and costs as awarded by the Court (in an amount not to exceed $1,800,000), and all settlement administration expenses incurred by the Claims Administrator (in an amount not to exceed $120,000), in accordance with the provisions of this Settlement Agreement.  The Settlement Fund consists of:
(i)    Pay Fund:  a total of One Million Dollars ($1,000,000) shall be paid in settlement of pay claims (“Pay Fund”), which sum shall include Employer Payroll Taxes;
(ii)    Promotion Fund:  a total of One Million Dollars ($1,000,000) shall be paid in settlement of promotion claims (including claims of discriminatory job assignments) (“Promotion Fund”), which sum shall include Employer Payroll Taxes;

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
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	SETTLEMENT AGREEMENT AND  
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(iii)    Termination/Demotion/Retaliation/Hostile Work Environment/Emotional Distress Fund:  a total of Three Million Five Hundred Eighty Thousand Dollars ($3,580,000) shall be paid in settlement of claims of discriminatory termination, demotion, or discipline (resulting in loss of pay) based upon race or color; harassment or hostile work environment based upon race or color; retaliation for complaining of race or color discrimination or harassment/hostile work environment; and emotional distress and damage to reputation resulting from the foregoing (“Termination/Other Fund”), which sum shall include Employer Payroll Taxes; 
(iv)    Claims Administration Fund:  a total of One Hundred Twenty Thousand Dollars ($120,000) to cover all fees and expenses of the Claims Administrator; and 
(v)    Class Counsel’s Attorneys’ Fees and Costs Fund:  a total of One Million Eight Hundred Thousand Dollars ($1,800,000) to cover Class Counsel’s reasonable attorneys’ fees and costs, or such lower amount ordered by the Court as described in Paragraph 41(c).
39.    Distribution to Participating Class Members:  
(a)    Submission of Claim Forms:  The Claims Administrator shall pay only those Class Members who submit timely and valid Claim Forms (the “Participating Class Members”).  To be timely, the Claim Forms must be postmarked by the deadline indicated on the Notice and Claim Forms.  To be valid, 

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
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	SETTLEMENT AGREEMENT AND  
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Claim Forms must be completed in full, signed under penalty of perjury, attest that the signatory is “African American” or “Black,” and returned to the Claims Administrator, postmarked by the deadline.
(b)    Allocation Plan:  
(i)    Pay Fund:  The disbursement of the Pay Fund portion of the Settlement Fund Account to eligible Class Members shall follow the allocation plan described in this Paragraph 39(b)(i) and its subparagraphs.  Each Class Member who seeks to receive a monetary award must fill out the Claim Form.  
(1)      Baseline Pay Fund Award:  $750,000 will be allocated to the Baseline Pay Fund Award.  Each Class Member who submits a timely, valid claim for recovery shall receive a Baseline Pay Fund Award.  The Claims Administrator shall have discretion to add the amounts from any unclaimed shares to the Enhanced Pay Fund or the Termination/Other Fund.  In allocating the Baseline Pay Fund Awards, the Claims Administrator shall determine a specific dollar amount that each eligible Class Member will receive for each Work Week that he or she worked for Defendants during the Covered Time Frame as a Store Manager or Acting Store Manager, Co-Manager, and/or Store Assistant Manager.
(2)    Enhanced Pay Fund Award:  The Claims Administrator, after considering information supplied by the Class Members, Class Counsel and Wet Seal, may, in its discretion, allocate some or all of the remaining 

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
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	SETTLEMENT AGREEMENT AND  
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Pay Fund to those eligible Class Members as to whom the Claims Administrator has received specific facts in support of their claims under the Pay Fund, after considering, assigning points to and weighting:  (i) length of service as a retail manager at Wet Seal; (ii) the Class Member’s communications with Class Counsel prior to May 8, 2013 concerning claims of discrimination based on race or color in compensation; and (iii) the Class Member’s complaints or claims of discrimination based on race or color in compensation submitted to the EEOC or state agencies prior to May 8, 2013.  The Claims Administrator shall total the points applicable to each eligible Class Member who fills out the Pay Fund section of the Claim Form and supplies information related to his or her claim to the Pay Fund, determine each eligible Class Member’s proportionate share of the total points, and allocate each eligible Class Member’s proportionate share of the Pay Fund.  For example, if the amount available for distribution from the Pay Fund to eligible Class Members after the Baseline Pay Fund Awards are calculated equals $250,000, and if the Claims Administrator awarded a total of 10,000 points to eligible Class Members collectively and 20 points to a particular eligible Class Member, then that Class Member would receive an award of $500, since each point would be worth $25 ($250,000 divided by 10,000).
(ii)      Promotion Fund:  The disbursement of the Promotion Fund portion of the Settlement Fund Account to eligible Class Members shall follow the allocation plan described in this Paragraph 39(b)(ii) and its 

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
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	SETTLEMENT AGREEMENT AND  
JOINT STIPULATION

subparagraphs.  Each Class Member who seeks to receive a monetary award must fill out the Claim Form.  
(1)      Baseline Promotion Fund Award:  $500,000 will be allocated to the Baseline Promotion Fund Award.  Each Class Member who submits a timely, valid claim for recovery shall receive a Baseline Promotion Fund Award, and the Claims Administrator shall have discretion to add the amounts from any unclaimed shares to the Enhanced Promotion Fund or the Termination/Other Fund.  In allocating the Baseline Promotion Fund Awards, the Claims Administrator shall determine a specific dollar amount that each eligible Class Member will receive for each Work Week that he or she worked for Defendants during the Covered Time Frame as a Store Manager or Acting Store Manager, Co-Manager, and/or Store Assistant Manager. 
(2)      Enhanced Promotion Fund Award:  The Claims Administrator, after considering information supplied by the Class Members, Class Counsel and Wet Seal, may, in its discretion, allocate some or all of the remaining Promotion Fund to those eligible Class Members as to whom the Claims Administrator has received specific facts in support of their claims under the Promotion Fund, after considering, assigning points to and weighting:  (i) length of service with Wet Seal up to a maximum of ten (10) years; (ii) length of service as a manager in each Covered Position at Wet Seal; (iii) length of service as a manager at other employers up to a maximum of five (5) years; (iv) evidence of expressions 

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
	35
	SETTLEMENT AGREEMENT AND  
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of interest in promotion made to a supervisor regarding Co-Manager, Acting Store Manager, Store Manager, or District Director positions; (v) communications with Class Counsel prior to May 8, 2013 concerning claims of discrimination against the Class Member based on race or color in promotions or job assignment; (vi) complaints or claims of discrimination against the Class Member based on race or color in job assignments in the Covered Positions, or promotion to Co-Manager, Acting Store Manager, Store Manager, or District Director submitted to the EEOC or state agencies prior to May 8, 2013; and (vii) the facts and documentary evidence submitted to demonstrate discrimination against the Class Member based on race or color with respect to job assignment in the Covered Positions or promotion to Co-Manager, Acting Store Manager, Store Manager or District Director.  The Claims Administrator shall total the points applicable to each eligible Class Member who fills out the Promotion Fund section of the Claim Form and supplies information related to his or her claim to the Promotion Fund, determine each eligible Class Member’s proportionate share of the total points, and allocate each eligible Class Member’s proportionate share of the Promotion Fund.  For example, if the amount available for distribution from the Promotion Fund to eligible Class Members after the Baseline Promotion Fund Awards are calculated equals $500,000, the Claims Administrator awarded a total of 10,000 points to eligible Class Members collectively, and 30 points to a particular eligible Class Member, then that Class 

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
	36
	SETTLEMENT AGREEMENT AND  
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Member would receive an award of $1500, since each point would be worth $50 ($500,000 divided by 10,000).
(iii)      Termination/Demotion/Retaliation/Hostile Work Environment Fund/Emotional Distress Fund (“Termination/Other Fund”):  The disbursement of the Termination/Other Fund portion of the Settlement Fund Account to eligible Class members shall follow the allocation plan described in this Paragraph 39(b)(iii) and its subparagraphs.  Each Class Member who seeks to receive a monetary award must fill out the Termination/Other Fund section of the Claim Form.
(1)    Eligibility for Awards:  Each Class Member who was involuntarily terminated during the Covered Time Frame is eligible to submit a claim for a Baseline Termination/Other Fund Award.  That individual is also eligible for a Discretionary Termination/Other Fund Award.  Each Class Member with a claim solely of discriminatory constructive discharge, demotion, discipline resulting in loss of pay, retaliation, hostile environment, damage to reputation, or emotional distress during the Covered time Frame shall not be eligible for a Baseline Termination/Other Fund Award, but shall be eligible for a Discretionary Termination/Other Fund Award.  
(2)    Baseline Termination/Other Fund Award:  $500,000 will be allocated to the Baseline Termination/Other Fund Award.  Each Class Member who was involuntarily terminated, and submits a timely, valid claim 

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
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	SETTLEMENT AGREEMENT AND  
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for recovery shall receive a baseline award.  In allocating the Baseline Termination/Other Fund Awards, the Claims Administrator shall determine a specific dollar amount that each eligible Class Member who was involuntarily terminated will receive depending on whether the Class Member was involuntarily terminated by Defendants during the Covered Time Frame from a Store Manager or Acting Store Manager position, a Co-Manager position, or a Store Assistant Manager position.  Any unclaimed shares shall be added to the Discretionary Termination/Other Fund Award.
 (3)    Discretionary Termination/Other Fund Award:  The Claims Administrator, after considering information supplied by the Class Members, Class Counsel and Wet Seal, may, in its discretion, allocate some or all of the remaining Discretionary Termination/Other Fund to eligible Class Members, after considering, assigning points to and weighting:  (i) length of service with Wet Seal; (ii) length of service as a manager at Wet Seal; (iii) facts and documentary evidence that the Class Member was subject to discrimination based on race or color in termination, demotion, or discipline (resulting in loss of pay), or was subject to harassment/hostile work environment based on race or color; (iv) facts and documentary evidence that the Class Member was subject to retaliation for opposing discrimination based on race or color; (v) communications by the Class Member with Class Counsel prior to May 8, 2013 concerning claims of discrimination based on race or color in termination, demotion, or discipline 

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
	38
	SETTLEMENT AGREEMENT AND  
JOINT STIPULATION

resulting in loss of pay, harassment/hostile work environment based on race or color, or retaliation for opposing discrimination based on race or color; (v) complaints or claims that the Class Member submitted to the EEOC or state agencies prior to May 8, 2013 that he or she was subject to discrimination based on race or color in termination, demotion, or discipline (resulting in loss of pay), harassment or hostile work environment based on race or color, or retaliation for opposing discrimination based on race or color; (vi) Class Member’s knowledge that he or she was targeted for termination, demotion or discipline (resulting in loss of pay) because of race or color; (vii) emotional distress; (viii) damage to the Class Member’s reputation because the Class Member made complaints of discrimination, harassment, termination, or hostile work environment based on race or color, or was retaliated against for opposing  discrimination based on race or color; (ix) a period of unemployment during which the Class Member was making reasonable efforts to find other employment and the length of that period; and (x) a finding by the EEOC or state agency that a violation of Title VII or state antidiscrimination law occurred with respect to the Class Member.  No Class Member who was terminated for unauthorized taking of Wet Seal’s property, fraud, falsification, assault/battery or other violence, harassment or discrimination based upon protected group status, or retaliation against another for exercising protected rights shall be eligible for a Discretionary Termination/Other Fund Award.  The Claims Administrator shall total the points applicable to all eligible Class Members 

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
	39
	SETTLEMENT AGREEMENT AND  
JOINT STIPULATION

who fill out the Termination/Other Fund section of the Claim Form and supply information related to his or her claim to the Termination/Other Fund, determine each eligible Class Member’s proportionate share of the total points, and allocate each eligible Class Member’s proportionate share of the Termination/Other Fund.  For example, if the amount available for distribution from the Termination/Other Fund to eligible Class Members after the Baseline Termination/Other Fund Awards are calculated equals $3,080,000, the Claims Administrator awarded a total of 100,000 points to eligible Class Members collectively, and 400 points to a particular eligible Class Member, then that Class Member would receive an award of $12,320, since each point would be worth $30.80 ($3,080,000 divided by 100,000). 
(c)    Tax Allocation:  The monetary awards under the Pay Fund and Promotion Fund shall be allocated Eighty Percent (80%) to lost wages and Twenty Percent (20%) to interest.  The monetary awards under the Termination/Other Fund shall be allocated Fifteen Percent (15%) to lost wages and Eighty-Five Percent (85%) to compensatory damages and interest.  
(d)    Payment of Taxes and Tax Reporting by the Claims Administrator:  The Claims Administrator shall be responsible for calculating and withholding all required state and federal taxes and all tax reporting on payments made under the Settlement.  The Claims Administrator shall report all payments for lost wages on an IRS Form W-2 as payments in settlement of claims for wages.  Therefore, the Claims Administrator shall deduct federal and state income taxes, the 

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
	40
	SETTLEMENT AGREEMENT AND  
JOINT STIPULATION

employee’s share of Social Security and Medicare tax, and any local income or payroll tax that applies, pursuant to state and federal law, and remit them to the taxing authorities.  The Claims Administrator shall report on an IRS Form 1099-MISC all payments made in settlement of claims for interest, emotional distress and damage to reputation, and no payroll or tax withholdings shall be made from these payments.  The Participating Class Members and the Class Representatives shall be responsible for correctly characterizing the settlement payments for tax purposes and paying any taxes owing on said amounts.  However, the Claims Administrator shall calculate the Employer Payroll Taxes, pay them from the Settlement Fund and file the appropriate returns with federal, state and local taxing authorities.  
(e)      Due Date for and Details of Settlement Payments:  Within fifteen (15) calendar days after the Settlement becomes Final, the Claims Administrator shall send the settlement payments to the Participating Class Members via first class mail and shall issue the payments due to the federal, state and local taxing authorities.  The Claims Administrator shall only issue the checks in the name of the Participating Class Members or their estates, if applicable.  The Claims Administrator shall include with each check a statement showing the gross amount of the payment and an itemized statement of all deductions made, including those for federal and state income taxes, the employee’s share of unemployment, Social Security and Medicare tax, and any local income or payroll tax that applies.  

