In Re Regions Morgan Keegan Securities, Derivative And ...securities.stanford.edu/filings-documents/1038/MAMI_01/2015122_r01x_07CV02784.pdfIN RE REGIONS MORGAN KEEGAN SECURITIES, DERIVATIVE

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

WESTERN DIVISION

IN RE REGIONS MORGAN KEEGAN SECURITIES, DERIVATIVE AND ERISA

LITIGATION

This Document Relates to:

In re Regions Morgan Keegan Open-End Mutual Fund Litigation,

No. 2:07-cv-02784-SHM-dkv

)))))))))))))

MDL Docket No. 2009

Judge Samuel H. Mays, Jr.

Magistrate Judge Diane K. Vescovo

DECLARATION OF GREGG M. FISHBEIN IN SUPPORT OF LEAD

PLAINTIFFS’ MOTION FOR PRELIMINARY APPROVAL OF PROPOSED CLASS SETTLEMENT AND CLASS CERTIFICATION

1. I am a partner with the law firm of Lockridge Grindal Nauen P.L.L.P.,

counsel of record for Plaintiffs. I make this declaration in support of Lead Plaintiffs’

Motion for Preliminary Approval of Proposed Class Settlement and Class Certification. I

have personal knowledge of the matters stated herein, and, if called upon, I could and

would competently testify thereto.

2. Attached are true and correct copies of the following exhibits:

Exhibit 1: Stipulation and Agreement of Class Settlement with exhibits; Exhibit 2: Proposed Term Sheet for Settlement of RMK Open-End Funds

Litigation; Exhibit 3: Renzo Comolli & Svetlana Strykh, Recent Trends in Securities Class

Litigation: 2013 Full-Year Review (NERA January 21, 2014);

Case 2:07-cv-02784-SHM-dkv Document 415-1 Filed 01/22/15 Page 1 of 146 PageID 20969

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Exhibit 4: Laarni Bulan, Ellen M. Ryan & Lauren E. Simmons, Securities Class Action Settlements: 2013 Review and Analysis (Cornerstone Research 2013);

Exhibit 5: Lockridge Grindal Nauen P.L.L.P. firm resume; Exhibit 6: Apperson Crump PLC firm resume; Exhibit 7: Zimmerman Reed, P.L.L.P. firm resume; and Exhibit 8: Garden City Group firm resume

FURTHER YOUR DECLARANT SAITH NOT. Dated: January 22, 2015 s/ Gregg M. Fishbein

Gregg M. Fishbein

CERTIFICATE OF SERVICE

The undersigned hereby certifies that this 22nd day of January, 2015, a true and correct copy of the forgoing document was served by electronic means via e-mail transmission (including the Court’s ECF System) on the following: Shepherd D. Tate, Esq. Michael A. Brady, Esq. Bass, Berry, & Sims, PLC 100 Peabody Place, Suite 900 Memphis, TN 38103-3672 Michael L. Dagley, Esq. Britt K. Latham, Esq. W. Brantley Phillips, Jr., Esq. Bass, Berry, & Sims, PLC 150 Third Avenue South, Ste. 2800 Nashville, TN 37201


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David B. Tulchin, Esq. David E. Swarts, Esq. Sullivan & Cromwell, LLP 125 Broad Street New York, NY 10004 S. Lawrence Polk, Esq. Sutherland Asbill & Brennan LLP 999 Peachtree Street, NE Atlanta, GA 30309-3996 Jeffrey Maletta, Esq. Nicole A. Baker, Esq. K & L Gates 1601 K Street NW Washington, DC 20006 Emily Nicklin, Esq. Timothy A. Duffy, Esq. Kristopher Ritter, Esq. Devon M. Largio, Esq. Kirkland & Ellis 200 East Randolph Dr., Ste. 5400 Chicago, IL 60601-6636 Leo Maurice Bearman, Jr., Esq. Eugene J. Podesta, Jr., Esq. Baker Donelson Bearman Caldwell & Berkowitz 165 Madison Avenue, Suite 2000 Memphis, TN 38103 Peter S. Fruin, Esq. Scott S. Brown, Esq. Luther M. Dorr, Jr., Esq. Maibeth J. Porter, Esq. Maynard Cooper & Gale PC 2400 Regions Harbert Plaza 1901 Sixth Avenue North Birmingham, AL 35203


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R. Hal Meeks, Jr., Esq. Amanda N. Wilson, Esq. James Bates Brannan Grover LLP 3339 Peachtree Street, NE Suite 1700 Atlanta, GA 30326 s/ Jerome A. Broadhurst Jerome A. Broadhurst


EXHIBIT 1


IN TIE UNITED STATES DISTRICT COITItTFOR TIDE WESTERN DISTRICT OF TENNESSEE

WESTERN DIVISION

IN RE REGIONS MORGAN KEEGAN

SECURITIES, DERNATIVE and ERISA LITI-

GATION


In re Regzons Morgan Keegan Open-End MutualFund Litigation,


MDL Docket No. 2009



STIPULATION AND AGREEMENT OF CLASS SETTLEMENT

This stipulation and agreement of settlement (the "Class Settlement Agreement") is made

and entered into by and between, each by and through their respective counsel: (i) Lead Plaintiffs

Estate of Kathryn S. Cashdollar, Dajalis Ltd., Jeanette H. Landers, H. Austin Landers, and Frank

D. Tutor ("Lead Plaintiffs" or "Plaintiffs"); (ii) PricewaterhouseCoopers LLP ("PwC"); iii the~~)

Morgan Keegan Defendants (defined below); (iv) Defendant Regions Financial Corporation

("RFC"); (v) Defendant Regions Bank ("RB"); (vi) the Open-End Funds (defined below); (vii)

the Officer Defendants (defined below); and (viii) the Director Defendants (defined below)

(collectively (ii) through (viii), "Defendants"; and together with Lead Plaintiffs, the "Parties").

WHEREAS:

A. All capitalized words or terms herein shall have the meanings ascribed thereto

herein and in Paragraph 1 below.

B. Beginning in December 2007, shareholders filed several securities class action

complaints in the United States District Court for the Western District of Tennessee on behalf of

persons and entities who purchased or otherwise acquired shares of three "open-end" fixed-

income mutual funds that were offered by Defendant Morgan Keegan &Company, Inc.

479236.1


("Morgan Keegan"). The three Open-End Funds were the Regions Morgan Keegan Select Short

Term Bond Fund ("STF"), the Regions Morgan Keegan Select Intermediate Bond Fund ("IBF"),

and the Regions Morgan Keegan Select High Income Fund ("HIF"), each of which was a series

of Morgan Keegan Select Fund, Inc., a registered investment company (together with STF, IBF

and HIF, the "Open-End Funds" or "Funds"),I

C. In July 2008, Hyperion Brookfield Asset Management, Inc., a New York-based

investment adviser, assumed management of the Funds. New Directors for the Funds took office

at that time ("New Board").

D. On September 23, 2008, Judge Samuel H. Mays, Jr. issued an Order consolidating

the class actions on behalf of purchasers of shares in the Open-End Funds under the style In re

Regions MoNgan Keegan Open-End Mutual Fund Litigation, No. 07-cv-02784-SMH-dkv (W.D.

Tenn.) ("Class Action Lawsuit").

E. On September 30, 2009, after Notice concerning lead plaintiff proceedings

pursuant to the Private Securities Litigation Reform Act of 1995 ("PSLRA") was reissued, Judge

Mays appointed Lead Plaintiffs and approved their selection of Lockridge Grindal Nauen

P.L.L.P, and Head Seifert &Vander Weide, P.A.2 as Lead Counsel and Apperson, Crump and

Maxwell as Liaison Counsel to represent the Class in the Class Action Lawsuit.

F, In the Class Action Lawsuit, Lead Plaintiffs filed a Consolidated Amended Class

Action Complaint on November 30, 2009, alleging violations of the Securities Act of 1933, the

1 Following shareholder approval of Hyperion Brookfield Asset Management as the Fund's

investment advisor in July 2008, the Funds were renamed Helios Select Short Term Bond Fund,

Helios Select Intermediate Bond Fund, and Helios Select High Income Fund; Morgan Keegan

Select Fund, Inc., was renamed Helios Select Fund, Inc.2 On October 7, 2011, Plaintiffs filed a Notice of Change of Affiliation of Counsel to note

that Head Seifert &Vander Weide, P.A. was dissolving and that Vernon J. Vander Weide had

joined Lockridge Grindal Nauen P.L.L.P.

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Securities Exchange -Act of 1934, and the Investment Company Act of 1940. By its Order dated

September 30, 2010, the Court denied Defendants' motions to dismiss Plaintiffs' 1933 Securities

Act claims and granted their motions to dismiss Plaintiffs' 1934 Exchange Act and Investment

Company Act claims. Lead Plaintiffs' and Defendants' motions for reconsideration were denied

on December 30, 2010. On June 8, 2012, Lead Plaintiffs moved for leave to file their proposed

Second Consolidated Amended Class Action Complaint ("SCAC"). On June 20, 2012, pursuant

to agreement with Defendants, the Court entered an Order granting an extension of time within

which to answer or otherwise respond to Lead Plaintiffs' motion for leave.

G. On November 30, 2010, the Funds filed a status report notifying the Court that

they had reached an agreement with Plaintiffs, reflected in a Memorandum of Understanding

("MOU" and as subsequently amended ("AMOU")). On December 6, 2010, the District Court

entered an order preliminarily approving the agreement outlined in the MOU. As part of the

Litigation, the Funds provided 510,000 pages of documents to Plaintiffs, including 236,000

pages of PwC documents and work papers that PwC had provided to the Funds.

H. On March 14, 2011, Plaintiffs and the Funds jointly moved for approval of the

Partial Settlement between the class and the Funds and approval of the AMOU. All Defendants

except the Funds opposed. The Court has not ruled on this joint motion by Plaintiffs and the

Funds.

I. In the summer of 2013, the Parties retained former United States District Court

Judge Layn R. Phillips, a respected and experienced mediator in complex class actions, to assist

them in exploring a potential negotiated resolution of the claims asserted in the Lawsuit. On July

18, 2013, Defendants provided Plaintiffs' Counsel with more than 6.7 million pages of

confidential documents and other confidential information in advance of the mediation. On

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December 17 and 18, 2013, the Parties met with Judge Phillips in Chicago, Illinois for two days

of intensive settlement negotiations. The mediation sessions were preceded by an exchange of

comprehensive mediation statements and supporting evidence, including information from expert

reports. While these discussions narrowed the Parties' differences and clarified the merits and

value of the Parties' claims and defenses, no agreement was reached.

J. On February 19, 2014, the Parties resumed settlement negotiations with Judge

Phillips in New York, New York. The Parties ultimately reached an agreement-in-principle and

signed a "Proposed Term Sheet for Settlement of RMK Open-End Funds Litigation" (the

"Settlement Term Sheet") consistent with the terms and conditions set forth herein.

K. On February 25, 2014, the Parties advised the Court that they were working on a

resolution and requested that the Court stay issuance of any ruling on the motion for approval of

the Partial Settlement and AMOU pending the consummation of this Class Settlement

Agreement. As part of the Settlement, Plaintiffs and the Funds are withdrawing their motion for

approval of the Partial Settlement and the AMOU.

L. Plaintiffs, through Lead Counsel, Liaison Counsel, and their additional counsel,

have conducted a thorough investigation relating to the claims, defenses, and underlying events

and transactions that are the subject of the Lawsuit. This process included reviewing and

analyzing: (i) over seven million pages of nonpublic e-mails, valuation-related materials and

other pertinent documents produced by the Funds, PwC ,and the Morgan Keegan Defendants; (ii)

over 200,000 pages of audit workpapers produced by PwC; (iii) publicly available orders, reports

and other information concerning the administrative enforcement proceedings brought by the

SEC, multiple State securities regulators, and the Financial Industry Regulatory Authority

("FINRA") against certain Defendants related to some of the conduct at issue in the Lawsuit; (iv)

479236.1 a


documents filed publicly by the Open-End Funds and certain Defendants with the SEC; (v) other

publicly available information and data concerning the Open-End Funds and the claims asserted

in the Complaint, including press releases, news articles, and other public statements issued by or

concerning the Defendants; (vi) research reports issued by financial analysts concerning the

Open-End Funds and securities held in the Open-End Funds' portfolios; (vii) prospectuses and

other offering documents related to the mortgage- and asset-backed securities in which the Funds

invested; (viii) pleadings filed in other pending lawsuits naming certain of the Defendants herein

as defendants or nominal defendants; and (ix) the applicable law governing the claims and

potential defenses. Plaintiffs' Counsel also reviewed the deposition transcripts of certain

employees of Defendants taken in the regulatory enforcement actions and FINRA arbitration

proceedings that were based on some of the allegations in the Lawsuit. Plaintiffs' Counsel also

consulted with a qualified expert on damages and causation issues as well as accounting and

auditing and investment company experts.

M. Defendants have denied and continue to deny any wrongdoing or any violation of

law, including any liability under the federal securities laws. Defendants have denied and

continue to deny each of the claims alleged by Plaintiffs on behalf of the Class, including all

claims asserted in the Complaint.

N. This Class Settlement Agreement, whether or not consummated, any proceedings

relating to any settlement, or any of the terms of any settlement, whether or not consummated,

shall in no event be construed as, or deemed to be evidence of, an admission or concession on the

part of the Parties with respect to any claim of any liability or damage whatsoever, or any

infirmity in any claim or defense that has been or could have been asserted. Defendants are

entering into this Settlement to eliminate the burden, expense, uncertainty, distraction, and risk of

479236.1 S


further litigation.

O. Plaintiffs believe that the claims asserted in the Class Action Lawsuit have merit

and that the facts and evidence reviewed and analyzed to date support the claims asserted.

However, Plaintiffs and their counsel recognize and acknowledge the expense and length of

continued proceedings necessary to prosecute the Class Action Lawsuit against Defendants

through trial and appeals. Plaintiffs and their counsel also have -taken into account the uncertain

outcome and the risk of any litigation, especially in complex actions such as the Lawsuit, as well

as the difficulties and delays inherent in such litigation. Plaintiffs' Counsel also are mindful of

the possible defenses to the claims alleged in the Class Action Lawsuit. Based on their

investigation and evaluation, Plaintiffs and their counsel believe that the Class Settlement set

forth in this Class Settlement Agreement confers substantial monetary benefits upon the Class

and is in the best interests of Plaintiffs and the Class.

NOW, THEREFORE, without any concession by Plaintiffs that the Class Action

Lawsuit lacks merit, and without any concession by Defendants of any liability or wrongdoing or

lack of merit in their defenses, it is hereby STIPULATED ANl) AGREED, by and among the

Parties to this Class Settlement Agreement, through their respective attorneys, subject to the

approval of the Court pursuant to Rule 23(e) of the Federal Rules of Civil Procedure, that, in

consideration of the benefits flowing to the Parties hereto, all Released Claims and all Released

Defendants' Claims as against all Released Parties shall be compromised, settled, released and

dismissed with prejudice and without costs, upon and subject to the following terms and

conditions.

DEFINITIONS

1. As used in this Class Settlement Agreement, the following terms shall have the

479236.1 6


meanings set forth below:

(a) "Alternative Judgment" means a form of final judgment that may be

entered by the Court but in a form other than the form of Judgment provided for in this Class

Settlement Agreement and where none of the Parties hereto elects to terminate this Settlement by

reason of such varzance.

(b) "Authorized Claimant" means a Class Member who timely submits a valid

Proof of Claim and Release form to the Claims Administrator that is accepted for payment by the

Court.

(c) "Claims Administrator" means the firm to be retained by Plaintiffs'

Counsel, subject to Court approval, to provide all notices approved by the Court to Class

Members, process Proofs of Claim and administer the Settlement.

(d) "Class" or "Class Member" or "Settlement Class" or "Settlement Class

Member" means: all Persons (as defined below) who (1) purchased any class of redeemable

shares of STF, IBF or HIF at any time during the period from December 6, 2004 through

December 6, 2007, inclusive; or (2) held and/or redeemed on or after July 3, 2006 through the

end of the Settlement Class Period (as defined below) shares of STF, IBF or HIF and were

damaged thereby. Excluded from the Class Settlement, the Settlement Class and Settlement

Class Members and from any participation in any form in this Settlement ("Excluded Persons")

are:

(i) the Individual Defendants and the members of the immediate

families of the Individual Defendants;

(ii) Defendants, other than the Individual Defendants, and the

subsidiaries and affiliates of Defendants (including but not limited to RFC, Morgan Asset

479236.1 7


Management, Inc., RB, Morgan Keegan, Morgan Properties LLC, and MK Holding, Inc.);

(iii) any Person who is a director ox officer subject to § 16 of the

Securities Exchange Act of 1934, partner or controlling person of the Open-End Funds or any

other Defendant;

(iv) any entity in which any Defendant has a controlling interest;

(v) any member of the TAL Fiduciary Accounts (defined below);

(vi) any Person who has at any time filed a proceeding with FINRA

against one or more Released Defendant Parties concerning losses alleged to be attributable to

the purchase or holding of shares in one or more of the Open-End Funds during the Class Period,

and such proceeding was not subsequently withdrawn or dismissed pursuant to a specific

agreement to allow the Person to participate as a Class Member;

(vii) any Person who has at any time filed a state court action that has

not been removed to federal court, or has been removed and remanded, against one or more of

the Defendants concerning losses alleged to be attributable to the purchase or holding of shares

in one or more of the Open-End Funds during the Class Period, and whose claims in that action

have been dismissed with prejudice, released, or fully adjudicated absent a specific agreement

with such Defendants) to allow the Person to participate as a Class Member;

(viii) any Person who has at any time filed a federal action or state court

action that has been removed to federal court, against one or more of the Defendants concerning

losses alleged to be attributable to the purchase or holding of shares in one or more of the Open-

End Funds during the Class Period, and whose claims in that action have been dismissed with

prejudice, released, or fully adjudicated absent a specific agreement with such Defendants) to

allow the Person to participate as a Class Member;

479236.1 g


(ix) any Person who has at any time individually settled with one or

more of the Defendants claims concerning losses alleged to be attributable to the purchase or

holding of shares in one or more of the Open-End Funds during the Class Period, and whose

claims in that settlement have been dismissed with prejudice, released, or fully adjudicated

absent a specific agreement with such Defendants) to allow the Person to participate as a Class

Member;

(x) any Person who submits a valid and timely request for exclusion

from the Class in accordance with the requirements set forth in the Notice; and

(xi) the legal representatives, heirs, successors and assigns of any such

excluded Person or entity.

Provided, however, these exclusions do not extend to the Regions 401(k) Plan or

the Morgan Keegan 401(k) Plan, or any portion thereof, which plans have participants who may

have held shares in STF, IBF and/or HIF. Neither the Regions 401(k) Plan nor the Morgan

Keegan 401(k) Plan shall be construed, for purposes of this Settlement, as being either

"affiliates" of any Defendant or entities in which any Defendant has a controlling interest.

Moreover, notwithstanding anything in this Settlement or plan of allocation to the contrary,

nothing in this Settlement or plan of allocation shall be .construed in any way to limit the ability

of the Regions 401(k) Plan or the Morgan Keegan 401(k) Plan to fully participate in the

Settlement and in any recovery hereunder. These exclusions also do not extend to trusts or

accounts as to which the control or legal ownership by any Defendant (or by any subsidiary or

affiliate of any Defendant) is derived or arises from an appointment as trustee, custodian, agent,

or other fiduciary ("Fiduciary Accounts") unless (i) that Fiduciary Account is part of the TAL

Fiduciary Accounts or (ii) with respect to any such Fiduciary Account, any Person has filed (A) a

479236.1 9


proceeding (described in Paragraph 1(d)(vi)-(viii)) against one or more Released Defendant

Parties concerning the purchase or holding of shares in one or more of the Open-End Funds

during the Class Period and such proceeding was not subsequently dismissed to allow the Person

to specifically participate as a Class Member or (B) otherwise resolved said Person's claims as

contemplated in Paragraph 1(d)(ix). With respect to Open-End Fund shares for which the TAL

Orders authorize the Trustee ad Litem to prosecute the claims or causes of action pleaded in the

Complaint ("TAL Represented Open-End Fund Shares"), "Class" and "Class Member" also

excludes Persons who are, or were during the Class Period, trust and custodial account

beneficiaries, principals, settlors, co-trustees, and others owning beneficial or other interests in

the TAL Represented Open-End Fund Shares ("Such Persons"), but this exclusion- applies only

to any claims or causes of action of Such Persons that the Trustee ad Litem is authorized by the

TAI, Orders to prosecute. With respect to Open-End Fund Shares that are not TAL Represented

Open-End Fund Shares and in which Such Persons have a beneficial or other interest, the

foregoing partial exclusion of Such Persons does not apply.

(e) "Class Period" or "Settlement Class Period" means the period December

6, 2004 through May 29, 2009.

(~ "Class Settlement" means the resolution of the Class Action Lawsuit as

against Defendants in accordance with the terms and provisions of this Class Settlement

Agreement.

(g) "Class Settlement Agreement" means this Stipulation and Agreement of

Class Settlement.

(h) "Class Settlement Amount" means the total principal amount of One

Hundred Twenty-Five Million and no/100 Dollars ($125,000,000.00) in cash less, pursuant to a

~F79236.1 1 ~


separate settlement agreement between Lead Plaintiffs, Derivative Plaintiffs and the Funds in the

Derivative Action Lawsuit, Fifteen Million and no/100 Dollars ($15,000,000.00) to be paid to the

Funds by certain Defendants other than the Funds to settle the claims asserted in the Derivative

Action Lawsuit on behalf of the Funds against such other Defendants ("Funds Settlement

Amount") for the net cash amount of One Hundred Ten Million and no/100 Dollars

($110,000,000.00).

(i) "Class Settlement Fund" means the Class Settlement Amount and any

earnings thereon.

(j) "Complaint" means the [Proposed] Second Consolidated Amended Class

Action Complaint filed on June 6, 2012 (ECF No. 395, filed as Exhibit A to ECF No. 394 in

Case No. 2:07-cv-02784-SHM-dkv).

(k) "Court" means the United States District Court for the Western District of

Tennessee, Western Division.

(1) "Defendants" means the Morgan Keegan Defendants, RFC, RB, the Open-

End Funds, the Officer Defendants, the Director Defendants, and PwC.

(m) "Defendants' Counsel" means the law firms of Bass Berry &Sims PLC;

Maynard, Cooper &Gale, P.C.; Sullivan &Cromwell LLP; K&L Gates LLP; Paul Hastings

LLP; James, Bates, Brannan &Groover LLP; Sutherland Asbill &Brennan, LLP; Kirkland &

Ellis LLP; Evans Petree, PC; and Baker Donelson Bearman Caldwell &Berkowitz.

(n) "Derivative Action Lawsuit" means Landers, et al. v. Morgan Asset

Management, Inc., et al., No. 2:08-cv-02260-SHM-dkv.

(o) "Derivative Plaintiffs" means Jeanette H. Landers, H. Austin Landers, the

Estates of Charles M. Crump and Diana W. Crump, James H. Frazier, James P. Whitaker, and

Peggy C. Whitaker.

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(p) "Director Defendants" means Allen B. Morgan, Jr., J. Kenneth Alderman,

Jack R. Blair, Albert C. Johnson, William Jefferies Mann, James Stillman R. McFadden, W.

Randall Pittman, Mary S. Stone, and Archie W. Willis III. "Independent Directors" means

Director Defendants Blair, Johnson, Mann, McFadden, Pittman, Stone and Willis.

(q) "Distribution Order" means an order of the Court approving the Claims

Administrator's administrative determinations concerning the acceptance and rejection of the

claims submitted and approving any fees and expenses not previously paid, including the fees

and expenses of the Claims Administrator and, if the Effective Date has occurred, directing

payment of the Net Class Settlement Fund to Authorized Claimants.

(r) "Effective Date" means the date upon which the Settlement shall become

effective, as set forth in Paragraph 38 below.

(s) "Escrow Account" means the separate escrow account designated by Lead

Counsel at The Huntington National Bank, into which the Class Settlement Amount and the

Funds Settlement Amount are to be deposited for the benefit of the Settlement Class and the

Funds, respectively. The Escrow Account, and the Class Settlement Fund portion of the Escrow

Account, is a "qualified settlement fund" ("QSF") within the meaning of Treas. Reg. § 1.468B-1,

as provided in ¶ 11 below.

(t) "Escrow Agent" means Lockridge Grindal Nauen P.L.L.P.

(u) "Excluded Persons" means those Persons excluded from the Settlement

Class as defined in Paragraph 1(d).

(v) "Final," with respect to a court order, means the later of: (i) if there is an

appeal from a court order, the date of final affirmance on appeal and the expiration of the time

for any further judicial review whether by appeal, reconsideration or a petition for a writ of

479236.1 12


certiorari and, if certiorari is granted, the date of final affirmance of the order following review

pursuant to the grant; or (ii) the date of final dismissal of any appeal from the order or the final

dismissal of any proceeding on certiorari to review the order; or (iii) the expiration of the time for

the filing or noticing of any appeal from the order (or, if the date for taking an appeal or seeking

review of the order shall be extended beyond this time by order of the issuing court, by operation

of law or otherwise, or if such extension is requested, the date of expiration of any extension if

any appeal or review is not sought). However, any appeal or proceeding seeking subsequent

judicial review pertaining solely to the Plan of Allocation of the Net Class Settlement Fund, the

Court's award of attorneys' fees or expenses, Notice and Administration Expenses, or any other

fees, or expenses awarded by the Court, shall not in any way delay or affect the time set forth

above for the Judgment or Alternative Judgment to become Final, or otherwise preclude the

Judgment or Alternative Judgment from becoming Final.

(w) "Funds Settlement Amount" means the amount of Fifteen Million and

no/100 Dollars ($15,000,000.00) to be paid to the Funds by Defendants in the Derivative Action

Lawsuit pursuant to the terms of the separate settlement agreement in the Derivative Action

Lawsuit. The Funds, Lead Plaintiffs, and Derivative Plaintiffs negotiated the allocation of the

Class Settlement Amount. Defendants, other than the Funds, did not participate in the

negotiations of the allocation of the monies paid to settle the Class Action Lawsuit or the

Derivative Action Lawsuit and have no responsibility therefor, but said other Defendants agree

that some amount must be paid to the Funds in settlement of the claims against them in the

Derivative Action Lawsuit and that said Defendants so intended.

(x) "Funds Shareholder" or "Funds Shareholders" means the record and

beneficial owners of common stock in the Open-End Funds (defined below) as of May 29, 2009.

479236.1 13


Defendants.

(y) "Individual Defendants" means the Officer Defendants and Director

(z) "Judgment" means the proposed judgment to be entered approving the

Settlement substantially in the form annexed hereto as Exhibit B.

(aa) "Lawsuit" or "Class Action Lawsuit" means In Ne Regions Morgan

Keegan Open-End Mutual Fund Litigation, No. 2:07-cv-02784-SH1VI-dkv (W.D. Tenn.), along

with all the cases consolidated therewith.

(bb) "Lead Counsel" and "Liaison Counsel" means the law firms of Lockridge

Grindal Nauen P.L.L.P. and Apperson Crump PLC, respectively.

(cc) "Lead Plaintiffs" means the Estate of Kathryn S. Cashdollar, Dajalis Ltd.,

Jeanette H. Landers, H. Austin Landers, and Frank D. Tutor.

(dd) "Morgan Keegan Defendants" means Morgan Keegan &Company, Inc.,

Morgan Asset Management, Inc., and MK Holding, Inc.

(ee) "Net Class Settlement Fund" means the Class Settlement Fund less: (i)

Court-awarded attorneys' fees andexpenses; (ii) Notice and Administration Expenses; (iii)

Taxes; and (iv) any other fees or expenses approved by the Court, including any award to Lead

Plaintiffs for reasonable costs and expenses (including lost wages) pursuant to the PSLRA.

(f~ "Notice" means the Notice of Pendency and Proposed Settlement of Class

and Derivative Actions and Motion for Attorneys' Fees and Expenses, which is to be sent to

Class Members and the Funds Shareholders, subject to approval of the Court, and shall be

substantially in the form annexed hereto as Exhibit A-1 to Exhibit A hereto.

(gg) "Notice and Administration Expenses" means all fees and expenses

incurred in connection with providing notice to the Settlement Class and administering the Class

479236.1 14'


Settlement, including but not limited to: (i) providing notice of the proposed Class Settlement by

mail, publication and other means to Class Members; (ii) receiving and reviewing claims; (iii)

applying the Plan of Allocation; (iv) communicating with Persons regarding the proposed Class

Settlement and claims administration process; (v) distributing the proceeds of the Class

Settlement; and (vi) fees related to the Escrow Account and investment of the Class Settlement

Fund.

(hh) "Officer Defendants" means Carter E. Anthony, Brian B. Sullivan, Joseph

C. Weller, J. Thompson Weller, G. Douglas Edwards, Charles D. Maxwell, David M. George,

Michelle F. Wood, James C. Kelsoe, Jr., David H. Tannehill and Thomas R. Gamble.

(ii) "Open-End Funds" or "Funds" means Morgan Keegan Select Fund, Inc.

(n/k/a Helios Select Fund, Inc.) and its portfolios STF, IBF, and HIF and the Funds' classes A, C

or I of their respective shares: STF (MSTBX, RSTCX, MSBIX), IBF (MKIBX, RIBCX, RIBIX),

and HIF (MKHIX, RHICK, RHIIX).

(jj) "Party" or "Parties" means (i) Defendants and (ii) Plaintiffs on behalf of

themselves and the other Class Members.

(kk) "Person" means an individual, corporation (including all divisions and

subsidiaries), general or limited partnership, association, joint stock company, joint venture,

limited liability company, professional corporation, estate, legal representative, trust or custodial

account (and their respective trustees, representatives, agents, and fiduciaries), unincorporated

association, government or any political subdivision or agency thereof, and any other business or

legal entity, including all trusts and custodial accounts (and their respective trustees,

representatives, agents, and fiduciaries) for which Regions Bank is or was a trustee or a directed

trustee, custodian, or agent, or other fiduciary (which includes, but is not limited to, all trusts and

479236.1 15


custodial accounts within the scope of the TAL Fiduciary Accounts and TAL Orders).

(11) "Plaintiffs" means Lead Plaintiffs.

(mm) "Plaintiffs' Counsel" means Lead Counsel, Liaison Counsel and the law

firm Zimmerman Reed, LLP

(nn) "Preliminary Approval Order" means the proposed order preliminarily

approving the Settlement and, pursuant to Rule 23, directing notice to the Settlement Class of the

pendency of the Lawsuit and of the Class Settlement, which, subject to the approval of the Court,

shall be substantially in the form annexed hereto as Exhibit A.

(oo) "Proof of Claim" means the Proof of Claim and Release form for

submitting a claim, subject to approval of the Court, which shall be substantially in the form

annexed as Exhibit A-2 to Exhibit A hereto.

(pp) "PSLRA" means the Private Securities Litigation Reform Act of 1995.

(qq) "Released Claims" means any and all claims, rights, causes of action,

demands, actions, debts, sums of money, obligations, judgments, suits, and liabilities of every

nature and description, including both known and Unknown Claims (as defined below), whether

fixed or contingent, liquidated or un-liquidated, at law or in equity, known or unknown,

suspected or unsuspected, disclosed or undisclosed, concealed or hidden, asserted or unasserted,

whether class or individual in nature, (i) that Plaintiffs or any other Class Member asserted in the

Complaint or any complaint filed in the Lawsuit; or (ii) that arise out of, relate to, or are in

connection with the claims, allegations, transactions, facts, events, acts, disclosures, statements,

representations or omissions or failures to act involved, set forth, or referred to in the Complaint,

but only as they relate to investments in the Open-End Funds during the Class Period; provided,

however, that Released Claims do not include (a) claims to enforce the Settlement; (b) any

479236.1 16


governmental or regulatory agency's claims in any criminal, or civil, or administrative action

against any of the Released Defendant Parties, or any claims or rights to compensation from the

SEC Fair Fund, the States' Fund, or other victim compensation funds resulting from any such

governmental or regulatory agency action; and (c) claims or causes of action of the types asserted

in In re Regions Mogan Keegan ERISA Litigation, No. 2:08-cv-02192-SHM-dkv (W.D. Tenn.).

(rr) "Released Defendant Parties" means Defendants, their past or present

subsidiaries, parents, successors and predecessors, officers, directors, shareholders, partners,

agents, employees, attorneys, auditors, assigns, affiliates, and insurers; the spouses, members of

the immediate families, representatives, and heirs of the Individual Defendants, as well as any

trust of which any Individual Defendant is the settlor or which is for the benefit of any of their

immediate family members; and any person, firm, trust, corporation, officer, director or other

individual or entity in which any Defendant has a controlling interest or which is related to or

affiliated with any of the Defendants and the legal representatives, heirs, successors in interest or

assigns of Defendants.

(ss) "Released Defendants' Claims" means all claims, including both known

and Unknown Claims (as defined below), whether arising under federal, state, common or

administrative law, or any other law, that the Defendants could have asserted against any of the

Parties that arise out of or relate in any way to the institution, prosecution, or settlement of the

Lawsuit (other than claims to enforce the Settlement). Released Defendants' Claims shall not

include any claims preserved and not released in Paragraphs 1(kk) and 1(mm) of the Derivative

Settlement Agreement.

