According to the Company’s Form 10-K for the fiscal year ended June 30, 2004, after a hearing on the final settlement agreement, the court entered an order approving the settlement and dismissing the Ruble case with prejudice on December 10, 2003. The state action filed on August 25, 1998 in Pima County, Arizona Superior Court, which contained virtually identical allegations as the federal action, was dismissed with prejudice on January 13, 2004.
By the Notice of Pendency and Proposed Settlement, the parties reached an agreement-in-principle to settle the action. The proposed settlement creates a fund in the amount of $15,000,000 in cash and will include interest that accrues on the fund prior to distribution (the "Settlement Fund"). Based on Representative Plaintiffs' estimate of the number of shares entitled to participate in the settlement, and the anticipated number of claims to be submitted by Class Members, the average distribution per share would be approximately $3.30 before deduction of court-approved fees and expenses.
If the settlement is approved by the Court, counsel for the plaintiffs will apply to the Court for attorneys' fees of 25% of the settlement proceeds and reimbursement of out-of-pocket expenses not to exceed $750,000 to be paid from the settlement proceeds. If the amount requested by counsel is approved by the Court, the average cost per share would be $0.99. The average cost per share could vary depending on the number of shares for which claims are filed.
Also, Rural/Metro and certain of its former officers and directors were named in another purported class-action lawsuit in 1998. Haskell v. Rural/Metro Corporation, et al. Haskell was filed August 25, 1998 in Pima County, Arizona, Superior Court.
The lawsuits, which contained virtually identical allegations, were brought on behalf of a class of persons who purchased the company's publicly traded securities including its common stock between April 28, 1997 and June 11, 1998. The Haskell case was stayed while the Ruble case moved forward. In March 2002, the court dismissed claims against some of the individual defendants in the Ruble case, allowing only limited claims against the Company and Warren Rustand, the Company's former CEO, to proceed. According to the terms of the Ruble settlement, both the Ruble and Haskell cases will be dismissed.