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
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	SETTLEMENT AGREEMENT AND  
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(f)     Uncashed Checks:  If a Participating Class Member’s check is returned to the Claims Administrator, the Claims Administrator shall make a reasonable effort to re-mail it to the Participating Class Member at his or her correct address.  It is expressly understood and agreed that the checks for the individual Settlement payments shall become void and no longer available if not cashed within 90 days after the initial mailing.  The Parties intend to completely distribute the funds in the Settlement Fund Account.  Thus, on the one hundredth and twentieth (120th) day following the initial mailing of the Settlement payments, the Claims Administrator shall issue a check in the amount of uncashed checks to the NAACP and the National Congress of Black Women for scholarships to students studying retail business management.  
(g)    Final Accounting to the Court:  Within thirty (30) days of the distribution of the monies from the Settlement Fund, the Claims Administrator shall furnish an accounting of all distributions from the Settlement Fund, including the range of awards, median average award, and mean average award for each specific Fund, to the Court with copies to Class Counsel and Wet Seal.
40.    Claims Administrator:  The Parties have selected Settlement Services Inc. to serve as the Claims Administrator.  The Claims Administrator shall open and administer a Settlement Fund Account, an interest-bearing account with a unique Taxpayer Identification Number.   If the Court does not grant final approval of the Settlement Agreement, the Claims Administrator shall return to The Wet Seal 

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
	42
	SETTLEMENT AGREEMENT AND  
JOINT STIPULATION

(i) the sum of Five Million Five Hundred Eighty Thousand Dollars ($5,580,000), representing the full deposit of the Pay Fund, Promotion Fund and Termination/Other Fund and the sum of One Million Eight Hundred Thousand Dollars ($1,800,000) representing the full deposit of Class Counsel’s attorneys’ fees and costs, as well as interest that has accrued on the two amounts; and (ii) the unspent portion of the Claims Administration Fund, as well as interest that has accrued on that sum.  The Claims Administrator shall perform the duties set forth in this Settlement Agreement.
41.    Class Counsel’s Attorneys’ Fees and Costs
(a)    Plaintiffs will request, and Defendants do not oppose, an award of attorneys’ fees and costs in the amount of One Million Eight Hundred Thousand Dollars ($1,800,000), which is twenty-four percent (24%) of the Maximum Payment, to compensate Class Counsel for all work already performed in this Action to investigate, prepare, litigate and settle this Action, as well as all work remaining to be performed in documenting the Settlement, securing Court approval of the Settlement, administering the Settlement, ensuring that the Settlement is fairly administered and implemented, monitoring Defendants’ performance under the Settlement Agreement, and obtaining dismissal of the Action.  These fees and costs are included in the Maximum Payment.  
(b)    Class Counsel shall file with the Court their application for an award of attorneys’ fees and costs no later than thirty (30) days following the 

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
	43
	SETTLEMENT AGREEMENT AND  
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Court’s Order Granting Preliminary Approval.  The application shall be posted simultaneously on the website established by the Claims Administrator designed to provide information and communications with Class members as provided in Paragraph 52 in order to permit Class Members to timely object.  
(c)    In the event that the Court approves an award of fees and costs for an amount less than One Million Eight Hundred Thousand Dollars ($1,800,000), then the difference between $1,800,000 and the approved award shall be allocated to the Pay Fund, Promotion Fund, and Termination/Other Fund in the same proportions provided in Paragraph 38 above; that is, 18% to the Pay Fund (Paragraph 38(d)(i) above), 18% to the Promotion Fund (Paragraph 38(d)(ii) above), and 64% to the Termination/Other Fund (Paragraph 38(d)(iii) above).
(d)    The Parties agree that a reduction by the Court in the attorneys’ fees and costs awarded Class Counsel is not a basis for rendering the entire Settlement voidable or unenforceable.  Class Counsel agree to give written notification within fifteen (15)  calendar days of approval by the Court if they will appeal a reduction in fees and costs awarded.
(e)    Upon Final Approval, the Claims Administrator shall pay the attorneys’ fees and costs awarded by the Court to Class Counsel and issue Class Counsel an IRS Form 1099-MISC to reflect that payment.

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
	44
	SETTLEMENT AGREEMENT AND  
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IV.     
MOTION FOR PRELIMINARY APPROVAL
42.    Promptly upon the execution of this Settlement, Plaintiffs shall file a motion for preliminary approval of the Settlement, applying to the Court for the entry of an Order: 
(a)    Scheduling a Final Approval Hearing on the question whether the proposed Settlement should be approved as fair, reasonable, and adequate as to the Class; 
(b)    Approving as to form and content the proposed Notice to the Class; 
(c)    Approving as to form and content the proposed Claim Form and instructions for Class Members; 
(d)    Approving as to form and content the proposed Wet Seal Letter;
(e)    Approving as to form and content the proposed Exclusion Statement; 
(f)    Directing the mailing of the Notice, the Claim Form, and the Wet Seal Letter by first-class mail to the Class Members; 
(g)    Preliminarily approving the Settlement;

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
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	SETTLEMENT AGREEMENT AND  
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(h)    Preliminarily certifying the Class for purposes of Settlement only; and
(i)    Approving Bill Lann Lee, Esq., Julie Wilensky, Esq., Shira Wakschlag, Esq. and Lewis, Feinberg, Lee, Renaker & Jackson, P.C.; Nancy C. DeMis, Esq., Susan R. Fiorentino, Esq. and Gallagher, Schoenfeld, Surkin, Chupein & DeMis, P.C.; Elise Boddie, Esq., ReNika C. Moore, Esq., Ria Tabacco Mar, Esq., and NAACP Legal Defense & Educational Fund, Inc. as Class Counsel; 
(j)    Approving Nicole Cogdell, Kai Hawkins, Myriam Saint-Hilaire, and Michelle Guider as Class Representatives; and
(k)    Approving Settlement Services, Inc. as the Claims Administrator.
//
//
V.     
NOTICE TO THE CLASS MEMBERS
43.    Within ten (10) calendar days after the Court’s entry of the Order Granting Preliminary Approval of the Settlement, Wet Seal shall provide the Claims Administrator (either by uploading to an FTP site or on a computer disk) with:  the (i) names, (ii) last known addresses, (iii) last known telephone numbers (if any), and (iv) Social Security numbers of the potential Class Members (i.e., 

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
	46
	SETTLEMENT AGREEMENT AND  
JOINT STIPULATION

those who are designated in Wet Seal’s human resource information system as “Black or African American” or “Two of More Races” or are otherwise known by Wet Seal to fall within that definition, along with, for each potential Class Member,  (v) the date of hire and, if applicable, most recent date of rehire by Wet Seal, (vi) the date of termination from Wet Seal, (vii) the reason code for termination, (viii) all positions held at Wet Seal since 2007, including job title and location, as well as the dates worked in each position; (ix) the number of Work Weeks worked in each Covered Position at a Wet Seal or Arden B. store during the Covered Time Frame, (x) the dates worked in each Covered Position during the Covered Time Frame, and (xi) the Class Member’s pay rate as of December 31 of each year from 2008 through 2012, as reflected in Wet Seal’s records.  The Class list shall be retained by the Claims Administrator and shall not be shared with Class Counsel.  Wet Seal shall also provide to the Claims Administrator for all other employees in Covered Positions during the Covered Time Frame with: (i) the date of hire or most recent date of rehire, (ii) the date of termination from Wet Seal, (iii) the reason code for termination, (iv) the date of promotion from each store management position, and (v) the employee’s pay rate as of December 31 of each year from 2008 through 2012.  
44.    Within twenty (20) calendar days after receipt of the Class Member information from Wet Seal, to the extent practicable, the Claims Administrator shall perform reasonably diligent skip tracing, and mail to all Class 

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
	47
	SETTLEMENT AGREEMENT AND  
JOINT STIPULATION

Members, by regular first-class U.S. mail, the Notice, the Claim Form and instructions, the Wet Seal Letter, and a pre-addressed, postage-paid envelope (“the Notice Packet”).  The Notice, Claim Form, and Wet Seal Letter shall be provided in the same form as Exhibits “1,” “2,” and “3,” respectively attached hereto, subject to the Court’s approval.  These documents shall be placed in an envelope which states on the front:  “IMPORTANT:  DO NOT DISCARD.  Please review the enclosed materials.  You may be eligible for payment under a proposed settlement with Wet Seal.”
45.    The Claims Administrator shall make Claim Forms available to potential Class Members who submit oral, e-mail or written requests for Claim Forms.  The Claims Administrator shall mail the requested Claim Form via first-class U.S. mail within two (2) business days after receiving a request.
46.    If Wet Seal, or its Counsel, receives requests for Claim Forms or for information regarding the Settlement, it shall refer such requestors to the toll-free number and website address established by the Claims Administrator for the purpose of administering this Settlement and inform the requestors that any requests for Claim Forms or information should be directed to the Claims Administrator.  
47.    The Claims Administrator shall retain copies of all written requests for Claim Forms and all records of oral or e-mail requests for Claim Forms until such time as it has completed its duties and responsibilities under this Settlement Agreement.     

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
	48
	SETTLEMENT AGREEMENT AND  
JOINT STIPULATION

VI.     
CLAIM PROCESS
48.    Class Members shall have ninety (90) calendar days from the mailing of the Notice Packet to mail their Claim Form to the Claims Administrator.  Class Members shall have forty-five (45) calendar days from the mailing of the Notice Packet to mail their Exclusion Statement.  No Claim Forms shall be honored if postmarked after the deadline to submit claims, except as otherwise mutually agreed by the Parties or ordered by the Court.      
49.    All Claim Forms must be signed under penalty of perjury to be considered and must attest that the Class Member is “African American” or “Black.”  Failure to file a timely, valid Claim Form, for any reason whatsoever, shall bar the potential Class Member from having his or her claim considered and from receiving monetary compensation from the Settlement Fund Account.  
50.    Claims may be filed on behalf of deceased Class Members through representatives of their estates if legally sufficient documentation is provided.  Any claims paid to a deceased Class Member shall be made payable to the estate of the deceased Class Member.
51.    Class Members who file a Claim Form must notify the Claims Administrator of any change of address.  A failure to notify the Claims 

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
	49
	SETTLEMENT AGREEMENT AND  
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Administrator of a change of address may result in the forfeiture of a monetary award.  
52.    The Claims Administrator shall be available through its toll-free line and via e-mail through the Claims Website it will establish to provide information on the settlement and respond to requests from Class Members for assistance in completing and filing Claim Forms.  
53.    The Claims Administrator shall make the determination as to whether a Claim Form is timely and complete.  If a Class Member submits a timely Claim Form that is rejected by the Claims Administrator as deficient in some material respect (for example, the Class Member failed to sign it), the Claims Administrator shall notify the Class Member in writing of the basis for the deficiency and shall specify the additional information necessary to complete the Claim Form, if it appears that such additional information would complete it.  The notice of deficiency and request for information shall be sent via first class mail and inform the Class Member that a response must be returned no later than fifteen (15) days from the date the request for information was mailed, or until the end of the ninety (90)-day claims period, whichever comes later.  The Claims Administrator shall also provide the Class Member with Class Counsel’s contact information in case the Class Member wishes to seek Class Counsel’s assistance.  The Class Member must provide the requested information, signed under penalty of perjury, to the Claims Administrator by mail with a postmark no later than the deadline 

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
	50
	SETTLEMENT AGREEMENT AND  
JOINT STIPULATION

specified in the notice of deficiency.  Such additional information shall be considered part of the original Claim Form and shall relate back to the original filing date.  The failure of a Class Member to timely respond to the request for information may result in the denial of the Claim.
54.    The Claims Administrator shall send postcard reminders and second postcard reminders to Class Members who have not submitted claim forms within forty-five (45) days and seventy (70) days, respectively, after the Claims Administrator initially mails the Notice Packet.  
55.    The Claims Administrator shall provide Counsel for all Parties with a weekly report showing the number of Claim Forms and Exclusion Statements received, and any objections.  
56.    For Claim Forms post-marked and received after the filing deadline, the Claims Administrator shall notify late-filing Class Members that their Claims are untimely and that they are not eligible for any monetary award.  The Claims Administrator shall also inform late-filing Class Members that they may seek a reconsideration of the determination that they filed untimely by requesting the Claims Administrator to reconsider its determination.  The Claims Administrator may reverse its determination that a Claim Form was not timely filed only if the Class Member proves that the Claim Form was deposited in the United States Mail on or before the filing deadline and that the untimeliness determination is erroneous.