(tt) "Released Parties" means the Released Defendant Parties and the Released

Plaintiff Parties.

479236.1 17


(uu) "Released Plaintiff Parties" means each and every Class Member, Lead

Plaintiffs, Plaintiffs' Counsel, and their respective past, current, or future trustees, officers,

directors, partners, employees, contractors, auditor's, principals, agents, attorneys, predecessors,

successors, assigns, parents, subsidiaries, divisions, joint ventures, general or limited partners or

partnerships, affiliates, and limited liability companies; the spouses, members of the immediate

families, legal representatives of Lead Plaintiffs, and Plaintiffs' Counsel, who are individuals, as

well as any trust of which any Class Member, Lead Plaintiff, or Plaintiffs' Counsel is the settlor

or which is for the benefit of any of their immediate family members. Released Plaintiff Parties

does not include any Class Member or Person who timely and validly seeks exclusion from the

Class.

(vv) "RFC" means Regions Financial Corporation. Regions Financial

Corporation is the parent company of Regions Bank, Morgan Asset Management, Inc. (now

known as Regions Investment Management, Inc.), Morgan Properties LLC, as well as several

other entities, and is the former parent company of Morgan Keegan &Company, Inc. and MK

Holding, Inc.

(ww) "Settlement Amount" means the total principal amount of One Hundred

Twenty-Five Million and no/100 Dollars ($125,000,000.00) in cash paid to settle the Class

Action Lawsuit and the Derivative Action Lawsuit pursuant to this Class Settlement Agreement

and the separate Derivative Settlement Agreement, respectively, which is divided between the

Class Settlement Amount and the Funds Settlement Amount.

(xx) "Settlement Class" means the "Class."

(yy) "Settlement Hearing" means the hearing to be held by the Court to

determine whether the proposed Settlement is fair, reasonable, and adequate and should be

479236.1 1 g


approved.

(zz) "Summary Notice" means the Summary Notice of Pendency of Class

Action and Proposed Settlement and Motion for Attorneys' Fees and Expenses for publication,

which, subject to approval of the Court, shall be substantially in the form annexed as Exhibit A-3

to Exhibit A hereto.

(aaa) "TAL Orders" means the orders entered by the Probate Court of Jefferson

County, Alabama, on June 20, 2008, and June 30, 2008, for the appointment of C. Fred Daniels

as a temporary special fiduciary, or Trustee ad Litem, to take certain litigation actions in

substitution for Regions Bank in Regions Bank's capacity as trustee, directed trustee, custodian,

agent, or other fiduciary on behalf of certain Regions Bank trusts, custodial accounts, and other

fiduciary accounts that were open and existing on June 30, 2008, and which held or had held

shares of the Open-End Funds. "TAL Orders" also includes any subsequent orders by the

Probate Court of Jefferson County, Alabama, in the proceeding that resulted in Mr Daniels'

appointment as Trustee ad Litem.

(bbb) "TAL Fiduciary Accounts" means the trusts, custodial accounts, and other

fiduciary accounts, such as decedents' estates, guardianships, and conservatorships, as well as

ERISA-non-fiduciary accounts: (a) which were identified by Regions Bank to the TAL as open

at Regions Bank on June 30, 2008, and as satisfying the criteria in the TAL Orders for inclusion

within the scope of the TAL's appointment; and (b) which (i) purchased, held, and/or redeemed

shares of STF, IBF, or HIF during the Settlement Class Period and were damaged thereby; (ii)

did not elect out of the TAL's appointment pursuant to the TAL Orders; and (iii) are not

removed or excluded from the TAL's appointment by an order of the Probate Court that issued

the TAL Orders.

479236.1 19


(ccc) "Taxes" means all taxes on the income of the Class Settlement Fund and

expenses and costs incurred in connection with the taxation of the Class Settlement Fund

(including, without limitation, interest, penalties and the expenses of tax attorneys and

accountants).

(ddd) "Unknown Claims" means any and all Released Claims, which Plaintiffs

or any other Class Members do not know or suspect to exist in his, her or its favor at the time of

the release of the Released Defendant Parties, and any Released Defendants' Claims that

Defendants do not know or suspect to exist in his, her or its favor at the time of the release of the

Released Plaintiff Parties, which if known by him, her or it might have affected his, her or its

decisions) with respect to the Settlement. Unknown Claims include those claims in which some

or all of the facts comprising the claim may be unsuspected, or even undisclosed, concealed, or

hidden. With respect to any and all Released Claims and Released Defendants' Claims, the

Parties stipulate and agree that, upon the Effective Date, Plaintiffs and Defendants shall

expressly, and all other Class Members shall be deemed to have, and by operation of the

Judgment or Alternative Judgment shall have, expressly waived and relinquished any and all

provisions, rights and benefits conferred by any law of any state or territory of the United States,

or principle of common law, which is similar, comparable, or equivalent to Cal. Civ. Code

§ 1542, which provides:

A general release does not extend to claims which 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.

Plaintiffs, the other Class Members, or Defendants may hereafter discover facts in addition to or

different from those which he, she, or it now knows or believes to be true with respect to the

subject matter of the Released Claims and the Released Defendants' Claims, but Plaintiffs and

479236. I 20


Defendants shall expressly, fully, finally and forever settle and release, and all other Class

Members shall be deemed to have settled and released, and upon the Effective Date and by

operation of the Judgment or Alternative Judgment shall have settled and released, fully, finally,

and forever, any and all Released Claims and Released Defendants' Claims, known or unknown,

suspected or unsuspected, contingent or non-contingent, whether or not concealed or hidden,

which now exist, or heretofore have existed, upon any theory of law or equity now existing,

heretofore have existed, or coming into existence in the future, including, but not limited to,

conduct which is negligent, reckless, intentional, with or without malice, or a breach of any duty,

law, rule or regulation, without regard to the subsequent discovery or existence of such different

or additional facts. Plaintiffs and Defendants acknowledge, and other Class Members by

operation of law shall be deemed to have acknowledged, that the inclusion of "Unknown Claims"

in the definition of Released Claims and Released Defendants' Claims was separately bargained

for and was a key element of the Settlement.

SCOPE AND EFFECT OF SETTLEMENT

2. The obligations incurred pursuant to this Class Settlement Agreement are subject

to approval by the Court and such approval becoming Final, and are in full and final disposition

of the claims in the Class Action Lawsuit with respect to the Released Parties and any and all

Released Claims and Released Defendants' Claims.

3. For purposes of this Class Settlement only:

(a) the Parties agree to: (i) certification of the Class Action Lawsuit as a class action,

pursuant to Fed. R. Civ. P. 23(a) and 23(b)(3), on behalf of the Settlement Class as defined in

Paragraph 1(d); (ii) the certification of Lead Plaintiffs as Class Representatives for the Class; and

(iii) the appointment of Lockridge Grindal Nauen P.L.L.P. as Lead Counsel for the Class and

479236.1 21


Apperson Crump PLC as Liaison Counsel for the Class.

(b) Defendants stipulate, solely for the purpose of and as a condition to this Class

Settlement, to the filing of the Proposed Second Amended Consolidated Complaint (2:07-cv-

02784-SHM-dkv ECF No. 395, filed as Exhibit A to ECF No. 394) pursuant to Lead Plaintiffs'

pending motion for leave (2:07-cv-02784-SHM-dkv ECF No. 392), subject to Defendants'

reservation of all their rights as to Lead Plaintiffs' motion for leave to file the Complaint, and as

to any claims and allegations asserted in the Complaint, if this Class Settlement is not approved.

4. By operation of the Judgment or Alternative Judgment, as of the Effective Date,

Plaintiffs and each and every other Class Member on behalf of themselves and each of their

respective heirs, executors, trustees, administrators, predecessors, successors, and assigns, shall

be deemed to have fully, finally, and forever waived, released, discharged, and dismissed each

and every one of the Released Claims against each and every one of the Released Defendant

Parties and shall forever be barred and enjoined from commencing, instituting, prosecuting, or

maintaining any of the Released Claims against any of the Released Defendant Parties.

5. By operation of the Judgment or Alternative Judgment, as of the Effective Date,

Defendants, on behalf of themselves and each of their respective heirs, executors, trustees,

administrators, predecessors, successors, and assigns shall be deemed to have fully, finally, and

forever waived, released, discharged, and dismissed each and every one of the Released

Defendants' Claims, as against each and every one of the Parties and shall forever be barred and

enjoined from commencing, instituting, prosecuting, or maintaining any of the Released

Defendants' Claims against any of the Parties.

THE CLASS SETTLEMENT CONSIDERATION

6. In full settlement of the claims asserted in the Lawsuit against Defendants and in

479236.1 22


consideration of the releases specified in Paragraphs 4-5 above, RFC, and PwC shall, as they

have separately agreed amongst each other, pay or cause to be paid the Class Settlement Amount

into the Escrow Account within twenty (20) business days after the Court enters the Preliminary

Approval Order and Lead Counsel has provided Defendants' Counsel (or their designee) with

complete and accurate wiring instructions, payment address, and a complete and accurate W-9

form for the Class Settlement Fund. Under no circumstances will the non-Fund Defendants be

required to pay or cause to be paid in cash to the Class more than the aggregate principal

amounts of the Class Settlement Amount and the Funds Settlement Amount pursuant to this

Class Settlement Agreement and the separate Derivative Settlement Agreement, the Class

Settlement set forth herein, and the Funds Settlement set forth in the separate Derivative


7. Defendants and Defendants' Counsel shall have no responsibility for, interest in,

or liability whatsoever with respect to: (i) any act, omission, or determination of Plaintiffs'

Counsel, the Escrow Agent or the Claims Administrator, or any of their respective designees or

agents, in connection with the administration of the Class Settlement or otherwise; (ii) the

management, investment, or distribution of the Class Settlement Fund; (iii) the Plan of

Allocation; (iv) the determination, administration, calculation, or payment of any claims asserted

against the Class Settlement Fund; (v) any losses suffered by, or fluctuations in value of, the

Class Settlement Fund; (vi) the payment of Notice and Administration Expenses, other than as

set forth in Paragraph 45 below; or (vii) the payment or withholding of any Taxes, expenses,

and/or costs incurred in connection with the taxation of the Class Settlement Fund or the filing of

any returns.

8. Contingent upon the Court including in the Preliminary Approval Order a

479236.1 23


requirement that the identified Defendant or Defendants provide the information set forth in

subsections (a)-(c) of this Paragraph, then within thirty (30) calendar days after that preliminary

approval of this Settlement by the Court:

(a) RFC and/or the Morgan Keegan Defendants shall provide or cause to be provided

to Lead Counsel and the Claims Adn:iinistrator, at no cost to the Class, Plaintiffs, Lead Counsel

or the Claims Administrator, the following information that is reasonably available regarding

those Excluded Persons reasonably capable of being identified: (i) a list of all Excluded Persons

(including all affiliates within the meaning of Paragraph 1(d) of such Persons) who purchased,

held and/or redeemed shares of one or more of the Funds during the Class Period; (ii) at Lead

Counsel's request, representative examples of redacted releases, notices of non-participation,

settlement agreements, or other evidence regarding the Excluded Persons identified in Paragraph

1(d)(v)-(ix); and (iii) other information as may be reasonably necessary to identify Excluded

Persons, provided that in the event that an Excluded Person seeks to assert a claim to the Net

Class Settlement Fund ox the Net Funds Settlement Fund, or otherwise objects to being excluded

therefrom, Defendants' Counsel shall cooperate with Lead Counsel and Funds' Counsel in

providing evidence, if available, that Lead Counsel and Funds' counsel may reasonably request

that supports the exclusion and enables them to respond thereto;

(b) the Open-End Funds shall provide or cause to be provided to Lead Counsel and

the Claims Administrator, at no cost to Plaintiffs, Plaintiffs' Counsel or the Claims

Administrator, lists of the names and addresses of Persons who held shares of the Open-End

Funds during the Class Period, the dates and amounts of all dividends paid by the Funds to such

Persons during the Class Period, the dates and amounts (dollar value and number of shares) of all

purchases or other acquisitions of the Funds' shares (including reinvested dividends) during the

479236.1 24


Class Period, and the dates and amounts of all redemptions of the Funds' shares during the Class

Period, to the extent available to them, such data to be provided in a form reasonably satisfactory

to the Claims Administrator; and

(c) RFC and/or the 1Vlorgan Keegan Defendants shall provide or cause to be provided

to Lead Counsel and the Claims Administrator, at no cost to Plaintiffs, Plaintiffs' Counsel, the

Class or the Claims Administrator, to the extent reasonably available to them:

(i) lists of the names and addresses of Persons who purchased and/or redeemed

shares of the Open-End Funds during the Class Period,

(ii) the number of each Person's shares and Fund in which such shares were held on

July 3, 2006,

(iii) the NAV of such shares on July 3, 2006,

(iv) the dates and amounts of all dividends paid by the Funds to such Persons during

the Class Period, the dates and amounts of all purchases or other acquisitions of the Funds'

shares (including reinvested dividends) during the Class Period,

(v) the dates and amounts (dollar value and number of shares) of all redemptions of

the Funds' shares during the Class Period, and

(vi) the amount of the distribution from the States' settlement fund and the SEC Fair

Fund received by each such Person with respect to his/her/its investments in the Funds. In lieu

of the foregoing information, Defendants shall provide Lead Counsel and the Claims

Administrator with access to all repositories of some or all of such information as may already

exist or from which some or all of such information can be readily calculated, in a form

satisfactory to Lead Counsel and the Claims Administrator.

(d) The information to be produced pursuant to this Paragraph 8 constitutes

479236.1 25


confidential and privacy protected business and personal information, and shall be treated as

confidential by the Claims Administrator, Lead Counsel, and Funds' Counsel. The Claims

Administrator, Lead Counsel and Funds' Counsel agree to use this information solely for the

purposes of providing notice, administering proofs of claim or requests for exclusion,

communicating with members of the Settlement Class, responding to Excluded Persons, or

otherwise administering the proposed settlement pursuant to the Class Settlement Agreement and

the Orders) of the Court, and further agree to not disclose this information to anyone (other than

the Class Member whose information is at issue) absent express authorization from the Court.

USE AND TAX TREATMENT OF SETTLEMENT FUND

9. The Class Settlement Fund shall be used: (i) to pay any Taxes and related interest

and penalties, if any; (ii) to pay Notice and Administration Expenses; (iii) to pay any attorneys'

fees and expenses awarded by the Court; (iv) to pay any costs and expenses allowed by the

PSLRA and awarded to Lead Plaintiffs by the Court; (v) to pay any other fees and expenses

awarded by the Court; and (vi) to pay the claims of Authorized Claimants.

10. The Net Class Settlement Fund shall be distributed to Authorized Claimants as

provided in Paragraphs 23-35 below: The Net Class Settlement Fund shall remain in the Escrow

Account prior to the Effective Date. All funds held in the Escrow Account shall be deemed to be

in the custody of the Court and shall remain subject to the jurisdiction of the Court until such

time as the funds shall be disbursed or returned, pursuant to Paragraph 45 of this Class

Settlement Agreement, and/or further order of the Court. The Escrow Agent shall invest funds in

the Escrow Account in instruments backed by the full faith and credit of, or insured by an

instrumentality of, the United States Government (or a mutual fund invested solely in such

instruments). Defendants and Defendants' Counsel shall have no responsibility for, interest in,

479236.1 26


or liability whatsoever with respect to investment decisions executed by the Escrow Agent.

11. After the Class Settlement Amount has been paid into the Escrow Account in

accordance with Paragraph 6 above, the Parties agree to treat the Escrow Account as a "qualified

settlement fund" within the meaning of Treas. Reg. § 1.468B-1. In addition, Lead Counsel shall

timely make, or cause to be made, such elections as necessary or advisable to carry out the

provisions of this paragraph, including the "relation-back election" (as defined in Treas. Reg.

§1.468B-1) to the earliest permitted date. Such election shall be made in compliance with the

procedures and requirements contained in such regulations. It shall be the responsibility of Lead

Counsel to timely and properly prepare and deliver, or cause to be prepared and delivered, the

necessary documentation for signature by all necessary parties, and thereafter take all such

actions as may be necessary or appropriate to cause the appropriate filing to occur.

(a) For the purposes of 26 U.S.C. § 468B(g) and Treas. Reg. §§ 1.468B-1

through 1.468B-5, the "administrator" responsible for the tax obligations of the QSF shall be

Lead Counsel or their successors, who shall timely and properly file, report to recipients and pay

or cause each of these to be performed, all informational and other tax returns and payments

required by state and federal law to the payments made by the fund, the earnings on the fund

deposited in the Escrow Account and in successor accounts (including without limitation the

returns described in Treas. Reg. § 1.468B-2(k)). Such returns, reports to recipients and tax

payments (as well as the election described above) shall be consistent with this subparagraph and

in all events shall reflect that all Taxes (including any estimated taxes, earnings, tax, interest, or

penalties) on the income earned on the funds deposited in the Escrow Account shall be paid aut

of such funds as provided in subparagraph (c) hereof.

(b) All Taxes shall be paid solely out of the Escrow Account. In all events,

479236.1 27


Defendants and Defendants' Counsel shall have no liability or responsibility whatsoever for the

Taxes or the filing of any tax returns or other documents with the Internal Revenue Service or

any state or local taxing authority. In the event any Taxes are owed by any of the Defendants on

any earnings on the funds on deposit in the Escrow Account, such amounts shall also be paid out

of the Escrow Account. Any taxes or tax expenses owed on any earnings on the Class

Settlement Amount prior to its transfer to the Escrow Account shall be the sole responsibility of

Defendants.

(c) Taxes shall be treated as allowed by law and shall be timely paid, or

caused to be paid, by Lead Counsel out of the Escrow Account without prior order from the

Court or approval by Defendants, and Lead Counsel shall be obligated (notwithstanding anything

herein to the contrary) to withhold from distribution to Authorized Claimants any funds

necessary to pay such amounts (as well as any amounts that may be required to be withheld

pursuant to the information reporting and withholding obligations of the QSF). The Parties agree

to cooperate with Lead Counsel, each other, and their tax attorneys and accountants to the extent

reasonably necessary to carry out the provisions of this paragraph.

12. This is not aclaims-made settlement. As of the Effective Date, Defendants and/or

such other persons or entities funding the Class Settlement on Defendants' behalf shall not have

any right to the return of the Class Settlement Fund or any portion thereof for any reason.

ATTOT~NEYS' FEES AND EXPENSES

13. Plaintiffs' Counsel will apply to the Court for an award from the Class Settlement

Fund of attorneys' fees and reimbursement of litigation expenses incurred in prosecuting the

Class Action Lawsuit, plus any earnings on such amounts at the same rate and for the same

periods as earned by the Class Settlement Fund ("Fee and Expense Application"). The award of

479236.1 2 g


attorneys' fees sought by Plaintiffs' Counsel shall not exceed 30 percent of the Class Settlement

Fund. Defendants shall take no position with respect to the Fee and Expense Application.

14. The amount of attorneys' fees and expenses awarded by the Court is within the

sole discretion of the Court. Any attorneys' fees and expenses awarded by the Court, plus

earnings thereon, shall be paid from the Class Settlement Fund to Lead Counsel immediately

after entry of the Order awarding such attorneys' fees and expenses, notwithstanding the

existence of any timely filed objections thereto, or potential for appeal therefrom, or collateral

attack on the Class Settlement or any part thereof.

15. Any payment of attorneys' fees and litigation expenses pursuant to Paragraphs

13-14 above shall be subject to Lead Counsel's obligation to make refunds or repayments to the

Class Settlement Fund of any paid amounts plus accrued earnings at the same net rate as it is

earned by the Settlement Fund, if the Class Settlement is terminated or fails to become effective

fox any reason or if, as a result of any appeal or further proceedings on remand, or successful

collateral attack, the award of attorneys' fees and/or litigation expenses is reduced or reversed by

Final non-appealable court order. Lead Counsel shall make the appropriate refund or repayment

in full no later than twenty (20) business days after receiving notice from a court of appropriate

jurisdiction of the termination of the Class Settlement or notice of any reduction or reversal of

the award of attorneys' fees and/or litigation expenses by Final non-appealable court order.

16. With the sole exception of Defendants causing the payment of the Class

Settlement Amount into the Escrow Account as provided for in Paragraph 6, Defendants shall

have no responsibility for, and nn liability whatsoever with respect to, any payment to Plaintiffs'

Counsel in the Class Action Lawsuit that may occur at any time.

17. Defendants shall have no responsibility for, and no liability whatsoever with

479236.1 29


respect to, the allocation of any attorneys' fees or expenses among any Plaintiffs' Counsel in the

Class Action Lawsuit, or any other Person who may assert some claim thereto, or any fee or

expense awards the Court may make in that Lawsuit.

18. Defendants shall have no responsibility for, and no liability whatsoever with

respect to, any attorneys' fees, costs, or expenses incurred by or on behalf of the Class Members,

whether or not paid from the Escrow Account.

19. The procedure for and the allowance or disallowance by the Court of any Fee and

Expense Application are not part of the Class Settlement set forth in this Class Settlement

Agreement, and are separate from the Court's consideration of the fairness, reasonableness and

adequacy of the Class Settlement set forth in the Class Settlement Agreement, and any order or

proceeding relating to any Fee and Expense Application, including an award of attorneys' fees or

expenses in an amount less than the amount requested by Lead Counsel, or any appeal from any

order relating thereto or reversal or modification thereof, shall not operate to terminate or cancel

the Class Settlement Agreement, or affect or delay the finality of the Judgment or Alternative

Judgment approving the Class Settlement Agreement and the Class Settlement set forth herein,

including, but not limited to, the release, discharge, and relinquishment of the Released Claims

against the Released Defendant Parties, or any other orders entered pursuant to this Class

Settlement Agreement. Plaintiffs and Plaintiffs' Counsel may not cancel or terminate the Class

Settlement Agreement or the Class Settlement in accordance with Paragraph 39 or otherwise

based on the Court's or any appellate court's ruling with respect to fees and expenses in the

Class Action Lawsuit.

CLASS ACTION FAIRNESS ACT NOTICE

20. No later than ten (10) calendar days after the Class Settlement Agreement is filed

479236.1


with the Court, Defendants, through the Claims Administrator, shall cause to be served, upon the

appropriate official(s), a notice of the proposed Class Settlement as required under 28 U.S.C. §

1715. Pursuant to 28 U.S.C. § 1715(d), the Judgment may be issued by the Court no earlier than

ninety (90) days after the appropriate official has been served with the notices) required by 28

U.S.C. §1715(b). The expenses required to satisfy the notice requirements of 28 U.S.C. § 1715

shall be paid by RFC and PwC.

ADMII`TISTRATION EXPENSES

21. Except as otherwise provided herein, the Class Settlement Fund shall be held in

the Escrow Account until the Effective Date.

22. Prior to the Effective Date and subject to the provisions of Paragraph 45, without

further approval from Defendants or further order of the Court, Lead Counsel may expend up to

Five Hundred Thousand Dollars ($500,000) from the Class Settlement Fund to pay Notice and

Administration Expenses actually incurred. Taxes and fees related to the Escrow Account and

investment of the Class Settlement Fund may be paid as incurred from the assets held in the

Escrow Account. After the Effective Date, without further approval of Defendants or further

order of the Court, Notice and Administration Expenses may be paid from the Class Settlement

Fund as incurred.

DISTRIBUTION TO AUTHORIZED CLAIMANTS

23. Lead Counsel will apply to the Court for a Distribution Order, on notice to

Defendants' Counsel, approving the Claims Administrator's administrative determinations

concerning the acceptance and rejection of the claims submitted herein, and, if the Effective Date

has occurred, directing the payment of the Net Class Settlement Fund to Authorized Claimants.

24. The Claims Administrator shall administer the Settlement under Lead Counsel's

479236.1 31


supervision and subject to the jurisdiction of the Court. Except as stated in Paragraphs 6 and 8

herein, Defendants and Defendants' Counsel shall have no responsibility for, interest in, or

liability whatsoever with respect to the administration of the Settlement or the actions or

decisions of the Claims Administrator, and shall have no liability to the Class in connection with

such administration.

25. The Claims Administrator shall determine each Authorized Claimant's pro rata

share of the Net Class Settlement Fund based upon each Authorized Claimant's Recognized Loss

Amount, as defined in the Plan of Allocation of Net Class Settlement Fund (the "Plan of

Allocation") included in the Notice, or in such other plan of allocation as the Court may approve.

26. Defendants will take no position with respect to the Plan of Allocation. The Plan

of Allocation is a matter separate and apart from the proposed Class Settlement between

Plaintiffs and Defendants, and any decision by the Court concerning the Plan of Allocation shall

not affect the validity or finality of the proposed Class Settlement. The Plan of Allocation is not

a necessary term of this Class Settlement Agreement and it is not a condition of this Class

Settlement Agreement that any particular plan of allocation be approved by the Court. Plaintiffs

and their counsel may not cancel or terminate the Class Settlement Agreement or the Class

Settlement in accordance with Paragraph 39 or otherwise based on the Court's or any appellate

court's ruling with respect to the Plan of Allocation or any plan of allocation in the Class Action

Lawsuit. Defendants and Defendants' Counsel shall have no responsibility or liability for

reviewing or challenging claims, the allocation of the Net Class Settlement Fund, or the

distribution of the Net Class Settlement Fund.

ADMINISTRATION OF THE CLASS SETTLEMENT

27. Any member of the Class who fails to timely submit a valid Proof of Claim

479236.1 32


(substantially in the form of Exhibit A-2 to Exhibit A hereto) will not be entitled to receive any

of the proceeds from the Net Class Settlement Fund, except as otherwise ordered by the Court,

but will otherwise be bound by all of the terms of this Class Settlement Agreement and the Class

Settlement, including the terms of the Judgment or Alternative Judgment to be entered in the

Class Action Lawsuit and the releases provided for herein, and will be barred from bringing any

action against the released Defendant Parties concerning the Released Claims.

28. Lead Counsel shall be responsible for supervising the administration of the Class

Settlement and disbursement of the Net Class Settlement Fund by the Claims Administrator.

Lead Counsel shall have the right, but not the obligation, to advise the Claims Administrator to

waive what Lead Counsel deems to be de minimis or formal or technical defects in any Proofs of

Claim submitted. Defendants and Defendants' Counsel shall have no liability, obligation or

responsibility for the administration of the Class Settlement, the allocation of the Net Class

Settlement Fund, or reviewing or challenging claims of Class Members. Lead Counsel shall be

solely responsible for designating the Claims Administrator, subject to approval by the Court.

29. For purposes of determining the extent, if any, to which a Class Member shall be

entitled to be treated as an Authorized Claimant, the following conditions shall apply:

(a) Each Class Member shall be required to submit a Proof of Claim,

substantially in the form annexed hereto as Exhibit A-2 to Exhibit A, supported by such

documents as are designated therein, including proof of the claimant's loss, or such other

documents or proof as the Claims Administrator or Lead Counsel, in their discretion, may deem

acceptable;

(b) All Proofs of Claim must be submitted by the date set by the Court in the

Preliminary Approval Order and specified in the Notice, unless such deadline is extended by

479236.1 33


Lead Counsel in their discretion and approved by the Court. Any Class Member who fails to

submit a Proof of Claim by such date shall be barred from receiving any distribution from the

Net Class Settlement Fund or payment pursuant to this Class Settlement Agreement (unless, by

Order of the Court, late-filed Proofs of Claim are accepted), but shall in all other respects be

bound by all of the terms of this Class Settlement Agreement and the Class Settlement, including

the terms of the Judgment or Alternative Judgment and the releases provided for herein, and will

be permanently barred and enjoined from bringing any action, claim or other proceeding of any

kind against any Released Party concerning any Released Claim or Released Defendants'

Claims. Provided that it is received before the motion for the Distribution Order is filed, a Proof

of Claim shall be deemed to be submitted when mailed, if received with a postmark on the

envelope and if mailed by first-class or overnight U.S. Mail or other such service and addressed

in accordance with the instructions thereon. In all other cases, the Proof of Claim shall be

deemed to have been submitted when actually received by the Claims Administrator;

(c) Each Proof of Claim shall be submitted to and reviewed by the Claims

Administrator, under the supervision of Lead Counsel, who shall determine in accordance with

this Class Settlement Agreement the extent, if any, to which each claim shall be allowed, subject

to review by the Court pursuant to subparagraph (e) below;

(d) Proofs of Claim that do not meet the submission requirements may be

rejected. Prior to rejecting a Proof of Claim in whole or in part, the Claims Administrator shall

communicate with the claimant in writing to give the claimant the chance to remedy any curable

deficiencies in the Proof of Claim submitted. The Claims Administrator, under supervision of

Lead Counsel, shall notify, in a timely fashion and in writing, all claimants whose claims the

Claims Administrator proposes to reject in whole or in part for curable deficiencies, setting forth

479236.1 34


the reasons therefor, and shall indicate in such notice that the claimant whose claim is to be

rejected has the right to a review by the Court if the claimant so desires and complies with the

requirements of subparagraph (e) below;

(e) If any claimant whose claim has been rejected in whole or in part desires

to contest such rejection, the claimant must, within twenty (20) calendar days after the date of

mailing of the notice required in subparagraph (d) above, serve upon the Claims Administrator a

notice and statement of reasons indicating the claimant's grounds for contesting the rejection

along with any supporting documentation, and requesting a review thereof by the Court. If a

dispute concerning a claim cannot be otherwise resolved, Lead Counsel shall thereafter present

the request for review to the Court; and

(~ The administrative determinations of the Claims Administrator accepting

and rejecting disputed claims shall be presented to the Court, on notice to Defendants' Counsel,

for approval by the Court in the Distribution Order.

30. Each claimant who submits a Proof of Claim shall be deemed to have submitted

to the jurisdiction of the Court with respect to the claimant's claim, and the claim will be subject

to investigation and discovery under the Federal Rules of Civil Procedure, provided that such

investigation and discovery shall be limited to the claimant's status as a Class Member and the

validity and amount of the claimant's claim. In connection with processing the Proofs of Claim,

no discovery shall be allowed on the merits of the Class Action Lawsuit or the Class Settlement.

31. Payment pursuant to the Distribution Order shall be deemed Final and conclusive

against all Class Members. All Class Members whose claims are not approved by the Court

shall be barred from participating in distributions from the Class Settlement Fund portion of the

Net Class Settlement Fund, but otherwise shall be bound by all of the terms of this Class

479236.1 3 5


Settlement Agreement and the Class Settlement, including the terms of the Judgment or

Alternative Judgment to be entered in the Lawsuit and the releases provided for herein, and will

be barred from bringing any action against the Released Defendant Parties concerning the

Released Claims.

32. All proceedings with respect to the administration, processing and determination

of claims described by Paragraphs 23-35 of this Class Settlement Agreement and the

determination of all controversies relating thereto, including disputed questions of law and fact

with respect to the validity of claims, shall be subject to the jurisdiction of the Court, but shall

not in any event delay or affect the finality of the Judgment or Alternative Judgment nor require

Defendants to participate in any such dispute, hearing, or controversy. Defendants will,

however, cooperate and participate as reasonably necessary to aid the Court in answering any

questions regarding such proceedings.

33. No Person shall have any claim of any kind against the Released Defendant

Parties or their counsel with respect to the matters set forth in Paragraphs 23-35 or any

subsections of those Paragraphs.

34. No Person shall have any claim against Plaintiffs or their counsel (including

Plaintiffs' Counsel), or the Claims Administrator, or other agent designated by Lead Counsel,

based on the distributions made substantially in accordance with this Class Settlement

Agreement and the Class Settlement contained herein, the Plan of Allocation, or further orders)

of the Court.

35. If there is any balance remaining in the Net Class Settlement Fund after at least

twelve (12) months from the date of distribution of the Net Class Settlement Fund (whether by

reason of tax refunds, uncashed checks or otherwise), Lead Counsel shall, if economically

479236.1 3 6


feasible, reallocate such balance in an equitable fashion among Authorized Claimants who have

cashed their checks. Any balance that still remains in the Net Class Settlement Fund, after

payment of Notice and Administration expenses, taxes, and attorneys' fees and expenses, if any,

shall be contributed to anon-sectarian charitable organization serving the public interest,

designated by Lead Plaintiffs and approved by the Court.

TER1dIS OF ~'HE PRELIMINARY APP120VAL ORDER

36. Concurrently with its application for preliminary Court approval of the Class

Settlement contemplated by this Class Settlement Agreement and promptly upon execution of

this Class Settlement Agreement, Lead Counsel shall apply to the Court for entry of the

Preliminary Approval Order, which shall be substantially in the form annexed hereto as Exhibit

A, which application shall not be opposed by Defendants or Defendants' Counsel. The

Preliminary Approval Order will, among other things, set the date and time for the Settlement

Hearing and prescribe the methods) for giving notice of the Class Settlement to the Class.

