Case: 1:14-cv-09786 Document #: 25-1 Filed: 07/02/15 Page 1 of 21 PageID #:421
UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS
: : Civil Action No. 1:14-cv-09786 IN RE WALGREEN CO. STOCKHOLDER : LITIGATION : : :
STIPULATION OF SETTLEMENT
This Stipulation of Settlement is made and entered into by and among the following parties to the above-captioned consolidated putative shareholder class action (the “Action”): (i) plaintiffs
James Hays (“Hays”) and Richard C. Potocki (“Potocki,” and together with Hays, “Plaintiffs”), each individually and on behalf of the Settlement Class (as defined infra), and (ii) defendants
Janice M. Babiak, David J. Brailer, Steven A. Davis, William C. Foote, Mark P. Frissora, Ginger
L. Graham, Alan G. McNally, Dominic Murphy, Stefano Pessina, Barry Rosenstein, Nancy M.
Schlichting, Alejandro Silva, James A. Skinner, Gregory D. Wasson (“Wasson”) (collectively, the
“Individual Defendants”), Walgreen Co. (“Walgreen” or the “Company”), Walgreens Boots
Alliance, Inc. (“WBA”), and Ontario Merger Sub (collectively, “Defendants,” together with
Plaintiffs, “Parties”), each by and through their respective counsel of record in the Action. The
Stipulation is intended by the Parties to fully, finally, and forever resolve, discharge, and settle the
Settled Claims (including Unknown Claims), as defined infra upon the terms and subject to the conditions set forth herein.
I. BACKGROUND TO THE LITIGATION
On August 2, 2012, Walgreen completed the acquisition of 45% of the issued and outstanding share capital of Alliance Boots GmbH (“Alliance Boots”) in exchange for cash and
Walgreen shares (the “Step 1 Acquisition”). The Step 1 Acquisition was made pursuant to a
Purchase and Option Agreement dated June 18, 2012 (the “Purchase and Option Agreement”) that
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provided the Company with the option to acquire the remainder of Alliance Boots during the six- month period beginning two and a half years after the closing of the Step 1 Acquisition (the “Call
Option”).
On August 4, 2014, Walgreen announced the resignation of its then-Chief Financial Officer
Wade Miquelon (“Miquelon”).
On August 5, 2014, Walgreen and Alliance Boots amended the Purchase and Option
Agreement to make the Call Option immediately exercisable (the “Amendment”) and an indirect wholly-owned subsidiary of Walgreen exercised the Call Option. Walgreen publicly announced the Amendment on August 6, 2014.
On August 6, 2014, Walgreen announced that the Company intended to purchase the remainder of Alliance Boots that it did not already own in exchange for £3.133 billion in cash, payable in British pounds sterling, and 144,333,468 shares of Walgreen common stock, subject to certain potential specified adjustments (the “Step 2 Acquisition”). On the same day, Walgreen publicly announced that the Company would undergo a corporate reorganization (the
“Reorganization”) in connection with the Step 2 Acquisition pursuant to which Walgreen would become a whole-owned subsidiary of WBA, a new Delaware corporation, and Walgreen shareholders would have their existing shares of Company stock automatically converted into shares of WBA.
On September 5, 2014, Barry Rosenstein of hedge fund JANA Partners was appointed to the Walgreen board of directors (the “Board”).
On September 16, 2014, WBA filed a registration on Form S-4 with the U.S. Securities and Exchange Commission (the “SEC”) in connection with seeking the approval of Walgreen shareholders for the Reorganization and Step 2 Acquisition (the “S-4”).
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On October 16, 2014, Miquelon filed a complaint against the Company in the Circuit Court of Cook County, Illinois, captioned Miquelon v. Walgreen Co. (WAG), 14-ch-16825, Cook
County, Illinois Circuit Court (Chicago).
On October 29, 2014 and November 18, 2014, WBA amended the S-4.
On November 24, 2014, Walgreen filed a definitive proxy statement on Schedule 14A with the SEC soliciting shareholder approval for the Reorganization and Step 2 Acquisition (the
“Proxy”). The Proxy announced that the special meeting of Walgreen shareholders to vote on the
Reorganization and Step 2 Transaction would be held on December 29, 2014.