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
	51
	SETTLEMENT AGREEMENT AND  
JOINT STIPULATION

57.    The Claims Administrator shall make the determination as to whether a Class Member is eligible for a monetary award and the amount of such award.  Within ten (10) days of the close of the Claims filing period, the Claims Administrator shall send all ineligible claimants written notice of their ineligibility for monetary relief.  Any claimants wishing to seek reconsideration of their ineligibility determinations must do so by returning a written request for reconsideration to the Claims Administrator by mail with a postmark no later than twenty-one (21) calendar days from the date of the notice of claim ineligibility.  Failure to file a timely request for reconsideration shall bar a claimant from challenging a determination of ineligibility.  The Claims Administrator shall resolve the requests for reconsideration based on the written requests for review and any other documentation or written information submitted by the claimant, or deemed necessary by the Claims Administrator.  The Claims Administrator may seek further written information from the claimant, Wet Seal or Class Counsel.  The Claims Administrator shall attempt to expeditiously resolve any requests for reconsideration within thirty (30) calendar days after the filing of the request for review.  The Claims Administrator’s decisions shall be communicated to the claimant in writing and shall be final and non-appealable.
58.    Class Counsel may provide the Claims Administrator with evidence that has a bearing on the awards, and Wet Seal shall provide the Claims Administrator with the following:  (i) evidence that Wet Seal believes substantiates 

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
	52
	SETTLEMENT AGREEMENT AND  
JOINT STIPULATION

any Class Member’s Claim; and (ii) evidence that Wet Seal believes reflects a termination for unauthorized taking of Wet Seal’s property, fraud, falsification, assault/battery or other violence, harassment or discrimination based upon protected group status, or retaliation against another for exercising protected rights.  Wet Seal shall provide any such information to Class Counsel at least fifteen (15) calendar days before Wet Seal submits it to the Claims Administrator, shall give Class Counsel the opportunity to refute or otherwise comment on it, and shall re-consider its submission in whole or in part in light of any contrary evidence that Class Counsel shares with Wet Seal.  
59.    Class Counsel and Wet Seal shall reasonably cooperate in providing information which the Claims Administrator deems reasonably necessary to assist in determining the eligibility of any Class Member for monetary relief.  Wet Seal or Class Counsel shall attempt to provide such information within fourteen (14) calendar days after receiving any written request for information from the Claims Administrator.
60.    Wet Seal agrees that no term of a settlement agreement to which it is a party with any current or former employee shall operate to limit or preclude a signatory to such an agreement from providing to the Claims Administrator pertinent information related to any Class Member’s claim.  Any such submission of information by a signatory should be marked “Confidential” and sent directly to the Claims Administrator or through the signatory’s private legal counsel to the 

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
	53
	SETTLEMENT AGREEMENT AND  
JOINT STIPULATION

Claims Administrator.  Except as expressly provided in this Paragraph, Wet Seal does not waive the confidentiality term or any other term of any settlement agreement to which it is a party. 
61.    The determinations of the Claims Administrator on whether a Class Member or claimant is eligible for an award and the amount of any award shall be final and non-appealable.

VII.     
RESOLUTION OF CLAIM DISPUTES
62.    Each Claim Form shall list:  (i) the time period during the Covered Time Frame that Wet Seal’s records show that the Class Member worked in each Covered Position; and (ii) the Class Member’s total number of Work Weeks in each Covered Position during the Covered Time Frame.  If a Class Member who receives a Claim Form wishes to dispute the time period(s) listed on the Claim Form and/or their total number of Work Weeks, he or she may so notify the Claims Administrator and produce evidence to the Claims Administrator indicating the dates and/or number of Work Weeks he or she contends to have worked in a Covered Position during the Covered Time Frame.  Wet Seal shall review its records and provide information to the Claims Administrator in response to any such disputed claims.  Wet Seal’s records shall be presumed to be accurate.  The Claims Administrator shall evaluate the evidence submitted by the Class Member 

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
	54
	SETTLEMENT AGREEMENT AND  
JOINT STIPULATION

and make the final decision as to which dates and/or number of Work Weeks in each Covered Position should be applied.  The determination by the Claims Administrator shall be final and not subject to further review.
63.    The dispute-resolution procedure described in the preceding Paragraph shall also apply in cases, if any, in which a person believes that he or she was wrongly excluded from the Class list. 
VIII.     
OBJECTIONS TO THE SETTLEMENT
64.    Class Members who wish to object to the Settlement must submit to the Claims Administrator, not later than forty-five (45) days after the date that the Claims Administrator first mails the Notice Packet, a written statement objecting to the Settlement and setting forth the grounds for the objection.  This statement also must indicate whether the Class Member intends to appear and object to the Settlement at the Final Approval Hearing.  The failure to so indicate shall constitute a waiver of the right to appear at the hearing, unless the Court rules otherwise.  A Class Member who does not submit an objection in the manner and by the deadline specified above shall be deemed to have waived all objections and shall be foreclosed from making any objection to the Settlement, whether by appeal or otherwise, absent a contrary order of the Court.  Class Members who wish to 

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
	55
	SETTLEMENT AGREEMENT AND  
JOINT STIPULATION

object to Class Counsel’s request for attorneys’ fees and costs may do so by following the same procedure as described above. 
65.    The Claims Administrator shall record the date of receipt of the objection and forward it to both Wet Seal and Class Counsel within two (2) business days following receipt.  The Claims Administrator shall also file the original objections with the Clerk of the Court no later than five (5) days prior to the scheduled Final Approval Hearing date.  The Claims Administrator shall retain copies of all written objections until such time as it has completed its duties and responsibilities under this Settlement Agreement.
IX.     
REQUESTS TO BE EXCLUDED FROM SETTLEMENT
66.    Eligible Class Members who wish to exclude themselves from the Settlement (“opt out” of the Settlement) must submit to the Claims Administrator, not later than forty-five (45) days after the date that the Claims Administrator first mails the Notice Packet, a written, signed, dated “Exclusion Statement,” which includes the following language:
I understand that I am requesting to be excluded from the class monetary settlement and that I shall receive no money from the Settlement Fund created under the Settlement Agreement entered into by Wet Seal.  I 

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
	56
	SETTLEMENT AGREEMENT AND  
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understand that if I am excluded from the class monetary settlement, I may bring a separate legal action seeking damages, but may receive nothing or less than what I would have received if I had filed a Claim under the class monetary settlement procedure in this Action.  I also understand that I may not seek exclusion from the class for injunctive relief and that I am bound by the injunctive provisions of the Settlement Agreement entered into by Wet Seal.
67.    Exclusion Statements may be submitted to the Claims Administrator via U.S. Mail.  
68.    Named Plaintiffs may not submit an Exclusion Statement.
69.    A Class Member who does not complete and submit a timely Exclusion Statement in the manner and by the deadline specified above shall, if the Court approves the Settlement, be bound by all terms and conditions of the Settlement and by the Judgment, regardless of whether he or she submits a Claim Form.  An eligible Class Member who timely submits an Exclusion Statement shall not participate in, or be bound by, the Settlement or the Judgment in any respect.  Persons who submit an Exclusion Statement shall not be permitted to file objections to the Settlement or appear at the Final Approval Hearing to voice any objections to the Settlement

	
			
	CASE NO.  SACV 12-01138 AG (ANx)
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	SETTLEMENT AGREEMENT AND  
JOINT STIPULATION

70.    The Claims Administrator shall date stamp the original of any Exclusion Statement and serve copies on both Wet Seal and Class Counsel within two (2) business days of receipt of such statement.  The Claims Administrator shall also file the original Exclusion Statements with the Clerk of the Court no later than five (5) days prior to the date of the Final Approval Hearing scheduled by the Court.  The Claims Administrator shall retain copies of all Exclusion Statements until such time as it has completed its duties and responsibilities under this Settlement Agreement.
71.    If an eligible Class Member completes and submits both a Claim Form and an Exclusion Statement, the Claims Administrator shall contact the Class Member to obtain clarification of the Class Member’s intent.  In the event that the Claims Administrator is unable to obtain clarification of the Class Member’s intent by the time of the Final Approval Hearing, it shall be presumed that the Claim Form is controlling, and such Class Member shall remain a member of the Class, be paid a settlement payment pursuant to the Claim Form, and be bound by the terms of the Settlement.  
72.    Eligible Class Members who do not submit either a valid and timely Claim Form or a valid and timely Exclusion Statement shall be bound by all of the terms of the Settlement and the release set forth herein.

X.        

	
			
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RESCISSION OF CLASS MEMBER EXCLUSION STATEMENTS
73.    The Parties recognize that some Class Members who initially submit an Exclusion Statement may, upon further reflection, wish to withdraw or rescind such Exclusion Statement.  The Parties agree that Class Members shall be permitted to withdraw or rescind their Exclusion Statements by submitting a “Rescission of Exclusion Statement” to the Claims Administrator.  The Rescission of Exclusion Statement shall include the following language:
I previously submitted an Exclusion Statement seeking exclusion from the class monetary settlement.  I have reconsidered and wish to withdraw my Exclusion Statement.  I understand that by rescinding my Exclusion Statement, I may be eligible to receive an award from the Settlement Fund and may not bring a separate legal action against Wet Seal seeking damages.
74.    A Class Member submitting such a Rescission of Exclusion Statement shall sign and date the Statement and cause it to be delivered to the Claims Administrator no later than the deadline for filing a Claim Form specified in the Preliminary Approval Order.  The Claims Administrator shall stamp the date received on the original of any Rescission of Exclusion Statement and serve copies on Counsel for Wet Seal and Class Counsel no later than (2) business days after 

	
			
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receipt thereof and shall file the date-stamped originals with the Clerk of the Court no later than five (5) business days prior to the date of the Final Approval Hearing scheduled by the Court.  The Claims Administrator shall retain copies of all Rescissions of Exclusion Statements until such time as the Claims Administrator is relieved of its duties and responsibilities under this Settlement Agreement.
XI.     
RIGHT OF REVOCATION
75.    If eighty (80) or more of the Class Members validly elect not to participate in the Settlement by filing an Exclusion Statement, Defendants shall have the right to rescind the Settlement and all actions taken in its furtherance will be null and void.  Defendants must exercise this right within ten (10) days after the Claims Administrator notifies the Parties of the valid elections not to participate received, which the Claims Administrator shall do within ten (10) days after the deadline for submission of the Exclusion Statements.  The Parties agree that neither side shall solicit or encourage opt-outs or exclusions from the Settlement.  
XII.     
ADDITIONAL BRIEFING AND FINAL APPROVAL

	
			
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76.    As soon as practicable following the deadline for the filing of Claim Forms, Class Counsel shall file with the Court a motion for final approval of the Settlement and a memorandum in support of their motion.  Plaintiffs’ Counsel shall prepare the motion for final approval and provide Defendants’ Counsel the opportunity to review and comment on the motion before it is filed.  
77.    At the time that Plaintiffs file their motion for final approval of the Settlement, Class Counsel shall provide the Court with a declaration executed by the Claims Administrator, specifying the due diligence the Claims Administrator has undertaken with regard to the mailing of the Notice; verifying its settlement administration costs; and reporting on the number of claims, objections, disputes (and status), Exclusion Statements submitted, median claim value, and amounts to be paid to each Class Member who is receiving funds from the Settlement Fund.
78.    Not later than five (5) court days before the Final Approval Hearing, the Parties may file, jointly or separately, a reply in support of the motion for final approval of the Settlement, in the event any opposition to the motion for final approval has been filed.  Likewise, Plaintiffs and Class Counsel may file a supplemental memorandum in support of their motion for attorneys’ fees and costs reflecting any additional fees and costs incurred after the filing of the motion, or a reply in support of their motion in the event that any opposition to their motion for fees and costs has been filed.  Defendants will not oppose this supplemental or reply memorandum.  

	
			
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79.    At or before the Final Approval Hearing, the parties shall present a Judgment for the Court’s entry in accordance with the terms of the Settlement.  After entry of the Judgment, the Court will have continuing jurisdiction over the Action and the Settlement solely for purposes of enforcing the Settlement, addressing settlement administration matters, and addressing such post-Judgment matters as may be appropriate under court rules or applicable law.
80.    Upon filing Plaintiffs’ motion for final approval of the Settlement, Plaintiffs shall submit a proposed Order or Orders:
(a)    Approving the Settlement, adjudging the terms thereof to be fair, reasonable, and adequate, and directing consummation of its terms and provisions;
(b)    Approving Class Counsel’s application for an award of attorneys’ fees and reimbursement of costs; 
(c)    Certifying the Class for settlement purposes only; and 
(d)    Permanently enjoining all Class Representatives and Class Members (other than those who timely filed Exclusion Statements) from prosecuting against the Released Parties any and all Released Claims as defined in Paragraph 81 below.  
XIII.     
RELEASE OF CLAIMS

	
			
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81.    Claims Released by Class Representatives and Class Members:  Upon the Court’s final approval of the Settlement, and except as to such rights or claims as may be created by the Settlement, the Class Representatives and the Class Members (other than those who file Exclusion Statements) hereby release and discharge all known and unknown “Released Claims” against the “Released Parties.”  The “Released Parties” are:  (i) the Defendants, (ii) all of their former and present parents, subsidiaries, and affiliates, and (iii) the current and former officers, directors, employees, partners, shareholders, agents, insurers, predecessors, successors, assigns, and legal representatives of all entities and individuals listed in (i) and (ii).  The “Released Claims” are any and all claims that are asserted in or could have been asserted in Plaintiffs’ First Amended Complaint, to the fullest extent permitted by law, during the period from May 8, 2008 through the date of Preliminary Approval, including those related to:  (i) allegations of discrimination and harassment against African-American and Black store management employees based on race and/or color with respect to compensation, selection, promotion, job assignments, demotion, discipline, actual and constructive termination, and other terms and conditions of employment; and/or (ii) allegations of retaliation against African-American and Black store management employees for opposition to discrimination or harassment based on race or color.  The Released Claims include claims for damages and equitable relief of every nature, including but not limited to back pay, front pay, reinstatement, instatement, benefits, emotional distress, and 

	
			
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other compensatory damages, damage to reputation, liquidated damages, penalties, interest, and punitive damages.  The Released Claims may have arisen under 42 U.S.C. § 1981, Title VII of the Civil Rights Act of 1964 (42 U.S.C. § 2000e et seq.), and all other federal, state and local laws.  
82.    Waiver of Unknown Claims:  As to the Released Claims against the Released Parties, the Class Representatives and Class Members each waive all rights and benefits afforded by Section 1542 of the Civil Code of the State of California, and do so understanding the significance of that waiver.  Section 1542 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.  
XIV.     
EFFECT OF DENIAL OF COURT APPROVAL
83.    If the Court does not grant final approval of the Settlement, or if the Court’s final approval of the Settlement is reversed or materially modified on 

	
			
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appellate review, then this Settlement will become null and void.  In such case, the Settlement shall not be used or be admissible in any subsequent proceedings, either in this Court or in any other Court or forum. 
XV.     
PARTIES’ AUTHORITY
84.    The respective signatories to the Settlement represent that they are fully authorized to enter into this Settlement and bind the respective Parties to its terms and conditions.
XVI.     
MUTUAL FULL COOPERATION
85.    The Parties agree to cooperate fully with each other to accomplish the terms of this Settlement, including but not limited to executing such documents and taking such other actions as may reasonably be necessary to implement the terms of the Settlement.  The Parties shall use their best efforts, including all efforts contemplated by this Settlement and any other efforts that may become necessary by order of the Court, or otherwise, to effectuate the terms of the Settlement.  