TEI2IVIS OI+' THE JUDGMENT

37. If the Class Settlement contemplated by this Class Settlement Agreement is

approved by the Court, Plaintiffs' Counsel and Defendants' Counsel shall request that the Court

enter a Judgment substantially in the form annexed hereto as Exhibit B:

(a) granting, as a condition of and solely for purposes of this Class Settlement,

Lead Plaintiffs' motion for leave to file Complaint (2:07-cv-02784-SHM-dkv ECF No. 395)

pursuant to Lead Plaintiffs' pending motion (2:07-cv-02784-SHM-dkv ECF No. 392), subject to

Defendants' reservation of rights as set forth in Paragraph 3 supra; and deeming the pending

Joint Motion for Preliminary Approval of Partial Settlement between the Class and the Funds

and AMOU (2:07-cv-02784-SHM-dkv ECF No. 309) withdrawn;

479236.1 3 7


(b) granting final approval of the Class Settlement as being fair, reasonable,

and adequate, within the meaning of Rule 23 of the Federal Rules of Civil Procedure, and

directing consummation of the Class Settlement pursuant to the terms of the Class Settlement

Agreement;

(c) directing that the Class Action Lawsuit be dismissed with prejudice and

that the Parties are to bear their own costs, except as otherwise provided in this Class Settlement

Agreement; and releasing the Released Claims;

(d) permanently barring and enjoining the institution and/or prosecution, by

Plaintiffs and the Class Members, of any other action against the Released Defendant Parties in

any court or other tribunal, forum, or proceeding asserting any Released Claims;

(e) permanently barring and enjoining the institution and/or prosecution, by

any Party of any other action against any other Party in any court or other tribunal, forum, or

proceeding asserting any claims released herein;

(~ reserving jurisdiction over the Class Action Lawsuit and the QSF created

as a result of this Settlement, including all future proceedings concerning the administration,

consummation, and enforcement of this Class Settlement Agreement;

(g) finding that all the filings made by each Party along with maintenance,

prosecution, defense and settlement of the Class Action Lawsuit were done on a good faith basis

in accordance with the PSLRA and Rule 11 of the Federal Rules of Civil Procedure;

(h) finding, pursuant to Rule 54(b) of the Federal Rules of Civil Procedure,

that there is no just reason for delaying and directing entry of a final judgment; and

(i) containing such other and further provisions consistent with the terms of

this Class Settlement Agreement to which the Parties expressly consent in writing.

479236.1 3 g


EFFECTIVE DATE OF CLASS SETTLEMENT, WAIVER OR TERMINATION

38. The Effective Date of this Class Settlement shall be the date when all of the

following shall have occurred:

(a) entry of the Preliminary Approval Order, which shall be in all material

respects substantially in the form set forth in Exhibit A annexed hereto;

(b) payment of the Class Settlement Amount into the Escrow Account;

(c) The Parties have not exercised any option to terminate the Class

Settlement Agreement pursuant to Paragraphs 39 or 40;

(d) approval by the Court of the Class Settlement, following notice to the

Class and a hearing, as prescribed by Rule 23 of the Federal Rules of Civil Procedure; and

(e} a Judgment, which shall be in all material respects substantially in the

form set forth in Exhibit B annexed hereto, has been entered, or be deemed under the Federal

Rules of Civil Procedure to have been entered, by the Court and has become Final; or in the

event that an Alternative Judgment has been entered and none of the Parties elects to terminate

the Settlement by reason of such variance, that judgment has become Final.

39. Defendants and Plaintiffs each shall have the right to terminate the Class

Settlement and this Class Settlement Agreement by providing written notice of their election to

do so ("Termination Notice"), through counsel, to all other Parties hereto within fourteen (14)

calendar days of: (a) the Court's refusal to enter the Preliminary Approval Order in any material

respect; (b) the Court's refusal to approve this Class Settlement Agreement or any material part

of it; (c) the Court's refusal to enter the Judgment in any material respect or an Alternative

Judgment; (d) the date upon which the Judgment or Alternative Judgment is modified or reversed

in any material respect by Final order of the United States Court of Appeals for the Sixth Circuit

479236.1 3 9


or, if certiorari is granted, the Supreme Court of the United States; or regardless of notice, (e) if,

for any reason, the Derivative Settlement is terminated or otherwise fails to become effective as

set forth in the Derivative Settlement Agreement.

40. RFC and PwC shall also have the right to terminate the Settlement on behalf of all

Defendants in the event the Termination Threshold (defined below) has been reached.

(a) Simultaneously herewith, counsel for the Parties are executing a

confidential Supplemental Agreement Regarding Requests for Exclusion ("Supplemental

Agreement"). The Supplemental Agreement sets forth certain conditions under which RFC and

PwC shall each have the option to terminate the Settlement on behalf of all Defendants and

render this Class Settlement Agreement null and void in the event that requests for exclusion

from the Class exceed certain agreed-upon criteria ("Termination Threshold"). The Parties agree

to maintain the confidentiality of the Termination Threshold in the Supplemental Agreement,

which shall not be filed with the Court unless a dispute arises as to its terms, or as otherwise

ordered by the Court, nor shall the Supplemental Agreement otherwise be disclosed to anyone

other than the named Parties and their counsel unless ordered by the Court. If submission of the

Supplemental Agreement is required for resolution of a dispute or is otherwise ordered by the

Court, the Parties will undertake to have the Termination Threshold submitted to the Court in

camera or under seal. The Claims Administrator shall keep the Parties apprised of all the

requests for exclusion received on a regular basis and shall provide counsel for Defendants

within five (5) business days of receiving any such exclusion or revocation as set forth in the

Supplemental Agreement with a list of all Persons who have requested exclusion from the Class

or have submitted a revocation of a request for exclusion, together with (to the extent disclosed

in the request for exclusion or revocation of request for exclusion) the number of shares of each

479236.1 4~


of the Open-End Funds purchased, held and/or redeemed by each such Person during the Class

Period. Defendants may also request from time to time copies of any or all requests for

exclusion received, together with all written revocations of requests for exclusion, which shall be

delivered to Defendants' Counsel promptly upon request. Separate lists of all Persons who have

validly or invalidly requested exclusion from the Class shall be provided to Defendants and the

Court at least ten (10) calendar days before the Settlement Hearing.

(b) In the event of a termination of this Settlement pursuant to the

Supplemental Agreement, this Class Settlement Agreement shall become null and void and of no

further force and effect, with the exception of the provisions of Paragraphs 44 and 45 which shall

continue to apply.

(c) The Requests for Exclusion, Persons submitting such Requests for

Exclusion, and/or the Termination Threshold pursuant to this Paragraph 40 shall not include

those Persons excluded from the Settlement pursuant to Paragraph 1(d).

41. In addition to all of the rights and remedies that the Plaintiffs have under the

terms of this Class Settlement Agreement, Plaintiffs shall also have the right to terminate the

Class Settlement in the event that Defendants do not pay, or cause to be paid, the Class

Settlement Amount as provided in Paragraph 6 above. In the event of such failure to pay,

Plaintiffs can elect to terminate by providing written notice to all other Parties to this Class

Settlement Agreement. The termination is not effective unless and until RFC and PwC fail to

pay the Class Settlement Amount within fourteen (14) calendar days of such written notice.

42. If, before the Class Settlement becomes Final, a trustee, receiver, conservator, or

other fiduciary is appointed under Title 11 of the United States Code (Bankruptcy), or any

similar law, and in the event of the entry of a Final order of a court of competent jurisdiction

479236.1 41


determining the transfer of money or any portion thereof to the Class Settlement Fund by or on

behalf of PwC or RFC to be a preference, voidable transfer, fraudulent transfer, or similar

transaction and any portion thereof is required to be returned, and such amount is not promptly

deposited into the Class Settlement Fund by others, then, at the election of Plaintiffs, the Parties

shall jointly move the Court to vacate and set aside the release given and the Judgment or

Alternative Judgment entered, and Defendants, Plaintiffs and the members of the Class shall be

restored to their litigation positions immediately prior to the execution of the Settlement Term

Sheet on February 19, 2014.

43. If an option to withdraw from and terminate this Class Settlement Agreement and

Settlement arises under any of Paragraphs 39-42 above: (i) neither Defendants nor Plaintiffs (as

the case may be) will be required for any reason or under any circumstance to exercise that

option; and (ii) any exercise of that option shall be made in good faith, but in the sole and

unfettered discretion of Defendants or Plaintiffs, as applicable.

44. In the event the Class Settlement is terminated or fails to become effective for any

reason, then: the Class Settlement shall be without prejudice, and none of its terms, including,

but not limited to, the certification of the Class and selection of Class Representative and Class

Counsel, shall be effective or enforceable except as specifically provided herein; the Parties to

this Class Settlement Agreement shall be deemed to have reverted to their respective litigation

positions in the Class Action Lawsuit immediately prior to their execution of the Class

Settlement Term Sheet on February 19, 2014; and the Parties in the Class Action Lawsuit shall

proceed in all respects as if this Class Settlement Agreement and any related orders had not been

entered. In such event, the Settlement Term Sheet, this Class Settlement Agreement or any

aspect of the discussions or negotiations leading to this Class Settlement Agreement, shall not be

479236.1 42


admissible in this Class Action Lawsuit and shall not be used by Plaintiffs against or to the

prejudice of Defendants or by Defendants against or to the prejudice of Plaintiffs in any court

filings, depositions, at trial or otherwise.


reason, any portion of the Class Settlement Amount previously paid on behalf of or by

Defendants, together with any earnings thereon, less any Taxes paid or due, less Notice and

Administration Expenses actually incurred and paid or payable from the Class Settlement

Amount, shall be returned to the entities that made the payments) within ten (10) business days

after written notification of such event. In such event, at the request of Defendants' Counsel, the

Escrow Agent or its designee shall apply for any tax refund owed on the amounts in the Escrow

Account and pay the proceeds, after any deduction of any fees or expenses incurred in

connection with such application(s), for refund to the applicable funder or as otherwise directed.

NO ADMISSION OF WRONGDOING

46. Except as set forth in Paragraphs 47-48 below, this Class Settlement Agreement,

whether or not consummated, and any discussions, negotiations, proceedings or agreements

relating to the Class Settlement Agreement, the Class Settlement, and any matters arising in

connection with settlement discussions or negotiations, proceedings, or agreements, shall not be

offered or received against or to the prejudice of the Parties for any purpose, and in particular:

(a) do not constitute, and shall not be offered or received against or to the

prejudice of Defendants as evidence of, or construed as, or deemed to be evidence of any

presumption, concession or admission by Defendants with respect to the truth of any allegation

by Plaintiffs and the Class or the validity of any claim that has been or could have been asserted

in the Class Action Lawsuit or in any litigation, including but not limited to the Released Claims,

479236.1 43


or of any liability, damages, negligence, fault or wrongdoing of Defendants;

(b) do not constitute, and shall not be offered or received against or to the

prejudice of Defendants as evidence of a presumption, concession, or admission of any fault,

misrepresentation, or omission with respect to any statement or written document approved or

made by Defendants, or against or to the prejudice of Plaintiffs or any other members of the

Class as evidence of any infirmity in the claims of Plaintiffs or the other members of the Class;

(c) do not constitute, and shall not be offered or received against or to the

prejudice of Defendants or against or to the prejudice of Plaintiffs or any other members of the

Class, as evidence of a presumption, concession or admission with respect to any liability,

damages, negligence, fault, infirmity, or wrongdoing, or in any way referred to for any other

reason against or to the prejudice of any of the Parties to this Class Settlement Agreement, in any

other civil, criminal, or administrative action or proceeding, or arbitration, other than such

proceedings as may be necessary to effectuate the provisions of this Class Settlement

Agreement;

(d) do not constitute, and shall not be construed against Defendants, Plaintiffs,

or any other members of the Class, as an admission or concession that the consideration to be

given hereunder represents the amount which could be or would have been recovered after trial;

(e) do not constitute, and shall not be construed as or received in evidence as,

an admission, concession, or presumption against Plaintiffs or any other members of the Class

that any of their claims are without merit or that damages recoverable under the Complaint

would not have exceeded the Class Settlement Amount.

47. Defendants may file this Class Settlement Agreement and/or the Judgment or

Alternative Judgment in any action that may be brought against them in order to support a

479236. I 4'4


defense or counterclaim based on principles of res judicata, collateral estoppel, release, good-

faith settlement, judgment bar or reduction, or any theory of claim preclusion or issue preclusion

or similar defense or counterclaim, or to effectuate the liability protection granted them under

any applicable insurance policies.

48. The Parties may file this Class Settlement Agreement and/or the Judgment or

Alternative Judgment in any action that may be brought to enforce the terms of this Class

Settlement Agreement and/or the Judgment or Alternative Judgment. All Parties submit to the

exclusive jurisdiction of the Court for purposes of implementing and enforcing the Class

Settlement.

MISCELLANEOUS PI20VISIONS

49. All of the exhibits to the Class Settlement Agreement, except any plan of

allocation, to the extent incorporated in those exhibits, are material and integral parts hereof and

are fully incorporated herein by this reference.

50. RFC and PwC warrant that, as to the payments made on behalf of Defendants

pursuant hereto, at the time of such payment, RFC and PwC will not be insolvent, nor will the

payment render either of them insolvent, within the meaning of and/or for the purposes of the

United States Bankruptcy Code, including Sections 101 and 547 thereof.

51. The Parties to this Class Settlement Agreement intend the Class Settlement of the

Class Action Lawsuit to be the full, final and complete resolution of the Released Claims and

Released Defendants' Claims. Accordingly, the Parties agree not to assert in any forum that the

Class Action Lawsuit was brought, prosecuted or defended in bad faith or without a reasonable

basis. The Parties and their counsel agree that each has complied fully with Rule 11 of the

Federal Rules of Civil Procedure in connection with the maintenance, prosecution, defense and

479236.1 45


settlement of the Lawsuit and shall not make any applications for sanctions, pursuant to Rule 11

or other court rule or statute, with respect to any claim or defense in this Class Action Lawsuit.

The Parties agree that the amount paid and the other terms of the Class Settlement were

negotiated at arm's length in good faith by the Parties and their respective counsel, and reflect a

settlement that was reached voluntarily based upon adequate information and after consultation

with experienced legal counsel.

52. The Parties and their respective counsel agree that they will refrain from

disparaging each other in any publicly disseminated statements concerning the Class Action

Lawsuit. The Parties and their respective counsel also agree to keep the information disclosed to

them during the acts contemplated by the Class Settlement and this Class Settlement Agreement

(including confidential information exchanged in connection with the mediations referenced in

Paragraphs I and J above) confidential unless required to publicly disclose such information by

applicable law, except that this agreement excludes information that the Parties or their counsel

obtain through means independent of acts contemplated by the Class Settlement or this Class


53. This Class Settlement Agreement may not be modified or amended, nor may any

of its provisions be waived, except by a writing signed by all Parties hereto or their successors.

54. The headings herein are used for the purpose of convenience only and are not

meant to have legal effect.

55. The administration and consummation of the Class Settlement as embodied in this

Class Settlement Agreement shall be under the authority of the Court, and the Court shall retain

jurisdiction for the purpose of entering orders providing for awards of attorneys' fees and any

expenses, and implementing and enforcing the terms of this Class Settlement Agreement.

479236,1 46


56. The waiver by one Party of any breach of this Class Settlement Agreement by any

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


57. Except as provided in this Paragraph 57, Paragraph 40, and in Paragraph 6 with

respect to the Defendants' agreement amongst themselves regarding allocation of responsibility

for payment of the Class Settlement Amount, this Class Settlement Agreement, its exhibits and

the Supplemental Agreement constitute the entire agreement among the Parties hereto concerning

the Class Settlement of the Class Action Lawsuit as against Defendants and each other, and no

representations, warranties, or inducements have been made by any Party concerning this Class

Settlement Agreement and its exhibits other than those contained and memorialized in such

documents. It is understood by the Parties that, except for the matters expressly represented

herein, the facts or law with respect to which this Class Settlement Agreement is entered into

may turn out to be other than or different from the facts now known to each party or believed by

such party to be true; each Party therefore expressly assumes the risk of the facts or law turning

out to be so different, and agrees that this Class Settlement Agreement shall be in all respects

effective and not subject to termination by reason of any such different facts or law. The Parties

agree that provisions of the separate Derivative Settlement Agreement that relate or are relevant

to the Class Settlement Agreement are to be read consistently with each other and are not within

the exclusionary scope of this Paragraph 57.

58. Nothing in the Class Settlement Agreement, or the negotiations relating thereto, is

intended to or shall be deemed to constitute a waiver of any applicable privilege or immunity,

including, without limitation, attorney-client privilege, joint defense privilege, or work product

protection.

479236.1 4 7


59. This Class Settlement Agreement may be executed in one or more counterparts.

All executed counterparts and each of them shall be deemed to be one and the same instrument.

Signatures sent by facsimile or by e-mail on a "pdf' document shall be deemed originals.

60. This Class Settlement Agreement shall be binding when signed, but the Class

Settlement shall be effective only on the condition that the Effective Date occurs.

61, This Class Settlement Agreement shall be binding upon, and inure to the benefit

of, the successors and assigns of the Parties hereto.

62. Nothing in this Class Settlement Agreement removes the parties' obligations

under any Confidentiality Agreement, including the July 17, 2013 letter agreement, entered into

by the parties prior to mediation in this Class Action Lawsuit, and all such obligations shall

continue to be observed in accordance with that agreement.

63. The construction, interpretation, operation, effect and validity of this Class

Settlement Agreement, and all documents necessary to effectuate it, shall be governed by the

laws of the State of Tennessee without regard to conflicts of laws, except to the extent that

federal law requires that federal law govern.

64. This Class Settlement Agreement shall not be construed more strictly against one

Party than another merely by virtue of the fact that it, or any part of it, may have been prepared

by counsel for one of the Parties, it being recognized that it is the result of arm's length

negotiations among the Parties, and all Parties have contributed substantially and materially to

the preparation of this Class Settlement Agreement.

65. All counsel and any other person executing this Class Settlement Agreement and

any of the exhibits hereto, or any related Settlement documents, warrant and represent that they

have the full authority to do so in the capacities stated therein, and that they have the authority to

479236.1 48


take appropriate action in such capacities required to be taken pursuant to the Class Settlement

Agreement to effectuate its terms. Plaintiffs and Plaintiffs' Counsel represent and warrant that

none of Plaintiffs' claims or causes of action referred to herein or that could have been alleged in

the Class Action Lawsuit have been assigned, encumbered or in any manner transferred in whole

or in part.

66. The Parties and their counsel agree to cooperate fully with one another in

promptly applying for preliminary approval by the Court of the Class Settlement and for the

scheduling of a hearing for consideration of final approval of the Class Settlement and Plaintiffs'

Counsel's application for an award of attorneys' fees and expenses, and to promptly agree upon

and execute all such other documentation as reasonably may be required to obtain final approval

by the Court of the Class Settlement.

67. Except as otherwise provided herein, each Party shall bear its own costs.

IN WITNESS WHEREOF, the Parties hereto have caused this Class Settlement

Agreement to be executed, by their duly authorized attorneys, as of January 19, 2015.

LOCKRIDGE GRINI)AL NAUEN P.L.L.~'.

s/ Rzcha~d A. Lock~idgeRichard A. LockridgeVernon J. Vander WeideGregg M. Fishbein100 Washington Avenue SouthSuite 2200Minneapolis, MN 55401Tel: (612) 339-6900Fax: (612) 339-0981gm~ [email protected]

Lead Coas~zsel for Plaisatiffs

APPERSON GRUMP PLCs/Jerome A. BroadhurstJerome A. Broadhurst, TN BPR 12529Charles D. Reaves, TN BPR 22550

479236.1 49


6070 Poplar Avenue, Sixth FloorMemphis, TN 38119-3954Te1:901-260-5133Fax :901-435-5133j broadhurst@appersoncrump. com

Liaisoyt Cor~fasel for d'laintiffs

ZIMMERMAN REED, LLPs/ Callolyn G. AndeNsonCarolyn G. AndersonPatricia A. Bloodgood1100 IDS Center80 South 8th StreetMinneapolis, MN 55402Telephone: 612-3 41-0400Fax: 612-341-0844Carolyn.Anderson@zimmreed. com

Additiofaal Cotsrzsel fog d'laint ffs

PAUL HASTINGS LLPs/Kevin C. LoweKevin C. Logue75 East 55th StreetNew York, NY 10022Tel: (212) 318-6000Fax: (212) [email protected]

Coc~lasel for ~efe~ada~rts Helios Select ~reszd, Iric.,Helios Select Nigh I~:corrie l%cctzd, ~~elios SelectIrtterrstediate Fa~rtd, end Helios Select Sltort Terrs~Fasiid (formerly l~~orga~i Keegaji Select Fend, Iric.,Regiojts 1V1'orgart Keegan Select Nigh Ir~corrie~F cctid, I~egiofts Morgan Keegan SelectIfzterfnediate Fd~nd, acid I~tegiojts 14~1orgarz KeeganSelect Short Terra Bored F~aftd, respectively)

MAYNARD COOPER &GALE PCs/Peter S. FNuinPeter S. FruinScott S. Brown2400 Regions Harbert Plaza1901 Sixth Avenue North

479236.1 5 ~


Birmingham, AL 35203Tel: (205) 254-1000Fax: (205) 254-1999pfruin@maynardcopper. com

SULLIVAN & CROMWEI,L LLP

David B. Tulchin125 Broad StreetNew York, NY 10004Tel: (212) 558-4000Fax: (212) [email protected]

Coc~rasel for Defendants l egions FinancialCorporatio~i, Regions Batik and Morgaya AssetMayaagefneyzt, Iric.

BASS BERRY & SIMS PLCs/Britt K. LathamBritt K. LathamW. Brantley Phillips, Jr.Joseph B. Crace, Jr.blatham@bas sberry. com150 Third Avenue South, Suite 2800Nashville, TN 37201Tel.: 615-742-6200Fax: [email protected]

BASS BERRY & SIMS PLC

Shepherd D. TateMichael A. Brady1.00 Peabody Place, Suite 900Memphis, TN 38103-3672Tel: (901) 543-5900Fax: (901) [email protected]

Coa~fasel for Defendasat lllorg~ta Keeg~rn & Co.,Irtc. atad 1V~K Holding, Ittc.

KIRI~LAND & ELLIS LLP

479236.1 51


s/ Timothy A. DuffyTimothy A. DuffyEmily Nicklin300 North LaSalleChicago, IL 60654Tel: (312) 862-2000Fax: (312) [email protected]

~3AK~R DONELSON B~ARIVIAN CALDWELL8~ B~RKOWITZ

Leo M. Bearman165 Madison Avenue, Suite 2000Memphis, TN 38103Tel: (901) 526-2000Fax: (901) 577-2303lbearman@bakerdonel son. com

Corc~asel for ~efefzdafzt Pricew~terhoa~seCoopersLLP

K & L GATES I,LPs/.Ie~f~'ev B. MalettaJeffrey B. MalettaNicholas G. TerrisNicole A. Baker1601 K Street NWWashington, DC 20006Tel: (202) 778-9000Fax: (202) 778-9100j effrey.maletta@klgates. com

Cou~zsel for .Tack IZ. Blair, Albert C. Jo/inson,Jatraes Stilltsiart R.1V~cFadden, t~illiarst JefferiesMllitit~ ~Y. ~llytlZlCZZ PLZt132ll11~ 1V~ary S. Stone, aszdArchie W. Wallis, I~~

JAMES BATES I3RANNAN & GROOVER LLPs/ R. Hal Meeks Jr.R. Hal Meeks, Jr.3399 Peachtree Rd. NESuite 1700Atlanta, GA 30326Tel: (404) 997-6020Fax: (404) 997-6021hmeeks@j amesbatesllp.com

479236.1 52


Coac~tsel for Cawter E. ~nthotzy

SUTHERLAND ASBII,L & Bi2ENNAN LLPs/ S. LawNence PolkS. Lawrence Polk999 Peachtree Street, NEAtlanta, GA 30309-3996Tel: (404) 853-8225Fax: (404) [email protected]

Coasnsel forAlleft B.1VV~orgasa, Jr., J. ICesa~ietlaAldef•mttasz, Brtasi B. Sacllzva~a, Josep{i C. Weller,J~rsfaes C. I~eCsoe, Jr., J. Thor~tpsoja Weller,1Vlic/ielle F. ~3~ood, af~d David ~I. 7'anrie/sill

479236.1 53


i. i


IN TIDE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF TENNESSEE

WESTERN DIVISION

IN RE REGIONS IVIORGAN KEEGAN

SECURITIES, DERIVATIVE AND ERISA

LITIGATION


In ~e Regions Mogan Keegan Open-End

Mutual Fund Litigation,


MDL Docket No. 2009



ORDER P12ELIMINARILY APP120VING CLASS SETTLEMENT

AND PROVIDING FOR NOTICE

WHEREAS, a consolidated class action entitled In Ne Regions Morgan Keegan Open-End

Mutual Fund Litzgatzon, No. 2:07-cv-02784 is pending in this Court (the "Class Action

Lawsuit")1;

WHEREAS, the Court has received the motion for preliminary approval of the

Stipulation and Agreement of Class Settlement ("Class Settlement Agreement") and the Court

has reviewed the Class Settlement Agreement, together with attached Exhibits, which has been

entered into by counsel for Plaintiffs and counsel for Defendants;

WHEREAS, Plaintiffs having made a motion for preliminary approval of the settlement

of the Class Action Lawsuit pursuant to Federal Rule of Civil Procedure 23(e) ("Federal Rule

23"), and for entry of an order preliminarily approving the settlement of the Class Action

Lawsuit, in accordance with the Class Settlement Agreement, which, together with the Exhibits

1 For purposes of this Order, the Court adopts all defined terms as set forth in the

Stipulation and Agreement of Class Settlement, with Exhibits thereto, dated January 19, 2015

(the "Class Settlement Agreement"), and the capitalized terms used herein shall have the same

meaning as in the Class Settlement Agreement.


annexed thereto, sets forth the terms and conditions for a proposed settlement of the Class Action

Lawsuit and for dismissal of the Class Action Lawsuit with prejudice upon the terms and

conditions set forth therein (the "Class Settlement"); and

WHEREAS, a preliminary fairness hearing was held on , 2015, during which

the parties presented oral arguments addressing the proposed class settlement.

NOW, THEREFORE, IT IS HEREBY ORDERED:

1. The Court preliminarily approves the Class Settlement Agreement and the Class

Settlement set forth therein, subject to further consideration at the Class Settlement Hearing

described below.

2. The Court finds that: (a) the Class Settlement resulted from arm's length

negotiations; and (b) the Class Settlement is sufficiently fair, reasonable, and adequate to the

Class Members to warrant providing notice of the Class Settlement to Class Members and

holding a Class Settlement Hearing.

3. A hearing (the "Class Settlement Hearing") shall be held before this Court on

2015 at A.M., at the Clifford Davis /Odell Horton Federal Building, 167 N.

Main Street, 11th Floor, Courtroom #2, Memphis, TN 38103, to determine: whether the

proposed settlement of the Class Action Lawsuit on the terms and conditions provided for in the

Class Settlement Agreement is fair, reasonable, and adequate to the Class and should be

approved by the Court; whether to finally certify a settlement class; whether the Final Judgment

and Order of Dismissal, attached as Exhibit B to the Class Settlement Agreement, should be

entered; whether the proposed plan of allocation for the proceeds of the Class Settlement ("Plan

of Allocation"), attached as part of Exhibit A-1 to the Class Settlement Agreement, should be

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approved; and the annount of attorneys' fees and expenses that should be awarded to Lead

Counsel.

4. Pursuant to Federal Rule 23, the Court preliminarily certifies, solely for the

purposes of effectuating this Class Settlement, the following Class:

All Persons who (1) purchased any class of redeemable shares of

the Regions Morgan Keegan Select Short Term Bond Fund

("STF"), the Regions Morgan Keegan Select Intermediate Bond

Fund ("IBF"), or the Regions Morgan Keegan Select High Income

Fund ("HIF"), at any time during the period from December 6,

2004 through December 6, 2007, inclusive; or (2) held and/or

redeemed on or after July 3, 2006 through the end of the

Settlement Class Period shares of STF, IBF or HIF and were

damaged thereby.

Excluded from the Class and as Class Members are:

(i) the Individual Defendants and the members of the immediate families of the

Defendants;

(ii) Defendants, other than the Individual Defendants, and the subsidiaries and

affiliates of Defendants (including but are not limited to RFC, Morgan Asset Management, Inc.,

RB, Morgan Keegan, Morgan Properties LLC, and MK Holding, Inc.);

(iii) any Person who is a director or officer subject to § 16 of the Securities Exchange

Act of 1934, partner or controlling person of the Open-End Funds or any other Defendant;


(v) any member of the TAL Subclass;

(vi) any Person who has at any time filed a proceeding with FINRA against one or

more Released Defendant Parties concerning losses alleged to be attributable to the purchase or

holding of shares in one or more of the Open-End Funds during the Class Period, and such

proceeding was not subsequently withdrawn or dismissed pursuant to a specific agreement to


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(vii) any Person who has at any time filed a state court action that has not been

removed to federal court, or has been removed and remanded, against one or more of the

Defendants concerning losses alleged to be attributable to the purchase or holding of shares in one

or more of the Open-End Funds during the Class Period, and whose claims in that action have

been dismissed with prejudice, released, or fully adjudicated absent a specific agreement with

such Defendants) to allow the Person to participate as a Class Member;

(viii) any Person who has at any time filed a federal action or state court action that has

been removed to federal court, against one or more of the Defendants concerning losses alleged to

be attributable to the purchase or holding of shares in ane or more of the Open-End Funds during

the Class Period, and whose claims in that action have been dismissed with prejudice, released, or

fully adjudicated absent a specific agreement with such Defendants) to allow the Person to

participate as a Class Member;

(ix) any Person who has at any time individually settled with one or more of the

Defendants claims concerning losses alleged to be attributable to the purchase or holding of

shares in one or more of the Open-End Funds during the Class Period, and whose claims in that

settlement have been dismissed with prejudice, released, or fully adjudicated absent a specific

agreement with such Defendants) to allow the Person to participate as a Class Member;

(x) any Person who submits a valid and timely request for exclusion from the Class in

accordance with the requirements set forth in the Notice; and

(xi) the legal representatives, heirs, successors and assigns of any such excluded

Person or entity.

Provided however, these exclusions do not extend to the Regions 401(k) Plan or the Morgan

Keegan 401(k) Plan, or any portion thereof, which plans have participants who may have held

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shares in STF, IBF and/or HIF. Neither the Regions 401(k) Plan nor the Morgan Keegan 401(k)

Plan shall be construed, for purposes of this Class Settlement, as being either "affiliates" of any

Defendant or entities in which any Defendant has a controlling interest. Moreover,

notwithstanding anything in this Class Settlement or Plan of Allocation to the contrary, nothing in

this Class Settlement or plan of allocation shall be construed in any way to limit the ability of the

Regions 401(k) Plan or the Morgan Keegan 401(k) Plan to fully participate in the Class

Settlement and in any recovery hereunder. These exclusions also do not extend to trusts or

accounts as to which the control or legal ownership by any Defendant (or by any subsidiary or

affiliate of any Defendant) is derived or arises from an appointment as trustee, custodian, agent, or

other fiduciary ("Fiduciary Accounts") unless (i) that Fiduciary Account is part of the TAL

Subclass or (ii) with respect to any such Fiduciary Account, any Person has filed (A) a proceeding

(described in clauses (vi)-(viii) above) against one or more Released Defendant Parties

concerning the purchase or holding of shares in one or more of the Open-End Funds during the

Class Period and such proceeding was not subsequently dismissed to allow the Person to

specifically participate as a Class Member or (B) otherwise resolved said Person's claims as

contemplated in clause (ix) above. With respect to Open-End Fund shares for which the TAL

Orders authorize the TAL to prosecute the claims or causes of action pleaded in the Complaint

("TAL Represented Open-End Fund Shares"), "Class" and "Class Member" also excludes

Persons who are, or were during the Class Period, trust and custodial account beneficiaries,

principals, settlors, co-trustees, and others owning beneficial or other interests in the TAL

Represented Open-End Fund Shares ("Such Persons"), but this exclusion applies only to any

claims or causes of action of Such Persons that the Trustee ad Litefn is authorized by the TAL

Orders to prosecute. With respect to Open-End Fund Shares that are not TAL Represented Open-

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End Fund Shares and in which Such Persons have a beneficial or other interest, the foregoing

partial exclusion of Such Persons does not apply,

5. The Court preliminarily finds that certification of the Class meets the

requirements of Federal Rule 23 as follows:

a. The number of Class Members is so numerous that joinder of all Class

Members is impracticable, thus satisfying Federal Rule 23(a)(1).

b. There are questions of law and fact common to the Class, thus satisfying

Federal Rule 23(a)(2).

c. The claims of Lead Plaintiffs, as Court appointed class representatives, are

typical of the Class they represent, thus satisfying Federal Rule 23(a)(3).

d. The proposed class representatives and their counsel have and will fairly

and adequately protect the interests of the Class, thus satisfying Federal Rule 23(a)(4).

e. The questions of law and fact common to the Class predominate over any

questions affecting only individual members, thus satisfying Federal Rule 23(b)(3).

£ A class action is superior to other available methods for the fair and

efficient adjudication of the controversy, thus satisfying Federal Rule 23(b)(3).

6. Class Members are hereby provided an opportunity to be excluded from the Class.

Such requests for exclusion shall, as set forth below, be received no later than ,

2015. The Parties have entered into a confidential supplemental agreement, which has been

incorporated by reference into the Class Settlement Agreement, that provides that RFC and PwC

shall each have the option to terminate the Class Settlement on behalf of all Defendants and

render the Class Settlement Agreement null and void in the event that requests for exclusion

from the Class exceed certain agreed-upon criteria.

