"FREQUENTLY ASKED QUESTIONS"
FREQUENTLY ASKED QUESTIONS 1. Why did I get the notice package? You or someone in your family may have purchased Mercury Interactive Corporation (“Mercury”) securities (including common stock, options, other equity securities, and debt securities) during the period beginning September 8, 2001 through July 3, 2006 (the “Class Period”). The Notice has been sent to you pursuant to Rule 23 of the Federal Rules of Civil Procedure and an Order of the United States District Court for the Northern District of California (the “Court”). The purpose of the Notice is to inform you of the pendency and proposed settlement of this class action litigation and of the hearing to be held by the Court to consider the fairness, reasonableness, and adequacy of the settlement. The Notice is not intended to be, and should not be construed as, an expression of any opinion by the Court with respect to the truth of the allegations in the Litigation or the merits of the claims or defenses asserted. The Notice describes the rights you may have in connection with the settlement and what steps you may take in relation to the settlement and this class action litigation. Please read the Notice carefully and in its entirety. Your rights may be affected by proceedings in this Litigation. Please note that if you are a Class Member, you may be entitled to share in the proceeds of the settlement described in the Notice. 2. What is this lawsuit about? On and after August 19, 2005, the following actions were filed in the United States District Court for the Northern District of California (the “Court”) as securities class actions on behalf of purchasers of Mercury securities during defined periods of time. CASE NAME CASE NUMBER Archdiocese of Milwaukee Supporting Fund, Inc. C 05-3395 JF v. Mercury Interactive Corporation, et al. Johnson v. Mercury Interactive Corporation et al. C 05-3864 JF Munao v. Mercury Interactive Corporation et al. C 05-4031 JF Singhal v. Mercury Interactive Corporation et al. C 05-4036 JF Public Employees’ Retirement System of Mississippi C 05-5157 JF v. Mercury Interactive Corporation et al. These actions were consolidated under case number 5:05-CV-3395-JF for all purposes by an order filed on or about December 8, 2005. The consolidated actions are referred to herein collectively as the “Litigation.” On May 5, 2006, Mercury Pension Fund Group, which is comprised of the Steamship Trade Association/International Longshoreman’s Association Pension Fund, the City of Sterling Heights General Employees Retirement System, the City of Dearborn Heights Police and Fire Retirement System, and the Charter Township of Clinton Police and Fire Pension System, was appointed as Lead Plaintiffs. On or about September 8, 2006, Lead Plaintiffs, individually and on behalf of all other persons and entities similarly situated, filed and served a Consolidated Class Action Complaint (the “Complaint”) against Mercury, the Individual Defendants and PwC. The Complaint alleges violations of Section 10(b) of the Exchange Act and Rule 10b-5 against Mercury and the Individual Defendants, violation of Section 20(a) of the Exchange Act against the Individual Defendants, and violations of Section 10(b) and Rule 10b-5 against PwC. On November 7, 2006, seven separate motions to dismiss the Complaint were filed by: (1) PwC; (2) Abrams; (3) Skaer; (4) Smith; (5) Mercury; (6) Landan; and (7) Kohavi, Shamir and Yaron. Defendants also joined in various portions of each other’s motions. Lead Plaintiff filed oppositions. On July 30, 2007, the Court granted the motions to dismiss with leave to amend. Lead Plaintiffs have not yet filed an amended complaint. With respect to Part III(1) (b) (i) of the Court’s July 30, 2007 order, which held that “the class should not include individuals or entities that purchased Mercury stock prior to September 8, 2001” and dismissed the claims asserted in the Complaint on behalf of purchasers during the period October 17, 2000 through September 7, 2001 as barred by the statute of limitations, Lead Plaintiffs and Plaintiffs’ Lead Counsel have determined, after research and investigation, that the Complaint cannot be amended to avoid the statute of limitations as applied by the Court with respect to claims of purchasers before September 8, 2001. 