II. THE LITIGATION
On December 5, 2014, Plaintiff Hays filed a complaint in the United States District Court for the Northern District of Illinois (the “Court”) captioned Hays v. Babiak, et al., Civil Action
No. 14-cv-09786, alleging violations of Section 14(a) of the Securities Exchange Act of 1934 (the
“Exchange Act”) and Section 20(a) of the Exchange Act, and breaches of the Board’s fiduciary duty of disclosure under Illinois state law (the “Hays Action”).
On December 10, 2014, Walgreen announced that Wasson, the Company’s then-President and Chief Executive Officer, had informed the Board that he would retire shortly after the closing of the Reorganization and Step 2 Acquisition.
Also on December 10, 2014, as a result of the pendency of the Hays Action, and the pending Walgreen shareholder vote on the Reorganization and Step 2 Acquisition, defense counsel and counsel to Plaintiff Hays commenced arms-length negotiations regarding a potential settlement of the Hays Action.
On December 12, 2014, Plaintiff Potocki filed an action in this Court captioned Potocki v.
Skinner, et al., Civil Action No. 14-cv-10006, containing substantially similar allegations and
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claims as the Hays Action and also alleging that the Proxy fails to adequately disclose the facts and circumstances surrounding Wasson’s retirement (the “Potocki Action,” and together with the
Hays Action, the “Actions”).
On December 15, 2014, counsel for Plaintiffs conferred and determined to work together on behalf of Plaintiffs and the Settlement Class in connection with the Actions.
Between December 15, 2014 and December 22, 2014, Defendants’ counsel and Plaintiffs’
Counsel continued negotiations regarding a potential settlement of the Actions.
On December 23, 2014, the Parties reached an agreement in principle, set forth in the
Memorandum of Understanding (“MOU”) of the same date, providing for settlement of the
Actions between and among the Parties, on behalf of themselves and the putative Settlement Class of persons on behalf of whom Plaintiffs have brought the Actions on the terms and subject to the conditions set forth therein.
Pursuant to the MOU, as a result of the pendency and prosecution of the Actions and the extensive arm’s-length negotiations, Defendants agreed to, inter alia, file with the SEC a Current
Report on Form 8-K (the “Form 8-K”) containing the agreed-upon supplemental disclosures concerning the Reorganization and Step 2 Acquisition (the “Supplemental Disclosures”).
On December 24, 2014, Walgreen filed with the SEC the Form 8-K which included, inter alia, the Supplemental Disclosures.
On December 29, 2014, Walgreen shareholders approved both the Reorganization and the
Step 2 Acquisition.
On December 31, 2014, Walgreen completed the Reorganization and the Step 2
Acquisition, and became a wholly owned subsidiary of Walgreens Boots Alliance, Inc.
On or about January 20, 2015, Plaintiffs moved to consolidate the Actions.
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On February 4, 2015, the Court granted Plaintiffs’ motion to reassign and consolidate the
Actions into the above-captioned action.
Further pursuant to the MOU, Defendants agreed to, inter alia, provide Plaintiffs with certain discovery to allow Plaintiffs to confirm the fairness, reasonableness and adequacy of the proposed Settlement (the “Confirmatory Discovery”). On April 13, 2015, Defendants produced nearly 900 pages of internal confidential Company documents as part of the Confirmatory
Discovery.
On May 13, 2015, Plaintiffs’ Counsel interviewed Mark Vainisi (“Vainisi”), Walgreen’s
Divisional Vice President of Mergers & Acquisitions as a part of the Confirmatory Discovery.
Following a careful and thorough review of the documents produced by Defendants, the
Company’s recent public filings and the information learned through Vainisi’s interview,
Plaintiffs’ Counsel determined that the terms of the proposed Settlement (defined infra) are fair, reasonable, and adequate, and in the best interests of the members of the Settlement Class because, as a result of Defendants’ public filing of the Supplemental Disclosures, Walgreen shareholders were able to make a fully informed decision with respect to their vote on the Reorganization and
Step 2 Transaction.
Accordingly, the Parties determined to enter into this Stipulation, which sets forth the terms and conditions of the Settlement. The Settlement set forth herein reflects the results of the Parties’ negotiations and the material terms of the MOU. The Settlement was only reached after vigorous arm’s-length negotiations between the Parties, who were all represented by counsel with extensive experience and expertise in shareholder class action litigation. During the negotiations, all Parties had a clear view of the strengths and weaknesses of their respective claims and defenses.