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7. The Court approves, as to form and content, the Notice of Pendency and Proposed

Settlement of Class and Derivative Actions and Motion for Attorneys' Fees and Expenses (the

"Notice"), the Proof of Claim and Release Form ("Proof of Claim"), and Summary Notice of

Pendency and Proposed Settlement of Class and Derivative Actions and Motion for Attorneys'

Fees and Expenses ("Summary Notice"), in substantially the forms annexed as Exhibits 1-3

hereto respectively, and finds that the mailing and distribution of the Notice and'Proof of Claim

and publishing of the Summary Notice, as set forth- herein, meet the requirements of Federal

Rule 23, due process, Section 27 of the Securities Act of 1933, 15 U.S.C. §77z-1(a)(7), as

amended by the Private Securities Litigation Reform Act of 1995 (the "PSLRA"), Section 21D

of the Securities Exchange Act of 1934, 15 U.S.C. § 78u 4(a)(7), as amended by the PSLRA, and

constitute the best notice practicable under the circumstances and shall constitute due and

sufficient notice to all persons and entities entitled thereto.

8. The Court hereby appoints The Garden City Group, Inc. ("Claims Administrator")

to supervise and administer the notice procedure as well as the processing of the claims, as more

fully set forth below and as set forth in the Class Settlement Agreement:

a. Pursuant to the Class Settlement Agreement, not later than ,

2015 (the "Notice Date"), the Claims Administrator shall cause a copy of the Notice and

Proof of Claim, substantially in the forms annexed hereto, to be mailed by first class mail,

postage prepaid, to all Class Members who can be identified with reasonable effort.

Within thirty (30) calendar days after the entry of this Order, Morgan Keegan &

Company, Inc. and the Open-End Funds, to the extent they have not already done so,

shall provide or cause to be provided to Lead Counsel and the Claims Administrator, at

no cost to the Class, the information that they have agreed to provide pursuant to

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Paragraphs 8(a)-(c) of the Class Settlement Agreement including information regarding

the Excluded Persons, information regarding those Persons who purchased and/or held

shares of the Open-End Funds during the Class Period and information regarding the

amount of the distributions from the States' settlement fund and the SEC Fair Fund.

b. The Claims Administrator shall use reasonable efforts to give notice to

nominee purchasers such as brokerage firms and other persons or entities who purchased

or otherwise acquired the shares of the Open-End Funds during the Class Period as record

owners but not as beneficial owners. Such nominee purchasers are directed, within seven

(7) calendar days of their receipt of the Notice, to either (i) provide the Claims

Administrator with lists of the names and last known addresses of the beneficial owners,

and the Claims Administrator is ordered to send the Notice and Proof of Claim promptly

to such identified beneficial owners by first-class mail, or(ii) request additional copies of

the Notice and Proof of Claim, and within seven (7) calendar days of receipt of such

copies send them by first-class mail directly to the beneficial owners. Nominee

purchasers who elect to send the Notice and Proof of Claim to their beneficial owners

shall also send a statement to the Claims Administrator confirming that the mailing was

made as directed. Additional copies of the Notice shall be made available to any record

holder requesting such for the purpose of distribution to beneficial owners, and such

record holders shall be reimbursed from the Settlement Fund, after receipt by the Claims

Administrator of proper documentation, for their reasonable expenses actually incurred in

sending the Notices and Proofs of Claim to beneficial owners.


c. Not later than , 2415, the Claims Administrator shall cause

the Summary Notice to be published once in Investor's Business Daily, and on a different

day to be transmitted over PRNewswire.

d. Not later than ~, 2015, the Claims Administrator shall cause the

Class Settlement Agreement and its Exhibits and a copy of the Notice to be posted on the

settlement website, which shall be created and maintained by the Claims Administrator or

Lead Counsel.

e. Lead Counsel shall, by , 2015, file with the Court and

serve on Defendants' counsel proof of such mailing, publishing, and posting as set forth

above.

f. At least by , 2015, the Defendants shall cause to be served

on Lead Counsel and filed with the Court proof, by affidavit or declaration from the

Claims Administrator, of the date and service upon the appropriate officials) of the

notices) set forth in 28 U.S.C. § 1715(b). This Court will not issue any final approval of

the Class Settlement or enter the Judgment as provided in the Class Settlement

Agreement until such proof has been filed with the Court, and in no event earlier than

ninety (90) days after the date on which the appropriate official was served with the 28

U.S.C. § 1715(b) notice. Other than the notices) under 28 U.S.C. § 1715(b) and the

provision of names and addresses, pursuant to paragraph 8 of the Class Settlement

Agreement, Defendants are not obligated to bear any cost associated with mailing and

publishing any notice as set forth above.

9. The information to be produced pursuant to paragraph $ of the Class Settlement

Agreement constitutes confidential and privacy protected business and personal information, and

D


shall be treated as confidential by the Claims Administrator, Lead Counsel, anal Funds'

Counsel. As the Parties agreed to in the Class Settlement Agreement, the Claims Administrator,

Lead Counsel, and Funds' Counsel shall use this information solely for the purposes of providing

notice, administering Proofs of Claim or requests for exclusion, communicating with members of

the Settlement Class, responding to Excluded Persons, or otherwise administering the proposed

settlement pursuant to the Class Settlement Agreement and the Orders) of the Court, and shall

not disclose this information to anyone (other than the Class Member whose information is at

issue) absent express authorization from the Court.

10. All Class ...Members (other than those persons or entities who shall timely and

validly request exclusion from the Class) shall be bound by all determinations and judgments in

the Class Action Lawsuit concerning the Class Settlement, whether favorable or unfavorable to

the Class.

11. A Class Member wishing to make an exclusion request shall mail a written

request to the address designated in the Notice for such exclusions, such that it is received no

later than , 2015. Such request for exclusion must state the name, address, and

telephone number of the person or entity seeking exclusion, that the person requests exclusion

from the Class in "In re Regions Morgan Keegan Open-End Mutual Fund Litigation, Case No.

2:07-cv-02784-SHM-dkv," and must be signed and dated by such person. Such persons

requesting exclusion are also directed to state: the date of each purchase or acquisition of Open-

End Fund shares during the period from December 6, 2004 through May 29, 2009, inclusive; the

number of shares purchased or acquired in each transaction; and the dates) of each sale or

redemption of said shares. The request for exclusion shall not be effective unless it provides all

of the required information and is made within the time stated above, or the exclusion is

~1]


otherwise accepted by the Court or allowed by Lead Counsel and counsel for the Morgan

Keegan Defendants, RFC and I'wC.

12. Class Members who timely and validly request exclusion from the Class as set

forth above shall not be eligible to receive any payment out of the Net Class Settlement Fund as

described in the Class Settlement Agreement, unless otherwise ordered by the Court.

13. In order to be eligible to receive a distribution from the Net Class Settlement

Fund, in the event the Class Settlement is effected in accordance with the terms and conditions

set forth in the Class Settlement Agreement, each Class Member shall take the following actions

and be subject to the following conditions:

a. A properly executed Proof of Claim, substantially in the form annexed

hereto as Exhibit 2, must be submitted to the Claims Administrator, at the address

indicated in the Notice, postmarked no later than ~, 2015. Such deadline may

be further extended by Court order or by Lead Counsel in their discretion. Each Proof of

Claim shall be deemed to have been submitted when mailed (if received with a postmark

and if mailed by first-class or overnight mail, postage prepaid) provided such Proof of

Claim is actually received prior to the motion for an order of the Court approving

distribution of the Net Class Settlement Fund. Any Proof of Claim submitted in any

other manner shall be deemed to have been submitted when it was actually received at

the address designated in the Notice. Any Class Member who does not timely submit a

Proof of Claim within the time provided for shall be barred from sharing in the

distribution of the Net Class Settlement Fund, unless otherwise ordered by the Court, but

shall remain bound by all determinations and judgments in this Class Action Lawsuit

concerning the Class Settlement.

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b. The Proof of Claim submitted by each Class Member must satisfy the

following conditions, unless otherwise ordered by the Court or specified in the

instructions in the Proof of Claim: (i) it must be properly completed, signed and

submitted in a timely manner in accordance with the provisions of the preceding

subparagraph; (ii) if the person executing the Proof of Claim is acting in a representative

capacity, a certification of his or her current authority to act on behalf of the Class

Member must be included in the Proof of Claim; and (iii) the Proof of Claim must be

complete and contain no material deletions or modifications of any of the printed matter

contained therein and must be signed under penalty of perjury.

c. As part of the Proof of Claim, each Class Member shall submit to the

jurisdiction of the Court with respect to the claim submitted.

14. Any Member of the Class may enter an appearance in the Class Action Lawsuit,

at his, her or its own expense, by appearing individually or through counsel of his, her or its own

choice. If a Class Member does not enter an appearance, Lead Counsel will represent them.

15. Any Member of the Class may appear at the Class Settlement Hearing (other than

those Persons or entities who timely and validly request exclusion from the Class) and show

cause as to why: the proposed settlement of the Class Action Lawsuit should or should not be

approved as fair, reasonable and adequate; why a judgment should or should not be entered

thereon; why the Plan of Allocation should or should not be approved; or why attorneys' fees

and expenses should or should not be awarded to Lead Counsel; provided, however, that no

Class Member or any other person shall be heard or entitled to contest the approval of the terms

and conditions of the proposed Class Settlement, or the judgment to be entered thereon

approving the same, or the Plan of Allocation, or the attorneys' fees and expenses to be awarded

12


to Lead Counsel, unless that person or entity has filed with the Clerk of the United States District

Court for the Western District of Tennessee a written objection, papers, and briefs that comply

with the requirements set forth in the Notice and has delivered by hand or sent by mail to the

parties named below the written objection, papers, and briefs filed with the Court such that the

papers are received by the Court and said parties on or before , 2015:

COURT:

Clerk of the CourtUnited States District Court for the Western District of

TennesseeClifford Davis/Odell Horton Federal Building

167 N. Main Street, Room 242Memphis, Tennessee 38103

LEAD COUNSEL:

Richard A. Lockridge, Esq.Vernon J. Vander Weide, Esq.Gregg M. Fishbein, Esq.LOCKRIDGE GRINDAL NAUEN P.L.L.P.

Minneapolis, MN 55401

ATTORNEYS FOR REGIONS FINANCIAL CORPORATION, REGIOl\TS BANK

& MORGAN ASSET MANAGEMENT, INC.:

Peter S. Fruin, Esq.MAYNARD, COOPER &GALE, P.C.

1901 6th Avenue North, Suite 2400

Birmingham, Alabama 3 5203

ATTORNEYS FOR THE MORGAN KEEGAN DEFENDANTS:

Britt K. Latham, Esq. BASS BERRY & SIMS PLC

150 Third Avenue South, Suite 2800

Nashville, Tennessee 37201

ATTORNEYS FOR CARTER E. ANTHONY:

R. Hal Meeks, Jr.JAMES, BATES, BRANNAN & GROOVER LLP

3399 Peachtree Rd. NE, Suite 1700

13


Atlanta, Georgia 30326

ATTORNEYS I+OR JACK R. BI.AIR, ALBERT' C. JOHNSON, JAIi~IES

STILLMAN R. MCFADDEN, WILLIAM JEFFERIES MANN, W. RANDALL

I'IT'~1VIAN, MARY S. STONE, AND ARCHIE W. WILLIS, III:

Jeffrey B. MalettaK & L GATES LLP1601 K Street NWWashington, DC 200006

ATTORNEYS FOR ALLEN B. MORGAN, JR., J. KENNETgI ALDERMAN,

BRIAN B. SUL,LIVAN, JOSEPH C. WELLER, JAMES C. KELSOE, JR, J.

THOMPSON WELLER, MICHELLE F. WOOD, AND DAVID TANNEHILL:

S. Lawrence Polk, Esq.SUTHERLAND ASBILL & BRENNAN, LLP

999 Peachtree Street, N.E. Atlanta, Georgia 30309

ATTORNEYS FOR PRICEWATER~IOUSECOOPERS LLP:

Timothy A. Duffy, Esq.KIRKLAND & ELLIS LLP

300 North LaSalleChicago, IL 60654

ATTORNEYS FOB THE OPEN-END FUNDS:

Kevin C. Logue, Esq. PAUL HASTINGS LLP

75 East 55th StreetNew York, New York 10022

Any Member of the Class who does not make an objection in the manner provided herein

and in the Notice shall be deemed to have waived such objection and shall forever be foreclosed

from making any objection to the fairness or adequacy of the proposed Class Settlement as set

forth in the Class Settlement Agreement, to the Plan of Allocation, or to the award of attorneys'

fees and expenses to Lead Counsel, unless otherwise ordered by the Court.

16. Attendance at the Class Settlement Hearing by Class Members is not necessary;

however, persons wishing to be heard orally in opposition to the approval of the Class

14


Settlement, the Plan of Allocation, and/or the application for an award of attorneys' fees and

other expenses to Lead Counsel are required to state in their written objection filed with the

Court that they intend to appear at the Class Settlement Hearing, as set forth in the Notice.

Persons who intend to object to the Class Settlement, the Plan of Allocation, and/or the

application for an award of attorneys' fees and expenses to Lead Counsel and desire to present

evidence at the Class Settlement Hearing must include in their written objections filed with the

Court the identity of any witnesses they may call to testify and exhibits they intend to introduce

into evidence at the Class Settlement Hearing, and they must comply with the requirements in

the Notice. Class Members who approve of the Class Settlement do not need to appear at the

hearing or take any other action to indicate their approval.

17. The passage of title and ownership of the Class Settlement Amount to the Escrow

Agent in accordance with the terms and obligations of the Class Settlement Agreement is

approved. No person shall have any right to any portion of, or to any distribution of, the Class

Settlement Fund unless otherwise ordered by the Court or otherwise provided in the Class


18. All funds held by the Escrow Agent shall be deemed and considered to be in

custodia legis of the Court, and shall remain subject to the jurisdiction of the Court, until such

time as such funds shall be distributed pursuant to the Class Settlement Agreement and/or further

orders) of the Court.

19. The administration of the proposed Class Settlement and the determination of all

disputed questions of law and fact with respect to the validity of any claim or right of any person

or entity to participate in the distribution of the Net Class Settlement Fund shall be under the

authority of this Court.

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20. All papers in support of the Class Settlement, the Plan of Allocation, and the

application for attorneys' fees or expenses, shall be filed and served not later than ,

2015. Any reply papers in further support of the Class Settlement, the Plan of Allocation and the

application for attorneys' fees or expenses, shall be filed and served no later than ,

2015.

21. Neither the Defendants nor the Released Defendant Parties shall have any

responsibility for or liability with respect to reviewing or challenging claims, the Plan of

Allocation or the allocation or distribution of the Net Class Settlement Fund, or any application

for attorneys' fees or reimbursement of expenses submitted by Lead Counsel, and such matters

will be considered separately from the fairness, reasonableness and adequacy of the Class

Settlement and will not affect any ruling on the approval of the Class Settlement or the

effectiveness or finality of the Class Settlement.

22. At or after the Class Settlement Hearing, the Court shall determine whether the

Plan of Allocation proposed in the Class Settlement and any application for attorneys' fees or

reimbursement of expenses by Lead Counsel shall be approved.


reason, any portion of the Class Settlement Amount previously paid on behalf of or by

Defendants, together with any earnings thereon, less any Taxes paid or due, less Notice and

Administration Expenses actually incurred and paid or payable from the Settlement Amount

shall be returned to the entities that made the payments) within ten (10) business days after

written notification of such event. In such event, at the request of Defendants' Counsel, the

Escrow Agent or its designee shall apply for any tax refund owed on the amounts in the Escrow

16


Account and pay the proceeds, after any deduction of any fees or expenses incurred in

connection with such application(s), for refund to the applicable funder or as otherwise directed.

24. This Preliminary Approval Order, the Class Settlement Agreement and its terms,

the negotiations leading up to the Class Settlement Agreement, the fact of the Class Settlement,

and the proceedings taken pursuant to the Class Settlement, shall not: (1) be construed as an

admission of liability or an admission of any claim or defense on the part of any party, in any

respect; (2) form the basis for any claim of estoppel by any third party against any of the

Released Defendant Parties; or (3) be admissible in any action, suit, proceeding, or investigation

as evidence, or as an admission, of any wrongdoing or liability whatsoever by any of the

Released Defendant Parties or as evidence of the truth of any of the claims or allegations

contained in any complaint filed in the Class Action Lawsuit or deemed to be evidence of or an

admission or concession that Plaintiffs or any Class Members have suffered any damages, harm,

or loss. Neither the Preliminary Approval Order, any Final Judgment or Final Alternative

Judgment, or the Class Settlement Agreement, nor any of their terms and provisions, nor any of

the negotiations or proceedings connected with them, nor any action taken to carry out this

Preliminary Approval Order, any Final Judgment or Final Alternative Judgment, or the Class

Settlement Agreement by any of the Parties shall be offered into evidence, or received in

evidence in any pending or future civil, criminal or administrative action, arbitration, or

proceeding, except: in a proceeding to enforce this Preliminary Approval Order, any Final

Judgment or Final Alternative Judgment, or the Class Settlement Agreement, or to enforce any

insurance rights; to defend against the assertion of Released Claims (including to support a

defense or counterclaim based on principles of res judicata, collateral estoppel, release, good

faith settlement, judgment bar or reduction); or by Lead Counsel to demonstrate its adequacy to

17


serve as class counsel pursuant to Federal Rule 23(g) (or its state law analogs); subject to the

prohibited purposes identified in Paragraph 46 (a)-(e) of the Class Settlement Agreement and in

Paragraph 24(1)-(3) above, or as otherwise required by law.

25. Pending final determination by the Court as to whether the Class Settlement, as

set forth in the Class Settlement Agreement, is fair, reasonable and adequate and should be

finally approved and whether the Judgment dismissing the Class Action Lawsuit with prejudice

should be approved, no Class Member shall commence or prosecute against any of the

Defendants or the Released Defendant Parties any of the Released Claims in this Class Action

Lawsuit, or in any other proceeding or forum. This injunction is necessary to protect and

effectuate the Class Settlement and to enter judgment when appropriate, and is ordered in aid of

the Court's jurisdiction and to protect its judgments.

26. Pending the Class Settlement Hearing, the Court hereby stays all proceedings in

the Class Action Lawsuit, other than the proceedings necessary to carry out or enforce the terms

and conditions of the Class Settlement Agreement.

27. In the event that the Class Settlement does not become effective in accordance

with the terms of the Class Settlement Agreement or the Effective Date does not occur, or in the

event that the Class Settlement Fund, or any portion thereof, is returned to the Defendants, then

this Order shall be rendered null and void and shall be vacated and, in such event, all orders

entered and releases delivered in connection herewith shall be null and void.

28. The Court reserves the right to adjourn the date of the Class Settlement Hearing

without further notice to the Members of the Class, and retains jurisdiction to consider all further

applications arising out of or connected with the proposed Class Settlement. The Court may

18


approve the Class Settlement and/or the Plan of Allocation, with such modifications as may be

agreed to by the Parties, if appropriate, without further notice to the Class.

It is so ORDERED this day of , 2015.

SAMUEL H. MAYS, JR.UNITED STATES DISTRICT JUDGE

~!:


i,,:

.:


IN THE ~TIeTITED STATES DISTRICT COiJI2T

FOR TIDE WESTERl~ DISTRICT ()F TEI~TNESSEE

WESTERN DIVISION

IN RE REGIONS MORGAN KEEGAN ) MDL Docket No. 2009

SECURITIES, DERIVATIVE and ERISA LITI-

GATION ~

This Document Relates to: ~ NOTICE OF PENDENCY AND~ PROPOSED SETTLEMENT OF

In re Regions Mogan Keegan Open-End ~ CLASS AND DERIVATIVE

Mutual Fund Litigation, ~ ACTIONS AND MOTION FOlt

No. 2:07-cv-02784-SHM-dkv ~ ATTORNEYS' FEES AND

and~ EXPENSES

Landers, et al. v. MoNgan Asset Management, ~Inc., et al., ~

No.2:08-cv-02260-SHM-dkv ~

(1) If you purchased during the period Deceiziber 6, 20 4 through December 6, 2007 or

held and/or redeemed during the period July 3, 200b th~oug~; May 29, 2009 ("Hold-

ers/Sellers doss Period") shares in the Regions Margin KeegaY~ Select S~~ort Ter~~ B~~id

FlII2f~ ~"S~F") (MSTBX, RSTCX, MSBIX}, tiie Reg~or~s Morgan Keega~a Select It~termedi-

ate Band Fund ("ISF'") (MI~3X, RIBC`X, RIBIX}, and/or the Regions Morgan Deegan Se-

lect High Income Fzand ("gIIF") (NII~, ItHICX, REIII[~ (collectively "the Funds") anti

you are not excluded by the terms ~f t~~e settlement ("Settlement Class"), yon may be enti-

tlet~ tt~ a payment front the settlement of a class actiorY brought on behalf of sharehalders iu

the ~anas ("Class settlement").

(2) If you were a shareholder of one or mare of the ~unt~s on May 29, 2009, the date on

which the liquidation of the I`~~nds was approved by the shareholders of the Funds, and you

are not excluded ~y the terms of the settlement ("I+`~~nds Sharehalders"), you n ay ~ eaati-

tlecl to a paynxent from the settleir~ent Qf a derivative action brought on be~~alf of the F`u~ads

("Derivative Settlement").

A federal court authorized this notice. This is not a solicztatzon from a lawyer.

If approved by the Court, the proposed Class Settlement and the proposed Derivative Settlement (col-

lectively referred to as the "Settlement") provides for: l

A $125 million cash settlement fund for the benefit of eligible investors in the Funds (the "Set-

tlement Amount").

$110 million of the Settlement Amount will be allocated to the Settlement Class ("Class Settle-

ment Amount"), which together with earnings thereon ("Class Settlement Fund") will be dis-

1 All capitalized terms used in this Notice are defined herein, in the Stipulation and Agreement

of Class Settlement (the "Class Settlement Agreement"), dated as of January 19, 2015, or in the Stipu-

lation and Agreement of Derivative Action Settlement ("Derivative Settlement A er~ement"), dated as

of January 19, 2015.


tributed, after fees and expenses ("Net Class Settlement Fund"), to persons who are members of

the Settlement Class ("Settlement Class Members"), as part of the settlement of the Class Action

Lawsuit; $15 million of the Settlement Amount will be allocated to the Funds ("Funds Settle-

ment Amount"), which together with earnings thereon ("Funds Settlement Fund") will be dis-

tributed, after fees and expenses ("Net Funds Settlement Fund"), to the Funds Shareholders, as

part of the settlement of the Derivative Action Lawsuit.

Unless excluded by the terms of the Derivative Settlement Agreement, Funds Shareholders shall

receive distributions from the Net Funds Settlement Fund ("Funds' Distribution") without re-

gard to whether they elect to exclude themselves from the Class Settlement. To the extent that

Funds Shareholders are also eligible to receive distributions from the Net Class Settlement

Fund, their Funds' Distribution will be deducted from their pro Nata share of the Net Class Set-

tlement Fund ("Class Distribution").

The Class Settlement resolves claims by plaintiffs in the Class Action Lawsuit that the

Class Action Defendants (defined below) made misrepresentations and omissions in the

Funds' public filings and other public statements to investors about the risks and types of

assets in which the Funds invested, and therefore allegedly violated various provisions of

the federal securities laws.

• The Derivative Settlement resolves claims by plaintiffs in the Derivative Action Lawsuit on

behalf of the Funds against the Derivative Action Defendants (defined below), alleging that

they mismanaged the Funds or negligently rendered services to the Funds.

• The Settlement avoids the costs and risks of continuing the Class Action Lawsuit and De-

rivative Action Lawsuit (collectively, "Lawsuits"), pays money to Persons who invested in

the Funds, and releases Defendants from liability (under the terms set forth in the Class and

Derivative Settlement Agreements).

YOUR LEGAL RIGHTS AND OPTIONS IN THE CLASS SETTLEMENT AS A SETTLEMENT CLASS MEMBER

SUBMIT A PROOF OF CLAIMAND RELEASE FORM BY

As a Settlement Clasp Member, this is the only way to get a payment from

2015the Net Ciass Settlement Fund.

Get no payment from the Net Ciass Settlement Fund. As a Settlement

EXCLUDE YOURSELFClass Member, this is the only option that allows you to ever bring, contin-

BY_ 2015ue to pursue, or be part of any other legal action involving the Released

, Claims (defined below) against the Released Defendant Parties (defined

below).

Write fo the Court about why you do not like the Class Settlement, the

OBJECT BY , 2015 proposed Plan of Allocation, and/or the request for attorneys' fees and

expenses. You will still be a member of the Settlement Class.

GO TO A HEARING ON You may ask to speak in Court about the Class Settlement at the

2015 Settlement Hearing.

As a Settlement Class Member, if you do nothing you will get no payment

DO NOTHINGand you will give up your rights to bring, continue to pursue, or to be part

of any other legal action involving the Released Claims (defined below)

against the Released Defendant Parties (defined below).

YOUR LEGAL RIGHTS AND OPTIONS IN THE DERIVATIVE SETTLEMENT AS A FUNDS SHAREHOLDER

NO PROOF OF CLAIM AND~f you are a Funds Shareholder (and not excluded from the Derivative Set-

tlement as ex lained below , ou need not submit a Proof of Claim and

2


RELEASE Release to share in the Funds' Distribution. This is separate from the dis-

tribution from the Class Settlement Fund. As discussed above, you must

submit a Proof of Claim and Release form to be paid from the Class Set-

tiement Fund.

NO OPTION TO EXCLUDEIf you are a Funds Shareholder, you do not have the opportunity to exclude

YOURSELFyourself from the Derivative Settlement; excluding yourself from the Set-

tlement Class does not affect your right to share in the Funds' Distribution.

You may write to the Court about why you do not like the Derivative

OBJECT BY ~, 2015 Settlement and/or the request for attorneys' fees and expenses. You will

still receive your share of the Funds' Distribution.

GO 'f0 A HEARING OiV You may ask to speak in Court about the Derivative Settlement at the

2015 Settlement Hearing.

DO NOTHINGIf you are a Funds Shareholder and if you do nothing, you will receive your

share of the Funds' Distribution.

MOST OR ALL FUNDS SHAREHOLDERS ARE ALSO SETTLEMENT CLASS MEMBERS UNLESS EX-

CLUDED. MOST SETTLEMENT CLASS MEMBERS ARE NOT FUNDS SHAREHOLDERS BECAUSE THEY

REDEEMED THEIR SHARES IN THE FUNDS BEFORE MAY 29, 2009.

• Your legal rights are affected whether you act or do not act. Read this Notice carefully.

• The Court will review the Settlement at the Settlement Hearing to beheld on o, 2015.

• These rights and options—and the deadlines to exercise them—are explained in this

Notice.

• The Court in charge of these cases still has to decide whether to approve the Settlement and

whether to certify a Settlement Class for purposes of the Class Settlement. Payments will

be made if the Court approves the Settlement and after any appeals are resolved. This pro-

cess may take significant time.

COVER PAGE

(as Required by the Private Securities Litigation Reform Act of 1995 ("PSLRA"))

(~) Statez~aent of Plaintiffs' Recovery

Pursuant to the Settlement, a Settlement Amount consisting of $125 million in cash, plus any

accrued interest, has been established, of which, pursuant to a separate agreement between the Funds

and Derivative Plaintiffs and Lead Plaintiffs, $110 million will be allocated to the Class Settlement,

and $15 million will be allocated to the Derivative Settlement. Based on the calculations shown in the

Proof of Claim and Release Form ("Proof of Claim") attached and in all Proofs of Claim submitted,

and assuming that all Settlement Class Members entitled to participate do so, and assuming further

that 89% of the Funds Shareholders' Funds' Distribution is set-off against their share of the Net Class

Settlement Fund,2 and giving effect to the exclusions and other adjustments described. below, and

based in part on data. provided by Defendant Regions Financial Corporation regarding such exclu-

sions, Lead Plaintiffs estimate that the average overall recovery is about < >% of the aggregate

2 Lead Plaintiffs' estimate that 11% of the Funds' Distribution will be paid to Funds Shareholders who are

not Settlement Class Members because they are excluded from sharing in the Class Settlement Fund.

3


Compensable Loss of all Settlement Class Members in all three Funds. This estimate is calculated be-

fore the deduction of Court-approved expenses, such as attorneys' fees and expenses and administra-

tive costs.

A Settlement Class Member's actual recovery will be a portion of the Net Class Settlement

Fund, determined by comparing his, her, or its "Recognized Claim" to the total Recognized Claims of

all Settlement Class Members who submit an acceptable Proof of Claim. An individual Settlement

Class Member's actual recovery will depend on, for example: (1) the total number and dollar amount

of claims subrzutted; (2) the Settlement Class Member's holdings in one or more of the Funds during

the "Holders/Sellers Loss Period" (July 3, 2006 through May 29, 2009); and (3) when those shares

were redeemed. See the Plan of Allocation at Question 26 below for information on your Recog-

nized Claim.

(b} Statea~ient of Potential Outcoarde if the Lativsuits Coa~tiiiues~ to I3e Litigated

The Parties disagree on both liability and the damages that would be recoverable if Plain-

tiffs in the Lawsuits were to prevail on one or more of the claims alleged. The issues on which

the Parties disagree include, but are not limited to: (1) whether Defendants made any material

misstatements or omissions; (2) whether the Funds' financial statements were improperly audited

or were materially misleading; (3) whether the Funds were mismanaged, were insufficiently di-

versified, or violated their investment objectives, policies and restrictions; (4) whether any pur-

chasers/holders of the Funds' shares have suffered damages as a result of the alleged misstate-

ments and omissions in Defendants' public statements; (5) the appropriate measure of any such

damages; (6) the amount by which the Funds' NAVs were inflated during the Class Period (if at

all) and the extent to which external factors, such as general market and industry conditions,

caused the Funds' and their shareholders' losses; (7) whether class members can pursue claims

under the federal securities laws based on allegations of mismanagement; and (8) whether hold-

ers of securities, who did not purchase or sell in reliance on an alleged misrepresentation or

omission, have standing to bring claims under the federal securities laws.

Defendants deny that they did anything wrong, deny any liability to Plaintiffs, and deny

that the Funds, Plaintiffs and the Class have suffered any losses attributable to Defendants' ac-

tions. Plaintiffs believe that they and the Funds have meritorious claims, although they recognize

that there are significant obstacles to a recovery.

(c) Statement of Attorneys' Fees a~ad Litigation Expenses Sought

Counsel for the Lead and Derivative Plaintiffs have expended considerable time and ef-

4


fort during the last seven years in the prosecution of this litigation without receiving any pay-

ment, and have advanced the expenses of the litigation, such as the cost of experts, in the expec-

tation that, if they were successful in obtaining a recovery for the Class and the Funds, they

would be paid from such recovery. In this type of litigation, it is customary for counsel to be

awarded a percentage of the common fund recovered as attorneys' fees. Lockridge Grindal Nau-

en, P.L.L.P. ("Lead Counsel") intends to make a motion in the Lawsuits asking the Court to

award attorneys' fees not to exceed 30% of the Settlement Amount and approve payment of liti-

gation expenses incurred in prosecuting this action in an amount not to exceed $< >,

plus any uaterest on such amounts at the same rate and for the same periods as earned by the Set-

tlement Fund ("Fee and Expense Ap,~lication"). If the Court approves the Fee and Expense Ap-

plication, the percentage recovery will be reduced to <_>%. Claimants actual percentage recov-

ery will vary depending on the number and aggregate losses of submitted claims and the number

and aggregate losses of the claims accepted, and the administrative expenses associated with the

claims process.

(c~) I+'urt~~er Informatian

Further information regarding the Lawsuits and this Notice may be obtained by contact-

ing the Claims Administrator: In re Regions Morgan Keegan Open-End Mutual Fund Litigation,

c/o GCG, PO Box 9939, Dublin, Ohio 43017-5939, 1-888-895-9227,

www.rmkopenendfundsettlement.com, [email protected]; Lead Coun-

sel: Richard A. Lockridge, Vernon J. Vander Weide, or Gregg M. Fishbein, Lockridge Grindal

Nauen, P.L.L.P., 100 Washington Ave. S., Minneapolis, Minnesota 55401, 1-800-<>; or visiting

~v`~v~~.r~organkeegani~ewsuit.car~.

Do Not Cali t~~.e Co~irt with Questions About t ie Settlement

(e) Reasons far the Settlement

The principal reason for the Settlement is the immediate benefit to the Settlement Class

and the Funds and the Funds Shareholders. This benefit must be compared to the risk that no re-

covery might be achieved after a trial and likely appeals, possibly years into the future.

For Defendants, who deny all allegations of wrongdoing or liability whatsoever, the prin-

cipal reason for the Settlement is to eliminate the expense, risks, and uncertain outcome of the

litigation.

[END OF PSLRA COVER PAGE]

A. BASIC INFORMATION


1. Why ciicl I get this Notace?

You have been identified as (A) someone (i) who may have purchased shares of one or

more of the Funds during the period December 6, 2004 through December 6, 2007, or (ii) who

may have held and redeemed shares of one or more of the Funds during the period July 3, 2006

through May 29, 2009 and, therefore, you are a Settlement Class Member; or (B) someone who

may have held shares of one or more of the Funds on May 29, 2009 and, therefore, you are a

Funds Shareholder. You may be both a Settlement Class Member and a Funds Shareholder,

The Court directed that this Notice be sent to you as a Settlement Class Member or a

Funds Shareholder to inform you about the proposed settlement of the Lawsuits, and about the

options available to you, before the Court decides whether to approve the Settlement. The Court

will review the Settlement at a Settlement Hearing on < , 205, at the United

States District Court for the Western District of Tennessee, Western Division, in the Clifford

Davis/Odell Horton Federal Building, 167 North Main Street, l lth Floor Courtroom #2, Mem-

phis, Tennessee 38103, at <~:~ ____.an. If the Court approves the Settlement, and after all ob-

jectians and appeals are resolved, a Claims Administrator appointed by the Court will make the

payments that the Settlement allows.