3. Why is this a class action? In a class action, one or more persons or entities called lead plaintiffs sue on behalf of people who, the Court determines, are similarly situated. In this case the lead plaintiffs are Mercury Pension Fund Group, which is comprised of the Steamship Trade Association/International Longshoreman’s Association Pension Fund, the City of Sterling Heights General Employees Retirement System, the City of Dearborn Heights Police and Fire Retirement System, and the Charter Township of Clinton Police and Fire Pension System. Bringing a case, such as this one, as a class action allows adjudication of many similar claims of persons and entities that might be economically too small to bring in individual actions. One court resolves the issues for all Class Members, except for those who exclude themselves from the Settlement Class. 4. Why is there a settlement? The Lead Plaintiffs believe that the claims asserted in the Litigation have merit and that the evidence developed to date supports the claims. However, Plaintiffs’ Lead Counsel recognize and acknowledge the expense and length of continued proceedings necessary to prosecute the Litigation against the Defendants through trial and through appeals. Plaintiffs’ Lead Counsel also has taken into account the uncertain outcome and the risk of any litigation, especially in complex actions such as the Litigation, as well as the difficulties and delays inherent in such litigation. Plaintiffs’ Lead Counsel also is mindful of the inherent problems of proof under and possible defenses to the securities law violations asserted in the Litigation. Plaintiffs’ Lead Counsel believes that the settlement set forth in the Stipulation confers substantial benefits upon the Class. Based on their evaluation, Plaintiffs’ Lead Counsel has determined that the settlement set forth in the Stipulation is in the best interests of the Lead Plaintiffs and the Class. 5. How do I know if I am part of the Class? You are a member of the Class if you fit the following: all Persons and entities who purchased or otherwise acquired securities of Mercury (including common stock, options, other equity securities, and debt securities) either directly or by dividend re-investment during the Class Period, and their respective executors, administrators, representatives, agents, attorneys, successors, heirs and/or assigns. 6. Are there exceptions to being included? Excluded from the Settlement Class are the Defendants; members of Defendants’ immediate families; all individuals who are either current officers and/or directors, or who served as officers and directors at any time during the Settlement Class Period or any of the Defendants; Defendants’ subsidiaries; any person, firm, trust, corporation, officer, director or other individual or entity in which any Defendant has a controlling interest or any entity which is related to or affiliated with any Defendant; Hewlett-Packard Company, and any and all subsidiaries and affiliates of Hewlett-Packard Company; and the legal representatives, agents, affiliates, heirs, successors and assigns of any such excluded persons. Also excluded from the Settlement Class are any persons who exclude themselves by filing valid and timely requests for exclusion from the Settlement Class in accordance with the requirements set forth in the Notice. 7. What if I am still not sure if I am included? If you are still not sure whether you are included, you can ask for free help. You can call the Claims Administrator at 888-356-0255 for more information or you can fill out and return the Proof of Claim form described in Section IX, Participation in the Settlement, to see if you qualify. You may also wish to contact your own attorney. 8. What does the settlement provide? The proposed settlement creates a fund in the amount of $117,500,000 in cash (the “Settlement Fund”) and will include interest that accrues on the fund prior to distribution. 9. How much will my payment be? Your recovery from this fund will depend on a number of variables, including the number of shares of Mercury securities you purchased during the period September 8, 2001 to July 3, 2006, and the timing of your purchases and any sales. Depending on the number of eligible shares purchased by Class Members who elect to participate in the settlement and when those shares were purchased and sold, the estimated average distribution per share will be approximately $1.34 before deduction of Court-approved fees and expenses. 