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1 SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN FRANCISCO JOSE M. CASAS and ALEX JIMENEZ, et al., individually and on behalf of others similarly situated, Plaintiffs, vs. PACIFIC BELL TELEPHONE COMPANY d/b/a AT&T CALIFORNIA, AT&T MOBILITY SERVICES LLC, and Does 1 through 100, inclusive, Defendants. Case No.: CGC NOTICE OF CLASS ACTION SETTLEMENT AND FINAL FAIRNESS AND APPROVAL HEARING Date: May 29, 2014 Time: 9:30 a.m. Dept: 302 Barcode BarDisplay FName LName Addr1 Addr2 City, St Zip-Zip4 Name / Mailing Address Changes: NOTICE TO CERTAIN CURRENT AND FORMER CALIFORNIA EMPLOYEES OF PACIFIC BELL TELEPHONE COMPANY D/B/A AT&T CALIFORNIA ( PACIFIC BELL ) AND AT&T MOBILITY SERVICES LLC ( AT&T ): This Notice relates to a settlement of a class action lawsuit and contains important information as to your right to receive payment, to elect to be excluded from the settlement class or to object to the settlement. Dear <<FName>> <<LName>>: You are eligible to receive an Individual Settlement Payment based on the number of weeks you worked in one or more of the job positions in the <<Class1>>/<<Class2>> <<[and] Subclass>> Settlement Class[es] (described in Section I below). Pacific Bell s and/or AT&T s employment records show that you worked <<WksWkd>> weeks and are eligible to receive an estimated payment of approximately $<<EstSet>>. Please note that the weeks worked listed above only reflect the qualifying dates and job titles for this Settlement and do not necessarily reflect all of your employment weeks. Only the workweeks worked in the Settlement Class periods (listed in Section I below) are eligible for payment pursuant to this Settlement. If you believe Pacific Bell s and/or AT&T s records are incorrect and want to correct the employment information above, you must notify the Settlement Administrator (listed in Section IV below) and provide documentation or other requested support for the correct employment weeks. The deadline for submitting a dispute of your employment is May 6, Pursuant to the Order of the Superior Court of the State of California, County of San Francisco, entered January 27, 2014, you are notified as follows: a proposed class settlement has been reached between the Parties in the above-captioned action and preliminarily approved by the Court, for current and former California employees of Pacific Bell and/or AT&T as described in Section I below. You have received this notice because Pacific Bell s and/or AT&T s records indicate that you are one of the individuals who fall within the Settlement Class. I. WHO IS INCLUDED IN THE SETTLEMENT CLASS? Casas Class: All persons who worked for Pacific Bell in the following job titles from July 5, 2007 through January 27, 2014 ( Casas Class Period ): Account Executive 1 TNSR ACQ ( ), Account Executive 1 ACQ ( ), Account Executive 1 ACQ ( ), Account Executive 1 TNSR ACQ ( ), Account Executive 1 ACQ RLBM ( ), Account Executive 1 ACQ NBM ( ), Account Executive 1 Acquisition ( ), Account Executive 1 ACQ RLBM ( ), Account Executive 1 ACQ NBM ( ), Account Manager BIS ( ), Account Manager OOR ( ), Account Manager BIS OOR ( ), Account Manager BIS ( ), Account Manager BIS OOR ( ), Account Manager Hybrid ( ), Account Manager Hybrid ( ), Account Executive 2 ACQ NBM ( ), Account Executive 2 Acquisition ( ), Account Executive 2 ACQ RLBM ( ), Acct Exec 2 ACQ NBM ( ), and Account Executive 2 New Bus Develop ACQ ( ). Jimenez Class: The settlement also includes all persons who worked for AT&T Mobility Services LLC in the following job titles and job keys from July 1, 2008 through January 27, 2014 ( Jimenez Class Period ): Business Account Executive ( ), Business Account Manager ( ), Account Manager-BIS ( ), Account Manager VDSL ( ), Account Manager OOR ( ), Solutions Account Manager OOR ( ), Account Manager-BIS ( ), Account Manager BIS OOR ( ), Account Manager Hybrid ( ), IRU Representative ( ), Account Manager Hybrid ( ) and Small Biz Advisor II. (S15001) Fair Labor Standards Act (FLSA) Sub-Class: In addition, all individuals who are members of the Casas and/or Jimenez Class, as defined above, at any time from January 27, 2011 through January 27, 2014 ( FLSA Class Period ), who submit an FLSA Opt-In Claim Form, are also part of the FLSA Sub-Class and will receive an additional amount per workweek worked 1