	
			
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86.    The Parties agree that they will not discourage Class Members from submitting Claim Forms or encourage Class Members to submit Exclusion Statements or to file objections to the Settlement.  

XVII.     
NO PRIOR ASSIGNMENTS
87.    The Parties represent, covenant, and warrant that they have not directly or indirectly assigned, transferred, encumbered, or purported to assign, transfer, or encumber to any person or entity any portion of any liability, claim, demand, action, cause of action, or right released and discharged in this Settlement.
XVIII.     
NO ADMISSION OF LIABILITY
88.    Nothing contained in this Settlement shall be construed or deemed an admission of liability, culpability, negligence, or wrongdoing on the part of Defendants.  All of the Parties entered into this Settlement with the intention to avoid further disputes and litigation, and the attendant inconvenience and expense.  This Settlement shall be inadmissible in evidence in any proceeding, except an action or proceeding to approve, interpret, or enforce its terms.

	
			
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XIX.     
NO WAIVER OF ENFORCEMENT OF ARBITRATION AGREEMENTS
89.    Nothing contained in this Settlement Agreement constitutes a waiver of any term of or application of any Mutual Agreement to Arbitrate or other arbitration agreement to which a current or former employee of Defendants is a party, other than that signing a Mutual Agreement to Arbitrate does not preclude anyone from being included in the Class for purposes of this Settlement or enforcement of its provisions.
XX.    
ENFORCEMENT ACTIONS
90.    In the event that one or more of the Parties institute any legal action or arbitration (not including the dispute resolution process described in Paragraph 35(s)) against any other Party or Parties to enforce the provisions of this Settlement, or to declare rights and/or obligations under this Settlement, the successful Party or Parties shall be entitled to seek an order providing that the unsuccessful Party or Parties pay the successful Party or Parties’ reasonable attorneys’ fees and costs, including expert witness fees incurred in connection with any enforcement actions, on the basis that the enforcement action is objectively frivolous, unreasonable, or without foundation.

	
			
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XXI.     
NOTICES
91.    Unless otherwise specifically provided herein, all notices, demands, or other communications given hereunder shall be in writing and shall be deemed to have been duly given as of the third (3rd) business day after mailing by United States first-class mail, return receipt requested, addressed as follows:

To the Class: 

Bill Lann Lee  
LEWIS, FEINBERG, LEE, RENAKER & JACKSON, P.C. 
476 9th Street 
Oakland, CA 94607

To Defendants:  
    
Nancy L. Abell  
    PAUL HASTINGS LLP 
    515 South Flower Street, 25th Floor 
    Los Angeles, CA 90071
XXII.     
CONSTRUCTION
92.    The Parties agree that the terms and conditions of this Settlement Agreement are the result of lengthy, intensive, arm’s-length negotiations between the Parties, and that this Settlement Agreement shall not be construed in 

	
			
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favor of or against any Party by reason of the extent to which any Party or his, her, or its Counsel participated in its drafting.
XXIII.     
CAPTIONS AND INTERPRETATIONS
93.    Paragraph titles or captions contained in this Settlement Agreement are a matter of convenience and for reference, and in no way define, limit, extend, or describe the scope of this Settlement Agreement or any provision. 
XXIV.     
MODIFICATION
94.    This Settlement Agreement may not be changed, altered, or modified, except in writing and signed by the Parties, and approved by the Court.  This Settlement Agreement may not be discharged except by performance in accordance with its terms or by a writing signed by the Parties.
XXV.     
INTEGRATION CLAUSE
95.    This Settlement Agreement contains the entire agreement between the Parties relating to the resolution of the Action.  All prior or 

	
			
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contemporaneous agreements, understandings, representations, and statements, whether oral or written and whether by a Party or such Party’s legal counsel, are merged in this Settlement Agreement.  No rights under this Settlement Agreement may be waived except in writing.
XXVI.     
BINDING ON ASSIGNS
96.    This Settlement Agreement shall be binding upon and inure to the benefit of the Parties and their respective heirs, trustees, executors, administrators, successors, and assigns.
XXVII.     
CLASS COUNSEL SIGNATORIES
97.    It is agreed that because the members of the Class are so numerous, it is impossible or impractical to have each Class Member execute this Settlement Agreement.  The Notice, Exhibit “1,” shall advise all Class Members of the binding nature of the release.  Excepting only the Class Members who timely submit an Exclusion Form, this Settlement Agreement shall have the same force and effect as if it were executed by each Class Member.

	
			
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XXVIII.     
COUNTERPARTS
98.    This Settlement Agreement may be executed in counterparts, and when each Party has signed and delivered at least one such counterpart, each counterpart shall be deemed an original, and, when taken together with other signed counterparts, shall constitute one Settlement Agreement, which shall be binding upon and effective as to all Parties.
XXIX.     
WAIVER OF APPEALS
99.    The Parties agree to waive all appeals from the Court’s final approval of this Settlement, unless the Court materially modifies the Settlement Agreement; provided, however, that Plaintiffs may appeal any reduction in the attorneys’ fee award.  Any reduction in the award of attorney’s fees and costs will not, however, constitute a material modification of the Settlement Agreement and will not be grounds to void the Settlement.  
XXX.     
CLASS CERTIFICATION

	
			
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100.    The Parties agree that the stipulation for Class Certification is for settlement purposes only, and if for any reason the Settlement is not approved, the stipulation will be of no force or effect.  The Parties agree that certification for settlement purposes under the lenient standard applied to settlements is in no way an admission that class certification is proper under the more stringent standard applied for litigation purposes, and that evidence of this limited stipulation for settlement purposes only will not be deemed admissible in this or any other proceeding.
//
//
// 
XXXI.     
NO TAX ADVICE
101.    Neither Class Counsel nor Counsel for Defendants intend anything contained herein to constitute legal advice regarding the taxability of any amount paid hereunder, nor shall it be relied upon as such. 
XXXII.     
COMMUNICATIONS

	
			
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102.    If Counsel for any of the Parties receives an inquiry about the Settlement from the media, Counsel may respond only after the motion for preliminary approval has been filed and may only discuss the terms of the Settlement or information contained in documents filed in this case.  If Wet Seal receives an inquiry about the Settlement from the media, its representative(s) may respond to the inquiry with information about its diversity and inclusion initiatives or by reference to the Preliminary Approval Motion and Settlement Agreement on file with the Court.  Before the date on which the Parties file their motion for preliminary approval of the Settlement, the Parties and their Counsel shall not initiate any contact with Class Members about the Settlement, except that Class Counsel, if contacted by a Class Member, may respond that a settlement has been reached and that the details shall be communicated in a forthcoming Court-approved notice.  This Paragraph does not apply to communications between Class Counsel and the Named Plaintiffs or other individuals with whom they have entered into a retention agreement.
XXXIII.    
TERM OF SETTLEMENT AGREEMENT

103.    The Term of the Settlement Agreement shall be three (3) years from the date of Preliminary Approval.  

	
			
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XXXIV.    
COURT’S RETENTION OF JURISDICTION

104.    The Settlement Agreement shall be entered as an order of the Court.  The Court shall retain jurisdiction during the term of the Settlement Agreement to enforce its provisions and to resolve disputes under the Settlement Agreement.  
XXXV.    
NOTICE OF SATISFACTION OF JUDGMENT

105.    Class Counsel shall file with the Court a notice of satisfaction of judgment in a form acceptable to Defendants within ten (10) days after the last of the following occurs:  Wet Seal deposits with the Claims Administrator the Maximum Payment required to fulfill its obligation under this Settlement Agreement and the Claims Administrator submits its final accounting to the parties reflecting that checks were issued and mailed to all Class Members who submitted timely and valid Claim Forms pursuant to this Settlement.
//
//
//
// 

	
			
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XXXVI.     
NO ADMISSION OF LIABILITY
106.    Nothing contained in this Settlement shall be construed or deemed an admission of liability, culpability, negligence, or wrongdoing on the part of Defendants.  All of the Parties entered into this Settlement Agreement with the intention to avoid further disputes and litigation, and the attendant inconvenience and expense.  This Settlement Agreement shall be inadmissible in evidence in any proceeding, except an action or proceeding to approve, interpret, or enforce its terms.

[Remainder of page intentionally left blank.]

	
			
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DATED:  May 8, 2013

	

EXECUTED BY PLAINTIFFS AND CLASS REPRESENTATIVES: 

By:
NICOLE COGDELL

By:
KAI HAWKINS

By:
MYRIAM SAINT-HILAIRE

By:
MICHELLE GUIDER

EXECUTED ON BEHALF OF DEFENDANTS:

	
			
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DATED:  May 8, 2013
	 

By:    
STEVEN H. BENRUBI
EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER OF THE WET SEAL, INC., who is authorized to sign on behalf of THE WET SEAL, INC., THE WET SEAL RETAIL, INC., WET SEAL GC, INC., AND WET SEAL GC, LLC

	 
	 

	
			
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DATED:  May 8, 2013

	

BILL LANN LEE
JULIE WILENSKY
SHIRA WAKSCHLAG
LEWIS, FEINBERG, LEE,
RENAKER & JACKSON, P.C. 
 
 
By:
BILL LANN LEE

ELISE C. BODDIE
RENIKA C. MOORE
RIA TABACCO MAR
NAACP LEGAL DEFENSE AND EDUCATIONAL FUND, INC.

By:
RENIKA C. MOORE

NANCY C. DEMIS
SUSAN R. FIORENTINO
GALLAGHER SCHOENFELD SURKIN CHUPEIN AND DEMIS P.C.

By:
NANCY C. DEMIS

Attorneys for Plaintiffs
NICOLE COGDELL, KAI HAWKINS, MYRIAM SAINT-HILAIRE, MICHELLE GUIDER, AND THE PROPOSED CLASS 

	
			
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DATED:  May 8, 2013
	

NANCY L. ABELL
JAMES P. CARTER
LISA M. PAEZ
HILLARY J. BACA
PAUL HASTINGS LLP
 

By:    
NANCY L. ABELL
Attorneys for Defendants
THE WET SEAL, INC., THE WET SEAL RETAIL, INC., WET SEAL GC, INC., AND WET SEAL GC, LLC

	
			
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EXHIBIT 1

IN THE UNITED STATES DISTRICT COURT

FOR THE CENTRAL DISTRICT OF CALIFORNIA

____________________________________
)
NICOLE COGDELL, et al.,            )
)    Case No. SACV 12-01138 AG (ANx)
Plaintiffs,        )
)    Honorable Andrew J. Guilford
v.                )
)
THE WET SEAL, INC., et al.,        )
)
Defendants.        )
____________________________________)

NOTICE OF PROPOSED SETTLEMENT OF EMPLOYMENT DISCRIMINATION CLASS ACTION 

		
	TO:
	All African-American and/or Black persons who worked in Wet Seal and Arden B. stores as Store Assistant Managers, Co-Managers, Acting Store Managers, and Store Managers at any time from May 8, 2008 to [DATE], 2013.

A FEDERAL COURT HAS AUTHORIZED THIS NOTICE.  PLEASE READ IT CAREFULLY.  IT CONTAINS IMPORTANT INFORMATION THAT MIGHT AFFECT YOUR LEGAL RIGHTS.  THIS IS NOT A SOLICITATION FROM A LAWYER.  YOU HAVE NOT BEEN SUED.

NOTICE SUMMARY

The Court has preliminarily approved a proposed Settlement of an employment discrimination class action lawsuit against The Wet Seal, Inc. (“Wet Seal” or “Defendants”).  The Class consists of all African-American and/or Black persons who worked as store management employees (Store Assistant Managers, Co-Managers, Acting Store Managers, and Store Managers) at Wet Seal and Arden B. stores at any time from May 8, 2008 to [DATE], 2013.  What the Settlement will provide if approved by the court is summarized in this Notice.

What is the Lawsuit about?

Four Named Plaintiffs brought this class action lawsuit on behalf of themselves and a class of similarly situated current and former Wet Seal employees, alleging that Wet Seal discriminated against African-American store management employees.  The Named Plaintiffs are Nicole Cogdell, Kai Hawkins, Myriam Saint-Hilaire, and Michelle Guider; they are all African Americans who worked as store management employees at Wet Seal or Arden B. stores.  The Plaintiffs claim that Wet Seal had a policy and practice of discriminating against African-American store management employees who worked at Wet Seal and Arden B. stores, in violation of 42 U.S.C. § 1981 and Title VII of the Civil Rights Act of 1964.  They allege that a policy of discrimination was adopted by the then-senior executives of the company, and resulted in targeting of African-American employees for demotion or termination, creation of a hostile work environment and denial of pay and promotions for African Americans because of their race and/or color.   

Why did I get this Notice package?

Wet Seal's records indicate that you may be African American and/or Black and worked as a store management employee (Store Assistant Manager, Co-Manager, Acting Store Manager, or Store Manager) in a Wet Seal or Arden B. store at some time from May 8, 2008 to [DATE], 2013.  

The Court approved this Notice to be sent to you because, if you fall within that group, you have a right to know about the Settlement and about all of your options before the Court decides whether to approve the Settlement.  You can decide to object to the Settlement, or to object to the award of attorneys' fees and costs, or to “opt out” of the Settlement entirely in order to bring your own case.  If the Court approves the Settlement, and after any appeals are resolved, the settlement will be implemented.  This Notice package describes the lawsuit, the Settlement, your legal rights, what monetary relief is available, who is eligible for such relief, and how to get it.

What is the Proposed Settlement?