10. How can I get a payment? To qualify for a payment, you must send in a Proof of Claim form. A Proof of Claim form was circulated with the Notice. You may also get a Proof of Claim by clicking on the link entitled “Proof of Claim” on the left. Read the instructions carefully, fill out the Proof of Claim form, include all the documents the form asks for, sign it, and mail it postmarked no later than November 29, 2008. 11. When would I get my payment? The Court will hold a hearing on September 25, 2008, to decide whether to approve the settlement. If the Court approves the settlement, there may then be appeals. It is always uncertain whether these appeals can be resolved, and resolving them can take time, perhaps more than a year. It also takes time for all the Proofs of Claim to be processed. Please be patient. 12. What am I giving up to get a payment? You will be bound by any and all determinations or judgments in the Litigation in connection with the settlement entered into or approved by the Court, whether favorable or unfavorable to the Class, and you shall be deemed to have, and by operation of the Judgment shall have fully released all of the Released Claims against the Released Persons, whether or not you submit a valid Proof of Claim. Refer to the Release on page 5 of the Proof of Claim and Release. 13. Can I exclude myself? If you do not wish to be included in the Class and you do not wish to participate in the proposed settlement described in this Notice, you may request to be excluded. To do so, you must submit a written request for exclusion (“Request for Exclusion”) that must be received no later than September 4, 2008. A Request for Exclusion must: (a) state the name, address, and telephone number of the Person requesting exclusion; (b) identify each of the Person’s purchases and sales of Mercury securities made during the Class Period, including the dates of purchase or sale, the number of shares purchased and/or sold, and the price paid or received per share for each such purchase or sale; (c) provide proper evidence of the Person’s purchases and sales of Mercury securities during the Class Period; and (d) state that the Person wishes to be excluded from the Class. The Request for Exclusion must be addressed as follows: Mercury Interactive Securities Litigation EXCLUSIONS c/o Complete Claim Solutions, LLC P.O. Box 24715 West Palm Beach, FL 33416 NO REQUEST FOR EXCLUSION WILL BE CONSIDERED VALID UNLESS ALL OF THE INFORMATION DESCRIBED ABOVE IS INCLUDED IN ANY SUCH REQUEST. If you timely and validly request exclusion from the Class, (a) you will be excluded from the Class, (b) you will not share in the proceeds of the settlement described herein, (c) you will not be bound by any judgment entered in the Litigation, and (d) you will not be precluded, by reason of your decision to request exclusion from the Class, from otherwise prosecuting an individual claim, if timely, against Defendants based on the matters complained of in the Litigation. 14. If I exclude myself, can I get money from the proposed settlement? No. If you exclude yourself, you cannot get money from the proposed settlement. 15. Do I have a lawyer in this case? The Court has appointed the law firms of Labaton Sucharow LLP and Glancy, Binkow & Goldberg LLP to represent you and the other Settlement Class members. As used in the Notice, these lawyers are called Plaintiffs’ Lead Counsel or Lead Counsel. You will not be separately charged for these lawyers. The Court will determine the amount of Plaintiffs’ Lead Counsel’s fees and expenses, which will be paid from the Settlement Fund. If you want to be represented by your own lawyer, you may hire one at your own expense. 16. How will the lawyers be paid? Counsel for plaintiffs will request that the Court award attorneys’ fees in the amount of 25% ($29.375 million) of the Settlement Fund, plus reimbursement of the expenses, not to exceed $975,000, which were incurred in connection with the Litigation, plus interest thereon. Such sums as may be approved by the Court will be paid from the Settlement Fund. Class Members are not personally liable for any such fees or expenses. 