2 in the FLSA Class Period. IF YOU ARE AN FLSA SUB-CLASS MEMBER, THE FLSA OPT-IN FORM IS INCLUDED WITH THIS NOTICE AND MUST BE COMPLETED BY YOU AND RETURNED TO THE SETTLEMENT ADMINSTRATOR NO LATER THAN MAY 6, Excluded from each of the above classes are: (1) those individuals who have previously signed a general release of all claims against AT&T pursuant to a severance agreement, and (2) those individuals who released all wage claims pursuant to the settlement of Mahoney, et al. v. AT&T Corp., et al., unless such persons were employed in one of the above job positions at any time after January 8, 2010, and (3) those individuals who released all wage claims pursuant to the settlement of Chu and Cantu, et al. v. Pacific Bell, et al., unless such persons were employed in one of the above job positions at any time after September 25, II. WHAT IS THIS CASE ABOUT? This Settlement resolves a lawsuit (the Litigation ) filed by two former employees of Pacific Bell, Jose M. Casas, and AT&T, Alex Jimenez ( Class Representatives or Plaintiffs ). Plaintiffs were employed as Account Executives and/or Account Managers and were classified as exempt from overtime. Plaintiffs allege that Pacific Bell and AT&T improperly classified certain California Account Executives and Account Managers, described in Section I, as exempt from overtime compensation and failed to pay these employees all wages. On behalf of themselves and the other Settlement Class Members, Plaintiffs sought payment for alleged unpaid overtime wages, missed meal and rest period payments, failure to pay wages due at time of termination, failure to furnish timely and accurate wage statements, failure to reimburse all business related expenses, payment of less than the contractual wage, failure to provide an explanation of incentive compensation, and related statutory and civil penalties. Pacific Bell and AT&T deny the claims of the Class Representatives and contends that Account Executives and Account Managers were properly classified as exempt under both Federal and California law, and Plaintiffs and the Classes they seek to represent were paid all wages due, reimbursed for all known business related expenses, were provided with all legally required meal and rest breaks, were provided with an explanation of incentive compensation, and were paid at least the contractual wage. Prior to the filing of the Litigation, there was ongoing investigation and information exchanged by the Parties. The Parties participated in extensive settlement discussions, including a mediation conference before a neutral and widely respected mediator. As a result of the mediation, the Parties reached a proposed settlement on April 3, The Parties have entered into a Joint Stipulation for Class Action Settlement and Release of Claims: ( Settlement Agreement ), which was preliminarily approved by the Court. The Class Representatives and Settlement Class Counsel support this Settlement. Among the reasons for their support are the complete defenses to liability available to Pacific Bell and AT&T, the inherent risk of trial, and the delays associated with ongoing litigation. If you are a member of one or more of the Classes as defined in Section I above, you may participate in the Settlement. This Settlement includes (a) payment of Individual Settlement Amounts to Settlement Class Members; (b) entry of a judgment and final order approving the Settlement; and (c) discharge and complete release of all Parties and their respective counsel from liability for any and all of the Released Claims. This Judgment and Final Order shall bar the Plaintiffs and each Settlement Class Member who has not been excluded from the Settlement Class from bringing any action asserting Released Claims as that term is defined in the Settlement Agreement. III. WHO ARE THE LAWYERS REPRESENTING THE PARTIES? Counsel for Plaintiffs and the Classes ( Settlement Class Counsel ): GOLDSTEIN, BORGEN, DARDARIAN & HO JAMES KAN GRAHAMHOLLIS APC KATRINA L. EILAND GRAHAM S.P. HOLLIS 300 Lakeside Drive, Suite 1000 MARTA MANUS Oakland, CA Fifth Avenue Telephone: (510) San Diego, CA Facsimile: (510) Telephone: (619) Facsimile: (619) Counsel for AT&T ( Defense Counsel ): MCGUIREWOODS LLP MATTHEW C. KANE MICHAEL D. MANDEL CHRISTOPHER A. KILLENS 1800 Century Park East, Suite 800 Los Angeles, CA Telephone: (310) Facsimile: (310) Copies of any documents filed with the Court in this Litigation should be sent to the above-listed counsel. IV. WHO IS THE SETTLEMENT ADMINISTRATOR? Gilardi & Co. LLC P.O. Box 1110 Corte Madera, CA Telephone:

3 V. WHAT ARE THE TERMS OF THE PROPOSED SETTLEMENT? The Settlement provides for the terms summarized below. A complete copy of the Settlement Agreement may be examined Mondays through Fridays, between 8:30 a.m. and 4:00 p.m., in the office of the Clerk of the Court of the Superior Court, County of San Francisco, located at 400 McAllister Street, San Francisco, California, The Settlement Agreement can also be found online at A. Qualified Settlement Fund. The total and all-inclusive Settlement Sum shall be a maximum of $6,000, This Settlement Sum shall be paid into a Qualified Settlement Fund. All Settlement Amounts to be paid under the Settlement Agreement shall be paid out of this Qualified Settlement Fund. Such Settlement Amounts shall include all amounts to be paid to Plaintiffs and Settlement Class Members including any FLSA Sub-Class Members who submit an FLSA Opt-In Claim Form; all amounts to be paid to Settlement Class Counsel as the Attorneys Fees and Costs; all amounts to be paid as a Service Award to Plaintiffs; all amounts to be paid as Settlement Administration Costs to the Settlement Administrator; all amounts required to be paid by AT&T as federal, state, and local payroll taxes (including both employer taxes and any employee withholdings) with respect to Individual Settlement Amounts paid to Settlement Class Members or any other Settlement Amounts paid to Settlement Class Counsel, the Settlement Administrator, the payment to the California Labor and Workforce Development Agency for its portion of the amount paid to settle alleged claims for California Labor Code Private Attorney General Act penalties, and any other Settlement Amounts to be paid according to the Settlement Agreement. All of these payments are subject to the final approval of the Court. B. Settlement Administration Costs. All costs of administering the Settlement ( Settlement Administration Costs ) shall also be paid from the Qualified Settlement Fund. These costs are anticipated not to exceed $25,000. C. Attorneys Fees and Costs. Settlement Class Counsel will be paid up to 33-1/3% of the Qualified Settlement Fund, which equals approximately $2,000, for attorneys fees and reasonable and actual costs in prosecuting this Litigation ( Attorneys Fees and Litigation Costs ). D. Service Awards Payable to Plaintiffs. Subject to Court approval, the Class Representative Casas shall receive a Service Award of $20,000, and Class Representative Jimenez shall receive a Service Award of $10,000, in recognition for the services they rendered in obtaining the Settlement for the benefit of the Settlement Class, as described herein, and the financial risks undertaken by the Plaintiffs in pursuing this matter on behalf of the Settlement Class. E. Payment to the California Labor and Workforce Development Agency. The Parties agree to allocate $13, of the Qualified Settlement Fund as penalties authorized by the California Labor Code Private Attorneys General Act. By law, seventy-five percent (75%) of this amount will be paid to the California Labor and Workforce Development Agency and twenty-five percent (25%) of this amount will be distributed to the participating Settlement Class members in proportion to their Individual Settlement Amounts. F. Settlement Amounts Payable to Settlement Class Members. Settlement Class Members shall be paid their Individual Settlement Amount from the Qualified Settlement Fund after deduction of (1) Settlement Administration Costs; (2) Attorneys Fees and Litigation Costs; (3) Service Awards to the Class Representatives; and (4) amounts paid to the California Labor and Workforce Development Agency for California Labor Code Private Attorneys General Act penalties. The amount left after these deductions from which to pay Settlement Class Members is estimated to be approximately $3,935, ( the Net Settlement Fund ). The Net Settlement Fund shall be allocated between the Casas Class and the Jimenez Class based on the proportional value of the claims of the Casas Class and