The Settlement provides injunctive relief and money damages.  Wet Seal, through its new Chief Executive Officer and new Board of Directors, has collaborated on this mutually beneficial settlement as a reflection of its commitment to diversity and inclusion.  Injunctive relief means that Wet Seal's commitment to changes and enhancements to its policies and practices ensure that its policy of equal employment opportunity is available to all and that African-American and other store management employees are not discriminated against on the basis of race and/or color.  These include:  creating and implementing new job selection criteria and procedures for store management and district director positions, posting store management and district director positions, providing all employees with regular non-discrimination training, partnering with organizations dedicated to the advancement and well-being of African Americans and other groups, and implementing a new Human Resources field compliance team.  Wet Seal has implemented many of these actions during 2013.  The Diversity and Inclusion Council that it formed and commits to continue is expected to play an important role in Wet Seal's diversity initiatives.  Wet Seal will designate an officer to monitor and ensure proper implementation of the Settlement, will maintain records relating to the terms of the Settlement, and will provide semi-annual Progress Reports to Class Counsel for three years.   

The Settlement also provides that Wet Seal will pay monetary relief totaling $7,500,000.  A total of approximately $5,580,000 will be divided among eligible Class Members who file 

claims with the Claims Administrator and whose claims are approved.  Subject to Court approval, the costs of administering the distribution of monetary awards to Class Members and attorneys' fees and costs for the prosecution of the case will be paid out of the remainder.  

What happens next?

The Court has scheduled a hearing on final approval of the Settlement and on the motion for attorneys' fees and expenses.  The hearing, before United States District Judge Andrew J. Guilford, has been scheduled for November 18, 2013, at 10:00 AM, at the United States District Court for the Central District of California, 411 West Fourth Street, Room 1053, Santa Ana, CA 92701-4516, in Courtroom 10D, or in the courtroom then occupied by Judge Guilford.  

Any objections to the Settlement or to the motion for attorneys' fees and costs must be sent in writing to the Court, Class Counsel, and Wet Seal's Counsel.  Section V of the Notice describes how to object.
    
How do I find out more about the Settlement?

Additional information regarding the Settlement, including the full Settlement Agreement and Joint Stipulation (the “Settlement”), briefs filed regarding the Settlement, and the Class Counsel's motion for attorneys' fees and costs, is available at Class Counsel's website:  www.lewisfeinberg.com and the case website:  http://wetsealdiscrimination.com. 

Further information may be obtained by contacting Class Counsel at (866) 276-5221.

PLEASE READ THIS NOTICE CAREFULLY AND COMPLETELY.
IF YOU ARE A MEMBER OF THE CLASS TO WHOM THIS NOTICE IS ADDRESSED, THE SETTLEMENT WILL AFFECT YOUR RIGHTS.

IF YOU ARE IN FAVOR OF THE SETTLEMENT AND SEEK COMPENSATION, YOU MUST SUBMIT A CLAIM FORM.  IF YOU ARE NOT IN FAVOR OF THE SETTLEMENT, YOU MAY OBJECT TO AND/OR OPT OUT OF THE SETTLEMENT.

	
		
	Your Legal Rights and Options in the Settlement:

	You Can Submit a Claim Form

(must be postmarked by October 8, 2013)
	If you wish to recover monetary damages, you must fill out, sign, and submit a claim form (included with this Notice) to the Claims Administrator.

	You Can Object

(must be postmarked by August 25, 2013)
	If you wish to object to any part of the Settlement, you may write to the Court, Class Counsel, and Defendants' Counsel about why the Settlement should not be approved.  If you object, you can still submit a Claim Form.

Objections are discussed further below.

	You Can Opt Out

(must be postmarked by August 25, 2013)
	If you wish to opt out of the monetary relief provisions of the Settlement in order to bring your own case, you must fill out, sign, and submit an opt-out statement to the Claims Administrator.  If you opt out, you cannot submit a Claim Form.

	You Can Rescind Your Opt Out

(must be postmarked by October 8, 2013) 
	If you change your mind about opting out of the monetary relief provisions of the Settlement, you must fill out, sign, and submit a Rescission statement to the Claims Administrator.  If you rescind your opt out, you can submit a Claim Form

	You Can Attend the Final Approval Hearing for the Court to Decide Whether to Approve the Settlement 

(to be held on November 18, 2013 at 10:00 AM)
	If you have submitted a written objection to the Settlement to the Court, Class Counsel, and Wet Seal's Counsel, you may (but do not have to) attend the Final Approval Hearing at which the Court will decide whether to approve the Settlement and present your objections to the Court.  You may attend the Final Approval Hearing even if you do not file a written objection, but you will only be allowed to speak at the hearing if you file written comments in advance, except by leave of the Court.

These rights and options-and the deadlines to exercise them-are explained in this Notice.

		
	•
	The Court in charge of this case still has to decide whether to approve the Settlement.  Payments will be made only if the Court approves the Settlement, unless someone appeals the approval order.  If that happens, payment will only be made if the appellate court approves the Settlement.

		
	•
	Further information regarding the lawsuit and this Notice may be obtained by contacting Class Counsel at the number listed above.

		
	•
	Additional information regarding the Settlement, including the briefs filed regarding the Settlement and the motions for attorneys' fees and costs, is available at Class Counsel's website:  www.lewisfeinberg.com and the case website:  http://wetsealdiscrimination.com. 

TABLE OF CONTENTS

		
	I.
	INTRODUCTION                                    1

		
	1.
	Potential Outcome of the Action                        1

		
	2.
	Attorneys' Fees and Costs Sought in the Action                2

		
	II.
	INJUNCTIVE RELIEF - HOW WILL WET SEAL CHANGE?            2

		
	3.
	What injunctive relief does the Settlement provide?                2

		
	4.
	Can I get out of the injunctive relief provisions of the settlement?        3

		
	III.
	MONETARY RELIEF - WHAT YOU GET                        3

		
	5.
	What monetary relief does the Settlement provide?                3

		
	6.
	How much will my payment be?                        4

		
	7.
	How can I get a payment?                            6

		
	8.
	When would I get my payment?                        6

		
	9.
	What happens if the Settlement is terminated?                6

		
	10.
	Can I get out of the monetary provisions of the Settlement?            7

		
	IV.
	THE LAWYERS REPRESENTING YOU                        8

		
	11.
	Do I have a lawyer in the case?                        8

		
	12.
	How will the lawyers be paid?                        8

		
	V.
	OBJECTING TO THE SETTLEMENT                        8

		
	13.
	How do I tell the Court that I don't like the Settlement?            8

		
	VI.
	THE COURT'S FINAL APPROVAL HEARING                    9

		
	14.
	When and where will the Court decide whether to approve the Settlement?    9

		
	15.
	Do I have to come to the hearing?                        9

		
	16.
	May I speak at the hearing?                            10

		
	VII.
	IF YOU DO NOTHING                                10

		
	17.
	What happens if I do nothing at all?                        10

		
	VIII.
	GETTING MORE INFORMATION                            10

		
	18.
	Are there more details about the Settlement?                    10

		
	19.
	How do I get more information?                        10

		
	I.
	INTRODUCTION

In this lawsuit (the “Action”), Plaintiffs allege that Wet Seal engaged in a policy and practice of discriminating against African-American store management employees (Store Assistant Managers, Co-Managers, Acting Store Managers, and Store Managers) at Wet Seal and Arden B. stores from May 8, 2008 to [DATE], 2013, in violation of 42 U.S.C. § 1981 and Title VII of the Civil Rights Act of 1964.  The Plaintiffs allege that this policy was adopted by then-senior executives of the company and resulted in the targeting of African-American store management employees for termination because of their race and/or color.  Plaintiffs also alleged African-American store managers were denied equal pay and promotions.   Wet Seal disputes the allegations of the Complaint and has vigorously defended the Action.  Copies of the Complaint and other documents filed in the Action are available online at www.lewisfeinberg.com and http://wetsealdiscrimination.com.   

You are receiving this Notice because Wet Seal's records indicate that you may be a Class Member.  As explained more fully below, as a Class Member, you will give up your right to bring your own lawsuit regarding claims that are or could have been alleged in this action unless you opt out of this case.  If you opt out, however, you will not be able to receive any money from the Settlement in this case.  Therefore it is very important that you carefully read this Notice.  You cannot opt out of the injunctive relief provisions of this Settlement if it is approved by the Court.  
The purpose of this Notice is to inform you of the injunctive and monetary relief provided in the Settlement; the claims procedure you need to follow to receive your award; the rights you are releasing by submitting a claim for a monetary award; your right to exclude yourself or “opt-out” from the damages portion of the Settlement; and your right to object to the Settlement.
The injunctive relief provided in the Settlement is intended to benefit Class Members and future African-American and Black employees of Wet Seal.  Monetary relief is only available to those Class Members who submit claim forms and whom the Claims Administrator determines are eligible for an award of monetary relief.  In order to benefit from the injunctive relief, you do not need to take any action. 

		
	1.
	Potential Outcome of the Action

If the case is not settled, then the litigation against Wet Seal will continue.  The possible result ranges from no relief at all to a judgment or verdict against Wet Seal, which could be more or less than the relief under the Settlement.  Throughout this lawsuit, the Plaintiffs and Wet Seal have disagreed on both liability and damages, whether the case should proceed as a class action, and the appropriate injunctive and/or monetary relief.

Wet Seal has denied and continues to deny the claims and contentions alleged by the Plaintiffs, that they are liable at all to the Class, and that the Class has suffered any damages for which Wet Seal is be legally responsible.  Nevertheless, Wet Seal has taken into account the desirability of resolving pending claims, along with the uncertainty and risks inherent in any litigation, and has concluded that it is desirable that the case be fully and finally settled on the terms and conditions set forth in the Settlement, particularly because the events at issue predate the arrival of Wet Seal's new Chief Executive Officer and Board of Directors and the injunctive relief aligns with the Company's current diversity initiatives. 

The Plaintiffs and their attorneys, who are experienced in litigating employment discrimination class actions, believe that they have strong claims against Wet Seal.  However, they recognize that there is uncertainty, delay, and risk in any litigation.  In addition, they understand that even if they win the case, they could recover less than the Settlement amount or the scope of injunctive relief set forth in the Settlement, and that any recovery could be delayed for as much as several years.  As a result, the Plaintiffs and their attorneys have concluded that it is desirable to settle the case on the terms set forth in the Settlement.

		
	2.
	Attorneys' Fees and Costs Sought in the Action

Wet Seal will not oppose Class Counsel's application for attorneys' fees and costs of up to $1,800,000.  This includes all fees and costs for the investigation, preparation, litigation, and settlement of this Action, including future monitoring of the Settlement.  Class Counsel will file with the Court an application for attorneys' fees and costs no later than July 10, 2013.  The application will be posted on the website established by the Claims Administrator so that Class Members can timely object if they wish. 

		
	II.
	INJUNCTIVE RELIEF - HOW WILL WET SEAL CHANGE?

		
	3.
	What injunctive relief does the Settlement provide?

As part of the Settlement, Wet Seal will make certain changes to its employment practices to enhance equal employment opportunity at Wet Seal.  Wet Seal will use best efforts to implement the relief described below as soon as reasonably possible.  The Court will enforce the provisions of the Settlement for the Term of the Settlement, which is three years.  

The summary below does not include all of the changes that the Settlement will require Wet Seal to make.  The full version of the Settlement is available at Class Counsel's website: www.lewisfeinberg.com and the case website: http://wetsealdiscrimination.com.  

Among the key changes that Wet Seal has agreed to make or continue as part of the Settlement are the following:

		
	•
	Post store management and District Director openings and track applications to ensure diversity in applications and hiring; 

		
	•
	Expand Wet Seal's human resources department and enhance its internal complaint process to effectively investigate complaints of discrimination;

		
	•
	Retain and work with experts to develop updated job-related hiring, promotion, and compensation policies and practices;

		
	•
	Retain and work with experts to develop performance evaluation tools for store management employees; 

		
	•
	Ensure that marketing materials include African Americans, of various skin tones, to reflect diversity in its marketing materials; and

		
	•
	Maintain a Diversity and Inclusion Council made up of a diverse group of current employees that will advise the company on topics including equal employment in recruiting, hiring, and compensation.  

		
	4.
	Can I get out of the injunctive relief provisions of the settlement?

No.   You may not “opt out” of the injunctive relief provisions of the Settlement if it is approved by the Court.  This means that a Class Member cannot bring a separate class action for 

injunctive relief, but could bring a claim for individual injunctive relief, such as reinstatement for wrongful termination.  However, you may opt out of the monetary relief provisions of the Settlement, as described in Section III below.  

		
	III.
	MONETARY RELIEF - WHAT YOU GET

		
	5.
	What monetary relief does the Settlement provide?

The Settlement provides a total of $7,500,000 for monetary relief that the Court will distribute for three purposes:  damages awards for Class Members who file claims and whose claims are approved; money paid to the Claims Administrator to give Notice to the Class and for administering the claims process; and an award of fees and costs to Class Counsel.  The amount of damages for the Class will be at least $5,580,000 and may be higher.  The Claims Administrator has estimated that the cost of administration should not exceed $120,000.  The parties have agreed that attorneys' fees and costs should not exceed $1,800,000.  

Class Members who do not opt out of the monetary provisions of the Settlement will be bound by those provisions and will release their rights to independently bring their own lawsuits for damages pertaining to the claims in this Action against Wet Seal.  As a result, any Class Member who does not opt out will be barred from seeking damages from (i) Wet Seal, (ii) its former and present parents, subsidiaries, and affiliates, and (iii) the current and former officers, directors, employees, partners, shareholders, agents, insurers, predecessors, successors, assigns, and legal representatives of all entities and individuals listed in (i) and (ii) for any of the claims released by this Settlement.  The claims you will release are any and all claims that are asserted in or could have been asserted in Plaintiffs' First Amended Complaint, to the fullest extent permitted by law, during the period from May 8, 2008 through [DATE], 2013, including those related to:  (i) allegations of discrimination and harassment against African-American and Black store management employees based on race and/or color with respect to compensation, selection, promotion, job assignments, demotion, discipline, actual and constructive termination, and other terms and conditions of employment; and/or (ii) allegations of retaliation against African-American and Black store management employees for opposition to discrimination or harassment based on race or color.  The Released Claims include claims for damages and equitable relief of every nature, including but not limited to back pay, front pay, reinstatement, instatement, benefits, emotional distress, and other compensatory damages, damage to reputation, liquidated damages, penalties, interest, and punitive damages.  The Released Claims may have arisen under 42 U.S.C. § 1981, Title VII of the Civil Rights Act of 1964 (42 U.S.C. § 2000e et seq.), and all other federal, state and local laws.
If the Settlement is finally approved by the Court, the releases described above will apply to all claims for racial discrimination arising from or attributable to any conduct of Wet Seal and other released parties listed above, whether known or unknown, and any and all rights granted to Class Members under Section 1542 of the California Civil Code or any analogous state or federal law or regulations, will be waived, if applicable.  In addition, Class Members who do not opt out will release their damages claims against Wet Seal up until the date of the Settlement.