17. How do I tell the Court that I do not like the proposed settlement? You may object to the Settlement, the Plan of Allocation described in the Notice and/or the application of Plaintiffs’ Lead Counsel for an award of attorneys’ fees and reimbursement of expenses in the manner set forth below. The filing of a Proof of Claim by a Class Member does not preclude a Class Member from objecting to the Settlement. However, if your objection is rejected you will be bound by the Settlement and the Judgment just as if you had not objected. Any Class Member who timely and validly files a written objection to any aspect of the settlement, the Plan of Allocation, or the application for attorneys’ fees and expenses, may appear and be heard at the Settlement Fairness Hearing. Any such Person must submit a written notice of objection, received or postmarked on or before September 4, 2008, to each of the following: UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA 280 South First Street San Jose, CA 95113 Co-Lead Counsel for Plaintiffs: Labaton Sucharow LLP Glancy Binkow & Goldberg LLP Joel H. Bernstein Peter A. Binkow 140 Broadway 1801 Avenue of the Stars, Suite 311 New York, NY 10005 Los Angeles, CA 90067 Counsel for Mercury: Counsel for PricewaterhouseCoopers Inc.: Heller Ehrman LLP Gibson Dunn & Crutcher LLP Sara Brody Scott A. Fink 333 Bush Street One Montgomery Street San Francisco, CA 94104-2878 San Francisco, CA 94104 Tel: 415-772-6000 The notice of objection must demonstrate the objecting Person’s membership in the Class, including the number of Mercury securities purchased and sold during the Class Period, and contain a statement of the reasons for objection as well as copies of all documents that the objector wishes to be considered. Only Members of the Class who have submitted written notices of objection in this manner will be entitled to be heard at the Settlement Fairness Hearing, unless the Court orders otherwise. 18. When and where will the Court decide whether to approve the proposed settlement? A settlement hearing will be held on September 25, 2008, at 9:30 a.m., before the Honorable Jeremy Fogel, United States District Judge, at the United States Courthouse, Northern District of California, 280 South First Street, San Jose, California (the “Settlement Fairness Hearing”). The purpose of the Settlement Fairness Hearing will be to determine: (1) whether the settlement consisting of $117,500,000 in cash should be approved as fair, reasonable and adequate to the Settling Parties; (2) whether the proposed plan to distribute the settlement proceeds (the “Plan of Allocation”) is fair, reasonable, and adequate; and (3) whether the application by Plaintiffs’ Lead Counsel for an award of attorneys’ fees and expenses should be approved. The Court may adjourn or continue the Settlement Fairness Hearing without further notice to the Class. 19. Do I have to come to the hearing? No. Plaintiffs’ Lead Counsel will answer questions the Court may have. But, you are welcome to come at your own expense. 20. May I speak at the hearing? Only Members of the Class who have submitted written notices of objection in the manner outlined above will be entitled to be heard at the Settlement Fairness Hearing, unless the Court orders otherwise. 21. What happens if I do nothing at all? You may do nothing at all. If you choose this option, you will not share in the proceeds of the settlement, but you will be bound by any Judgment entered by the Court, and you shall be deemed to have, and by operation of the Judgment shall have fully released all of the Released Claims against the Released Persons. 22. Are there more details about the proposed settlement? The notice summarizes the proposed settlement. More details are in the Stipulation of Settlement dated October 31, 2007 (the “Stipulation”). You can view a copy of the Stipulation by clicking on the link entitled “Court Documents”. You can also contact the Claims Administrator at 888-356-0255 toll free, email at info@MercuryInteractiveSecuritiesSettlement.com, or write to Mercury Interactive Securities Litigation, c/o Complete Claim Solutions, LLC, P.O. Box 24715, West Palm Beach, FL 33416 for other information to help you determine whether you are a Class Member and whether you are eligible for a payment. 23. How do I get more information? For full details of the matters discussed in the Notice, you may review the Stipulation and other papers filed with the Court, which may be inspected during business hours, at the office of the Clerk of the Court, United States Courthouse, Northern District of California, 280 South First Street, San Jose, California. If you have any questions about the settlement of the Litigation, you may contact Plaintiffs’ Lead Counsel by writing: Labaton Sucharow LLP Glancy Binkow & Goldberg LLP Michael H. Rogers, Esq. Peter A. Binkow, Esq. 140 Broadway 1801 Avenue of the Stars, Suite 311 New York, NY 10005 Los Angeles, CA 90067