ADAMS ESOP LITIGATION

ADAMS ESOP LITIGATION
Foster, et al. v. Adams and Associates, Inc., et al
Case No. 18-cv-02723-JSC
United States District Court
Northern District of California – San Francisco Division

The Court has vacated the Fairness Hearing scheduled for February 16, 2022 and granted Final Approval on February 11, 2022. A copy of the Order is available on the Court Documents page. Unless someone files an appeal, the settlement will become final and non-Appealable on April 13, 2022.

The Class for the settlement of this lawsuit is defined as: All participants in the Adams and Associates, Inc. Employee Stock Ownership Plan (“the ESOP” or “the Plan”) from October 25, 2012 to December 30, 2020, who vested under the terms of the Plan and those participants’ beneficiaries. Excluded from the Class are Defendants and their immediate family, any fiduciary of the Plan; the officers and directors of Adams and Associates or of any entity in which a Defendant has a controlling interest; and legal representatives, successors, and assigns of any such excluded persons.

If you meet the definition of the Class and are not excluded as set forth above, you are a member of the Class.

The lawsuit alleges on behalf of the Class that the Defendants breached their fiduciary duties and engaged in prohibited transactions by causing the ESOP to purchase Adams and Associates, Inc. (“AAI”) company stock for more than fair market value in a transaction that took place on October 25, 2012. The lawsuit also alleges that AAI failed to make proper disclosures to participants in the ESOP and that certain indemnification provisions in the ESOP and other documents that purport to require AAI to be responsible for the liability of Defendants are void as against public policy under the Employee Retirement Income Security Act (ERISA).

The Settlement requires Defendants (other than AAI) to pay $3 million to resolve the claims and to also provide additional non-monetary relief, including issuing a new summary plan description (SPD) for the ESOP. After subtracting court-approved attorneys’ fees and expenses and service awards for the class representatives, the remaining amount of the $3 million settlement payment will be distributed to the participant Class members (and beneficiaries who would be entitled to payment under the terms of the Plan).

The Court will hold a hearing on February 17, 2022, at 9:00 a.m. PST, in the courtroom of Judge Jacqueline Scott Corley at the United States District Courthouse in San Francisco, California, to decide whether the Settlement is fair, reasonable, and adequate, and whether and in what amount to award Class Counsel with attorneys’ fees and reimbursement of expenses and the class representatives with service awards.

The following are the rights and options of the Class Members who received a Notice and of the individuals who did not receive a Notice but believe that they are a Class Member:

SUMMARY OF YOUR LEGAL RIGHTS & OPTIONS
ALL MEMBERS OF THE CLASS	OPTION #1(A): ELECT TO RECEIVE YOUR PAYMENT BY CHECK OR TAKE A ROLLOVER. If You received a Notice and You are eligible for an immediate distribution from the AAI 401(k) Plan, you may elect to receive a distribution by check or take a rollover by returning an election form by February 17, 2022 to the address listed in the Election Form. OPTION #1(B): DO NOTHING NOW, BUT LATER ELECT A ROLLOVER OR HAVE YOUR PAYMENT REMAIN IN THE AAI 401(K) PLAN. If You received a Notice and You are not eligible for an immediate distribution (or you do not elect to take a distribution now), your settlement payment will be transferred to the AAI 401(k) Plan. You may then elect to take a rollover or provide instructions about how to invest your settlement monies (if you want to leave the money in the 401(k) Plan). If you do not currently have an account in the 401(k) Plan, one will be created for you, and if you do not provide other instructions, the monies will be invested in the default investment option for the Plan.
	OPTION #2: SUBMIT A CHALLENGE TO THE DATA. If you believe that the data about your shares is incorrect OR you believe that you are a class member but did not receive a personalized notice sent to you, you can submit information explaining why the data needs to be corrected or why you are a Class Member. You need to submit this challenge by January 10, 2022 at the address listed below.
	OPTION #3: OBJECT. If you are not satisfied with the terms of the proposed Settlement, then you or your attorney may inform the Court by sending a letter or written statement by January 10, 2022 at the address listed under the Question “How Do I Tell The Court What I Think About the Settlement ?” in the Notice.
	YOU ARE ABLE TO CHOOSE MORE THAN ONE OPTION: If you object or challenge data, you may still request a distribution or provide instructions about the investment of your settlement proceeds.

For additional details about the Settlement, you may view the Court Documents available on this website.