Jimenez Class. Individual Settlement Amounts will be determined by multiplying the number of Qualifying Work Weeks worked by each Settlement Class Member in the Casas Class and/or Jimenez Class during the Class Period by a Weekly Recovery value to be determined by the Settlement Administrator. Forty percent (40%) of the Net Settlement fund shall be allocated to the Casas Class. The Casas Class members are estimated to receive approximately $1,574, of the Net Settlement Fund. Five percent (5%) of the Net Settlement Fund allocated to the Casas Class shall be allocated to the FLSA Sub-Class members who worked in one or more of the job positions in the Casas Class during the FLSA Class Period. Sixty percent (60%) of the Net Settlement Fund shall be allocated to the Jimenez Class. The Jimenez Class members are estimated to receive approximately $2,361, of the Net Settlement Fund. Five percent (5%) of the Net Settlement Fund allocated to the Jimenez Class shall be allocated to the FLSA Sub-Class members who worked in one or more of the job positions in the Jimenez Class during the FLSA Class Period. 3

4 In order to receive the additional payment as a member of the FLSA Sub-Class, FLSA Sub-Class members must submit their FLSA Opt-In Claim Form. If you are a member of the FLSA Sub-Class, the necessary FLSA Opt-In Claim Form is enclosed. Settlement Class Members who were presented with and did not opt-out of AT&T s Management Arbitration Agreement ( MAA ) will receive 25% less per work week than Settlement Class Members who were not presented with the MAA or who opted-out of the MAA. This is due to the additional defense that AT&T s MAA presents against the wage and hour claims of individuals subject to the MAA. G. Tax Treatment of Individual Settlement Amounts. The Individual Settlement Amounts paid to each Settlement Class Member will be allocated equally between payment for wages and payment for interest, liquidated damages, and penalties. That portion of each Settlement Class Member s Individual Settlement Amount representing wages will be subject to normal employment tax withholdings and an IRS Form W-2 will be provided to each Settlement Class Member. That portion of each Settlement Class Member s Individual Settlement Amount constituting interest, liquidated damages, and penalties will be reported on an IRS Form 1099 provided to each Settlement Class Member, with required copies of the IRS Form 1099 provided to the pertinent taxing authorities. VI. WHAT ARE MY RIGHTS AS A SETTLEMENT CLASS MEMBER? A. How do I receive a payment from the Settlement? You do not need to do anything to receive your Individual Settlement Payment as part of the Casas Class and/or the Jimenez Class. But if you are also a member of the FLSA Sub-Class, you must complete and sign the enclosed FLSA Opt-In Claim Form and mail it to the Settlement Administrator in order to receive the additional FLSA Payment. Your envelope must be mailed by first class mail and be postmarked no later than May 6, 2014 to: Casas & Jimenez et al. v. AT&T Class Action Settlement c/o Gilardi & Co. LLC P.O. Box 1110 Corte Madera, CA If you lose, misplace, need another FLSA Opt-In Claim Form or believe you have not been sent the necessary forms, you can either print the forms from the website: or contact the Settlement Administrator at or Class Counsel listed in Section III above. B. What if I do nothing? You may decide to do nothing. If you are a member of the Casas or Jimenez Class you will receive your share of the settlement if the settlement is approved according to Paragraph VIII below. HOWEVER, IF YOU ARE A MEMBER OF THE FLSA SUB-CLASS YOU MUST COMPLETE AND RETURN THE FLSA OPT-IN CLAIM FORM TO RECEIVE THE ADDITIONAL PAYMENT AS A MEMBER OF THE FLSA SUB-CLASS. Unless you exclude yourself from the settlement you will be bound by the terms of the Settlement Agreement and/or by any other final disposition of this litigation. Specifically, you will be bound by the terms of the release as described in Section VII below and therefore be barred from pursuing the state law wage and hour claims described below against Pacific Bell Telephone Company, AT&T Mobility Services LLC, AT&T Mobility Corporation, and all other related entities or persons. C. How do I exclude myself from the Settlement? If you do not wish to