		
	6.
	How much will my payment be?

All Class Members may file a claim for a monetary award.  The Claims Administrator will review and verify the information that you provide, and will determine whether you are eligible for a monetary award and how much you will receive.  You are not responsible for calculating the 

amount you may be entitled to receive under the Settlement.  This calculation will be made as part of the implementation of the Settlement.  

Monetary awards for eligible claimants will be paid from three funds:  (1) a $1,000,000 Pay Fund for settlement of pay claims, (2) a $1,000,000 Promotion Fund for settlement of promotion claims (including claims of discriminatory job assignments), and (3) a $3,580,000 Termination/Demotion/Retaliation/Hostile Work Environment/Emotional Distress Fund for settlement of claims of discriminatory termination, demotion, or discipline (resulting in loss of pay) based upon race or color; harassment or hostile work environment based upon race or color; retaliation for complaining of race or color discrimination or harassment/hostile work environment; and emotional distress and damage to reputation resulting from the foregoing.  

Up to $1.25 million from the Promotion and Pay Funds will be allocated among all eligible Class Members based on the amount of time each Class Member worked in each Covered Position (Store Assistant Manager, Co-Manager, and Acting Store Manager/Store Manager) during the class period.  Up to $500,000 from the Terminations/Other Fund will be allocated among all Class Members who were involuntarily terminated from Covered Positions during the class period.  

The remaining amount, of up to $3.83 million, will be distributed from all three Funds according to the criteria described in the Claim Form and with further information and documentary support from Class Members.  In allocating these remaining funds, the Claims Administrator will specifically consider the following: 

		
	(1)
	Pay Fund: (i) length of service as a retail manager at Wet Seal; (ii) the Class Member's communications with Class Counsel prior to May 8, 2013 concerning claims of discrimination based on race or color in compensation; and (iii) the Class Member's complaints or claims of discrimination based on race or color in compensation submitted to the EEOC or state agencies prior to May 8, 2013.  

		
	(2)
	Promotion Fund:  (i) length of service with Wet Seal up to a maximum of ten years; (ii) length of service as a manager in each Covered Position at Wet Seal; (iii) length of service as a manager at other employers up to a maximum of five years; (iv) evidence of expressions of interest in promotion made to a supervisor regarding Co-Manager, Acting Store Manager, Store Manager, or District Director positions; (v) communications with Class Counsel prior to May 8, 2013 concerning claims of discrimination against the Class Member based on race or color in promotions or job assignment; (vi) complaints or claims of discrimination against the Class Member based on race or color in job assignments in the Covered Positions, or promotion to Co-Manager, Acting Store Manager, Store Manager, or District Director submitted to the EEOC or state agencies prior to May 8, 2013; and (vii) the facts and documentary evidence submitted to demonstrate discrimination against the Class Member based on race or color with respect to job assignment in the Covered Positions or promotion to Co-Manager, Acting Store Manager, Store Manager or District Director.

		
	(3)
	Terminations/Other Fund:  (i) length of service with Wet Seal; (ii) length of service as a manager at Wet Seal; (iii) facts and documentary evidence that the 

Class Member was subject to discrimination based on race or color in termination, demotion, or discipline (resulting in loss of pay), or was subject to harassment/hostile work environment based on race or color; (iv) facts and documentary evidence that the Class Member was subject to retaliation for opposing discrimination based on race or color; (v) communications by the Class Member with Class Counsel prior to May 8, 2013 concerning claims of discrimination based on race or color in termination, demotion, or discipline resulting in loss of pay, harassment/hostile work environment based on race or color, or retaliation for opposing discrimination based on race or color; (v) complaints or claims that the Class Member submitted to the EEOC or state agencies prior to May 8, 2013 that he or she was subject to discrimination based on race or color in termination, demotion, or discipline (resulting in loss of pay), harassment or hostile work environment based on race or color, or retaliation for opposing discrimination based on race or color; (vi) Class Member's knowledge that he or she was targeted for termination, demotion or discipline (resulting in loss of pay) because of race or color; (vii) emotional distress; (viii) damage to the Class Member's reputation because the Class Member made complaints of discrimination, harassment, termination, or hostile work environment based on race or color, or was retaliated against for opposing  discrimination based on race or color; (ix) a period of unemployment during which the Class Member was making reasonable efforts to find other employment and the length of that period; and (x) a finding by the EEOC or state agency that a violation of Title VII or state antidiscrimination law occurred with respect to the Class Member.  

The Court has approved the following process for the Claims Administrator to determine who is eligible to receive a monetary award.  In order to be eligible to receive money from the Settlement, each Claimant must satisfy all of the prerequisites set forth in the attached claim form.  In summary, these are as follows:

		
	1)
	Sign and submit a claim form verifying that you are African American and/or Black and have worked at a Wet Seal or Arden B. store as a store management employee at some point between May 8, 2008 and [DATE], 2013;

		
	2)
	Return a completed claim form no later than October 8, 2013; and

		
	3)
	Cooperate with the efforts of the Administrator to process and verify the claim.

If the Court approves the Settlement, the Claims Administrator-not the Court and not the Parties or Class Counsel-has the final authority to determine eligible claims and the amounts, in accordance with the terms of the Settlement that the parties have proposed to the Court for approval.  The Claims Administrator may require additional documentation in support of your claim.

Monetary awards obtained from this Lawsuit are subject to taxation and may impact eligibility for various government benefits, such as Supplemental Security Income, and/or other government-sponsored benefits.  You may also be required to report your receipt of settlement funds to government agencies.  If you receive government benefits you are strongly advised to consult an independent tax advisor or your local legal aid office, in order to obtain advice.

If you have questions regarding the Settlement, please contact Class Counsel at the number listed above.

		
	7.
	How can I get a payment?

A Class Member who wishes to recover must complete and timely submit a signed claim form to the Claims Administrator at the address provided on the claim form.  TO BE VALID, A
CLAIM FORM MUST BE POSTMARKED NO LATER THAN October 8, 2013.  The claim form and instructions are enclosed with this Notice.  All Claims will be subject to review by the Claims Administrator.

		
	8.
	When would I get my payment?

It is not possible to say precisely when payment will be made, because it depends on when the Court approves the Settlement and that approval becoming final and no longer subject to any appeals to any court.  Once that happens, payment will be made to eligible Claimants as soon as possible after final approval has been obtained for the Settlement.  If final approval is appealed, resolution of that appeal may take several years.  

		
	9.
	What happens if the Settlement is terminated?

The Settlement may be terminated on several grounds, including if the Court does not approve the Settlement or if the Settlement does not become final.  Should the Settlement be terminated, the Action will proceed as if the Settlement had not been entered into.

		
	10.
	Can I get out of the monetary provisions of the Settlement?

You may exclude yourself, or “opt out,” of the monetary provisions of the Settlement.  To do so, you must file a written “opt out” statement with the Claims Administrator using the address: 

Cogdell v. Wet Seal Claims Administrator
P.O. Box [#]
Tallahassee, FL 32302-[#]

Your “opt out” statement must be POSTMARKED AND MAILED to the Claims Administrator on or before August 25, 2013.

If you opt out of the monetary provisions of the Settlement: (1) you will have no right to file a claim or receive any monetary award under this Settlement; (2) you will not be bound by the monetary settlement in this Action; and (3) your right to bring a separate lawsuit against Wet Seal for damages or individual injunctive relief will not be affected.  However, if you opt out of the monetary relief in this Action and bring a separate lawsuit or other legal proceeding, you may lose your case and receive nothing, your claims may be time-barred, it may take several years to obtain any money, or you may obtain less money than you will receive under this Settlement.

To opt out of the monetary provisions of the Settlement, you must submit your full name, address and a signed and dated copy of the following opt-out statement:

I understand that I am requesting to be excluded from the class monetary settlement and that I shall receive no money from the Settlement Fund created under the Settlement Agreement entered into by Wet Seal.  I understand that if I am excluded from the class monetary settlement, I may bring a separate legal action seeking damages, but may receive nothing or less than what I would have received if I had filed a Claim under the class monetary settlement procedure in this Action.  I also understand that I may not seek exclusion from the class for injunctive relief and that I am bound by the injunctive provisions of the Settlement Agreement entered into by Wet Seal.

If you file a request to “opt out” of the monetary award provisions of the Settlement, you may later withdraw that request.  To do so, you must submit a Rescission to the Claims Administrator at the address above no later than October 8, 2013, and must file the claim form provided with this Notice.  The Statement of Rescission must be signed and dated and at a minimum contain the following language:

I previously submitted an Exclusion Statement seeking exclusion from the class monetary settlement.  I have reconsidered and wish to withdraw my Exclusion Statement.  I understand that by rescinding my Exclusion Statement, I may be eligible to receive an award from the Settlement Fund and may not bring a separate legal action against Wet Seal seeking damages.

Please remember that if you submit a Rescission, you must complete the claim form provided with this Notice in order to obtain money under the Settlement. 

		
	IV.
	THE LAWYERS REPRESENTING YOU

		
	11.
	Do I have a lawyer in the case?

The Court has appointed the law firms of Lewis, Feinberg, Lee, Renaker & Jackson, P.C., NAACP Legal Defense and Educational Fund, Inc., and Gallagher, Schoenfeld, Surkin, Chupein, & DeMis, P.C. as Class Counsel for the Class in the Action.  You will not be charged any fees by these lawyers.  The Court will determine whether and how much an award of attorneys' fees and costs will be paid to Class Counsel.  If you want to be represented by your own lawyer, you may hire one at your own expense.

		
	12.
	How will the lawyers be paid?

Class Counsel will file or have filed a motion for an award of attorneys' fees and costs.  This motion will be available for your review on Class Counsel's website: www.lewisfeinberg.com or the case website at: http://wetsealdiscrimination.com, and will be considered at the Final Approval Hearing.  You can object to the award in a written objection.  As previously described, Class Counsel's fees and costs will not exceed $1,800,000.  If the Court awards less than this amount to Class Counsel, the remainder will be distributed to eligible 

Claimants.  The Court will examine the application of Class Counsel and determine the amount to award.

		
	V.
	OBJECTING TO THE SETTLEMENT 

		
	13.
	How do I tell the Court that I don't like the Settlement?

If you are a Class Member, you can object to the Settlement if you do not like any part of it.  You can give reasons why you think the Court should not approve it.  To object, you must send a letter or other written statement saying that you object to the Settlement in Cogdell, et al. v. The Wet Seal, Inc., et al., No. SACV 12-01138 AG.  Be sure to include your name, address, telephone number, signature, and a full explanation of all reasons you object to the Settlement.  
Copies of your written objection must be sent to Class Counsel and Wet Seal's Counsel at the following addresses, in an envelope labeled on its face “Cogdell v. The Wet Seal, Inc. Objection,” and must be postmarked no later than August 25, 2013.

Class Counsel:

Bill Lann Lee
Lewis, Feinberg, Lee,    Renaker, & Jackson, P.C.     
476 9th Street
Oakland, CA 94607

Defendants' Counsel:

Nancy Abell
Paul Hastings LLP
515 South Flower Street, 25th Floor
Los Angeles, CA 90071

You must also send your objection to the Clerk of the United States District Court for the Central District of California, 411 West Fourth Street, Room 1053, Santa Ana, CA 92701-4516.

		
	VI.
	THE COURT'S FINAL APPROVAL HEARING

		
	14.
	When and where will the Court decide whether to approve the Settlement?

The Court will hold the Final Approval Hearing at 10:00 AM on November 18, 2013, at the United States District Court for the Central District of California, 411 West Fourth Street, Room 1053, Santa Ana, CA 92701-4516 in Courtroom 10D, or in the courtroom then occupied by Judge Guilford.  At the hearing, the Judge will consider whether the Settlement is fair, adequate, and reasonable.  If there are objections, the Judge will consider them.  After the Final Approval Hearing, the Judge will decide whether to approve the Settlement.  The Judge will also rule on the motions for attorneys' fees and costs.  We do not know how long after the Final Approval Hearing the Court will issue its decisions.

		
	15.
	Do I have to come to the hearing?

No.  Class Counsel will answer any questions Judge Guilford 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 mail your written objection on time, the Judge can consider 

it when deciding whether to approve the Settlement as fair, adequate, and reasonable.  You also may have your own lawyer, retained at your expense, attend the Final Approval Hearing.

		
	16.
	May I speak at the hearing?

If you are a Class Member, you may ask the Court for permission to speak at the Final Approval Hearing when you send in your objection, by including the words “Notice of Intention to Appear” on your objection.  Be sure to include your name, address, telephone number, and your signature.  Your Notice of Intention to Appear must be sent to Class Counsel and Wet Seal's Counsel and filed with the Clerk of the Court at the addresses listed in Section V, postmarked no later than August 25, 2013.

		
	VII.
	IF YOU DO NOTHING

		
	17.
	What happens if I do nothing at all?

The Settlement, if finally approved by the Court, will bind Wet Seal and all Class Members with respect to injunctive relief.  You will not recover monetary damages if you do not submit a claim form, and you will waive your right to bring an independent lawsuit on the claims related to this Action.