This Notice explains the Lawsuits, the Settlement, Settlement Class Members' and Funds

Shareholders' legal rights, the benefits that are available, who is eligible for them, and how to get

them. The Court in charge of the case is the United States District Court for the Western District

of Tennessee, Western Division (Judge Samuel H. Mays, Jr.). The lawsuits are known as In re

Regions Mogan Keegan Open-End Mutual Fund Litigation, No. 2:07-cv-02784-SHM-dkv

(W.D. Tenn.) (the "Class Action Lawsuit"), and Landers, et al. v. Morgan Asset Management,

Inc., et al., No. 2:08-cv-02260-SHM-dkv (the "Derivative Action Lawsuit") (together, the "Law-

suits"). The people who sued are called plaintiffs, and the companies and the persons they sued

are called defendants. In the Class Action Lawsuit, the Lead Plaintiffs asserted claims on behalf

of a class of shareholders in the Funds who purchased or held and redeemed shares during the

Class Period. In the case of the Derivative Action Lawsuit, the Derivative Plaintiffs sued on be-

half of the Funds for the Funds' benefit.

Lead Plaintiffs in the Class Action Lawsuit, representing the Class, are the Estate of

Kathryn S. Cashdollar, Dajalis Ltd., Jeanette H, and H. Austin Landers, and Frank D. Tutor

("Lead Plaintiffs"). Derivative Plaintiffs in the Derivative Action Lawsuit are H. Austin and

Jeanette H. Landers, James H. Frazier, James P. and Peggy C. Whitaker, and the Estates of

6


Charles M, and Diana W. Crump ("Derivative Plaintiffs").

Defendants in the Class Action Lawsuit are Morgan Keegan &Company, Inc., Morgan

Asset Management, Inc., MK Holding, Inc., Regions Financial Corporation, and Regions Bank

("RMK Defendants"); Morgan Keegan Select Fund, Inc. and its portfolios or "series": STF

(n/k/a Helios Select Short-Term Fund), IBF (n/k/a Helios Select Intermediate Bond Fund), and

HIF (n/k/a Helios Select High Income Fund) ("Funds"); Allen B. Morgan, Jr., J. Kenneth Al-

derman, Jack R. Blair, Albert C. Johnson, William Jeffries Mann, James Stillman R. McFadden,

W. Randall Pittman, Mary S. Stone, Archie W. Willis, III, Carter E. Anthony, Brian B. Sullivan,

Joseph C. Weller, J. Thompson Weller, G. Douglas Edwards, Charles D. Maxwell, David M.

George, Michele F. Wood, James C. Kelsoe, Jr., David H. Tannehill, and Thomas R. Gamble

(each an "Individual Defendant" and together "Individual Defendants"); and Pricewaterhouse-

Coopers LLP ("PwC") (collectively, the "Class Action Defendants"). All of the Defendants in

the Class Action Lawsuit are also defendants in the Derivative Action Lawsuit except Messrs.

Mann, Anthony, Edwards, George, and Gamble (collectively, the "Derivative Action Defend-

ants"); the Funds are nominal defendants in the Derivative Action Lawsuit because it is brought

for their benefit. Together, the Class Action Defendants and the Derivative Action Defendants

are sometimes referred to as "Defendants."

2. What are t~~ese Iawsuits about and ~v~iat I~as tia pe~~ed so fir?

The Class Action Lawsuit was commenced on December 6, 2007 on behalf of a class of

shareholders of IBF and HIF and was subsequently amended to include the shareholders of STF. The

Lead Plaintiffs filed the Consolidated Amended Class Action Complaint ("CAC") on November 30,

2009. The CAC alleged seven causes of action based on federal law (§§ 1l, 12(a)(2) and 15 of the

Securities Act of 1933; §§ 10(b) and 20 of the Securities Exchange Act of 1934; and various sections

of the Investment Company Act of 1940) on behalf of the investors in the Funds. On September 30,

2010, the Court entered an order granting in part and denying in part Defendants' motions to dismiss

the CAC. The claims that survived the motion to dismiss alleged violations of §§ 11, 12(a)(2) and 15

of the Securities Act of 1933. The claims dismissed included one that alleged violations of § 10(b) of

the Securities Exchange Act of 1934, which, along with the § 11 claim, was asserted against the Funds

("§ 10(b) claim"). Plaintiffs seek compensatory or rescissory damages for their losses, prejudgment

interest, costs, and reasonable attorneys' fees. In June 2012, Lead Plaintiffs moved for leave to file a

proposed Second Consolidated .Amended Class Action Complaint ("SCAC"), which motion has been

stayed pursuant to agreement with Defendants. The SCAC alleges additional wrongdoing by Defend-


ants in support of the § 10(b} claim.

The Derivative Action Lawsuit was commenced on March 28, 2008 on behalf of the Funds.

Derivative Plaintiffs are represented by the same attorneys who represent plaintiffs in the Class Action

Lawsuit. Plaintiffs filed their First Amended Derivative Complaint on October 13, 2009. Defendants

moved to dismiss that complaint on December 15, 2009.On September 24, 2010, the Court denied all

motions to dismiss, determined that Plaintiffs had made a demand on the Funds, ordered the Funds'

directors to complete their investigation of Derivative Plaintiffs' claims on behalf of the Funds against

the Derivative Action Defendants, and stayed the case pending the Funds' response to Plaintiffs' de-

mand.

On November 30, 2010, the Funds and Derivative and Lead Plaintiffs reached an agree-

ment to settle the Class Action Lawsuit claims against the Funds and to pursue the Derivative

Plaintiffs' claims asserted in the Derivative Action Lawsuit ("Partial Settlement"). Plaintiffs and

the Funds jointly moved for Court approval of the Partial Settlement. The Court has not ruled on

the Partial Settlement. In connection with the proposed Partial Settlement, the Funds produced

over 510,000 pages of documents, which included audit workpapers and related documents for

the Funds' 2006 and 2007 audits. The Settlement described herein supersedes the proposed Par-

tial Settlement, rendering it moot, and the proposed Partial Settlement has been withdrawn.

In August 2013, Lead and Derivative Plaintiffs and Defendants (including the Funds)

agreed to explore a settlement of the Lawsuits. The Parties retained former U.S. District Court

Judge Layn Phillips, a respected and experienced mediator in complex litigation, to assist them

in exploring a potential negotiated resolution of the claims asserted in the Lawsuits. The media-

tion sessions were preceded by Defendants' production of over over 6.7 million pages of docu-

ments, and an exchange of comprehensive mediation statements and supporting evidence and

expert reports. On December 17 and 18, 2013, the Parties met with Judge Phillips for two days

of intensive negotiations, but no agreement was reached. On February 19, 2014, the Parties again

met and reached an agreement-in-principle to settle both Lawsuits. Lead and Derivative Plain-

tiffs and the Funds then negotiated the allocation of the Settlement Amount between the Class

Action Lawsuit and the Derivative Action Lawsuit without any involvement by Defendants, oth-

er than the Funds. These and additional negotiations resulted in all Parties subscribing to the

Class and Derivative Settlement Agreements.

Plaintiffs, through Lead Counsel and other Plaintiffs' counsel, conducted a thorough in-

vestigation relating to the claims, defenses, and underlying events and transactions that are the

~:?


subject of the Lawsuits. This process included reviewing and analyzing: (i) almost seven million

pages of nonpublic emails, valuation-related materials and other pertinent documents produced

by the RMK Defendants and the Funds; (ii) 236,000 pages of audit workpapers and related doc-

uments produced by PwC; (iii) publicly available orders, reports and other information concern-

ing the administrative enforcement proceedings brought by the SEC, multiple State securities

regulators, and the Financial Industry Regulatory Authority ("FINRA") against certain Defend-

ants related to some of the conduct at issue in the Lawsuits, including documents used in certain

of those proceedings; (iv) documents filed publicly by the Funds and certain Defendants with the

SEC; (v) other publicly available information and data concerning the Funds and the claims as-

serted in both Lawsuits; (vi) research reports issued by financial analysts concerning the Funds

and securities held in the Funds' portfolios; (vii) prospectuses and other offering documents re-

lated to the mortgage- and asset-backed securities in which the Funds invested; and (viii) the ap-

plicable law governing the claims and potential defenses. Plaintiffs' counsel also reviewed the

deposition transcripts of certain employees of Defendants taken in the regulatory enforcement

actions. Plaintiffs' counsel consulted with experts on damages, accounting and auditing, and in-

vestment company issues.

The Lawsuits seek money damages against Defendants for, as to the Class, violations of

the federal securities laws and, as to the Funds, state statutory and common law. Defendants de-

ny all allegations of misconduct contained in the Lawsuits, and deny having engaged in any

wrongdoing whatsoever. The Settlement should not be construed, or seen as evidence of or an

admission or concession on the part of any Defendant with respect to any claim or of any fault or

liability or wrongdoing or damage whatsoever, or any infirmity or weakness in the defenses that

Defendants have asserted.

3. ~'Vliy is this a class actio~~? Ho`~v does t~se derivative actio~l relate to the class action?

In a class action, one or more people called class representatives sue on behalf of people

who have similar claims, who are known as class members. Bringing a case as a class action al-

lows the adjudication of many similar claims of persons and entities where those claims might

not be economically feasible to pursue individually because the amount at issue in a single claim

would be too small. One court resolves the issues for all class members, except for those who

exclude themselves from the class. Here, the Court has preliminarily certified the Settlement

Class for purposes of the Class Settlement only. The Court will decide whether to grant final ap-

proval to certification of the Settlement Class at the Settlement Hearing. In the Class Action

D


Lawsuit, Lead Plaintiffs seek remedies under the federal securities laws for investors in the

Funds.

A derivative action is different from a class action because it is brought by a shareholder

on behalf of a corporation or other entity. In the Derivative Action Lawsuit, Derivative Plaintiffs

sought remedies under state statutory and common law for the Funds' benefit for the purpose of

enabling the Funds to satisfy any judgment that might have been obtained against them in the

Class Action Lawsuit; that purpose has been rendered moot by the Settlement. The Funds Set-

tlement Amount .paid to the Funds as part of the Derivative Settlement will be distributed to the

Funds Shareholders, net of fees and expenses.

4. ~Vl~y is there a settle east?

This litigation has been pending for over seven years and is being settled now to avoid

the risks and further delays of a trial and appeals. By settling now, Defendants avoid the risks

and cost of further litigation and a potential trial. Lead Plaintiffs believe the Class Settlement is

in the best interest of the Settlement Class, and Derivative Plaintiffs and the Funds' board of di-

rectors believe the Derivative Settlement is in the best interest of the Funds.

B. WHO CAN PARTICIPATE IN THE SETTLEMENT

5. ~Io~~v do I kno`v if I an; part of tl~e Setttet~ent?

The Court directed, for the purpose of the Class Settlement, that everyone who fits the

following description is a Settlement Class Member, unless they are an Excluded Person or they

take steps to exclude themselves (see below): All Persons who (i) purchased shares of one or

more of the Funds during the period December 6, 2004 through December 6, 2007, inclusive, or

(ii) held and/or redeemed shares of one or more of the Funds during the period July 3, 2006

through May 29, 2009. In order to share in the Class Settlement, you must be a Settlement Class

Member who (1) held and/or redeemed shares in one or more of the Funds during the Hold-

ers/Sellers Loss Period (July 3, 2006 through May 29, 2009) and (2) incurred a Compensable

Loss upon redeeming said shares, regardless of when such shares were purchased. Additionally,

Funds Shareholders (those holding shares of one or more of the Funds on May 29, 2009) will

share in the Funds' Distribution without regard to whether they participate in the Class Settle-

ment, unless they are excluded as a Funds Shareholder as described below.

G. Are there exceptio~is to ~Sei~zg included an tiie Class or to sharing in t~~e Funds' Distri-

butioa~?

Yes. Certain persons who were or may have been shareholders in the Funds are excluded

10


from the proposed Settlement Class ("Excluded Persons"). These Excluded Persons are defined

in the Class Action and Derivative Settlement Agreements, and include:

(a) the Individual Defendants and the members of the immediate families of the Indi-

vidual Defendants; Defendants other than the Individual Defendants and the sub-

sidiaries and affiliates of Defendants (which include but are not limited to RFC,

Morgan Asset Management, Inc., RB, Morgan Keegan Morgan Properties LLC,

and MK Holding, Inc); any person who is a director or officer subject to § 16 of

the Securities Exchange Act of 1934, partner or controlling person of the Funds or

any other Defendant or any entity in which any Defendant has a controlling inter-

est;

(b) any Person who has at any time filed a proceeding with FINRA against one or

more Released Defendant Parties concerning losses alleged to be attributable to the

purchase or holding of shares in one or more of the Funds during the Class Period,

and such proceeding was not subsequently withdrawn or dismissed pursuant to a

specific agreement to allow the Person to participate as a Settlement Class Mem-

ber;

(c) any Person who has at any time filed a state court action that has not been removed

to federal court, or has been removed and remanded, against one or more of the

Defendants concerning losses alleged to be attributable to the purchase or holding

of shares in one or more of the Funds during the Class Period, and whose claims in

that action have been dismissed with prejudice, released, or fully adjudicated ab-

sent aspecific agreement with such Defendants) to allow the person to participate

as a Settlement Class Member9

(d) any Person who has at any time filed a federal court action or a state court action

that has been removed to federal court against one ar more of the Defendants con-

cerning losses alleged to be attributable to the purchase or holding of shares in one

or more of the Funds and whose claims in that action have been dismissed with

prejudice, released, or fully adjudicated absent a specific agreement with such De-

fendant(s) to allow the person to participate as a Settlement Class Member;

(e) any Person who has at any time individually settled with one or more of the De-

fendants claims concerning losses alleged to be attributable to the purchase or

holding of shares in one or more of the Open-End Funds during the Class Period,

and whose Maims in that settlement have been dismissed with prejudice, released,

or fully adjudicated absent a specific agreement with such Defendants) to allow

the Person to participate as a Class Member;

(~ those Settlement Class Members whose accounts are included in the "TAL Fiduci-

ary Accounts"3;

(g) any Person who submits a valid and timely request for exclusion from the Settle-

The "TAL Fiduciary Accounts" means the trusts, custodial accounts, and other fiduciary accounts, such as

decedents' estates, guardianships, and conservatorships, aswell as ERISA-non-fiduciary accounts: (a) which were

identified by Regions Bank to the TAL as open at Regions Bank on June 30, 2008, and as satisfying the criteria in

the TAL Orders for inclusion within the scope of the TAL's appointment; and (b) which (i) purchased, held, and/or

redeemed shares of STF, 1BF, or HIF during the period December 4, 2004 through May 29, 2009 and were damaged

thereby; (ii) did not elect out of the TAL's appointment pursuant to the TAL Orders; and (iii) are not removed or

excluded from the TAL's appointment by an order of the Probate Court that issued the TAL Orders.

11


went Class in accordance with the requirements set forth in this Notice and ex-

plained in Question 14, below; and

(h) the legal representatives, heirs, successors and assigns of any such Excluded Per-

sons.

As shown on the attached Proof of Claim, you are presumptively eligible to be a Settle-

ment Class Member because you are a Person (including a trust or custodial account) who either

(1) purchased shares in one or more of the Funds during the period December 6, 2004 through

December 6, 2007 or (2) held shares in one or more of the Funds and incurred a Compensable

Loss during the Holders/Sellers Loss Period. If the attached Proof of Claim does not show that

you held such shares and incurred a Compensable Loss during the Holders/Sellers Loss Period,

check your investment records or contact your broker to see if you did hold such shares. Merely

holding and selling shares of one or more of these Funds during the Holders/Sellers Loss Period

at a Compensable Loss makes you a Settlement Class Member, regardless of when you pur-

chased or acquired them. If yogi f~tec~ a clai~x in eiti~er the States' Fund or tine SEC Fair Fuaid

and it ~v~s accepted, and you are not an Exciuc~ed Pet•son, you are most likely a Settieinei~t

Class Me bey ai d should ale a clai~a~.. Merely because the Proof of Claim attached hereto may

show Recognized Loss Amounts and a Recognized Claim does not mean you are eligible to

share in the Class Settlement Fund; if you ire ara Excluded Person you ire riot eligible to cio

so, and yai~ sl~ouicl ~~ot file a claim, unless you ~Ie air objectio~x to your excl€~sion end you

ire mule to establish your right to g~articipate in the Class Settlement.

Those who come within the definition of Excluded Person in Question 6(a) and those

who come within the definition of Excluded Person in Question 6(h) whose capacity is derived

from the Persons identified in Questions 6(a) above for purposes of the Settlement Class will al-

so be excluded from participating in the Derivative Settlement as a Funds Shareholder and shar-

ing in the Funds Distribution. Excluded Persons who come within definitions 6(b), 6(c), 6(d),

and 6(e) for purposes of the Settlement Class may also be excluded as a Funds Shareholder for

purposes of sharing in the Funds' Distribution, depending upon the terms of any release granted

by said persons in connection with any settlement or other resolution of any claims brought by

them against one or more Defendants, A Funds Shareholder who is an Excluded Person for pur-

poses of the Class Settlement pursuant to definitions 6(b) through 6(g) will nevertheless receive

their share of the Funds' Distribution unless that Person has agreed not to participate in the De-

rivative Action Lawsuit or released claims asserted in the Derivative Action Lawsuit or the abil-

ity to receive additional monies from the Funds. A Funds Shareholder was is an Excluded Per-

12


son for purposes of the Class Settlement pursuant to definition 6(h) whose capacity is derived

from the Persons identified in 6(b) through 6(g) ("6(b)-(g) Person") will nevertheless receive

their share of the Funds' Distribution unless that 6(b)-(g) Person has agreed not to participate in

the Derivative Action Lawsuit or released claims asserted in the Derivative Action Lawsuit or

the ability to receive additional monies from the Funds.

7. What if I a still got sure if I am included?

If you are still not sure whether you are included in the Settlement Class and if the Proof

of Claim described in Question 10 does not show that you have a Recognized Claim, you can ask

for free help. You can call 1-888-895-9227, or visit w~v~v.r~tii~openenclfui~dsettiein~nt.com or

www.~~ao~°g~r~keeganla`~vs~~it.coi for more information. If the Proof of Claim does not show

that you have a Recognized Claim and you are not an Excluded Person, you can complete, sign

and return the Proof of Claim to see if you qualify.

C. THE SETTLEMENT BENEFITS—WHAT YOU GET

8. '6~Viiat sloes the Settlement ~3rovide?

In exchange for the Settlement and the release of the Released Claims (defined below)

against the Released Defendant Parties (defined below), Defendants have agreed to pay a total of

$125 million, to be placed in a settlement fund, which will earn interest, and will be divided be-

tween the Settlement Class ($110 million, the Class Settlement Amount) and the Funds ($15 mil-

lion, the Funds Settlement Amount). After deduction of attorneys' fees and expenses (to be

awarded by the Court), settlement administration costs, any applicable taxes, and any other fees

or expenses approved by the Court, as allocated between the Net Class Settlement Fund and the

Net Funds Settlement Fund pursuant to agreement between Lead and Derivative Plaintiffs and

the Funds, the $110 million less such expenses will be distributed among all Settlement Class

Members who submit valid and timely Proofs of Claim, and the $15 million less such fees and

expenses will be paid to the Funds Shareholders (Funds' Distribution). To the extent that Funds

Shareholders are also Settlement Class Members, their Class Distribution from the Class Settle-

ment Fund will be reduced by their share of the Funds Distribution.

9. How mach ~~ill nay payffiaent be?

Your share of the Class Settlement Amount will depend on several things, including: (a)

the total amount of Recognized Claims of all Settlement Class Members who are determined to

be Authorized Claimants; (b) which Fund's shares you held during the Holders/Sellers Loss Pe-

riod; (c) how many shares you held; (d) the amount of dividends that you received but did not

13


reinvest in shares of the Funds, if any; and (e) when you redeemed your shares and for how

much. The Funds' shares that had not been redeemed before May 29, 2009 were redeemed based

on the respective NAVs of the Funds on the date of redemption in connection with the Funds'

initial liquidating distribution.

Your Recognized Claim will be calculated according to the formula shown below in the

Plan of Allocation. It is highly unlikely that you will get a payment for your entire Recognized

Claim, given the number of potential Authorized Claimants, the fact that the Settlement Amount

is less than the aggregate Recognized Claims of all potential Authorized Claimants, and that ex-

penses and attorneys' fees will be paid out of the Settlement Amount. After all Settlement Class

Members have sent in their Proofs of Claim, the payment you receive will be a pro rata share of

the Net Class Settlement Fund based on your Recognized Claim divided by the total of all Set-

tlement Class Members' Recognized Claims that are accepted. See the Plan of Allocation in

Question 26 for more information on your Recognized Claim.

D. HOW YOU GET APAYMENT—SUBMITTING A CLAIM

10. Ho~~v can I get a p~yrrterat fro~~B the Cass SettleBnent Fund?

To qualify for a payment from the Class Settlement Fund, you must complete, sign, and

send in a Proof of Claim. A Proof of Claim is enclosed with this Notice. For most recipients of

this Notice, this Proof of Claim shows your Recognized Loss Amounts and your Recognized

Claim. You may also get a blank Proof of Claim on the Internet at the websites for the Claims

Administrator or Lead Counsel: ~v~vw.rinkopenendf~ndsettle~~~ent.can or

`~v`v`v.morgan~eeganiawsuit.com. The Proof of Claim available at this website will not show

your Recognized Loss Amounts or your Recognized Claim. The Claims Administrator can also

help you if you have questions about the form. Please read the instructions carefully, fill out the

Proof of Claim, include all the documents to the extent that the form requires them, sign it, and

mail it postmarked Rio ~~ter ti~an < , 2015.

If you agree ~vitli tie amount of the Recognized Clain as sho~~v~i on your enclosed

Froof of Claim, you need trot inci~~de any docuinet~ts but you must sign a~~c~ return the

Proof of Ciaia~~e by the c~e~ciliiie of < , 201.5. If yoga clo NOT agree with the a ou~it of tiie

Recog~iized Cl~in~ as sho`vai o~ your Prat~f of Claim, or if the Proof of Claim does I~ot shoi~v

a Recogr~izecl Loss A au~it or ~ Recognized C1~.~ ,you ix~a~st provide the required iaifor-

ij~atior~ ~~d docunle~atatioaz to receive a pay~nei~t from the Class Settieine~'t Fur~cl. See

Questian 26. If you at-e a F€~nc3s Share~~olc~er, you ;geed not sig~i and retur~l tl~e Proof of

14


Claim to abtain year share of the Fu~~c~s' Distributia~; ~aowever, to share in ttie Cl~.ss Set-

tie~i~ex~t F~nc~, you must sign and return the Proof of Claia~x. IF YOU ADZE AN EXCLUD-

ED PEI2S01~T, iZEGARDLESS OF YOUR RECEIPT HEREOF AND REGARDLESS OF

dVHETHER OR NOT 'THE PROOF OF CLAIM ACCOMPANYING TINS NOTICE

SLOWS A RECOGNIZED CLAIM, YOU ARE NOT ENTITLED TO SHARE IN THE

CLASS SE'~TLEMENT FUND, AND YOU SI-€OULD NOT SUBMIT A CLAIM, UlvLESS

YOU ESTABLISH YOUR RIGHT TO DO SO.

~~. Ho`v c~i~ I get a ~ayBnent frarti the Net Funcds Settlement Fund?

You do not need to take any action to receive a payment from the Net Funds Settlement

Fund (Funds' Distribution)—i.e., if you are a Funds Shareleolcler, you need nflt sign anti re-

tur•n ttie Proof of Clain to obtain yo~~~° share of the Funds' Distribution, provided you a~•e

riot an Excluded Person; liozvever, to snare in t~~e Class Settlement Fuz~~l, you ~z~ust sign

and x°etur~~ a Proof of Clain.

12. W1ien wilt I get my paynxent?

The Court will hold a Settlement Hearing on < , 2Q15, to decide whether

to approve the Settlement. Even if the Court approves the Settlement, there may still be appeals,

which can take significant time to resolve. It also takes time for all the Proofs of Claim to be pro-

cessed. All Proafs of Clair► must be submitted ~y < , 2015.

Once all Proofs of Claim are processed and claims are calculated, Lead Counsel and De-

arivative Plaintiffs' counsel, joined by Funds' separate counsel with respect to the Funds S

ettle-

ment Fund, without further notice to the Class or to the Funds Shareholders, will apply to the

Court for an order distributing the Settlement Amount to the Class Settlement Fund and to the

Funds Settlement Fund, distributing the Net Class Settlement Fund to Authorized Claimants, al-

locating the Net Funds Settlement Fund among the three Funds, and distributing the allocated

Net Funds Settlement Fund to the Funds Shareholders. Plaintiffs' counsel, joined by Funds' sep-

arate counsel with respect to the Funds Settlement Fund, will also ask the Court to approve pay-

ment of the Claims Administrator's fees and expenses incurred in connection with giving notice

and administering the Settlement. Please be patient.

~3. What am I giving up by staying i€i tlxe Class to get a pay~nei~t from tl~e Class Settte-

rne~~ t?a

4 Terms similar to those defined in this answer to this Question 13 are also defined in the

Derivative Settlement Agreement with respect to the Derivative Settlement. For these defini-

15


Unless you exclude yourself or you are an Excluded Person, you will remain a member of

the Settlement Class, which means that upon the "Effective Date" you will release all "Released

Claims" (as defined below) against the "Released Defendant Parties" (as defined below).

"Released Claims" means any and all claims, rights, causes of action, demands, actions,

debts, sums of money, obligations, judgments, suits, and liabilities of every nature and descrip-

tion, including both known and Unknown Claims (as defined below), whether fixed or contin-

gent, liquidated or un-liquidated, at law or in equity, known or unknown, suspected or unsus-

pected, disclosed or undisclosed, concealed or hidden, asserted or unasserted, whether class or

individual in nature, (i) that Plaintiffs or any other Settlement Class Member asserted in the Class

Action; or (ii) that arise out of, relate to, or are in connection with the claims, allegations, trans-

actions, facts, events, acts, disclosures, statements, representations or omissions or failures to act

involved, set forth, or referred to in the Class Action Lawsuit, but only as they relate to invest-

ments in the Open-End Funds during the Class Period regardless of when those investments were

made; provided, however, that Released Claims do not include (i) claims to enforce the Settle-

ment; (ii) any governmental or regulatory agency's claims in any criminal, or civil, or adminis-

trative action against any of the Released Defendant Parties, or any claims or rights to compensa-

tion from the SEC Fair Fund, the States' Fund, or other victim compensation funds resulting

from any such governmental or regulatory agency action; and (iii) claims or causes of action of

the types asserted in In Ne Regions Mogan Keegan ERISA Litigation, No. 2:08-cv-02192-SHM-

dkv (W.D. Tenn.).

"Unknown Claims" means any and all Released Claims, which Plaintiffs or any other

Settlement Class Member do not know or suspect to exist in his, her or its favor against one or

more of the Defendants at the time of the release of the Released Defendant Parties, and any Re-

leased Defendants' Claims that Defendants do not know or suspect to exist in his, her or its favor

against one or more of the Plaintiffs or Settlement Class Members at the time of the release of

the Released Plaintiff Parties, which if known by him, her or it might have affected his, her or its

decisions) with respect to the Settlement. Unknown Claims include those claims in which some

or all of the facts comprising the claim may be unsuspected, or even undisclosed, concealed, or

hidden. With respect to any and all Released Claims and Released Defendants' Claims, the Par-

ties stipulate and agree that, upon the Effective Date, Plaintiffs and Defendants shall expressly,

tions, please refer to the Derivative Settlement Agreement on file with the Court and available at

www.rmkopenendfundsettlement.com or www.morgankeeganlawsuit.com.

16


and each Settlement Class Member shall be deemed to have, and by operation of the Judgment or

Alternative Judgment shall have, expressly waived and relinquished any and all provisions,

rights and benefits conferred by any law of any state or territory of the United States, or principle

of common law, which is similar, comparable, or equivalent to Cal. Civ. Code § 1542, which

provides:

A general release does not extend to claims which 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.

Plaintiffs, the other Settlement Class Members, or Defendants (including the Funds) may

hereafter discover facts in addition to or different from those which he, she, or it now knows or

believes to be true with respect to the subject matter of the Released Claims and the Released

Defendants' Claims, but Plaintiffs and Defendants (including the Funds) shall expressly, fully,

finally and forever settle and release, and all other Class Members shall be deemed to have set-

tled and released, and upon the Effective Date and by operation of the Judgment or Alternative

Judgment shall have settled and released, fully, finally, and forever, any and all Released Claims

and Released Defendants' Claims, known or unknown, suspected or unsuspected, contingent or

non-contingent, whether or not concealed or hidden, which now exist, or heretofore have existed,

upon any theory of law or equity now existing, heretofore have existed, or coming into existence

in the future, including, but not limited to, conduct which is negligent, reckless, intentional, with

or without malice, or a breach of any duty, law, rule or regulation, without regard to the subse-

quent discovery or existence of such different or additional facts. Lead Plaintiffs and Defendants

(including the Funds) acknowledge, and other Settlement Class Members by operation of law

shall be deemed to have acknowledged, that the inclusion of "Unknown Claims" in the definition

of Released Claims and Released Defendants' Claims was separately bargained for and was a

key element of the Class Settlement.

"Released Defendant Parties" means Defendants, their past or present subsidiaries, par-

ents, successors and predecessors, officers, directors, shareholders, partners, agents, employees,

attorneys, auditors, assigns, affiliates, and insurers; the spouses, members of the immediate fami-

lies, representatives, and heirs of the Individual Defendants, as well as any trust of which any

Individual Defendant is the settlor or which is for the benefit of any of their immediate family

members; and any person, firm, trust, corporation, officer, director or other individual or entity in

which any Defendant has a controlling interest or which is related to or affiliated with any of the

17


Defendants and the legal representatives, heirs, successors in interest or assigns of Defendants.

"Released Plaintiff Parties" with respect to the Class Settlement means each and every

Settlement Class 1Vlember, Lead Plaintiffs, Plaintiffs' Counsel, and their respective past, current,

or future trustees, officers, directors, partners, employees, contractors, auditors, principals,

agents, attorneys, predecessors, successors, assigns, parents, subsidiaries, divisions, joint ven-

tures, general or limited partners or partnerships, affiliates, and limited liability companies; the

spouses, members of the immediate families, legal representatives, Lead Plaintiffs, and Plain-

tiffs' Counsel, who are individuals, as well as any trust of which any Class Member, Lead Plain-

tiff, or Plaintiffs' Counsel is the settlor or which is for the benefit of any of their immediate fami-

ly members. Released Plaintiff Parties does not include any Class Member or Person who timely

and validly seeks exclusion from the Class.

The "Effective Date" of the Settlement will occur when an Order by the Court approving

the Class Settlement becomes Final and is not subject to appeal as set out more fully in the Class

Settlement Agreement on file with the Court and available at

wE~~w.r•n~kopenendfutic~settlerneB~t.com or ~v~v`v.niorgankeegai~la~vsuit.co~t~. If you remain a

member of the Settlement Class, all of the Court's orders in the Class Action Lawsuit will apply

to you and legally bind you.

If you are an Excluded Person, you are not bound by the release provisions of the Class

Settlement Agreement described in this Question 13 (but nothing in the Settlement affects the

extent to which you are bound by such other release provisions as may form the basis for your

being an Excluded Person). If you are a Funds Shareholder who is also a Settlement Class Mem-

ber who has not elected to exclude yourself from the Settlement Class (and you are not an Ex-

cluded Person); you will be bound by the release provisions of the Class Settlement Agreement de-

scribed in this Question 13.

E. EXCLUDING YOURSELF FROM TIDE CLASS SETTLEMENT

If you do not want a payment from the Net Class Settlement Fund, but you want to keep

any right you may have to sue or continue to sue Defendants and the other Released Defendant

Parties, on your own, regarding the Released Claims, then you must take steps to remove your-

self from the Settlement Class. This is called "excluding yourself from"—or "opting out of'—

the Settlement Class. Defendants may withdraw from and terminate the Settlement if Settlement

Class Members who have in excess of a certain amount of Recognized Claims exclude them-

selves from the Settlement Class. If you are a Funds Shareholder, you are not given the choice to

~:3


voluntarily exclude yourself from the Derivative Settlement, but you may exclude yourself from

the Settlement Class if you are not already excluded as an Excluded Person.

14. ~-Io~v do I aft at~t of tl~e proposed Settlement Class?