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Furthermore, at no time prior to the completion of Confirmatory Discovery and Plaintiffs’
Counsel’s determination that such discovery further confirmed the fairness, adequacy, and reasonableness of the proposed Settlement were there any discussions or agreements between the
Parties regarding the reasonable amount of Plaintiffs’ attorneys’ fees or expenses (“Fee Petition”).
III. PLAINTIFFS’ CLAIMS AND THE BENEFITS OF SETTLEMENT
Plaintiffs’ entry into this Stipulation is not an admission or concession as to the lack of merit of any claims in the Action. Plaintiffs and Plaintiffs’ Counsel believe that they brought their claims in good faith and that the claims asserted in the Action have merit. Plaintiffs and Plaintiffs’
Counsel also believe that the Settlement addresses a substantial majority of the disclosure claims asserted in the Action.
Plaintiffs’ Counsel recognize and acknowledge the expense and length of continued proceedings necessary to prosecute the Action against Defendants through trial and through appeals. Plaintiffs’ Counsel have also taken into account the uncertain outcome and the risk of any litigation, especially in complex actions such as the Action, as well as the difficulties and delays inherent in such litigation, and the difficulties associated with securing appropriate relief after consummation of the Reorganization and Step 2 Acquisition. Plaintiffs’ Counsel are also mindful of the inherent problems of proof and possible defenses to the claims asserted in the
Action. Plaintiffs’ Counsel believe that the Settlement set forth in this Stipulation confers substantial benefits upon the Settlement Class. Based on their evaluation, Plaintiffs and Plaintiffs’
Counsel have determined that the Settlement set forth in this Stipulation is fair, reasonable, and adequate, and in the best interests of the Settlement Class.
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IV. DEFENDANTS’ DENIALS OF WRONGDOING AND LIABILITY
Defendants have denied and continue to deny each and every claim and contention alleged by the Plaintiffs in the Action. Defendants have expressly denied and continue to deny all charges of wrongdoing or liability against them as alleged in the complaints in the Actions, and specifically deny that the Step 2 Acquisition and Reorganization materials provided to Walgreen shareholders were incomplete or in any way misleading or that any additional disclosure was required under the
SEC rules or any applicable legal principle. Further, Defendants have denied and continue to deny that they have committed, threatened to commit, or aided and abetted in the commission of any wrongdoing, violation of law, or breach of duty in connection with the Settled Claims and the subject matter thereof, including with respect to the Proxy and the disclosures to Walgreen shareholders contained therein.
Nevertheless, Defendants are entering into the Settlement solely to eliminate the distraction, burden and expense of further litigation. Defendants also have taken into account the uncertainty and risks inherent in any litigation, especially in complex cases similar to the Action.
Defendants have, therefore, determined that it is desirable and beneficial that the Action be settled in the manner and upon the terms and conditions set forth in this Stipulation. Without admitting any wrongdoing, Defendants acknowledge that the filing and prosecution of the Action and discussions with Plaintiffs’ Counsel were the sole factor in the decision to make the Supplemental
Disclosures.
V. TERMS OF STIPULATION AND AGREEMENT OF SETTLEMENT
NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED by and among the
Plaintiffs (individually and on behalf of the Settlement Class) and Defendants, by and through their attorneys of record, subject to the approval of the Court, that the Action and the Settled Claims
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(including Unknown Claims) shall be finally and fully compromised, settled, and released, and the
Action shall be dismissed with prejudice, as to all Parties, upon and subject to the terms and conditions of the Stipulation as follows:
1. Definitions
As used in this Stipulation, the following terms have the meanings specified below:
1.1 “Action” means the consolidated class action lawsuit currently pending in the
United States District Court for the Northern District of Illinois, captioned In re Walgreen Co.
Stockholder Litigation, Civil Action No. 1:14-cv-09786.
1.2 “Court” means the United States District Court for the Northern District of Illinois.
1.3 “Defendants” means the Individual Defendants, Walgreen Co., Walgreen Boots
Alliance, Inc. and Ontario Merger Sub, Inc.
1.4 “Defendants’ Counsel” means Sidley Austin LLP, Wachtell Lipton Rosen & Katz, and any partners, principals, associates or employees of these firms.
1.5 “Effective Date” means the first date by which all of the events and conditions specified in paragraph 6.1 hereof have been met and have occurred.