		
	VIII.
	GETTING MORE INFORMATION

		
	18.
	Are there more details about the Settlement?

This Notice summarizes the Settlement.  The complete Settlement is set forth in the written Settlement Agreement.  You may obtain a copy of the Settlement Agreement by contacting Class Counsel.  Copies of the Settlement Agreement, as well as Class Counsel's motion for attorneys' fees and costs, the motion seeking preliminary approval of the Settlement, and the Preliminary Approval Order, may be obtained online at www.lewisfeinberg.com or http://wetsealdiscrimination.com.  The Settlement Agreement also was filed with the Clerk of the United States District Court for the Central District of California and may be reviewed at the Clerk's office.

		
	19.
	How do I get more information?

You can contact Class Counsel at (866) 276-5221.  You also may visit www.lewisfeinberg.com or http://wetsealdiscrimination.com for more information regarding the Settlement.

Claim # [UNIQUE]

EXHIBIT 2

Cogdell v. The Wet Seal, Inc.

CLAIM FORM 
This Claim Form has four parts: Parts A, B, C, and D.  These parts are explained below.

All Class Members will receive a payment if they fill out Parts A and D of this Form below, Questions 1-12 and the Certification on the last page.  The Baseline Pay Awards and Baseline Promotion Awards are based on the number of weeks worked by a Class Member in each Covered Position from May 8, 2008 to [DATE], 2013.  In addition, Class Members who were involuntarily terminated while working in a Covered Position at any point from May 8, 2008 to [DATE], 2013 will receive a Baseline Termination Award.

Class Members can receive additional amounts of money if they are eligible under Parts B and C of this Form, Questions 13-84 below.  In order to be considered for these additional amounts of money, a Class Member must fill out Parts B and C and provide additional information about his or her claims.
INSTRUCTIONS
IMPORTANT:  Your Claim Form MUST be returned to the Claims Administrator POSTMARKED by October 8, 2013.  Please use the enclosed self-addressed envelope to return your completed Claim Form.  All Class Members whose Wet Seal employment is confirmed and who submit this Claim Form will receive a monetary award.

INSTRUCTIONS
		
	A.
	It is important to read and follow these instructions carefully.  Failure to follow these instructions may result in your losing benefits to which you might otherwise be entitled.

		
	B.
	You are eligible to file a claim in this case if 1) you are African American and/or Black; 2) you worked as a Store Assistant Manager, Co-Manager, Acting Store Manager, and/or Store Manager (these positions are collectively referred to as “Covered Positions” in this Claim Form) in a Wet Seal or Arden B. Store at any time from May 8, 2008 to [DATE], 2013; and 3) you have not previously signed a general release of claims against Wet Seal that releases claims of race discrimination.  Please note that an arbitration agreement is not a general release of claims against Wet Seal.

		
	C.
	Aside from Part B, you should only answer the questions on this Claim Form about events 1) that occurred between May 8, 2008 and [DATE], 2013; and 2) that occurred while you were working as a Store Assistant Manager, Co-Manager, Acting Store Manager, and/or Store Manager (i.e., in a Covered Position) in a Wet Seal or Arden B. Store

		
	D.
	You may use additional paper to answer these questions, if necessary.  If you do so, write your name and Social Security number on each additional page.

		
	E.
	Any documents you provide to the Claims Administrator will not be returned to you.  Please make copies of anything you send to the Claims Administrator.

		
	F.
	You must sign and date the Claim Form on page 14.  If you are under 18 years of age, your parent or legal guardian must also sign your Claim Form. If you cannot sign your name due to a disability or incapacity, the Claim Form may be signed by your designated representative.  If a Class Member has died, the executor of the estate or authorized representative may complete and sign the Claim Form.

		
	G.
	By signing your Claim Form at the end of Part D, you are declaring under penalty of perjury that the information on the Claim Form and any attachments is true and correct, and that you are African American and/or Black.  You can be subject to criminal penalties for submitting any false information on your Claim Form.

		
	H.
	Only claims submitted on an original, non-photocopied Claim Form will be accepted. If your Claim Form is damaged, you may contact the Claims Administrator for a new form.

		
	I.
	If you do not return this Claim Form postmarked by October 8, 2013, your claim will be rejected and you will lose all rights to receive any money from this settlement.  You must mail the Claim Form to:

	
	
	Cogdell v. The Wet Seal, Inc. Claims Administrator
P.O. Box [#]
Tallahassee, FL  32302-[#]

		
	J.
	To ensure that you have a record of your claim and date of mailing, we suggest that you keep a copy of your signed Claim Form and mail the original Claim Form by certified mail, and keep a copy of the receipt.  (Certified mail is suggested, but not required.)

		
	K.
	The Claims Administrator is responsible for determining whether your Claim Form is complete.  You may be asked to provide additional information to support your claim.  If the Claims Administrator asks for additional information, you will also be told how to send your response.  If you fail to respond to the request for additional information within the specified time period, your claim may be denied.

		
	L.
	It is your responsibility to keep the Claims Administrator advised of any change in your address.  If you do not keep the Claims Administrator advised of your current address, you might not get money to which you may be entitled.  Any change of address should be reported in writing along with your complete name, signature, Social Security number, and former address to the Claims Administrator at the address above.

		
	M.
	For more information about the claims process that the Claims Administrator will use to distribute money from the three funds, please refer to the Claims Administrator's website at [WEBSITE], or call the Claims Administrator at [#].

		
	N.
	If you want additional information about the settlement, or have questions about these instructions, or about how to complete the Claim Form, please call the Claims Administrator at the number above.  Do not call the Court or the Clerk of the Court.

                        

Claim # [UNIQUE]

Part A-Personal Information 

In order to be eligible for a monetary award, you must complete all of Part A (Questions 1-12), and sign and date the Claim Form in Part D.  All other parts of this Claim Form are optional.  
		
	1.
	________________________________________

Name  (First, Middle, Last)
		
	2.
	_____________________________________________________________

Street Address                    Apartment Number
		
	3.
	_____________________________________________________________

		
	     City                         
	State              Zip Code

		
	4.
	__________________________________

Social Security Number (required)
		
	5.
	_____________________________________________________________

E-mail Address
		
	6.
	__________________________________    ________________________

Cell Phone Number                Best Time to Call
		
	7.
	__________________________________    ________________________

Work Phone Number                Best Time to Call
		
	8.
	__________________________________    ________________________

Home Phone Number                Best Time to Call
		
	9.
	_____________________________________________________________

Phone Number of Relative or Other Contact    (Optional)
		
	10.
	__________________________________

Date of Birth
		
	11.
	Please list any other name, such as a maiden or married name, that you used while employed at Wet Seal and the dates when you used each name:

_________________________________________    ________________________
Name                                Date Range
_________________________________________    ________________________
Name                                Date Range
		
	12.
	How do you identify your race, color, and/or ethnicity?  Please check all that apply:

______    Black and/or African-American
______    Two or more races, one of which is Black and/or African-American

Part B-Employment History

EMPLOYMENT AT WET SEAL
 
		
	13.
	According to Wet Seal's records, you have held the following positions at Wet Seal since 2007.  If you believe that any information is missing or incorrect, please correct it in the relevant box(es) below.  For any corrections you submit to the dates below, please provide documentary proof that you held the position you claim during the dates you claim.

	
				
	 
	Start Date
	End Date
	Wet Seal Store Location

	Job Title
	 
	 
	 

	Job Title  (2)
	 
	 
	 

	Job Title  (3)
	 
	 
	 

	Job  Title (4)
	 
	 
	 

	Job  Title (5)
	 
	 
	 

Please note, you are only eligible to receive a monetary award based on discrimination 1) that occurred between May 8, 2008 and [DATE], 2013; and 2) that occurred while you were working in a Covered Position in a Wet Seal or Arden B. Store.  Your complete employment history at Wet Seal since 2007, regardless of the position in which you worked, is printed above for your reference.
		
	14.
	If you worked in a store management position (Store Assistant Manager, Co-Manager, Acting Store Manager, or Store Manager) at Wet Seal before 2007, please list the management positions you held and the dates that you held them to the best of your recollection:

_______________________________________________________________________
OTHER MANAGEMENT EXPERIENCE
		
	15.
	Did you work in a management position for a different employer before you worked at Wet Seal? 

___ Yes ___ No     If your answer is “No,” continue to Part C.
		
	16.
	For the management position you held most recently before you worked at Wet Seal, please list the name of your employer:

________________________________________________________________________

		
	17.
	What was your job title?

________________________________________________________________________
		
	18.
	Please list the city and state where you worked:

________________________________________________________________________
		
	19.
	Please list the approximate dates of employment at that employer, to the best of your recollection:

________________________________________________________________________

		
	20.
	If you had additional management positions in the five years before you started working at Wet Seal, please answer Questions 16-19 for each position on separate sheets of paper.

Part C-Claims

All eligible Class Members will receive a Baseline Pay Award and a Baseline Promotion Award based on the number of weeks worked for Wet Seal or Arden B. between May 8, 2008 and [DATE], 2013 in a Covered Position.  In addition, Class Members who were involuntarily terminated while working in a Covered Position during this time frame will be eligible to receive a Baseline Termination Award.  It is not necessary to answer the questions below to receive these awards; you only have to complete Parts A and D.  
If any of the questions below are applicable to you, please complete them as instructed.  You might be eligible for an additional award based on some or all of your answers below.  In addition, if you have evidence, such as emails or other documents, that support any of your claims below, please include copies of that evidence with your Claim Form.  At the top of the document, please indicate your name, Social Security number, and the question number for which you are submitting the document. 
ADDITIONAL PROMOTION CLAIMS
Interest in Promotion
		
	21.
	When you worked in a Covered Position, did you  express interest to a supervisor in promotion to a Co-Manager, Acting Store Manager, Store Manager, District Director in Training, or District Director at any time from May 8, 2008 to [DATE], 2013, and not get that promotion? 

_____Yes    ____No        If your answer is “No,” please go to Question 26. 
If your answer is “Yes,” please complete Questions 22-25 below.  If you expressed interest in promotion on multiple occasions, please answer Questions 22-25 for each occasion on a separate page. 
		
	22.
	Please list the Wet Seal store where you worked at the time you expressed interest in promotion.  Please be as specific as possible, and list the store number if you know it.

________________________________________________________________________
		
	23.
	Please list the name and title of the supervisor(s) to whom you expressed your interest in promotion.

________________________________________________________________________
		
	24.
	Please list the approximate date when you expressed interest in promotion, to the best of your recollection

________________________________________________________________________
		
	25.
	Please provide a brief description of what happened when you expressed interest in a promotion.  Attach a separate page if necessary.

________________________________________________________________________

Discriminatory Denial of Promotion
		
	26.
	Do you believe that Wet Seal discriminatorily denied you a promotion to Co-Manager, Acting Store Manager, Store Manager, District Director in Training, or District Director because of your race or color when you worked in a Covered Position at any point from May 8, 2008 to [DATE], 2013?

___ Yes          ___ No        If your answer is “No,” please go to Question 33.
If your answer is “Yes,” please answer Questions 27-31 below.  If you believe that Wet Seal discriminatorily denied you a promotion on multiple occasions, please answer Questions 27-31 for each occasion on a separate page.  
		
	27.
	Please list the Wet Seal store where you worked at the time you were discriminatorily denied a promotion.  Please be as specific as possible, and list the store number if you know it.

________________________________________________________________________
		
	28.
	Please list the title and location of the position you sought.

________________________________________________________________________
		
	29.
	Please list the approximate date that you were denied the promotion, to the best of your recollection.

________________________________________________________________________
		
	30.
	Please state the name and race, if you know, of the person who received the promotion you sought.

________________________________________________________________________
		
	31.
	Please briefly describe why you think you were equally or more qualified than the person who got the promotion you sought.  Attach a separate page if necessary.

________________________________________________________________________
Discrimination in Job Assignments
		
	32.
	Do you believe that Wet Seal discriminated against you in job assignments (such as assigning you to a store location that was less desirable to you or unfavorable job tasks), because of your  race or color when you worked in a store management Position at any time from May 8, 2008 to [DATE], 2013?

____Yes          ___ No        If your answer is “No,” please go to Question 34.
If your answer is “Yes,” please answer Question 33 below.  If you believe that you were subjected to discrimination with respect to job assignments on multiple occasions, please answer Question 33 for each occasion on a separate page. 
		
	33.
	Please briefly describe the basis for your belief that Wet Seal discriminated against you with respect to job assignments.  Attach a separate page if necessary.

________________________________________________________________________

TERMINATION AND OTHER CLAIMS
Termination/Discipline
		
	34.
	Were you involuntarily terminated from a store management Position at Wet Seal  at any time from May 8, 2008 to [DATE], 2013?

___ Yes    ___ No         
		
	35.
	Do you believe that Wet Seal terminated you,  demoted you, subjected you to discipline resulting in loss of pay, or made your working conditions so unbearable that you were forced to quit, because of your race or color when you worked in a store management Position at any time from May 8, 2008 to [DATE], 2013.

___ Yes    ___ No        If your answer is “No,” please go to Question 53.
If your answer was “Yes,” please answer Questions 36-52 below.  If you were subjected to the adverse actions below on multiple occasions between May 8, 2008 and [DATE], 2013, please answer Questions 36-52 on separate sheets for each occasion.
		
	36.
	Please state the Wet Seal store where you worked at the time you were terminated, demoted, or subjected to discipline resulting in loss of pay.  Please be as specific as possible, and list the store number if you know it.

________________________________________________________________________
		
	37.
	What adverse action(s) were you subjected to?  Please check all that apply:         

		
	______
	Termination (including making working conditions so unbearable that you were forced to quit)

______    Demotion
______    Discipline resulting in loss of pay
______    Other (please explain) ________________________________
		
	38.
	Please list the approximate date, to the best of your recollection, that you were terminated, demoted, or subjected to discipline resulting in loss of pay.

__________________________________________________________________
		
	39.
	Please briefly describe what happened.

__________________________________________________________________

		
	40.
	Did Wet Seal terminate you, demote you, or subject you to discipline resulting in a loss of pay for a policy violation?