To exclude yourself from the Settlement Class, you must send a signed letter by mail stat-

ing that you "request exclusion from the Settlement Class in In re Regions Morgan Keegan

Open-End Mutual Fund Litigation, No. 2:07-cv-02784-SHM-dkv." Your letter must state the

dates) of (1) each purchase or acquisition of Fund shares during the period from December 6,

2004 through December 6, 2007, inclusive, and the number of shares purchased or acquired in

each transaction, and (2) the dates) of each sale or redemption of Fund shares held during the

period July 3, 2006 through May 29, 2009, inclusive. In addition, you must include your name,

address, telephone number, and your signature. You must mail your exclusion request so that it is

received Rio later tlia~~ < , 2015, to:

In Ne Regions Morgan Keegan Open-End Mutual Fund Litigation

Claims Administratorc/o GCG

PO Box 9939Dublin, Ohio 43017-5939

You cannot exclude yourself by telephone or by email. If you write to request to be ex-

chided, you will not get any settlement payment from the Class Settlement Fund, you cannot ob-

ject to the Class Settlement, you will not be legally bound by anything that happens in the Class

Action Lawsuit, and nothing in this Settlement will prevent you from suing (or continuing to sue)

Defendants and the other Released Defendant Parties if you are otherwise able to do so.

NO REQUEST FOR EXCLUSION WILL BE CONSIDERED VALID UNLESS ALL OF

THE INFORMATION DESCRIBED ABOVE IS INCLUDED IN ANY SUCH REQUEST.

ANY SUCH REQUEST FOR EXCLUSION DOES NOT APPLY TO THE DERIVATIVE

ACTION LAWSUIT OR TO THE DERIVATIVE SETTLEMENT.

15. If I do not exclude myself, can I sue, or continue to sue, Defendants and tie other Re-

leasecl Defendant Parties for tl~e sane t~ai~ig?

No. If you are a Settlement Class Member, unless you exclude yourself, you give up any

rights to sue, or to continue to sue, Defendants and the other Released Defendant Parties for any

and all Released Claims. Remember, tl~e exclusion deadiix~e is < , 2015.

i6. If I exclude myself, can I get rna~ey frort~ tiie Cass Settlement?

If you exclude yourself from the Class Settlement, you will not get money from the pro-

posed Class Settlement Fund. Some of you who receive this notice are also Funds Shareholders,

19


as well as members of the proposed Settlement Class. The exclusion rights herein are relevant to

you only as a Settlement Class Member. As a Funds Shareholder, unless you are an Excluded Per-

son, you will share in the Funds' Distribution, even if you do exclude yourself from the Settle-

ment Class if the Settlement is approved.

F. THE LAWYERS REPRESENTING YOU

17. Do I lave a lai~vyer ire this case?

The Court appointed the law firms of Lockridge Grindal Nauen P.L.L.P., of Minneapolis,

Minnesota, as Lead Counsel and Apperson Crump, PLC, of Memphis, Tennessee, as Liaison

Counsel to represent all Settlement Class Members. Additional counsel to the class are Zimmer-

man Reed, P.L.L.P., of Minneapolis, Minnesota. These three law firms also represent the Deriva-

tive Plaintiffs in the Derivative Action Lawsuit brought on behalf and for the benefit of the

Funds. You will not be separately charged for these lawyers. The Court will determine the

amount of counsel's fees and expenses, which will be paid from the Settlement Amount. If you

want to be represented by your own lawyer, you may hire one at your own expense.

18. How will the la`vyers be paid?

None of the counsel representing the Lead Plaintiffs in the Class Action Lawsuit or the

Derivative Plaintiffs in the Derivative Action Lawsuit have received any payment for their ser-

vices in pursuing the claims against Defendants on behalf of the Settlement Class and the Funds,

nor have they been paid for the expenses they have incurred in connection with this litigation. At

the Settlement Hearing, or at such other time as the Court may order, Lead and Derivative Plain-

tiffs' Counsel will ask the Court to award, from the Settlement Amount, attorneys' fees of no

more than 30% of the Settlement Amount, plus any interest on such amount at the same rate and

for the same periods as earned by the Settlement Amount, plus litigation expenses (such as the

cost of experts and document management and analysis) that have been incurred in pursuing the

Lawsuits. The request for litigation expenses will not exceed $< .Lead Counsel's request for

attorney's fees and litigation expenses will be made on behalf of Lead and Derivative Plaintiffs'

counsel and the other counsel to the class and Derivative Plaintiffs identified above.

G. OSJEC~'ING TO THE SETTLEMENT

19. Hagv da I teil the Court t~iat I c10 not like the Settleanc~~t?

If you are a Settlement Class Member and have not elected to exclude yourself from the

Settlement Class, you can object to the proposed Class Settlement or any of its terms (including,

if you are an Excluded Person, your exclusion from the Settlement Class), the certification of the

20


Settlement Class, the proposed Plan of Allocation, and/or the application by Lead Counsel for an

award of fees and expenses. To object as a Settlement Class Member to the proposed settlement

of the Class Action Lawsuit, you must send a signed letter stating that you "object to the Class

Settlement in In re Regions Morgan Keegan Open-End Mz~tual Fund Litigation, No. 2:07-cv-

02784-SHM-dkv." Your letter must state the dates) of each purchase or acquisition of Fund

shares during the period from December 6, 2004 through May 29, 2009, inclusive, the number of

shares purchased or acquired in each transaction, the dates) of each sale or redemption of said

shares, and state the reasons why you object to the Class Settlement.

If you are a Funds Shareholder, you can object to the Derivative Settlement or any of its

terms and/or the application by Derivative Plaintiffs' counsel for an award of fees and expenses.

You may give reasons why you think the Court should not approve any part or all of the Deriva-

tive Settlement's terms or arrangements. You cannot object to the Derivative Settlement if you

are not a Funds Shareholder. To object as a Funds Shareholder to the proposed Derivative Set-

tlement, you must send a signed letter stating that you "object to the Settlement in Landers v.

Morgan Asset Management, Inc., No. 2:08-cv-02260-SHM-dkv." Your letter must state the

number of shares you held on May 29, 2009, and state the reasons why you object to the Deriva-

tive Settlement.

If you are objecting to either the Class or Derivative Settlement, you must include your

name, address, telephone number, your signature, and the information required in the preceding

two paragraphs relevant to the settlement to which you are objecting. Your objections, and all

supporting documents, must be filed with the Court and mailed or delivered to all of the follow-

ing so that it is received o~i o~• &~efore < , 2015:

COURT:Clerk of the CourtUnited States District Court for the

Western District of Tennessee

Clifford Davis/Odell Horton Federal Building

167 N. Main Street, Room 242

Memphis, Tennessee 38103

COUNSEL FOR LEAD, DERIVATIVE

PLAINTIFFS:Richard A. Lockridge, Esq.

LOCKRIDGE GRINDAL NAUEN, P.L.L.P

100 Washington, Ave. S., Suite 2200

Minneapolis, Minnesota 55401

21

COUNSEL FOR REGIONS FINANCIAL

CORPORATION, REGIONS SANK

AND MORGAN ASSET MANAGE-

MENT, INC.:Peter S. Fruin, Esq.MAYNARD, COOPER &GALE, P.C.

1901 6th Avenue North, Suite 2400

Birmingham, Alabama 35203


C0~11~SEL FOR M0~2GAN KEEGAN &

CO. AND 1V1K HOLDING, INC:

Britt K. Latham, Esq.BASS BERRY & SIMS PLC

150 Third Avenue South, Suite 2800

Nashville, Tennessee 37201

COUNSEL FOR PRICEWAT~RHOUSE-

COOPERS ~,LP:Timothy A. Duffy, Esq.

KIRKLAND & ELLIS LLP

300 North LaSalleChicago, IL 60654

COUl~TSEL FOR THE FUNDS:

Kevin C. Logue, Esq.PAUL HASTINGS LLP

75 East 55th StreetNew York, New York 10022

COUNSEL FOR ALLEN B. MORGAN,

JR., J. KENNETH ALAERMAN, BRIAN B.

SULLIVAN, JOSEPH T. W~LLER, AND

JAMES C. I~LSOE, JR.:

S. Lawrence Polk, Esq.

SUTHERLAND ASBILL & BRENNAN, LLP

999 Peachtree Street, N.E.

Atlanta, Georgia 30309

COUNSEL FOR JACK R. I3LAIR, AL-

BERT C. JOHNSON, JAMES STILL-

MAN R. MCFADDEN, WILLIAM JEF-

FERIES MANN, W. RANDALI..

PITTMAN, MARY S. STONE, AND

ARCHIE W. WILLIS, III:

Jeffrey B. MalettaK&L GATES1601 K Street NWWashington, DC 20006

CO~JNSEL FOR CARTER E. ANTHONY:

R. Hal Meeks, Jr.JAMES BATES BRANNAN & GROOVER

LLP3399 Peachtree Rd. NE

Suite 1700Atlanta, GA 30326

24. Wlyat is the difference ben~een objecting to tl~e Class Settlement anct seeking exclusion

f~oi~~ or "opting out" of the Settlement Class?

Objecting is telling the Court that you do not like something about either or both of the

Class Settlement or the Derivative Settlement. As a Settlement Class Member, you can object to

the Class Settlement only if you stay in the Settlement Class (or, as an Excluded Person, seek to

be included in the Settlement Class). Excluding yourself from or "opting out" of the Settlement

Class is telling the Court that you do not want to be part of the Settlement Class. If you exclude

yourself, you have no basis to object because the Class Settlement no longer affects you. As a

Funds Shareholder, you can object to, but you cannot exclude yourself from, the Derivative Set-

tlement.

~-I. THE COURT'S SETTLEMENT HEARING

The Court will hold a hearing to decide whether to approve the Settlement. You may at-

tend, and you may ask to speak, but you do not have to do so.

21. When anc~ ~v~~ere ̀~viil the Court c~ecic3e ̀ vhet~er to ~~prove the Settle~i~e t?

22


The Court will hold a Settlement Hearing at < _.nz. on , 2015,

at the United States District Court for the Western District of Tennessee, Western Division, in

the Clifford Davis/Odell Horton Federal Building, 167 North Main Street, 1 lth Floor Courtroom

#2, Memphis, Tennessee 38103.

At this hearing, the Honorable Samuel H. Mays, Jr. will consider whether the Class and

Derivative Settlements are fair, reasonable, and adequate. The Court also will consider the pro-

posed Plan of Allocation for the Net Class Settlement Fund, the proposed Funds' Distribution of

the Net Funds Settlement Fund, and the application of Lead Counsel and Derivative Plaintiffs'

counsel for attorneys' fees and reimbursement of expenses. The Court will take into considera-

tion any written objections filed in accordance with the instructions set out in Question 19 above.

The Court also may listen to people who have properly indicated, within the deadline identified

above, an intention to speak at the Settlement Hearing, but decisions regarding the conduct of the

Settlement Hearing will be made by the Court. See Question 23 for more information about

speaking at the Settlement Hearing. After the Settlement Hearing, the Court will decide whether

to approve the Settlement, and, if the Settlement is approved, the amount of attorneys' fees and

expenses to be awarded. We do not know how long these decisions will take.

You should be aware that the Court may change the date and time of the Settlement Hear-

ing without another notice being sent. If you want to attend the hearing, you should check

`v~v`v.~~~organkeegani~;vsuit.coi~a or contact Lead Counsel before coming to be sure that the

date and/or time have not changed.

22. Do I have to cone to the Settlement ~Ieari~~g?

No. Counsel for Lead and Derivative Plaintiffs will answer any questions the Court may

have, but you are welcome to come at your own expense. Settlement Class Members and Funds

Shareholders do not need to appear at the Settlement Hearing or take any other action to indicate

their approval, except Settlement Class Members must submit a claim in compliance with the

procedures described in this Notice to obtain a payment. If you submit an objection, you do not

have to come to Court to talk about it. If you properly filed your written objection on time, the

Court will consider it. You may also pay your own lawyer to attend, but it is not necessary.

23. May I speak ~t tl~e Settlement Hearing?

If you object to either the Class Settlement or the Derivative Settlement, you may ask the

Court for permission to speak at the Settlement Hearing. To do so, you must include with your

23


objection (see Question 19 above) a statement stating your intent to do so and entitled "Notice of

Intention to Appear in In ~e Regions Morgan Keegan Open-End Mutual Fund Litigation, No.

2:07-cv-027$4-SHM-dkv" or "Notice of Intention to Appear in Landers v. Morgan Asset Man-

agenZent, Inc,, No. 2:08-cv-02260-SHM-dkv." Persons who intend to object to either the Class

Settlement or the Derivative Settlement, the Plan of Allocation for the Net Class Settlement

Funds, the Funds' Distribution, and/or Lead/Derivative Plaintiffs' Counsel's Fee and Expense

Application and desire to present evidence at the Settlement Hearing must also include in their

written objections the identity of any witnesses they may call to testify and exhibits they intend

to introduce into evidence at the Settlement Hearing. You cannot speak at the Settlement Hearing

with respect to the Class Settlement if you excluded yourself from the Settlement Class; you

cannot speak at the Settlement Hearing with respect to either the Class Settlement or the Deriva-

tive Settlement if you have not provided written notice of your objection and intention to speak

at the Settlement Hearing in accordance with the procedures described in Questions 19 and 23.

I. IF YOU DO NOTHING

24. What ~~appens if I coo ~iothi gat ait?

If you are a Settlement Class Member and you do nothing, you will get no money from

the Net Class Settlement Fund, but you will be bound by the terms of the Class Settlement and

the releases required thereby, which means you will be precluded from starting an action (wheth-

er it be a lawsuit, arbitration, or other form), continuing to pursue an action, or being part of any

other action against Defendants and the other Released Defendant Parties about the Released

Claims ever again.

To share in the Net Class Settlement Fund you MUST submit a Proof of Claim (see

Question 10). To start, continue or be a part of any other lawsuit against Defendants and the oth-

er Released Defendant Parties about the Released Claims in this case, you MUST exclude your-

self from the Settlement Class (see Question 14).

If you are a Funds Shareholder, and are not an Excluded Person excluded from sharing in

the Funds Distribution, and you do nothing, you will receive your share of the Funds' Distribution,

and no additional action is required on your part. However, Funds Shareholders who are also Settle-

ment Class Members must comply with the requirements described herein to receive a Class Distribu-

tionfrom the Net Class Settlement Fund or to be excluded from the Settlement Class.

J. GETTING MODE INFORMATION

24


25. Are there ~~ore details ai~fl~it t~ze ~ettlen~ent?

This Notice summarizes the Settlement. More details are in the Class and Derivative Set-

tlement Agreements, .dated January 19, 2015. You may review the Class and Derivative Settle-

ment Agreements filed with the Court or any other documents filed in the case during business

hours at the Office of the Clerk of the United States District Court for the Western District of

Tennessee, Western Divisional Office, 167 N. Main Street, Room 242, Memphis, TN 38103.

You also can call the Claims Administrator toll free at 1-888-895-9227, or write to I~z re

~egiorts IVlorgafz Keegtc~t Opera-E~td Mirtaaal Rind Litagatiort, c/o GCG, PO Box 9939, Dublin,

Ohio, 43017-5939, to request additional information. You can also visit the websites of the

Claims Administrator or Lead Counsel at `~~v.rankopen~ndfundsettle~ner~t,cane or

`vw`v.,norgankeeg~~ilaivsiut.co, where you will find answers to common questions about the

Settlement, download copies of the Settlement Agreements or Proof of Claim, and locate other

information to help you determine whether you are a Settlement Class Member and whether you

are eligible for a payment.

Flease Do Not Call tie Court ̀vit Questions About tine Settlement

K. PLAN OF ALLOCATION OF NET CLASS SETTLEMENT FUND

AMONG AUTHORISED CLAIMANTS

26. ~Io;v ~vili x'~y ci~i~n be calculated?

Your claim will be calculated using the Plan of Allocation (the "Plan") approved by the

Court. The purpose of the Plan is to distribute settlement proceeds equitably to those Settlement

Class Members who suffered economic losses as a result of investing in the Funds. The Plan

measures the amount of loss that a Settlement Class Member can claim for purposes of making

pro rata allocations of the Net Class Settlement Fund to Authorized Claimants.

The Settlement Amount is to be allocated between the Class and the Derivative Settle-

ments: $110 million (88%) will be allocated to the Class ("Class Settlement Amount") and $15

million (12%) to the Funds ("Funds Settlement Amount").

The Class Settlement Amount plus any interest it earns is called the Class Settlement Fund.

If the Court so approves, the Class Settlement Fund, less payment of fees and expenses approved

by the Court ("Net Class Settlement Fund"), will be distributed according to the Plan described

below to Settlement Class Members who timely submit valid Proofs of Claim that show a Recog-

nized Claim and whose claims are allowed by the Court ("Authorized Claimants"). Settlement

25


Class Members who do not timely submit valid Proofs of Claim will not share in the Settlement

proceeds, but will otherwise be bound by the terms of the Settlement. The Court may approve the

Plan or modify it without additional notice to the Class. Any order modifying the Plan will be

posted on the websites of the Claims Administrator (~~vww.ra~~~openendfunc~settlenient.co~a~) and

Lead Counsel (f~vww.org~~akeegai~t~`~vs~a~t.com).

The portion of the Settlement Amount allocated to the Funds Settlement Fund, less any

expenses and attorneys' fees, will be allocated among each of the respective Funds on a pro rata

basis based on each Fund's losses, and then distributed to each Fund Shareholder consistent with

the Funds' Plan of Liquidation ("Funds' Distribution"). Most of the Funds Shareholders are Set-

tlement Class Members, unless they are Excluded Persons or elect to exclude themselves from

the Settlement Class. For those Funds Shareholders who are also Settlement Class Members,

each Fund Shareholder's Funds' Distribution will be deducted from that person's pNo rata share

of the Net Class Settlement Fund but will not reduce that person's share thereof below zero. If a

Funds Shareholder's Funds Distribution is less than $10.00, it will not be distributed to the

Shareholder, given the administrative expenses of processing and mailing such checks and will

not be deducted from such Shareholder's share of the Net Class Settlement Fund if such Share-

holder is also an Authorized Claimant.

Each Authorized Claimant's "Recognized Claim" shall be the total of his, her or its

"Recognized Loss Amounts" as calculated herein by the Claims Administrator for all of the

Funds in which each Authorized Claimant invested. Each Authorized Claimant shall be allocated

his, her or its pro rata share of the Net Class Settlement Fund based on the ratio of his, her, or its

Recognized Claim to the total Recognized Claims of all Authorized Claimants. Each Authorized

Claimant shall be paid an amount ("Class Distribution") determined by multiplying the amount

of the Net Class Settlement Fund by a fraction, the numerator of which shall be his, her or its

Recognized Claim and the denominator of which shall be the total Recognized Claims of all Au-

thorized Claimants; for an Authorized Claimant who is also a Funds Shareholder, his, her or its

Class Distribution shall be reduced by such Claimant's Funds' Distribution. If an Authorized

Claimant's Class Distribution (after deducting the Funds' Distribution paid to such Claimant

who is a Funds Shareholder) is calculated to be less than $10.00, it will not be included in the

final pNo rata calculation and it will not_ be distributed to the Authorized Claimant, given the ad-

ministrative expenses of processing and mailing such checks. The Court will be asked to approve

26


the Claims Administrator's determinations before the Net Class Settlement Fund is distributed to

Authorized Claimants.

In developing the Plan, Lead Plaintiffs, in consultation with their damages and account-

ing experts, estimated the amount of economic loss that was caused by the alleged misconduct.

Compensable losses were estimated under both the Securities Act of 1933 and the Securities Ex-

change Act of 1934. Compensable losses under the Securities Act of 1933 are those losses at-

tributable to the shares of one or more of the Funds that were purchased during the period De-

cember 6, 2004 through December 6, 2007 ("Purchasers Class Period"). A significant portion of

Settlement Class Members' aggregate losses is attributable to shares purchased or acquired be-

fore December 6, 2004 and would not be compensable under the Securities Act of 1933. Howev-

er, any such losses not compensable under the Securities Act of 1933 may be compensable under

the Securities Exchange Act of 1934. In this instance, compensable losses under the Securities

Exchange Act of 1934 are those losses attributable to the shares of one or more of the Funds held

and redeemed by an Authorized Claimant during the period July 3, 2006 through May 29, 2009

without regard to when those shares were purchased ("Holders/Sellers Loss Period"). The Plan

of Allocation is based on losses attributable to shares held and redeemed during the Hold-

ers/Sellers Loss Period ("Compensable Losses") without regard to when those shares were pur-

chased ("Holders/Sellers Plan"). This method of allocation is consistent with that used to allocate

the States' Fund and SEC Fair Fund.

The aggregate Compensable Loss under the Holders/Sellers Plan was estimated based on

each Fund's losses during the Holders/Sellers Loss Period attributable to the shares outstanding

during that period, reduced by redemptions and dividends, and adjusted in accordance with the

benchmark index used by RMK for comparing each Fund's performances. The date used for de-

termining when the Funds' alleged undisclosed risks either existed or began to materialize is July

3, 2006; accordingly, the relevant period during which investors' losses are calculated is July 3,

2006 through May 29, 2009 (Holders/Sellers Loss Period). The benchmark indices used for pur-

poses of determining the Recognized Loss Amounts are the following: the Barclays (formerly

Lehman Brothers) Ba U.S. High Yield Bond Index for HIF; the Barclays (formerly Lehman

Brothers) Intermediate U.S. Aggregate Index for IBF; and the Barclays (formerly Lehman

Brothers) 1 — 3 Year Government/Credit Index for STF. These were the benchmark indices that

RMK used to compare the Funds' performance and are generally referred to hereinafter as

27


"Benchmark" or "Index," Under the Plan's method of allocation of the Net Class Settlement

Fund, what Lead Plaintiffs' counsel estimate to be all losses incurred by investors in the Funds

are included in calculating each Claimant's Recognized Loss Amount without regard to when the

investor purchased their shares. Such losses are estimated to include, and significantly exceed, all

Purchasers Class Period losses. Accordingly, under the Plan, the recovery represented by the Set-

tlement as a percentage of losses is lower than if compensable losses were limited to Purchasers

Class Period losses, but the number of investors in the Funds who will be able to participate in

the Settlement will be greater.

As explained above, some investors (Excluded Persons) who held shares in one or more

of the Funds are not eligible to share in one or both of the Class or Funds Settlement Funds.

Based on the calculations shown in the attached Proof of Claim, reducing the aggregate Compensa-

ble Loss by the losses attributable to these Excluded Persons results in a gross average recovery

for investors in all three Funds of about < >% of the Compensable Loss of those eligible to par-

ticipate in the Settlement Amount before deducting expenses allowed by the Court and assuming

that all Settlement Class Members entitled to participate do so and asswning further that 89% of the

Funds' Distribution is set-off against Funds Shareholders' share of the Net Class Settlement Funds

Defendants, their respective counsel, and all other Released Defendant Parties will have

no responsibility or liability whatsoever for the investment of the Settlement Amount, the distri-

bution of the Net Class Settlement Fund, the Plan of Allocation, ar the payment of any claim.

The Defendants had no involvement in the proposed Plan of Allocation. Defendants, their re-

spective counsel, and all other Released Defendant Parties except the Funds will have no respon-

sibility or liability whatsoever for the allocation of the Net Funds Settlement Fund among the

three Funds and the distribution of the Net Funds Settlement Fund to the Funds Shareholders.

Lead and Derivative Plaintiffs and their counsel and the Funds and their counsel likewise will

have no liability for their reasonable efforts to execute, administer, and distribute the Net Class

and Funds Settlement Funds.

CALCULATION OF "RECOGNIZED LOSS AMOUNTS," "RECOGNIZED CLAIMS,"

AND "CLASS DISTRIBUTION"

Based on the formulas set forth below and in accordance with the Plan, a Recognized

5 Lead Plaintiffs estimate that 11% of the Funds' Distribution will be paid to Funds Shareholders who are not

Settlement Class Members because they are excluded from sharing in the Class Settlement Fund and, thus, will not

be deducted from Net Class Settlement Fund distributions.

28


Loss Amount shall be calculated for each share held and redeemed during the Holders/Sellers

Loss Period (July 3, 2006 through May 29, 2009) and is shown in the Proof of Claim attached

hereto. All shares held on and after July 3, 2006 were eventually redeemed, including those held

on May 29, 2009, when the Funds Shareholders approved the proposal to liquidate the Funds,

and the Funds thereafter paid out most of their remaining assets to the Funds Shareholders.

The Plan shall distribute the Net Class Settlement Fund to those Authorized Claimants

who (i) held shares in one or more of the Funds at any time during the Holders/Sellers Loss Peri-

od and (ii) incurred a Compensable Loss during the Holders/Sellers Loss Period (July 3, 2006

through May 29,2009) based on each Authorized Claimant's Recognized Loss Amount. An Au-

thorized Claimant's total recognized Loss Amount is that Claimant's Recog izec~ C1aiYn. An

Authorized Claimant's Class Distrib~xtioa~ will be the amount determined by (i) dividing the Au-

thorized Claimant's Recognized Cl~i~~i by the aggregate Recognized Ciaiins of all Authorized

Claimants, (ii) multiplying the fraction derived in clause (i) by the Net Class Settlement Fund,

and (iii), if the Authorized Claimant is also a Funds Shareholder, subtracting the Claimant's

Finds' Dish i~ution.

An Aut orizecl Cl~.in~ant's Recognized Loss Am.ou~it is the "IY~vestecl Atnou~at" less

the "Recovered A~~~oua~t" }~I~,is tl~e "Index Ac~just~ne~it." The "Invested Anioui~€" is the dollar

value of the Authorized Claimant's shares as of July 3, 2006 (based on the NAV reported for

each Fund for that date and without regard to the cost basis for those shares}, plus the dollar val-

ue of all purchases or acquisitions from July 3, 2006, through May 29, 2009, including shares

acquired upon reinvested dividends. An Authorized Claimant's "Recaverec~ Amount" is the dol-

lar value of all Divide~~ds Received from July 3, 2006, through May 29, 2009, plus the dollar

value of the net proceeds of all share sales/redemptions from July 3, 2006, through and including

the amount paid by each Fund on or after May 29, 2009, based on the NAV at which the shares

were redeemed (before deducting loads, commissions, taxes, and fees). The term "Dividei~cls

Received" shall refer to the total cash dividends and capital gain distributions per share received

(whether or not reinvested) during the Holders/Sellers Loss Period. The term "Fa~i~ds' Dastribu-

tion" is the distribution that Funds Shareholders will receive from the Funds Settlement Fund net

of expenses ("Net Funds Settlement Fund"). An Authorized Claimant's Recognized Claiaai shall

be reduced by the distribution said Claimant received from the settlement funds established in

connection with settlements by certain of the Defendants with state regulators ("State Regula-

29


tors' Fund") and the SEC ("SEC Fair Fund"). If a Recognized Claim is calculated to be a nega-

tive number, that Recognized Cl~.i~'i shall be zero.

The term Index Adj~ast~a~ent is the change in the Benchmark relevant to the Fund for

which the I~ecog~aized Loss A~r~ount is calculated between July 3, 2006 and the date or dates the

Iravestec~ Amount was redeemed, The Funds paid substantial dividends on their shares. To ac-

count for the impact of these dividend payments during the Holders/Sellers Loss Period, the val-

ue of dividends received is included as part of the Recoverecd Amount—i.e., the total value re-

ceived (whether or not the dividend was taken in cash or immediately reinvested in the Fund;

such reinvestment is treated as a separate purchase). The computation of the Recognized Loss

Ax~~oi~nts under the Plan compares an Authorized Claimant's total return on his or her invest-

ment in the Funds, including dividend income, with the relevant Index's total return, which like-

wise includes periodic income such as interest and dividends. By comparing a Fund's and its In-

dex's total returns in this manner, the end result is that dividends received from the Funds reduce

an Authorized Claimant's Recognized Loss Amount only to the extent that such dividend income

exceeds the interest, dividend, or other income that would have been earned as a result of an in-

vestment in the relevant Index at the same time and during the same period. Thus, this methodol-

ogy seeks to measure an Authorized Claimant's loss on her/his/its investment in one or more of

the Funds by reference to how that Claimant's investment would have performed if, as Plaintiffs

allege, that Fund had been managed in a manner consistent with its Index.

RMK Seiec~ Short Ter~i~ Bond Fu~~d.

1. STF's NAV on July 3, 2006 was $9.98; STF shares purchased or redeemed between

July 3, 2006 and July 1, 2007 were at NAVs that ranged from $9.97 to $10.11 and thereafter

were at NAVs lower than $10.00.

2. For each STF share held and redeemed during the Holders/Sellers Loss Period, the

Recognized Loss Ai~~ount per share shall be the Invested Ai~iount minus the Recovered

Anioui~t plus the I~~dex Adjustei~t. The I~~clex Adji~strnent shall be calculated as $9.98 (the

NAV on July 3, 2006) multiplied by the Perce~atage Change in the I~~dex from July 3, 2006 to

the redemption date. The Percentage Change in t~~e Ia~ciex shall be calculated as the value of

the Index on the redemption date divided by the value of the Index on July 3, 2006 minus one.

The total Recognized Loss A au~~s shall equal an Authorized Claimant's Recog~izec~ Claim.

3. An Authorized Claimant's Cuss Distributio~i shall equal that Claimant's pro Na-

30


to share of the Net Class Settlement Fund determined by dividing the Claimant's Recogaaized

Cl~i~x by the aggregate Recogn~zec~ Chinas of all Authorized Claimants.

4. The Ciass DistributioB~ of Authorized Claimants who are Funds Shareholders

shall be reduced by that Claimant's Funds' Distribution but not to a number less than zero.

RMK Select Intermediate Bong F~~ic~

1. IBF's NAV on July 3, 2006 was $9.83; IBF shares purchased or redeemed between



2. For each IBF share held and redeemed during the Holders/Sellers Loss Period, the

Recognized Loss Anaou~t per share shall be the Invested Amount minus the Recaverec~

A~no~a~t plus the Index Adjustment. The Index Adjustffnei~t shall b~ calculated as $9.83 (the

NAV on July 3, 2006) multiplied by the Percentage Change ire tt~e Index from July 3, 2006 to

the redemption date. The Percentage C~~ange in t~.e Index shall be calculated as the value of

the Index on the redemption date divided by the value of the Index on July 3, 2006 minus one.

The total Recoga~~zed Loss Amounts shall equal an Authorized Claimant's Recog~~~zed C1aiTi1.

3. An Authorized Claimant's Class Distribution shall equal that Claimant's pro ra-

to share of the Net Class Settlement Fund determined by dividing the Claimant's Recognized

Claim by the aggregate Recoga~izeci Ciai~ns of all Authorized Claimants.

4. The Ciass Dfstribut~on of Authorized Claimants who are Funds Shareholders

6 For example, if you held one STF share on July 2, 2007, redeemed it on December 28, 2007, for

$8.44, and received dividends totaling $0.2189 during that period, your Recognized Loss Amount would

be:(July 2, 2007 NAV —Dividends Received —Redemption NAV) + (July 2, 2007 NA

V x [(Index on re-

demption date /Index on July 2, 2007) — 1])($10.00—$0.2189—$8.44)+($10.00x[(0/o)-1])=$1.34+o=$v,

If the dividends received were reinvested, your Recognized Loss Amount would be:

(July 2, 2007 NAV— Dividends Received +Reinvested Dividends —Redemption NAV) + (July 2,

2007 NAV x [(Index on redemption date /Index on July 2, 2007) — 1])

($10.00 — $0.2189 + $0.2189 — $8.44) + ($10.00 x [(o / o) — 1]) _ $<1.SE) + O = $O,

If you are also a Funds' Shareholder of STF, did not reinvest the dividends, and assuming the STF Funds'

Distribution per share is $<0.3331 and assuming all Settlement Class Members are Authorized Claimants,

your Class Distribution would be:

[{(July 2, 2007 NAV —Dividends Received —Redemption NAV) + (July 2, 2007 NAV x [(Index on

redemption date /Index on July 2, 2007) — 1])} / (total of all Authorized Claimants' Recognized

Claims)] —Funds Distribution

[{($10.00 — $0.2189 — $8.44) + ($10.00 x [(~ / o) — 1])} / $o] - $<0.3331 = $o.

31


shall be reduced by that Claimant's Funds' Distributi~~i but not to a number less than zero. ~

R1VIK Select High Rico e Fua~ci.

1. HIF's NAV on July 3, 2006 was $10.19; HIF shares purchased or edeemed between



2. For each HIF share held and redeemed during the Holders/Sellers Loss Period, the

Recognized Loss Amount per share shall be the Invested Amount minus the Recovered Amount

plus the Index Adjustment. The Index Adjustment shall be calculated as $10.19 (the NAV on

July 3, 2006) multiplied by the Percentage C3~ange i~~ the Index from July 3, 2006 to the re-

demption date. The Percentage CI~~~ige in tie I~ic~ex shall be calculated as the value of the In-

dex on the redemption date divided by the value of the Index on July 3, 2006 minus one. The to-

tal Reeogn~zecl Loss Amounts shall equal an Authorized Claimant's Recognized Clai~~a.

3. An Authorized Claimant's Class Dastributio~i shall equal that Claimant's pro ra-

to share of the Net Class Settlement Fund determined by dividing the Claimant's ~2ecognized

Clai~aa by the aggregate Recog~~ized Clai~~as of all Authorized Claimants.