participate in the Settlement, you may exclude yourself ( opt out ) by sending a Request for Exclusion to the Settlement Administrator listing your name, address, and phone number, along with the following statement: I do not wish to participate in or be bound by the Casas, et al. v. AT&T class action settlement. The Request for Exclusion must be completed, signed, dated, and returned to the Settlement Administrator as follows: Casas & Jimenez et al. v. AT&T Class Action Settlement c/o Gilardi & Co. LLC P.O. Box 1110 Corte Madera, CA The Request for Exclusion must be mailed via First-Class Mail and postmarked no later than May 6, Any person who files a complete and timely Request for Exclusion shall, upon receipt, no longer be a member of the Settlement Class, shall be barred from participating in any portion of the Settlement, and shall receive no benefits from the Settlement. Any such person, at his/her own expense, may pursue any claims he/she may have against Pacific Bell and/or AT&T. However, there are deadlines to pursuing such claims, known as statutes of limitation. Please consult an attorney of your choice to ensure you are not forever barred from pursuing your individual claim if you decide to opt out of this Settlement. 4

5 D. How do I object to the Settlement? You may object to the terms of the Settlement before final approval. If you choose to object to the Settlement, you may represent yourself or hire your own attorney. You must file a written objection and notice of intention to appear at the Final Fairness and Approval Hearing described below in Section VIII. You must file these documents, along with any briefs, exhibits, and/or other material that you wish the Court to consider, with the Clerk of the Court, Superior Court of California for the County of San Francisco, at 400 McAllister Street, San Francisco, CA In addition, you must send copies to Settlement Class Counsel and Defense Counsel identified in Section III above. Any written objections should state each specific reason for your objection and any legal support for each objection. Your objection must also state your full name, address, and the dates of your employment by Pacific Bell and/or AT&T in a California exempt position listed in Section I. To be valid and effective, any objections to the proposed Settlement must be filed with the Clerk of the Court and served upon each of the above-listed attorneys no later than May 13, If the Court rejects your objection, you will be bound by the terms of the Settlement unless you submit a Request for Exclusion. If the Court approves the Settlement despite any objections, unless you submit a Request for Exclusion, you will receive your Individual Settlement Amount and release the claims described below. VII. RELEASE OF CLAIMS. As described in Section II, above, Plaintiffs allege that Pacific Bell and AT&T improperly classified certain California Account Executives and Account Managers (described in Section I, above) as exempt from overtime compensation, failed to pay these employees all wages due to them, and otherwise violated various provisions of California law. On behalf of themselves and the other Settlement Class Members, Plaintiffs sought payment for alleged unpaid overtime wages, missed meal and rest period payments, failure to pay wages due at time of termination, failure to furnish timely and accurate wage statements, failure to reimburse all business-related expenses, payment of less than a contractually-agreed upon wage, failure to provide an explanation of incentive compensation, maintenance of an unlawful use it or lose it vacation pay policy, and related statutory and civil penalties. Unless you opt out of this Settlement, you will release all of the claims alleged by Plaintiffs against Pacific Bell Telephone Company d/b/a AT&T California and AT&T Mobility Services LLC, and its current or former subsidiaries, parents, affiliates, predecessors, insurers, agents, partners, employees, successors, assigns, officers, officials, directors shareholders, attorneys, benefit plans, administrators and trustees (collectively the Released Parties ), as well as any claims that arise out of the same facts that the Plaintiffs alleged in the lawsuit. The released claims include all claims relating to the designation and treatment of you by