___ Yes    ___ No        If your answer is “No,” continue to Question 47.
		
	41.
	If your answer to Question 40 is “Yes,” please state the policy.

__________________________________________________________________
		
	42.
	Do you believe that you violated the policy?

__________________________________________________________________

		
	43.
	If your answer to Question 40 is “Yes,” do you believe that other employees who are not African American or Black were not terminated, demoted, or disciplined (resulting in loss of pay) for violating the same policy?

___ Yes    ___ No        If your answer is “No,” continue to Question 45.
		
	44.
	Please explain in detail the basis for your belief, for example, the names of employees who were not terminated, demoted, or disciplined for violating the same policy, and the name(s) of any Wet Seal personnel whom you believe enforced the policy unfairly. 

________________________________________________________________________
		
	45.
	Do you believe that Wet Seal targeted you for termination, demotion, or discipline resulting in loss of pay?

___ Yes    ___ No        If your answer is “No,” continue to Question 47.
		
	46.
	If your answer to Question 45 is “Yes,” please describe the basis for your belief (and attach copies of any documents in support):

________________________________________________________________________
		
	47.
	If Wet Seal terminated your employment or made your working conditions so unbearable that you quit, did you have a period of unemployment or reduced income immediately after your employment with Wet Seal ended?

___ Yes    ___ No        If your answer is “No,” continue to Question 53.
		
	48.
	If your answer to Question 47 is “Yes,” how long were you unemployed following the termination of your employment with Wet Seal?

________________________________________________________________________
		
	49.
	Following your termination, were you actively looking for work during the period you were unemployed?

___ Yes    ___ No        
		
	50.
	If you got a job after your termination, did you earn more or less than you earned at Wet Seal?  Please check one:

___ More    ___ Less
		
	51.
	If you earned less at your next job than you had been making at Wet Seal, how much less per hour were you making in your next job?  Provide the name of your next employer and your next supervisor. 

________________________________________________________________________
		
	52.
	Please provide any additional facts to support your claim of discrimination in termination, demotion and discipline resulting in loss of pay (use additional sheets if necessary).

________________________________________________________________________

Harassment/Hostile Work Environment
		
	53.
	Do you  believe that Wet Seal subjected you to harassment and/or a hostile work environment (for example, offensive comments or conduct) because of your race or color when you worked in a Covered Position at any point from May 8, 2008 to [DATE], 2013.

___ Yes    ___ No        If your answer is “No,” please go to Question 59.
If your answer is “Yes,” complete Questions 54-58 below. If you were subjected to harassment and/or a hostile work environment based on race or color during multiple time periods during the Covered Time Frame, please answer Questions 54-58 on separate sheets for each time period.
		
	54.
	Please list the Wet Seal store(s) where you worked at the time you were subjected to harassment or a hostile work environment.  Please be as specific as possible, and list the store number if you know it. ________________________________________________________________________

		
	55.
	Please describe the harassment and/or the actions that you believe created a hostile work environment for you.

________________________________________________________________________
		
	56.
	Please provide the dates of such actions, to the best of your recollection. 

________________________________________________________________________
		
	57.
	Please list the names and titles of Wet Seal personnel who harassed you and/or whom you believe created the hostile work environment.

________________________________________________________________________
		
	58.
	Please briefly describe what happened.  Attach additional pages if needed.

________________________________________________________________________
________________________________________________________________________
Retaliation
		
	59.
	Did you complain about discrimination, harassment or hostile work environment when you worked in a store management Position at any point from May 8, 2008 to [DATE], 2013?

___ Yes    ___ No        If you answered “No,” please go to Question 72.
If your answer is “Yes,” complete Questions 60-71 below. If you were subjected to retaliation on multiple occasions during the Covered Time Frame, please answer Questions 60-71 for each occasion on separate sheets.
		
	60.
	How did you complain about discrimination, harassment or hostile work environment based on race or color at Wet Seal? Please check all that apply:

		
	            
	Complained orally (in person or by phone) to an employee with the same    job title as you

                Complained in writing to an employee with the same job title as you

		
	            
	Complained orally (in person or by phone) to someone at Wet Seal with a higher job title than you (a Store Management Employee with a higher title, District Director, Regional Director, or Loss Prevention personnel) 

                Complained orally (in person or by phone) to Human Resources personnel
		
	            
	Complained in writing to someone at Wet Seal with a higher job title than you (a Store Management Employee with a higher title, District Director, Regional Director, or Loss Prevention personnel)

______    Filed a charge of discrimination, harassment or hostile work environment             with the EEOC or state agency
______    Other (please explain): __________________________________
		
	61.
	When did you make a complaint or complaints?

________________________________________________________________________

		
	62.
	Did you ever participate in an investigation about discrimination, harassment or hostile work environment while you were employed at Wet Seal?

___ Yes    ___ No        If your answer is “No,” continue to Question 64.
		
	63.
	If the answer to Question 62 is “Yes,” please describe, to the best of your recollection, the investigation, when it occurred, and what your participation involved:

________________________________________________________________________
		
	64.
	After you complained or participated in an investigation about discrimination, harassment or hostile work environment, did Wet Seal take any adverse employment actions against you, such as demotion or termination? 

___ Yes    ___ No        If your answer is “No,” go to Question 72.
		
	65.
	What types of adverse employment action did Wet Seal take against you?  Please check all that apply.

		
	______
	Discipline - including a Corrective Action Notice indicating Verbal Counsel/Warning, Written Warning, or Final Warning

______    Demotion
______    Reduction of hours/shifts
______    Decreasing your pay rate
______    Termination
		
	66.
	Please list the Wet Seal store(s) where you worked at the time you were subjected to the adverse action.  Please be as specific as possible, and list the store number if you know it.

________________________________________________________________________
		
	67.
	Please list the approximate date(s) of the adverse action, to the best of your recollection.

________________________________________________________________________

		
	68.
	Please list the name(s) and title(s) of Wet Seal personnel whom you believe were responsible for the adverse action.

________________________________________________________________________
		
	69.
	Please briefly describe what happened.  Attach additional pages if needed.

________________________________________________________________________
		
	70.
	Do you have any evidence that Wet Seal retaliated against you?

___ Yes    ___ No        If your answer is “No,” continue to Question 72.
		
	71.
	If you answer to Question 76 is “Yes,” please describe such evidence (and attach copies of any documents in support):

________________________________________________________________________
Emotional Distress or Physical Effects of Discriminatory Conduct
		
	72.
	Do you have or have you had any emotional, psychological, or physical effects or symptoms that you believe were a result of any of the discriminatory, harassing or retaliatory conduct that you listed in response to the Questions above?

___ Yes    ___ No      If your answer is “No,” please go to Question 74.  
If your answer is “Yes,” complete Question 73 and its sub-parts.
		
	73.
	Please provide the following information regarding: emotional reaction, psychological effects, and/or physical effects that you believe resulted from any of the actions or conduct you listed in response to the Questions above.

		
	i.
	Describe what effects or symptoms you had or have:

____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
		
	ii.
	Describe the discriminatory, harassing or retaliatory conduct that you believed caused the effects or symptoms that you have described.

____________________________________________________________
____________________________________________________________
____________________________________________________________
		
	iii.
	If you discussed any of the effects or symptoms listed above with any person (including family member, friend, co-worker, doctor, psychologist, or other person), please state the name and relationship to you, of each person with whom you discussed these symptoms or effects:

	
		
	Name
	Relationship

	 
	 

	 
	 

	 
	 

Damage to Reputation
		
	74.
	Have you experienced damage to your reputation that you believe was a result of your complaints of discrimination, harassment, or hostile work environment based on race or color, or retaliation for opposing such conduct based on race or color?

___ Yes    ___ No      If your answer is “No,” please go to Question 77.
If your answer is “Yes,” complete Questions 75-76 below.
		
	75.
	Please describe the damage to your reputation that you have experienced.  Please be as specific as possible.

________________________________________________________________________
		
	76.
	When did you experience damage to your reputation?

________________________________________________________________________
EEOC  AND AGENCY COMPLAINTS AGAINST WET SEAL
		
	77.
	Did you ever file a complaint or charge with the Equal Employment Opportunity Commission (EEOC) or a state fair employment agency before May 8, 2013 regarding claims of discrimination, harassment, or hostile work environment based on race or color, or retaliation based on opposing such conduct based on race or color at Wet Seal?

___ Yes    ___ No      If you answered “No,” please go to Question 81.
If the answer is “Yes,” complete Questions 78-80 below. 
		
	78.
	Please state the date of the complaint or charge, to the best of your recollection, and the name of the agency where you filed the complaint or charge.  Please attach a copy if you have one.

________________________________________________________________________
		
	79.
	In your complaint or charge with the EEOC or state fair employment agency, did you allege any of the following?  Please check all that apply.

		
	______
	Discrimination based on race or color in promotion to Co-Manager, Store Manager, District Director in Training, and District Director

______    Discrimination based on race or color in pay
		
	______
	Discrimination based on race or color with regard to terminations, demotions, and discipline

		
	______
	Retaliation based on opposition to Wet Seal's discrimination, harassment or hostile work environment based on race or color 

		
	80.
	Has the EEOC or a state fair employment agency issued a determination that Wet Seal violated federal or state law with respect to your claims of discrimination, harassment and/or hostile work environment based on race or color or your claims of retaliation?

		
	___ Yes
	___ No        If the answer is yes, please attach a copy if you have one.

COMMUNICATIONS WITH CLASS COUNSEL
		
	81.
	Did you communicate with class counsel or anyone in their offices (listed in the Class Notice you received with this Claim Form), or provide information through the web site at http://wetsealdiscrimination.com before May 8, 2013 regarding any claims of discrimination based on race or color with respect to pay, promotions, terminations, demotions, and discipline (resulting in loss of pay); harassment or hostile work environment based on race or color; or retaliation for opposing such conduct based on race or color at Wet Seal? 

___ Yes    ___ No         If the answer is “No,” please go to Part D.
If the answer is “Yes,” complete Questions 82-84 below.
		
	82.
	Please list the approximate date or dates, to the best of your recollection, when you communicated with Class Counsel or their staff.

________________________________________________________________________
		
	83.
	With whom did you communicate?  List any names of attorneys, law firms, or staff, to the best of your recollection.

________________________________________________________________________
		
	84.
	Did you submit a website questionnaire through the website at  http://wetsealdiscrimination.com?

___ Yes    ___ No    

Part D-CERTIFICATION
You must sign and date your Claim Form below in order for your claim to be valid.
If you are under 18 years of age, your parent or legal guardian must also sign your Claim Form. If you cannot sign your name due to a disability or incapacity, the Claim Form may be signed by your designated representative.  If a Class Member has died, the executor of the estate or authorized representative may complete and sign the Claim Form.  

I, ________________________________, declare under penalty of perjury that the
print name
information and  facts I have stated in this Claim Form are true and accurate to the best of my personal knowledge.  I understand that making a knowingly false statement may subject me to prosecution for perjury.

Date:  __________________________        _________________________________
Signature of Claimant

For representatives of minors or disabled claimants and executors of estates: 
 I, ______________________, declare under penalty of perjury that the
print name 
information and  facts I have stated in this Claim Form are true and accurate to the best of my personal knowledge.  I understand that making a knowingly false statement may subject me to prosecution for perjury.  I submit this claim in my capacity as (check one) ___parent of a minor claimant, ____representative of a disabled or deceased claimant or ___ executor of the estate of  the deceased claimant, and represent that I am authorized to do so.

Date:  ______________________                    _________________________________
Signature of Parent, Representative or
Executor

This Claim Form must be postmarked on or before October 8, 2013.  Please use the enclosed self-addressed envelope to return your completed Claim Form.  A Claim Form postmarked later than October 8, 2013 will not be accepted for any reason.  This Claim Form must be mailed to:
Cogdell v. Wet Seal Claims Administrator
P.O. Box [#]
Tallahassee, FL  32302-[#]

END OF CLAIM FORM

EXHIBIT 3

[FOR THE LETTERHEAD OF THE WET SEAL, INC.]

IMPORTANT NOTIFICATION FROM JOHN D. GOODMAN
CHIEF EXECUTIVE OFFICER OF THE WET SEAL, INC.
to 
African-American and/or Black persons who worked as a store management employee (Assistant Manager, Co-Manager, Acting Store Manager, or Store Manager) in a Wet Seal or Arden B. store at some time from May 8, 2008 to [DATE], 2013 (“Class Members”)

Re:    Nicole Cogdell et al. v. The Wet Seal, Inc., et al., U.S. District Court, Central of California Case No.12-CV-01138 AG (ANx)

With this Important Notification, you have received a Notice of Proposed Settlement of Employment Discrimination Class Action, a Claim Form and other documents advising you about a class action settlement and your right to claim your share of the settlement monies if you are a Class Member.  Please read all of the documents carefully.

I want you to know that The Wet Seal, Inc. supports this settlement.  If you are a Class Member, I encourage you to fill out the Claim Form and return it to the Claims Administrator before the postmark deadline, October 8, 2013, so that you can participate in the settlement.  

As indicated in the attached Notice of Class Action Settlement, the settlement provides for a pool of up to $5,580,000 to pay claims to those Class Members who properly submit Claim Forms by the October 8, 2013 deadline, assuming the Court grants final approval of the settlement.  The Claims Administrator will be instructed to distribute all of this settlement pool to eligible Class Members who make claims.    

Wet Seal's managers will not be told who has or has not made a claim.  Wet Seal has a no-retaliation policy.  You will not be retaliated against for submitting a Claim Form.  Wet Seal will pay out the same total amount of money whether or not you submit your claim.  If you are a Class Member, we encourage you to timely submit your Claim Form.   

Wet Seal values a diverse work force and I believe that a dynamic and representative employee base allows us to best serve all of our customers.  Wet Seal is committed to nondiscriminatory employment practices that create a welcome environment in which people of all backgrounds are respected.

Very truly yours,

John D. Goodman
Chief Executive Officer

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