4. The Class Distribution of Authorized Claimants who are Funds Shareholders

shall be reduced by that Claimant's Funds' Distribution but not to a number less than zero. 8

' For example, if you held one IBF share on July 2, 2007, redeemed it on December 28, 2007, for


be:(July 2, 2007 NAV —Dividends Received —Redemption NAV) + (July 2, 2007 NAV x [(Index on re-

demption date /Index on July 2, 2007) — 1])

($9.47 — $03095 — $4.55) + ($9.47 x [(o / d) —1]) _ $4.73 + o = $o,


(July 2, 2007 NAV— Dividends Received +Reinvested Dividend —Redemption NAV) + (July 2,


($9.47 — $0.3095 + $03095 — $4.55} + ($9.47 x [(~ / o) — 1)) _ $<5.04 + o = $U.

If you are also a Funds' Shareholder of IBF, did not reinvest the dividends, and assuming the IBF Funds'


your Class Distribution would be:

[{(July 2, 2007 NAV —Dividends Received —Redemption NAV) + (July 2, 2007 NAV x [(Index on


Claims)] —Funds Distribution

[{($9.47 — $0.3095 — $4.55) + ($9.47 x [(Q / ~) — 1])} / $o] - $<0.2372 = $<= .

a For example, if you held one HIF share on July 2, 2007, redeemed it on December 28, 2007, for


be:

32


Additional General Provisions

Distributions to Authorized Claimants will be made after all claims have been processed

and after the Court has approved the Claims Administrator's determinations. After an initial dis-

tribution of the Net Class and Funds Settlement Funds, if there is any balance remaining in the

Net Class Settlement Fund after at least twelve (12) months from the date of the initial distribu-

tion of the Net Class Settlement Fund (whether by reason of tax refunds, uncashed checks or

otherwise), Lead Counsel with respect to the Net Class Settlement Fund shall, if feasible and

economical, reallocate in an equitable and economic fashion such balance among Authorized

Claimants who have cashed their checks. Any balance that still remains in the Net Class Settle-

ment Fund, after payment of Notice and Administration Expenses, Taxes, and attorneys' fees and

expenses, if any, shall be contributed to anon-sectarian charitable organizations) serving the

public interest, designated by Lead Plaintiffs and approved by the Court. To the extent that any

funds distributed from the Net Funds- Settlement Funds are returned or otherwise unable to be

distributed to the Funds Shareholders, the Funds' board of directors will determine, at that time,

what appropriate action to take, pursuant to the Plan of Liquidation previously approved by the

Funds Shareholders.

Recognized Loss Amounts, Recognized Claims, and Class Distributions will be calculat-

ed as defined herein and payment in this manner will be deemed conclusive against all Author-

ized Claimants, including Funds Shareholders who, as Settlement Class Members, are also Au-

thorized Claimants. Each claimant is deemed to have submitted to the jurisdiction of the United

States District Court for the Western District of Tennessee for all purposes relevant to the im-

(July 2, 2007 NAV —Dividends Received —Redemption NAV) + (July 2, 2007 NAV x [(Index on re-

demption date /Index on July 2, 2007) — 1 ])

($9.21 — $0. 4523 — $3.49 -f- $9.21 X ~~O / O~ - 1~~ _ 5.27 -I- O = $O,


(July 2, 2007 NAV— Dividends Received +Reinvested Dividend —Redemption NAV) + (July 2,


($9.21 — $0.4523 + $0.4523 — $3.49) + ($9.21. X ~~O / U~ - j~~ _ $<$,$2 -I- O = $O,

If you are also a Funds' Shareholder of HIF, did not reinvest the dividends, and assuming the HIF Funds'


your Class Distribution would be:[{(July 2, 2007 NAV —Dividends Received —Redemption NAV) + (July 2, 2007 NAV x

[(Index on


Claims)] —Funds Distribution[{($9.21 — $0.4523 — $3.49) + ($9.21 x [(o / o) — 1]) _ $<0.3120 = $o.

33


plementation and administration of the Settlement.

L. SPECIAL NOTICE TO SECURITIES BROKERS AND OTHER NOMINEES

If you held shares of STF, IBF, or HIF for the beneficial interest of a person or organiza-

tion other than yourself, the Court has directed that, WITHIN SEVEN (7) DAYS OF YOUR

.RECEIPT OF THIS NOTICE, you either: (a) provide to the Claims Administrator the name and

last known address of each person or organization for whom or which you held shares of the

Funds during such time period; or (b) request additional copies of this Notice and the Proof of

Claim, which will be provided to you free of charge, and within seven (7) days thereafter mail

the Notice and Proof of Claim directly to the beneficial owners of those shares of the Funds.

If you choose to follow alternative procedure (b), the Court has directed that, upon such

mailing, you are to send a statement to the Claims Administrator confirming that the mailing was

made as directed. You are entitled to reimbursement from the Settlement Amount of your rea-

sonable expenses actually incurred in connection with the foregoing, including reimbursement of

postage and the cost of ascertaining the names and addresses of beneficial owners. Those ex-

penses will be paid upon request and submission of appropriate supporting documentation. All

communications concerning the foregoing should be addressed to the Claims Administrator:

In re Regions Mogan Keegan Open-End Mutual Fund Litigation


PO Box 9939Dublin, Ohio 43017-5939

Phone: 1-888-895-9227questions@rmkopenendfundsettlement. com

www.rmkopenendfundsettlement.com,

DO NOT CONTACT THE COURT 1E22EGARDING THIS NOTICE

If you have any questions about the Settlement, you may contact the following Plaintiffs'

Lead Counsel:

Richard A. LockridgeVernon J. Vander WeideGregg M. FishbeinLOCKRIDGE GRINDAL NAUEN P.L.L.P.

100 Washington Avenue South, Suite 2200

Minneapolis, MN 55401Telephone: 1-800-0Fax: (612) 339-0981ralo ckridge@locklaw. com

34


Dated:

vj vanderweide@locklaw. com

gmfi shbein@locklaw. com

2015

35

BY ORDER OF THE COURT

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF TENNESSEE

WESTERN DIVISION



In re Regions Morgan Keegan Open-End Mutual Fund Litigation

c/o GCG

PO Box 9939

Dublin, Ohio 43017-5939

INSTRUCTIONS FUI2 PR~+DF OF C'L~IN[ ~ttiD REI.,EASE t~C

1ItM

-

---

Plea

se carefully review the accompanying Notice pr

ior to completing this Proof of Claim and the information in Section B below. In Section B, your Re

cogn

ized

Claim has

been

calculated for th

e sh

ares

you lieid in the Funds during the Ho

lder

s/Se

ller

s Loss Period (July 3, 2006 through May 29, 2009) in your Morgan Keegan and Company, In

c. ("MK") or

Morgan Asset Management, In

c. ("MAM") account. This ca

lcul

atio

n is based on information provided by MK or MAM. You will be required to con

firm

thi

s calculation provided for

your holdings in the

Funds or, if you disagree, provide your holdings at the close of trading on July 3, 2006, a?i purchases/acquisitions (including reinvested dividends) during the

Holders/Sellers Loss Period, al

l interest and dividends rec

eive

d du

ring

that Period, and all redemptions during that Period (including any sha

res you held on May 29, 20

09).

In order to participate in the Class Settlement, al

l Potential Claimants must com

plet

e this Proof of Claim and Rel

ease

Form ("Proof of Claim") per the following instructions

and sign and mail it to the Administrator at the address above, postmarked no later than o, 2015.

If you are

required to submit documentation to support your cl

aim and you have

difficulty in locating doc

umen

tati

on, or

you are

not sure what doc

umen

ts mig

ht be considered as

adequate proof

to su

ppor

t your cl

aim,

purchases/acquisitions,

dividends/interest received,

and sales/redemptions, you may review the

information

on the

website

www.rmkopenendfundsettlement.com or www.morgankeeganlawsuit.com or contact the

Administrator at 1-888-895-9227.

If you are an Excluded Person (se

e accompanying Notice for definition of "Excluded Person'), do not submit a Proof of Claim regardless of whether or not amounts are shown for

Recognized Los

s Amounts) or Recognized Claim in Section B below.

REQUIREMENTS FOR FILING A PROOF OF CLAIM

Your cla

im wil

l be con

side

red for payment only upon compliance with all of the fo

llow

ing conditions to th

e extent that they are

applicable to you:

1. You must accurately co

mple

te all

portions of th

is Proof of Claim. If you a ;ree with the calculation of your Recognized Loss Amounts) and Recognized Claim in Section B,

CHECK THE ~°YES" BOX and proceed to item 3.

If you do not agree with the calculation of the Reco;nized Loss Amounts) or Recognized Claim in Se

ctio

n B, you must carefully complete each applicable section of

Section C. Do not omi

t any req

uest

ed information regarding your positions, purchases/acquisitions, div

iden

ds/i

nter

est payments received, and sales/redemptions/transfers of the

Fund

s. This information is ne

cess

ary to determine your sha

re of the Class Settlement if you do not anree with the calculation of the Recognized Loss Amounts) or

Recognized Claim in Section B. I

f you cannot

list all transactions in the

spaces provided in the Proof of Claim, or if you believe that you must or sh

ould

supply additional

information with respect to any tra

nsac

tion

, attach additional sh

eets

to this Proof of Claim, supplying th

e required inf

orma

tion

. Your name and Taxpayer Identification Number

(Social Security number or Employer Identification Number) must be properly identified on each additional sheet of paper. DO NOT INCLUDE INFORMATION FOR ANY

FUND WITHOUT A FUND NUMBER SPECIFICALLY LISTED 1N SECTION C BELOW; TRANSACTIONS FOR INELIGIBLE FUNDS WILL NOT BE PROCESSED.

2. If you do not agree with the calculation of the Recognized Loss Amounts) or Recognized Claim in Se

ctio

n B, you must attach to this Proof of Claim legible copies of

annual, quarterly, or monthly account statements from MK (or MAM), or br

oker

confli-mation s

lips for purchases and/or

redemptions, or

other proof satisfactory to the

Administrator confirming the

particulars of each po

siti

on, purchase/acquisition, dividends/interest received, and/or rede

mpti

on/t

rans

fer of Fund sha

res du

ring

the Set

tiem

e~rt

Class

Period. Please make sure that all supporting documentation states your account name.

3. You must com

plet

e Section D and sibn th

is Proof of Claim.

1~OTE: If Fund sha

res were owned jo

intly, all jo

int owners must sign th

e Proof of Claim. Executors, administrators, guardians, conservators, trustees, and attorneys

-in-fact may

comp

lete

and sign th

e Proof of Claim on behalf of Po

tential Claimants represented by them, but they must ide

ntif

y such Potential Claimants and provide proof of th

eir authority

(for example, currently ef

fect

ive letters testamentary, letters of administration, ce

rtification o; trust, power of attorney) to

com

plet

e and execute the

Proof of Claim on the

ir behalf

and to bind them in accordance with the te

rms thereof. Where a Potential Claimant has more tha

n one legal representative, the Proof of Claim must be executed by all

such

representatives. If you are filing on behalf of a deceased claimant, you must provide a copy of th

e death certificate and a will or probate documents or proof of joint ownership.

4.

Separate Pro

ofs of Claim should be submitted for each type of account in which Fund shares were held (e.g., a cla

im from joint owners sho

uld not include th

e separate tra

nsac

tion

s

of just one of th

e joint owners; an individual should not combine transactions in a Roth or IRA. account with transactions in a non-RoYh/IRA account).

5. See section K. of th

e Notice (attached or available for download on the

websites ww

w.rm

kope

nend

fund

sett

leme

nt.c

om or www.morgankeeganlawsuit.com) fo

r more information

on how your claim wi11 be calculated. NOTE: I2 is not necessary to hue an attorney to represent you in order to file a claim or in order to participate in the

Class Set

tlem

ent Fund;

however, you are

free to do so at your expense if you so choose.

QUESTIONS? CALL Z-&8&-895-9227 OR VISIT www.rmkopenendfundsettlement.com or www.morgankeeganlawsuit.com

PAGE 1 OF 9


6.

Ii~ you held Fund shares Uri IVlay 29, 2049; ye

ti are a Set~leiiient Cia'ss'ivZei~ der (unle'ss yriu are'an Exclui~ed Person' or uoluntarily exctucle yourself fx

oan the Settle~a~ent Cla

ss) anc~

must completz th

is Pro

af of Claim to sh

are in the Class Settlenient~ You wil

l also be

ei~t

itl~

d to sha

re` in the Funds` Distributzon; you will no

t ne

ed to complete thi

s Proof of Claim

to sha

re in the Funds' Distribution; which will be paid to you without any action on your part.

'Regions Morgan Keegan Open-End Funds

Settlement

For official use only

SECTION A: CONTACT INFORMATION

Last Name (C

laimant)

Last Name (B

eneficial Owner If D

ifferent from Claimant)

Regions Morgan Keegan Open-End Mutual Fund

Litigation Settlement Fund

In re Regions Morgan Keegan Open-End Mutual Fund

Litigation, File No. 2:

07-cv-02784

Landers, et al

. v. Morgan Asset Management, In

c., et al.,

File No. 2:

08-cv-02260

Proof of Claim and Rel

ease

Form

Please pri

nt or type

Firs

t Name (C

laimant}

1Vlust be postanarked no later than

~, 2015

Firs

t I~tame (

Beneficial Owner)

Last

Name (Co-Beneficial Owner)

First Name (Co-

Beneficial Owner)

Company/Other En

tity

(If Claimant is Nat an Individual)

Contact Person fox such Company or Other En

tity

Record Owner's Name (I

f Different From Claimant or Ben

efic

ial Owner Listed Above, e.

g., B

rokerage Firm, Bank, Tr

ustee; Nominee, et

c.)

Acco

unt Number (I

f Claimant Is Not an Individual)

Address Line 1

Address Line 2 (1f Ap

plic

able

)

City

Foreign Province

❑ Check Here to Use Alternate Add

ress

for Distribution OPTIONAL

Distribution Address Line 1

Distribution Add

ress

Line 2 (If Ap

plic

able

)

Trust/Other Date (I

f Applicable)

State

Zip Code

Foreign Zip Code

Foreign Country

QLTE

S'TI

ONS?

CALL 1-888-895-9227 OR VISIT www

.rmk

open

endf

unds

ettl

emen

t.co

m or www.morgankeeganlawsuit.com

PAGE 2 OF 9


Distribution Address City

Disixibution Address Foreign Province

Telephone Number (Day)

Claimant's or Beneficial Owner's Employer Identification Number

or

Email Address

State

Foreign Zip Code

Telephone Number (N

iglii)

Social Security N~arnber

Zip Code

Foreign Country

Legal representatives of Po

tential Claimants must attach power of attorney or other instrument showinb authority to act as such. See Instructions Item # 3 above.

TYPE OF CLAIMANT (check only one box):

❑ Individual

❑Joint Owners

❑Estate

❑Trust

❑Corporation

❑Partnership

❑Limited liability company ~ Private Pension Fund

❑Legal Representative

❑ IRA, Ro

th, Keogh, or other type of in

dividual retirement plan (s

tate type of pl

an, mailing address, and name of cu

rrent custodian)

❑ Other (s

pecify, describe on separate sheet)

SECTION B: CALCULATED RECOGNIZED LOSS AMOUNTS) AND RECOGNIZED CLAIM FOR CLAIMANTS WITH PURCHASES FROM MK DIRECTLY OR

THROUGH MAM

Please carefully review the information below.

Regions Morgan Keegan Open-End Funds Settlement Fund Calculation of Reco;nized Loss Amount and Recognized Claim: The Regions Morgan Keegan Open-End Funds

Settlement Fund Recognized Loss Amount is, for each Fund, the amount invested at the beginning of th

e Holders/Sellers Loss Period {July 3, 2006), plus all purchases/acquisitions

(including reinvested dividends) made during the Holders/Sellers Loss Period, le

ss all interest or dividends received during the Holders/Sellers Loss Period (July 3, 2006 through May

29, 2009}, le

ss all redemptions during the Settlement Class Period (including the amount received for any Fund shares owned at the end of tr

ading on May 29, 2009); the Recognised

Claim is the sum of al

l Recognized Loss An~ount(s) le

ss distributions received from the States' Fund and the SEC Fair Fund. The Class Distribution (

individual Claimants' respective

shares of the Net Class Settlement Fund) received by a Claimant who is also a F~uids Shareholder will be reduced by their Funds Distribution.

If you DO NOT AGREE with one or more of the Recognized Loss Amount or Recognized Claim Calculations below or "UNKNOWN" appears in those boxes, check "NO"; you

must then complete Section C below.

If you AGREE with the Recognized Loss Amount and Recognized Claim Calculations as stated, check "YES" and GO DIRECTLY TO SECTION D, as you will not be required to

submit documentation for your claim.

If you have questions as you are completing the Proof of Claim, please call t

he Administrator for assistance at 1-888-895-9227.

REGIONS MORGAN KEEGAN OPEN-END FUNDS SETTLEMENT Fi7ND —RECOGNIZED LOSS AMOUNTS) AND RECOGNIZED CLAIM CALCULATIONS

ESTABLISHED PER MK's RECORDS

Based on the net asset value of Fund shares held as of th

e close of tr

ading on July 3, 2006, purchases/acquisitions (

including reinvested dividends) during the Holders/Sellers Loss

Period (July 3, 2006 through May 29, 2009); dividends/interest received and sales/redemptions during the Holders/Sellers Loss Period; the amount received fox any shares head as of

the close of tr

ading on May 29, 2009; and amounts received in the States Fund and SEC Fair Fund distributions:

QUESTIONS? CALL 1-888-895-9227 OR VISIT www.rmkopenendfundsettlement.com or www.morgankeeganlawsuit.com

PAGE 3 OF 9


If you invested in the RMK SELECT SHORT-TERM BOND FUND, this is your RECOGNIZED LOSS AMOUNT;

Invested ?s.mount

Less Recovered

Compensable

Plus Index

Reco n

ixed Loss

~Do you agree with your

Recognized Loss Amount

Amount

Loss Calculation

Adjustment

Amount

Calculation? (check one)

$$

$$

$❑YES

❑ NO

If you invested in the RMK SELECT INTERMEDIATE BOND FUND, this is your RECOGNIZED LOSS AMOUNT:

Invested Amount

Less Recovered

Compensable

Plus Index

Recognized Loss

bDo you agree with your

Recognised Loss Amount

Amount

Loss Calculation

Adjustment

Amount

Calculation? (check one)

$$

$$

$❑YES

~ NO

If you invested in the RMK SELECT HIGH INCOME FUND, this is your RECOGNIZED LOSS AMOUNT:

Invested Amount

Less Recovered

Compensable

Plus Index

Reco n

ixed Loss

gDo you agree with your

Recognized Loss Amount

Amount

Loss Calculation

Adjustment

Amount

Calculation? {check one)

$$

$$

$❑YES

❑ NO

Based on the RECOGNIZED LOSS AMOUNT for each of your investments in one or more of the RMK Select Funds, as

calculated above, th

is is your RECOGNIZED

CLAIM:

Total of Recognized Loss

Less States' Fund

Less SEC Fair Fund

COGNIZED CLAIM

Do you agree with your Recognized

Amounts)

Distribution Amount

Distribution Amount

Claim Calculation? (check one)

$$

$$

DYES

❑ NO

PLEASE NOTE: IF

YOU ARE A FUNDS SHAREHOLDER, YOUR CLASS DISTRIBUTION WILL BE REDUCED BY YOUR FUNDS

DISTRIBUTION FOR ALL THREE FUNDS, WHICH THE FUNDS ESTIMATE WILL SE: $

IF YOU AGREE WITH THESE CALCULATED AMOUNTS, CHECK THE "YES" BOX AND PROCEED TO SECTION D BELOW. IF

YOU

DO NOT AGREE, PROCEED TO SECTION C.

SEC'~ION C: SPECIAL INSTRUCTIONS FOR CLAIMANTS WHO DO NOT AGREE WITH TI3E RECOGNIZED LOSS AMOUNTS) OI2 RECOGNIZED CLAIM

CALCUATIONS IN SECTION B OR IF THE RECOGNIZED LOSS AMOUNTS) CALCULATION IN SECTION S ABOVE READS ̀~UNIiNOWN."

For eac~i Fund, separately list your opening position on July 2, 2007, purchases/acquisitions (

including reinvested dividends) during the Settlement Class Period (July 2, 2007 through

May 29, 2009), dividends/interest received during the Settlement Class Period, and sates/redemptions of th

e Funds during the Settlement Class Period. You may make copies of th

is

schedule or attach additional li

sts of tr

ansactions in the same format as the schedules below if more space is needed. Be sure to include your name and Social Security number or

employer identification number on all separate sheets. For purposes of th

is schedule, you must

list all transactions in addition to dividends/interest received.


PAGE 4 OF 9


The date of acquisition and -sale is the "trade" or "contract" date and not the "settlement" or "payment" date. The acquisition price is the price paid without regard to commissions or

other expenses. The sale/redemption price is the amount received without regard to commissions or other expenses.

Use the Fund numbers below t

o identify your transactions in the schedules that follow by Fund number. These Fund numbers inay

also appear on your statements.

For your

convenience, th

e short-form names of each Fund are included in parentheses after the full name of each Fund. Only Funds listed below are eligible. The Fund numbers are provided

for your use in completing the transaction and dividend interest schedules.

FUND NAMES

FUND NUMBERS

Regions Morgan Keegan Select Intermediate Bond Fund ("

Intermediate Bond Fund")

1

Regions Morgan Keegan Select High Income Fund ("

Select High Income Fund")

2

Regions Morgan Keegan Select Short Term Bond Fund ("Short Term Bond Fund")

3

OPENING P05ITIONS

Enter the number of Fund shares held at the opening of tr

ading on July 3, 2006, fo

r each of ti

ne Funds listed below; if greater than zero (0), please provide docwmentation. Use your

statement for June 30, 2006 for your July 3, 2006 position. YOU MUST INCLUDE A COPY OF YOUR MONTHLY, QUARTERLY, OR ANNUAL STATEMENT THAT SHOWS

YOUR FUND HOLDINGS ON JUNE 30, 20

06.

#FUND

NUMBER OF SHARES HELD ON JULY 3, 2006

PROOF ENCLOSED?

1Regions Morgan Keegan Select Intermediate Bond Fund ("

Intermediate Bond Fund")

o Y o N

2Regions Morgan Keegan Select High Income Fund ("

Select High Income Fund")

o Y o N

3Regions Morgan Keegan Select Short Term Bond Fund ("

Short Tenor Bond Fund")

o Y o N

PURCHASES/ACQUISITIONS

List the Fund number, dates) of acquisirion, aid number of shares acquired (including reinvested dividends) during the Holders/Sellers Loss Period

(July 3, 2006 through May 29, 2009. You should provide annual or quarterly statements, brokerage statements, or confirmation slips to document all

acquisitions; if you cannot locate such documentation, provide the documentation upon which you rely in providing this information. If you cannot

locate any such documentation, you may st

ill l

ist t

he transaction information, but you will be contacted by mail to request additional information.

~'' NONE, CHECK HERE

❑

FUND NUMBER *

DATES) OF ACQUISITION

LIST CHRONOLOGICALLY

MM

DD

XYYY

NUMBER OF SHARES ACQUIRED

(INCLUDE REINVESTED DIVIDENDS)

~PROOF ENCLOSED.

/;

/oY oN

QUESTIONS? CALL Z-888-895-9227 OR VISIT www.rmlcopenendfundsettlement.com or www.morgankeeganlawsuit.com

PAGE 5 OF 9


/:

/—~--~

,--------- --

--- -----

o Y o N

/ /

—

oY oN

*See the chart on page 5 of th

is Proof of Ciaim for a list of Fund numbers that correspond to the eligible Fund names during the Settlement Class Period.

DIVIDENDS/INTEREST PAYMENTS RECEIVED

List the Fund number, dates of di

vidend/interest payments, and amounts received during the Holders/Sellers Loss Period (July 3, 2006 through May

29, 2009}. You should provide annual or

quarterly statements, brokerage statements, or IRS Forms 1099-DIV

or 1099-INT to document

all

payments received

If you can

not lo

cate

such documentation, provide the documentation upon which you rely in providing this information. If you

cannot loc

ate any such documentation, you may s

till

list the

transaction information, but

you w

ill be contacted by mail to request additional

information.

IF NONE, CHECK HERE

~

FU1~TD NUMBER x

DATES) OF DIVIDEND/INTEREST PAYMENT


MM

DD

YYYY

AMOUNT RECEIVED

PROOF ENCLOSED?

/ /

_.0

o Y N

$

__~

~oY oN

$

~

~ /

oY oN

j$

;

/ /

oY oN

$

* See the chart on page 5 of th

is Proof of Claim for a li

st of Fund numbers Tha

t correspond to the eligible Fund names during the Settlement Class Period.

SALES/REDEMPTIONS

List the Fund number, date(s), and namber of shares redeemed during the

Holders/Sellers Loss Period (July 3, 2006 through May 29, 2004),

including any shares held on May 29,

2009 tha

t were redeemed threafter. You should provide annual or quarterly statemen

ts, brokerage statements,

or confirmation

slips to document

all re

demp

tion

s; if you cannot locate such documentation, provide the documentation upon which you rely in

providing this information. If you can

not locate any such documentation, you may sti

ll list the transaction information, but you will be contacted by

mail to re u

est additional inf

orma

tion

.

FUND NUMBER x

DATES) OF SALE/REDEMPTION


MM

DID

YYYY

NUMBER OF SHARES SOLD/REDEEMED

PROOF ENCLOSED?

~ ~

oy oN

~_ ' ~ ~

_._.__I— __ ~

____

._.._.L

../

/~ Y ~ N

i

~--T-

~--;- -

k I

~

QUESTIONS? CALL 1-888-895-9227 OR VISIT www.rmkopenendfundsettlement.com or www.morgankeeganlawsuit_com

PAGE 6 OF 9


o Y o

i-.

_,_

— --

~~

_~

~~

~=~---,--,

o Y o N

~ ~

~

* See the chart on page 5 of th

is Proof of Claim for a li

st of Fund numbers tha

t correspond to the eligible Fund names during the Settlement Class Period.

SECTION D: SUBSTITUTE FORM ~'-9

Employer Identification Number (f

or estates t

rusts corporations, etc.)

Social Security Number (f

or individuals)

Check appropriate box for federal tax classification (

required): D IndividuaUSole proprietor

❑ C Corporation

❑ Pa

rfie

rshi

p D Exempt payee

❑ Trust/Estate ❑Limited

Liability Company ❑Other

Enter the tax classification C = C corporation, S = S corporation, P =partnership

Enter U.S. Taxpayer Identification Number (TIN) on the appropriate line, if a

pplicable. For individuals, t

his is your Social Security number (SSN). If you are not an individual or you

are an individual who is an employer or who is engaged in a U.S. trade or business as a sole proprietor, you must enter an Employer

Identification Number (EII~.

If you are a

disregarded en

tity

claiming treaty ben

efit

s as a hybrid entity, e

nter your EIN. If you are anon-

United States citizen and have no SSN or EIN, pl

ease check "Not Applicable" below and

review the instrucrions that

follow.

O Not Applicable

If you are a U.S. citizen or other U.S. person, you are subject to the Substitute Form W-9 certifications, which are set forth in Verifications 9, 10, and 11 below. Please see the

definition of "U.S. person" at irs.~ov/dub/irs=pdf/fw9.pdf.

In the event you are not a U.S. citizen or other U.S. person, please cross out Verbcations 9, 10 and 11 and complete an appropriate Form W-8. The various options for Form W-8

are available for download at irs.gov/nub/irs-pdf/fw8ben.pdf (most common), ir

s.~ov/pub/irs-pdf/fw8eci.pdf, irs.gov/pub/irs-pdf/fw8exp.pdf, or irs.sov/uub/irs-ndf/fw8imv.ndf.

If you are not a U.S. citizen or other U.S. person, you must submit a completed Form W-8 alon; wi

th this Proof of Claim or your claim will be deemed deficient, which may result in

rejection of your claim.

SECTION E: SUBMISSION TO JURISDICTION OF COURT ANI) ACKNOWLEDGEMENTS, VERIFICATION ANI) RELEASE

I (We) submit this Proof of Chun and Release Form under the terms of th

e Stipulation and Agreement of Settlement described in the Notice. I (We) also submit to the ju

risdiction of

the United States District Court for the Western District of Tennessee, Western Division, with respect to my (our) cl

aim as a Settlement Class Member and for purposes of en

forcing

the release set forth herein. I (We) further acknowledge th

at I (we) wi

ll be bound by and subject to the terms of th

e Final Judgment and Order of Dismissal that may be entered in the

Lawsuits. I (We) ag

ree to furnish additional information to the Claims Administrator to support this claim if requested to do so. I (We) have not submitted any other claim in this

Settlement covering the same purchases, acquisitions and sales/redemptions of sh

ares ~n the Funds during the Settlement Class Period and know of no other Person having dane so on

my (o

ur) b

ehalf.

The undersigned represents and certifies UNDER PENALTY OF PERT[JRY that:

1. I (We) he

reby warrant and represent that I (we) am (are) not (a) excluded from the Settlement Class as defined herein, in the accompanying Notice, and in the Settlement

Agreement; or (b) the Administrator, an employees) of th

e Administrator, or a persons) assisting the Administrator in its role as the Administrator.

2. If signing this Proof of Claim on behalf of a corporation, partnership, or other business entity, I (we) have the legal authority to act on its behalf and execute this Proof of

Claim and have represented my (our) au

thority to sign below and/or am (are) pr

oviding documentation of such authority if I am (we are) acting on behalf of a trust, estate, o

r

under terms of an assignment of in

terest from the original shareholder.

3. I (We) understand that the Administrator may require add

itio

nal information from me (us) in order to

validate or pay my (our) claim, and I (we) agree to provide any

information requested by the Administrator for those purposes. If n

ecessary, I

(we) au

thorize the Administrator to obtain and review any and ail

tradang records relevant to my


PAGE 7 OF 9


(our) t

ransactions in the Funds from any brokerage firm or oilier entity that has possession of such records and further consent to

tfie release of such recoriis by such brokerage

firm or other entity to the Administrator.

~. I (We) hereby ac~Cnowledge full and complete satisfaction of, and do hereby fully, finally and forever settle, release and discharge from the Released Claims each and all of the

Released Defendant Parties as those terms and terms related thereto are defined in the Settlement Agreements and e~ibits thereto.

5.

This release shall be of no force or effect unless and until the Court approves the Settlement Agreement and the Effective Date (as defined in the Settlement Agreement) has

occurred.

6. I (We) hereby warrant and represent that I (we) have not assigned or transferred or purported to assign or transfer, voluntarily or involuntarily, any claim or o#her matter

released pursuant to this release or any other part or portion thereof or

any interest therein.

7. I (We) agree that under no circumstances shall Defendants or their counsel, Lead or Derivative Plaintiffs or th

eir counsel, th

e Funds or their counsel, th

e Administrator or it

s agents

incur any liability to me (us) or to any other person if it

mates a distribution in accordance with the list of al

l Authorized Claimants and their Recognized Claims as approved by

the Court and that I

am (we are) e

njoined from taking any action in contravention of this provision.

8. If I am (we are) a custodian, t

rustee, o

r professional investing on behalf of and representing more than one Potential Claimant in a pooled investment fund or entity, I (we) also

attest that any distribution received will be allocated for the benefit of cu

rrent or former pooled investors and not for the benefit of management.

9. The number shown on this form is my (our) correct Taxpayer Identification Number (e

ither Social Security number or Employer Identification Number).

10.

I (We) certify that I am (we are) U

nited States citizens}, resident(s), or

entity(ies).

11.

I (We) certify that I am (we are) n

ot subject to backup withholding under the provisions of Section 3406(a)(1)(C) of th

e Internal Revenue Code.

NOTE: If you have been

notified by the Internal Revenue Service that you are subject to backup withholding, please strike out the lanua;e that you are not subject to

backup withholding in the certification in item # 11 above.

I (We) de

clare under penalty of perjury under the laws of th

e United States of America that all of th

e foregoing information supplied on the Proof of Claim by the undersigned is true

ar~d correct and that the documents submitted herewith are true and genuine. The Internal Revenue Service does not require your consent to any provision other than the

certification required to avoid backup withholding listed in item # 11 of the Verification section above.

Signature of Claimant

Date

Print name here

Signature of Jo

int Claimant (if any)

Date

Print name here

If the Claimant is other than an individual (e.g., trust, estate, company, or other business entity) or if t

he Claimant is not the person completing this form (e.g., attorney-in-

fact, t

hird-party claim

-filing service, nominee), the following must also be provided:

ignature o person signang an e a o

a~nant

ate

rmt name ere

Capacity/title of person signing (Executor, P

resident, CEO, Tr

ustee, etc.)

PROOFS OF CLAIM MUST BE POSTMARKED BY o, 2015.

ACCURATE CLAIMS PROCESSING TAKES A SIGNIFICANT AMOUNT OF TIME. THANK YOU FOR XOUR PATIENCE.

ANY PERSON WHO KNOWINGLY SUBMITS A FALSE PROOF OF CLAIM IS SUBJECT TO PENALTIES FOR PERJURY AND OTHER VIOLATIONS OF FEDERAL LAW.

Submission of th

is Proof of Claim does not ensure that you will share in the distribution of th

e Settlement.

REMINDER CHECKLIST

1. PLEASE COMPLETE SECTIONS B AND D OR B, C, AND D AND SIGN THE PROOF OF CLAIM. If this claim is being made on behalf of joint owners, ALL OWNERS

MUST SIGN.


PAGE 8 OF 9


2.