Defendants (or any Released Parties) as exempt from overtime compensation, including claims for violations of any state or federal statutes (except for the FLSA), rules, or regulations. This includes, but is not limited to, claims that, during the Class Periods, Defendants: (1) failed to pay overtime or any other wages due under California state law; (2) failed to provide legally-required meal and rest periods or pay wages due for such failure; (3) failed to timely furnish accurate itemized wage statements; (4) engaged in conduct subjecting it to any statutory or civil penalties under any statute, ordinance, or otherwise arising from or related to the classification of you as exempt from overtime, including, without limitation, California Labor Code section 2698, et seq. ( The Labor Code Private Attorney General Act of 2004 or PAGA ) and Labor Code Sections 203 and 226; (5) engaged in any unfair business practices; and (6) failed to pay all wages due to you upon termination of employment. The released claims also include claims that Defendants (and the Released Parties) failed to pay wages (including commissions) agreed upon pursuant to the sales compensation plan, failed to provide an explanation of the incentive plan formula, failed to maintain accurate production records, and maintained an unlawful vacation policy in violation of Labor Code section 227.3, and any other claims that arise out of the same facts the Plaintiffs alleged. The Plaintiffs also alleged that Defendants did not fully or accurately reimburse them for certain business expenses. Unless you exclude yourself from the Settlement, you will be deemed to have received full and complete reimbursement of all businessrelated expenses of the type alleged in the lawsuit, and you may be precluded from further recovery for any such expenses. Unless you opt out of the Settlement, you will also waive all rights and benefits afforded by California Civil Code section 1542, which provides that 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. This means that you will release the claims described above even if you did not know that such claims existed. 5

6 Finally, if you are an FLSA Sub-Class Member and you timely submit an FLSA Opt-In Claim Form, you will also release all of the above-mentioned claims that might arise under the federal Fair Labor Standards Act. Settlement Class Members who do not submit an FLSA Opt-In Claim Form will not release their claims under the FLSA. VIII. FINAL SETTLEMENT APPROVAL HEARING. The Superior Court of California, County of San Francisco, will hold a hearing in Department 302, 400 McAllister Street, San Francisco, CA 94102, on May 29, 2014 at 9:30 a.m. to determine whether the Settlement should be finally approved as fair, reasonable, and adequate. The Court also will be asked to approve Settlement Class Counsel s request for attorneys fees and reimbursement of costs and expenses and the Service Award to be paid to Plaintiffs. The hearing may be continued without further notice to the Settlement Class. It is not necessary for you to appear at this hearing unless you object to the proposed Settlement and you have timely filed an objection with the Court. IX. ADDITIONAL INFORMATION. The above is a summary of the basic terms of the Settlement. For the precise terms and conditions of the Settlement, you should consult the complete Settlement Agreement, which is on file with the Clerk of the Court. The pleadings and other records in this lawsuit, including the Settlement Agreement, may be examined at any time during regular business hours (Monday-Friday, 8:30 a.m. to 4:00 p.m.) at the Office of the Clerk, Superior Court of California, County of San Francisco, 400 McAllister Street, San Francisco, CA Please put your Social Security Number on all correspondence to Settlement Class Counsel and to the Settlement Administrator. If you move after receiving this notice, or if it was incorrectly addressed, please provide your correct address to the Settlement Administrator, Gilardi & Co. LLC. A complete copy of the Settlement Agreement and other Court documents can also be found online at PLEASE DO NOT TELEPHONE THE COURT FOR INFORMATION REGARDING THIS SETTLEMENT OR THE CLAIM PROCESS. ALL QUESTIONS REGARDING THE SETTLEMENT SHOULD BE DIRECTED TO THE SETTLEMENT ADMINISTRATOR. 6