If re

quired, REMEMBER TO ATTACH SUPPORTING DOCUMENTATION. Do not use a highlighter on this form or any supporting docurr►ents. Supporting documentation

includes trade confirmations, official monthly, quarterly or annual brokerage account statements.

3. DO NOT SEND ORIGINAL DOCUMENTS; SEND ONLY COPIES.

4. Keep a copy of your Proof of Claim and supporting documentation for your records; supporting documentation cannot be returned to you once the documenfis are submitted.

5. The Claims Administrator will acknowledge receipt of your Proof of Claim by mail within 60 days. Your claim i

s not deemed by the Claims Administrator to be submitted

unless you receive an acknowledgment postcard. If you do not receive an aclrnowledgment postcard within 60 days, please call the Claims Administrator at 1-888-895-9227.

Also, you can submit your claim using a service that provides you with proof of mailing, such as registered or certified mail, return receipt requested; express mail that does not

waive signature; or courier service.

6. If you move or change your name after submitting this Proof of Claim, pl

ease not

ify the ad

mini

stra

tor;

failure to have a correct address on fi

le with the administrator may result in

forfeiture of any payment from the net distribution fund that is returned to ti

ie administrator as undeliverable by the United States Postal Service.

QUESTIONS? CALL 1-888-895-9227 OR VISIT www.rznkopenendfundsettlement.com or www.morgankeeganiawsuit.com

PAGE 9 OF 9


i :~~


IloT THE UNI'~ED STATES DISTRICT COURT

FOR SHE WESTERN DISTRICT OF TENNESSEE

WES~'EIZN DIVISION

IN RE REGIONS MORGAN KEEGANSECURITIES, DERIVATIVE and ERISA

LITIGATION


In re Regions Morgan Keegan Open-EndMutual Fund Litigation,


and

Landers, et al. v. MoNgan Asset Management,Inc., et al.,


MDL Docket No. 2009

SUMMARY NOTICE OF PENDENCYAND PROPOSED

SETTLEMENT OF CLASS ANDDERIVATIVE ACTIONS AND MOTION

FOR ATTORNEYS' FEES ANDEXPENSES

SUMMARY NOTICE OF SETTLEMENT OF CLASS AND DERIVATIVE ACTIONS

TO: (1) ~'ersons w~io pa~rc~~ased during the period December 6, 2004 t~irai€gh December 6,

2007 or held and/or redee~~ed daring the ~eri~d July 3, 2006 throug~~ May 29, 20Q9

shares in the Regions Morgan Keegan Select Short Terin Band I nd ("S'TF")

(MS~'BX, RSTC~ MSBIX), the Regions Morgan Keegan Select Intermediate Bond

Fund ("IBF") (MI~BX, RIBCX, RIBI~, ai~d/o~° the Regions Morgan Keegan Select

High Income FF`~nd ("HIF"') (NII~IIX, RHICX, RHII~ (ccsitectively "the Funds") and

wlio are riot excluded by the terms of the settle~Y€ent ("Settlement Class").1

(2) Pe~•sans ~v~~a ̀ vere sl~~reliolciers of oi~e or nxore of the Fui~c~s on May 29, 2009

`v~~e~~ tl~e Funds' shareholders approved tl~e forY~ial Iiqui atioai of the Funt~s aiici who

ire riot exc3uded by t ie terms of the settlement ("Futzds Sharei~oiders").

YOIJ ARE HEREBY NOTIFIED, pursuant to Rules 23 and 23.1 of the Federal Rules of Civil

Procedure and an order of the Court, that a proposed settlement has been entered into between

Plaintiffs and Defendants in the above-captioned Class Action Lawsuit and Derivative Action

Lawsuit ("Settlement"). This proposed settlement includes (1) a Settlement Class in the above-

captioned Class Action Lawsuit between Lead Plaintiffs the Estate of Kathryn S. Cashdollar,

Dajalis Ltd., Jeanette H. and H. Austin Landers, and Frank D. Tutor ("Lead Plaintiffs"), on behalf

of themselves and a Settlement Class that has been preliminarily certified for purposes of settlement

only, and Defendants Morgan Keegan &Company, Inc., Morgan Asset Management, Inc., MK

Holding, Inc., Regions Financial Corporation, Regions Bank; Morgan Keegan Select Fund, Inc. and

All capitalized terms used in this Summary Notice are defined in the Stipulation and Agreement

of Class Settlement (the "Class Settlement Agreement"), dated as of January 19, 2015, or in the

Stipulation and Agreement of Derivative Action Settlement ("Derivative SEttlement Agreement"), dated

as of January 19, 2015.


its portfolios or "series": STF (n1k1a Helios Select Short-Term Fund), IBF (n/k/a Helios Select

Intermediate Bond Fund), and HIF (n/k/a Helios Select High Income Fund) ("Funds"); Allen B.

Morgan, Jr., J. Kenneth Alderman, Jack R. Blair, Albert C. Johnson, William Jeffries Mann, James

Stillman IZ. 1VIcFadden, W. Randall Pittman, Mary S. Stone, Archie W. Willis, III, Carter E.

Anthony, Brian B. Sullivan, Joseph C. Weller, J. Thompson Weller, G. Douglas Edwards, Charles

D. Maxwell, David M. George, Michele F. Wood, James C. Kelsoe, Jr., David H. Tannehill, and

Thomas R. Gamble; and PricewaterhouseCoopers LLP ("Defendants"), and (2) a settlement in the

Derivative Action Lawsuit between and among Derivative Plaintiffs H. Austin and Jeanette H.

Landers, James H. Frazier, James P. and Peggy C. Whitaker, and the Estates of Charles M. and

Diana W. Crump on behalf of the Funds; the Funds, as nominal defendants; and Defendants, except

Messrs. Mann, Anthony, Edwards, George, and Gamble. The Settlement provides for the payment

by certain Defendants in the amount of $125 million in cash ("Settlement Amount"). Pursuant to

an agreement between Lead and Derivative Plaintiffs and the Funds, it is proposed that $110 million

of the Settlement Amount be allocated to the Class ("Class Settlement Amount") and $15 million to

the Funds ("Funds Settlement Amount"); the Funds Settlement Amount is to be further allocated

among the Funds in accordance with their respective losses and distributed to the Funds

Shareholders ("Funds' Distribution"). A full description of the Class and Derivative Settlements can

be found in the Notice of Pendency and Proposed Settlement of Class and Derivative Actions and

Motion for Attorneys' Fees and Expenses (the "Notice").

A hearing will be held before the Honorable Samuel H. Mays, Jr. of the United States District Court

for the Western District of Tennessee, Western Division, in the Clifford Davis/Odell Horton Federal

Building, 167 North Main Street, 1 lth Floor Courtroom #2, Memphis, Tennessee 38103 at i•

.m., on , 2015 to, among other things: determine whether the proposed

Settlement should be' approved by the Court as fair, reasonable, and adequate; determine whether

the proposed Plan of Allocation of the Net Class Settlement Fund should be approved as fair and

reasonable; determine whether the Funds' Distribution should be approved as fair and reasonable;

and consider the application of Lead Counsel and Derivative Plaintiffs' counsel for an award of

attorneys' fees and payment of litigation expenses. The Court may change the date of the hearing

without providing another notice.

IF YOU ARE A MEMBER OF THE CLASS, YOUR RIGHTS WILL BE AFFECTED BY

THE PROPOSED SETTLEMENT AND YOU MAY BE ENTITLED TO RECEIVE MONEY

FROM THE NET CLASS SETTLEMENT FUND. If you have not yet received the full printed

Notice and a Proof of Claim and Release Form ("Proof of Claim"), you may obtain copies of these

documents by contacting the Claims Administrator:

In ~e Regions Morgan Keegan Open-End Mutual Fund Litigation


PO Box 9939Dublin, Ohio 43017-5939Phone: 1-888-895-9227

www.rmkopenendfundsettlement.com oN www.morgankeeganlawsuit.com.

DO NOT CONTACT THE COURT REGARDING THIS NOTICE


Inquiries, other than requests for information about the status of a claim, may also be made

to Lead Counsel.LOCKRIDGE GRINDAL NAUEN P.L.L.P.

Richard A. LockridgeVernon J. Vander Weide

Gregg M. Fishbein100 Washington Avenue South, Suite 2200

Minneapolis, MN 55401

Telephone: (612) 339-6900; Fax: (612) 339-0981

vj vanderweide@locklaw. [email protected]

If you are a Class Member, in order to be eligible to share in the distribution of the Net Class

Settlement Fund, you must submit a Proof of Claim to the Claims Administrator postsrtarked or

otherwise receaved tao later tlaafP _, 241 S. To exclude yourself from the Class, you

must submit a written request for exclusion in accordance with the instructions set forth in the

Notice such that it is received rzo later tlta~z , 2015. If you are a Class Member

and do not exclude yourself from the Class, you will be bound by the Final Order and Judgment of

the Court, and will lose the ability to pursue, or to continue to pursue, or to participate in any way

in, any legal action against Released Defendants concerning the Released Claims, as those terms

and terms related thereto are defined in the Class Settlement Agreement. Any objections to the

proposed Settlement, Class Plan of Allocation, determination of the Class and Derivative Settlement

Amounts, allocation of the Funds Settlement Amount among the Funds, the Funds' Distribution,

and/or application for attorneys' fees and payment of expenses ~azust be filed with the Court and

served an counsel for the Parties in accordance with the instructions set forth in the Notice, such

that they are received no later than , 2015.

If you are a Class Member and do not timely submit a valid Proof of Claim, you will not be

eligible to share in the Net Class Settlement Fund, but you nevertheless will be bound by the Final

Order and Judgment in the Class Action.

If you are a Funds Shareholder in one or more of the Funds, you need do nothing to receive

your share of the Settlement allocated to the Net Funds Settlement Fund.

DATED: , 2015 BY ORDER OF THE UNITED STATES

DISTRICT COURT FOR THE WESTERN

DISTRICT OF TENNESSEE


1. ♦. >~. ~~ ;: `~`


IlV THE UNITED STATES DISTRICT COURT

F0~2 THE WESTERN DISTRICT OF TENNESSEE

WESTERN DIVISION

II~T RlE REGIONS MORGAN KEEGAN

SECURITIES, DERIVATIVE AND ERISA

LITIGATION


In ~e Regions MoNgan Keegan Open-End

Mutual Fund Litigation,


MILL Docket No. 2009



FINAL .TUDGMENT AND ORDER OF DISMISSAL

This Court having considered: the Stipulation and Agreement of Class Settlement dated

January 19, 2015, including all Exhibits thereto (the "Class Settlement Agreement"), between

and among (i) the Estate of Kathryn S. Cashdollar, Dajalis Ltd., Jeanette H. Landers, H. Austin

Landers, and Frank D. Tutor (collectively, "Lead Plaintiffs" or "Plaintiffs"); (ii)

PricewaterhouseCoopers LLP ("PwC"); (iii) Morgan Keegan &Company, Inc., Morgan Asset

Management, Inc., and MK Holding, Inc.; (iv) Regions Financial Corporation ("RFC"); (v)

Regions Bank ("RB"); (vi) Regions Morgan Keegan Select Short Term Bond Fund ("STF"),

Regions Morgan Keegan Select Intermediate Bond Fund ("IBF"), and Regions Morgan Keegan

Select High Income Fund ("HIF"), each of which was a series of Morgan Keegan Select Fund,

Inc., a registered investment company (together with STF, IBF, and HIF, the "Open-End Funds"

or "Funds");1(vii) Carter E. Anthony, Brian B. Sullivan, Joseph G Weller, J. Thompson Weller,

1 Following shareholder approval of Hyperion Brookfield Asset Management as the Fund's

investment advisor in July 2008, the Funds were renamed Helios Select Short Term Bond Fund,

aa~4i~.i 1


G. Douglas Edwards, Charles D, Maxwell, David M. George, Michelle F. Wood, James C.

Kelsoe, Jr., David H. Tannehill, and Thomas R. Gamble; and (viii) Allen B. Morgan, Jr., J.

Kenneth Alderman, Jack R. Blair, Albert C. Johnson, William Jefferies Mann, James Stillman

I2.. McFadden, W. Randall Pittman, Mary S. Stone, and Archie W. Willis III (collectively, (ii)

through (viii), "Defendants" and together with Lead Plaintiffs, the "Parties") and having held a

hearing on , 2015; and having considered all of the submissions and arguments with

respect thereto, and otherwise being fully informed, and good cause appearing therefore,

IT IS HEREBY ORDERED, ADJUDGED, and DECREED that:

Introc~uctary Fi~din~s

1. This Final Judgment and Order of Dismissal ("Judgment") incorporates herein

and makes a part hereof, the Class Settlement Agreement, including the Exhibits thereto. Unless

otherwise defined herein, all capitalized terms used herein shall have the same meanings as set

forth in the Class Settlement Agreement.

2. This Court has jurisdiction over the subject matter of the Class Action Lawsuit

and over all parties to the Class Action Lawsuit, including all Class Members who did not timely

file a valid request for exclusion from the Class by the , 2015 deadline pursuant to

the Court's Order Preliminarily Approving Class Settlement and Providing for Notice entered

201 S (ECF No. ~ (the "Class Preliminary Approval Order").

Af~rta~~.ce of Class Certificatiai;

3. Pursuant to Rule 23 of the Federal Rules of Civil Procedure ("Federal Rule 23"),

the Court certifies this Class Action Lawsuit as a class action for settlement purposes and

Helios Select Intermediate Bond Fund, and Helios Select High Income Fund; Morgan Keegan

Select Fund, Inc., was renamed Helios Select Fund, Inc.

487417.1 2


confirms certification of the following settlement Class, as ordered by the Court in the

Preliminary Approval Order:

All Persons who (1) purchased any class of redeemable

shares of the Regions Morgan Keegan Select Short Term

Bond Fund ("STF"), the Regions Morgan Keegan Select

Intermediate Bond Fund ("IBF"), ox the Regions Morgan

Keegan Select High Income fund ("HIF"), at any time

during the period from December 6, 2004 through

December 6, 2007, inclusive; or (2) held and/or redeemed

on or after July 3, 2006 through the end of the Settlement

Class Period shares of STF, IBF, or HIF and were

damaged thereby.

Excluded from the Class and as Class Members are:

(i) the Individual Defendants and the members of the immediate families of the

Defendants;

(ii) Defendants, other than the Individual Defendants, and the subsidiaries and

affiliates of Defendants (including but not limited to RFC, Morgan Asset Management, Inc., RB,

Morgan Keegan, Morgan Properties LLC, and MK Holding, Inc.);

(iii) any Person who is a director or officer subject to § 16 of the Securities Exchange

Act of 1934, partner, or controlling person of the Open-End Funds or any other Defendant;


(v) any member of the TAL Subclass;

(vi) any Person who has at any time filed a proceeding with FINRA against one or

more Released Defendant Parties concerning losses alleged to be attributable to the purchase or

holding of shares in one or more of the Open-End Funds during the Class Period, and such

proceeding was not subsequently withdrawn or dismissed pursuant to a specific agreement to


aa~4i~.i 3


(vii) any Person who has at any time filed a state court action that has not been.

removed to federal court, or has been removed and remanded, against one or more of the

Defendants concerning losses alleged to be attributable to the purchase or holding of shares in one

or more of the Open-End Funds during the Class Period, and whose claims in that action have

been dismissed with prejudice, released, or fully adjudicated absent a specific agreement with

such Defendants) to allow the Person to participate as a Class Member;

(viii) any Person who has at any time filed a federal. action or state court action that has

been removed to federal court, against one or more of the Defendants concerning losses alleged to

be attributable to the purchase or holding of shares in one or more of the Open-End Funds during

the Class Period, and whose claims in that action have been dismissed with prejudice, released, or

fully adjudicated absent a specific agreement with such Defendants) to allow the Person to

participate as a Class Member;

(ix) any Person who has at any time individually settled with one or more of the

Defendants claims concerning losses alleged to be attributable to the purchase or holding of

shares in one or more of the Open-End Funds during the Class Period, and whose claims in that

settlement have been dismissed with prejudice, released, or fully adjudicated absent a specific

agreement with such Defendants) to allow the Person to participate as a Class Member;

(x) any Person who submits a valid and timely request for exclusion from the Class in

accordance with the requirements set forth in the Notice; and

(xi) the legal representatives, heirs, successors and assigns of any such excluded

Person or entity.

Provided however, these exclusions do not extend to the Regions 401(k) Plan or the

Morgan Keegan 401(k) Plan, or any portion thereof, which plans have participants who may have

487417.1 4


held shares in STF, IBF, and/or HIF. Neither the Regions 401(k) Plan nor the Morgan Keegan

401(k) Plan shall be construed, for purposes of this Class Settlement, as being either "affiliates"

of any Defendant or entities in which any Defendant has a controlling interest. Moreover,

notwithstanding anything in this Class Settlement or Plan of Allocation (as defined in Paragraph

25 of the Class Settlement Agreement) to the contrary, nothing in this Class Settlement or plan of

allocation shall be construed in any way to limit the ability of the Regions 401(k) Plan or the

Morgan Keegan 401(k) Plan to fully participate in the Class Settlement and in any recovery

hereunder. These exclusions also do not extend to trusts or accounts as to which the control or

legal ownership by any Defendant (or by any subsidiary or affiliate of any Defendant) is derived

or arises from an appointment as trustee, custodian, agent, or other fiduciary ("Fiduciary

Accounts") unless (i) that Fiduciary Account is part of the TAL Subclass or (ii) with respect to

any such Fiduciary Account, any Person has filed (A) a proceeding (described in clauses (vi)-

(viii) above) against one or more Released Defendant Parties concerning the purchase or holding

of shares in one or more of the Open-End Funds during the Class Period and such proceeding was

not subsequently dismissed to allow the Person to specifically participate as a Class Member or

(B) otherwise resolved said Person's claims as contemplated in clause (ix) above. With respect to

Open-End Fund shares for which the TAL Orders authorize the TAL to prosecute the claims or

causes of action pleaded in the Complaint ("TAL Represented Open-End Fund Shares"), "Class"

and "Class Member" also excludes Persons who are, or were during the Class Period, trust and

custodial account beneficiaries, principals, settlors, co-trustees, and others owning beneficial or

other interests in the TAL Represented Open-End Fund Shares ("Such Persons"), but this

exclusion applies only to any claims or causes of action of Such Persons that the TAL is

authorized by the TAL Orders to prosecute. With respect to Open-End Fund Shares that are not

487417.1 5


TAL Represented Open-End Fund Shares and in which Such Persons have a beneficial or other

interest, the foregoing partial exclusion of Such Persons does not apply.

4. The Court confirms and incorporates its finding in the Class Preliminary

Approval Order that the prerequisites for class certification under Rules 23(a) and 23(b)(3) of the

Federal Rules of Civil Procedure have been satisfied in that:

a. The number of Class Members is so numerous that joinder of all Class

Members is impracticable, thus satisfying Federal Rule 23(a)(1).

b. There are questions of law and fact common to the Class, thus satisfying

Federal Rule 23(a)(2). Among the questions of law and fact common to the Class are:

whether the Securities Act of 1933 and the Securities Exchange Act of 1934 and Rule

lOb-5 promulgated thereunder were violated by Defendants' acts as alleged; whether

statements made by Defendants to the investing public in the Funds' Registration

Statements and Prospectuses misrepresented or omitted material facts; whether

statements made by Defendants in the Funds' public filings misrepresented or omitted

material facts; and whether the Members of the Class have sustained damages and, if so,

what is the proper measure thereof.

c. The claims of Lead Plaintiffs, as Court appointed class representatives, are

typical of the Class they represent, thus satisfying Federal Rule 23(a)(3).

d. Lead Plaintiffs the Estate of Kathryn S. Cashdollar, Dajalis Ltd., Jeanette

H. Landers, H. Austin Landers, and Frank D. Tutor will fairly and adequately protect the

interests of the Class, thus satisfying Federal Rule 23(a)(4). Accordingly, Lead Plaintiffs

are appointed as Class Representatives for the Class.

487417.1 6


e. The questions of law and fact common to the Class predominate over any

questions affecting only individual members, thus satisfying Federal Rule 23(b)(3).

f. A class action is superior to other available methods for the fair and

efficient adjudication of the controversy, thus satisfying Federal Rule 23(b)(3).

In making all of the foregoing findings, the Court has exercised its discretion in certifying the

Class.Class Notice Fia~din~s acid Opt-guts

5. The record shows that Notice has been given to the Class in the manner approved

by the Court in its Class Preliminary Approval Order (ECF No. ~. The Court finds that such

Notice: (i) constitutes reasonable notice and the best notice practicable, under the circumstances;

(ii) constitutes notice that was reasonably calculated, under the circumstances, to apprise all

Class Members who could reasonably be identified of the pendency of the Class Action Lawsuit,

the terms of the Settlement, and the Class Members' right to object to or exclude themselves

from the Class and to appear at the settlement fairness hearing held on , 2015

(the "Class Settlement Hearing"); (iii) constitutes due, adequate, and sufficient notice to all

persons or entities entitled to receive notice; and (iv) meets the requirements of due process,

Federal Rule 23, Section 27 of the Securities Act of 1933, 15 U.S.C. §77z-1(a)(7), as amended by

the Private Securities Litigation Reform Act of 1995 (the "PSLRA"), and Section 21D(a)(7) of

the Securities Exchange Act of 1934, 15 U.S.C. § 78u-4(a)(7), as amended by the PSLRA, and

any other applicable law.

6. The appropriate officials have been served with the notice set forth in 15 U.S.C. §

1715(b) and were served at least ninety (90) days prior to the entry of this Order.

7. No individuals or entities, other than those listed on Exhibit A hereto, have

timely and validly excluded themselves from the Class. This Judgment shall have no force or

487417.1 7


effect on the persons or entities listed on Exhibit A hereto.

Approval of t3~e Class Settleme~gt

8. In light of the benefits to the Class, the complexity, expense, and possible

duration of further litigation against the Defendants, the risks of establishing liability and

damages, and the costs of continued litigation, the Court hereby fully and finally approves the

Class Settlement, pursuant to Federal Rule 23, as set forth in the Class Settlement Agreement in

all respects, and finds that the Class Settlement is, in all respects, fair, reasonable, and adequate,

and in the best interests of Plaintiffs, the Class, and each of the Class Members. This Court

further finds the Class Settlement set forth in the Class Settlement Agreement is the result of

arm's length negotiations between experienced counsel representing the interests of the Class

and Defendants. The Court has considered any submitted objections to the Class Settlement and

hereby overrules them.

9. The Parties are hereby directed to implement and consummate the Class

Settlement according to the terms and provisions of the Class Settlement Agreement. In addition,

the Parties are authorized to agree to and adopt such amendments and modifications to the Class

Settlement Agreement, or any Exhibits attached thereto, to effectuate the Class Settlement if they

(i) are consistent in all material respects with this Judgment, and (ii) do not limit the rights of the

Class in connection with the Class Settlement. Without further order of the Court, the Parties

may agree to reasonable extensions of time to carry out any of the provisions of the Class


Dis~~issal of Clainxs ai d Release

10. Except as to any individual claim of those Persons who have been excluded from

the Class (identified in Exhibit A attached hereto), the Class Action Lawsuit and all claims

487417.1 g


asserted therein are dismissed with prejudice as to the Plaintiffs and the other Members of the

Class, and as to each and all of the Defendants. The Parties are to bear their own costs, except as

otherwise provided in the Class Settlement Agreement.

11. The Court finds, after review of the record of this Class Action Lawsuit, including

the Second Consolidated Amended Class Action Complaint and the dispositive motions, that

during the course of the Class Action Lawsuit, the Parties and their respective counsel at all

times complied with the requirements of Rule 11 of the Federal Rules of Civil Procedure, and

particularly with Rule 11(b) of the Federal Rules of Civil Procedure.

12. Upon the Effective Date of the Class Settlement (as defined in Paragraph 38 of

the Class Settlement Agreement), the Settlement Class (as defined in Paragraph 1(d) of the Class

Settlement Agreement, other than those Persons or entities listed on Exhibit A who have timely

and validly requested exclusion from the Class), shall be deemed to have, and by operation of the

Judgment shall have, fully, finally, and forever released, relinquished, and discharged all

Released Claims (as defined in Paragraph 1(qq) of the Class Settlement Agreement) to the full

extent set forth in the Class Settlement Agreement, including Unknown Claims (as defined in

Paragraph 1(ddd) of the Class Settlement Agreement), as against the Released Defendant Parties

(as defined in Paragraph 1(rr) of the Class Settlement Agreement).


the Settlement Agreement), Defendants, on behalf of themselves, and their heirs, executors,

trustees, administrators, predecessors, successors, and assigns, shall be deemed to have, and by

operation of this Judgment shall have, fully, finally, and forever released, relinquished, and

discharged the Released Plaintiff Parties (as defined in Paragraph 1(uu) of the Class Settlement

Agreement) from all claims related to the commencement, continuation, or prosecution of

487417.1 9


Released Defendants' Claims (as defined in Paragraph 1(ss) of the Class Settlement Agreement),

as set forth in the Class Settlement Agreement.


the Class Settlement Agreement), all Class Members, either directly, representatively, or in any

other capacity (other than those Persons ox entities listed on Exhibit A who have timely and

validly requested exclusion from the Class), are hereby permanently enjoined from commencing,

continuing, or prosecuting against any or all Released Defendant Parties (as defined in Paragraph

1(rr) of the Class Settlement Agreement) any action or proceeding in any court or tribunal

asserting any of the Released Claims (as defined in Paragraph 1(qq) of the Class Settlement

Agreement). Upon the Effective Date, and without any further action, the Lead Plaintiffs further

shall not knowingly and voluntarily assist in any way any third party in commencing or

prosecuting any suit against the Released Defendant Parties relating to any Released Claim,

including any derivative suit not otherwise released.

15. Each Class Member (other than those Persons or entities listed on Exhibit A who

have timely and validly requested exclusion from the Class), whether or not such Class Member

executes and delivers a Proof of Claim form, is bound by this Judgment, including, without

limitation, the release of claims as set forth in the Class Settlement Agreement and this

Judgment.

16. Any plan for allocating the Net Class Settlement Fund (as defined in Paragraph

1(ee) of the Class Settlement Agreement) to eligible Class Members submitted by Class Counsel

or any order regarding the Fee and Expense Application (as defined in Paragraph 13 of the Class

Settlement Agreement), or any appeal modification or change thereof, shall in no way disturb or

affect this Judgment or any releases contained therein, and shall be considered separate from this

487417.1 1 ~


Judgment.

17. This Judgment, the Class Settlement Agreement and its terms, the negotiations

leading up to the Class Settlement Agreement, the fact of the Class Settlement, and the

proceedings taken pursuant to the Class Settlement, shall not: (1) be construed as an admission of

liability or an admission of any claim or defense on the part of any party, in any respect; (2) form

the basis for any claim of estoppel by any third party against any of the Released Defendant

Parties; or (3) be admissible in any action, suit, proceeding, or investigation as evidence, or as an

admission, of any wrongdoing or liability whatsoever by any of the Released Defendant Parties

or as evidence of the truth of any of the claims or allegations contained in any complaint filed in

the Class Action Lawsuit or deemed to be evidence of or an admission or concession that Lead

Plaintiffs or any Class Members have suffered any damages, harm, or loss. Neither this

Judgment, the Class Preliminary Approval Order, the Class Settlement Agreement, nor any of

their terms and provisions, nor any of the negotiations or proceedings connected with them, nor

any action taken to carry out this Judgment, the Class Preliminary Approval Order, or the Class

Settlement Agreement by any of the Parties shall be offered into evidence, or received in

evidence in any pending or future civil, criminal, or administrative action, arbitration, or

proceeding, except: in a proceeding to enforce this Judgment, the Class Preliminary Approval

Order, the Class Settlement Agreement, or to enforce any insurance rights; to defend against the

assertion of Released Claims (including to support a defense or counterclaim based on. principles

of res judicata, collateral estoppel, release, good faith settlement, judgment bar, or reduction); by

Lead Counsel to demonstrate its adequacy to serve as class counsel pursuant to Federal Rule

23(g) (or its state law analogs); subject to the prohibited purposes identified in Paragraph 46 (a)-

(e) of the Class Settlement Agreement and in Paragraph 17(1)-(3) above; or as otherwise

4874171 11


required by law.

Coi~tiizs~~ J~arisdictio~~

18. Without affecting the finality of this Judgment, the Court retains continuing and

exclusive jurisdiction over all matters relating to administration, consummation, enforcement,

and interpretation of the Class Settlement Agreement, the Class Settlement, and of this

Judgment, to protect and effectuate this Judgment, and for any other necessary purpose.

Defendants, Class Representatives, and Class Members are hereby deemed to have irrevocably

submitted to the exclusive jurisdiction of this Court for the purpose of any suit, action,

proceeding, or dispute arising out of or relating to the Class Settlement or the Class Settlement

Agreement, including the Exhibits thereto, and only for such purposes. Without limiting the

generality of the foregoing, and without affecting the finality of this Judgment, the Court retains

exclusive jurisdiction over any such suit, action, or proceeding. Solely for purposes of such suit,

action or proceeding, to the fullest extent they may effectively do so under applicable law,

Defendants, Class Representatives, and Class Members are hereby deemed to have irrevocably

waived and agreed not to assert, by way of motion, as a defense or otherwise, any claim or

objection that they are not subject to the jurisdiction of this Court, or that this Court is, in any

way, an improper venue or an inconvenient forum.

19. With respect to any future hearing or determination of any investment or

distribution of the Net Class Settlement Fund to Class Members, the Plan of Allocation, the

determination, administration, or calculation of claims by claimants and attorneys' fees of Class

Counsel, or the payment or withholding of taxes of the Settlement Fund, Defendants have no

responsibility for, interest in, or liability in connection with such matters and do not have to

appear or participate in any hearing or determination for such separate matters.

487417.1 I Z


20. In the event that the Settlement does not become effective in accordance with the

terms of the Class Settlement Agreement or the Effective Date does not occur, or in the event

that the Class Settlement Fund, or any portion thereof, is returned to the Defendants, then this

Judgment shall be rendered null and void to the extent provided by and in accordance with the

Class Settlement Agreement and shall be vacated and, in such event, all orders entered and

releases delivered in connection herewith shall be null and void to the extent provided by and in

accordance with the Class Settlement Agreement.

21. This Judgment is a final, appealable judgment and there is no just reason for

the delay in the entry of this Judgment and it is to be entered forthwith by the Clerk in

accordance with Rule 58 of the Federal Rules of Civil Procedure.

It is so ORDERED this day of , 2015.

SAMUEL H. MAYS, JR.UNITED STATES DISTRICT JUDGE

487417.1 13


EXHIBIT A

List of Persons and Entitles Excluded from the Class in

In ~e Regions Morgan Keegan Open-End Fund Litigation,


The following persons and entities, and only the following persons and entities, have

properly excluded themselves from the Class:

487417.1 ~ 4


EXHIBIT 2


PROPOSED TERM SHEET FOR SETTLEMENT OF RMK OPEN-END FUNDSLITIGATION

Settling Defendants to pay cash of $125,000,000. Payment to be deposited in aninterest-bearing independent escrow account within 10 days after preliminary approvalby the Court.

2. Class approval: Lead and Derivative Plaintiffs and Funds shall move for preliminaryapproval within 60 days from the date hereof.

A percentage of Defendants' payment shall be allocated to the funds in settlement of theLandes derivative action subject to the approval of the Funds' board of directors. Theparties shall advise the Court that the pending motion For preliminary approval of thePartial Settlement between the class and the Funds and AMOU shall be withdrawn andshall be superseded by this settlement.

4. The Class representatives, Funds, and other Defendants shall execute mutual releasesand dismissals.

The following persons/entities shall be excluded from participating in this settlement,including the portion thereof allocated to the class and the portion thereof allocated tothe Funds:

a. Any and all entities related to the RMK organization—i.e., RFC and its direct andindirect subsidiaries.

b. Individuals named as defendants or related thereto; any entity in which anyexcluded party has a controlling interest; or any legal representatives, heirs,successors and assigns of any of the foregoing persons.

With respect to S.a. and S.b., Defendants shall provide a list of said persons andentities.

6. Additionally, RMK shall provide the releases, agreements or other bases for excludingfrom the settlement, including the portion thereof allocated to the class and to thederivative action, the following:

a. Individuals or entities identified by Defendants as having opted out of the class andderivative actions to pursue their claims in an individual court action, having filedan FINRA arbitration (that has not been dismissed on the express condition ofallowing the party to participate in the class), or having otherwise released theirclaims against the Funds and the other Defendants, including those identified onRMK Submission Ex. Y.

b. Individuals or entities represented by the Trustee ad Liten~ in a separate settlementwith soiree or all of the Defendants.

7. It is understood that the final settlement agreement will contain other standard terms ofsettlement. It is agreed that this Term Sheet sets forth certain material terms of thissettlement, and additional terms may be added.

8. Any disputes relating to this agreement will be submitted to Judge Layn Phillips formediation.


FOR PLAINTIFFS

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FOR THE Ft7NDS: J~~t ~'.

FOR DE NDANTS REG ONS et al.:

FOR PwC:


Documents

In Re Regions Morgan Keegan Securities, Derivative And ...securities.stanford.edu/filings-documents/1038/MAMI_01/2015122_r01x_07CV02784.pdfIN RE REGIONS MORGAN KEEGAN SECURITIES, DERIVATIVE