1.6 “Final” means: (i) the date of final affirmance on any appeal of the Judgment (as defined, infra), the expiration of the time for a petition for or a denial of a writ of certiorari to review the Judgment and, if certiorari is granted, the date of final affirmance of the Judgment following review pursuant to that grant; or (ii) the date of final dismissal of any appeal from the
Judgment or the final dismissal of any proceeding on certiorari to review the Judgment; or (iii) if no appeal is filed, the expiration date of the time for the filing or noticing of any appeal from the
Court’s Judgment, in all material respects in the form of Exhibit C attached hereto.
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1.7 “Individual Defendants” means Janice M. Babiak, David J. Brailer, Steven A.
Davis, William C. Foote, Mark P. Frissora, Ginger L. Graham, Alan G. McNally, Dominic
Murphy, Stefano Pessina, Barry Rosenstein, Nancy M. Schlichting, Alejandro Silva, James A.
Skinner and Gregory D. Wasson.
1.8 “Judgment” means the Order and Final Judgment to be rendered by the Court, in all material respects in the form attached hereto as Exhibit C.
1.9 “Notice” means the notice substantially in the form described in paragraph 3.2 herein.
1.10 “Parties” means each of the Defendants and the Plaintiffs, individually and on behalf of the Settlement Class.
1.11 “Person” means an individual, corporation (including all divisions, affiliates, joint ventures, parents, and subsidiaries), limited partnership, limited liability company, partnership, professional corporation, association, joint stock company, estate, legal representative, trust, unincorporated association, government or any political subdivision or agency thereof, and any business or legal entity and their present and former spouses, heirs, executors, estates, predecessors, successors, personal or legal representatives, directors, officers, agents, servants, employees, affiliates, insurers, reinsurers, underwriters, controlling shareholders, accountants, advisors, or assignees.
1.12 “Plaintiffs” means James Hays and Richard C. Potocki.
1.13 “Plaintiffs’ Counsel” means Pomerantz LLP (“Pomerantz”), Friedman Oster
PLLC, Law Office of Alfred G. Yates, Jr., P.C., DiTommaso Lubin, P.C., Levi & Korsinsky LLP and any partners, principals, associates or employees of these firms.
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1.14 “Released Persons” means Defendants and their respective families, predecessors, successors-in-interest, parents, subsidiaries, associates, affiliates and each and all of their respective past, present or future representatives, agents, officers, directors, trustees, executors, heirs, spouses, marital communities, assigns or transferees and any person or entity acting for on behalf of any of them, and each of their respective predecessors, successors-in-interest, parents, subsidiaries, affiliates, representatives, agents, officers, directors, employees, trustees, executors, heirs, spouses, marital communities, assigns or transferees or any person or entity acting for on behalf of any of them and each of them.
1.15 “Settled Claims” means all known and unknown claims, demands, rights, actions or causes of action, liabilities, damages, losses, obligations, judgments, suits, fees, expenses, costs, penalties, sanctions, matters and issues of every nature and description whatsoever, whether legal, equitable, or any other type, whether or not concealed, hidden or undisclosed, matured or unmatured, that have been, could have been, or in the future can or might be, asserted by or on behalf of Plaintiffs, the Company (whether by the Company or any shareholder or other Person derivatively on behalf of the Company), or any Settlement Class members in their capacity as shareholders, including class, derivative, individual or other claims, in state or federal court, and, based upon, arising from, or related to the disclosure claims or disclosure allegations in, and the settlement of, the Actions including, but not limited to, disclosure claims or disclosure allegations based upon, arising from, or related to: (i) the contents of the Proxy or the S-4; (ii) solicitation of shareholder support for the Reorganization and Step 2 Acquisition; (iii) the fiduciary obligations, if any, of the Defendants or Released Persons in connection with the solicitation of shareholder support for the Reorganization and Step 2 Acquisition; and (iv) the fees, expenses, or costs incurred in prosecuting, defending, or settling the Actions, other than as provided in this Stipulation;
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provided, however, that the Settled Claims shall not include any claims to enforce the Settlement or to enforce any award of attorneys’ fees and reimbursement of expenses pursuant to the
Settlement.
1.16 “Settlement” means the resolution of the Action as contemplated and set forth herein.
1.17 “Settlement Class” means a non-opt-out class defined as all record holders and beneficial holders of any shares of common stock of Walgreen and any and all of their successors in interest, predecessors, representatives, trustees, executors, administrators, heirs, assigns or transferees, immediate and remote, and any Person or entity acting for or on behalf of, or claiming under, any of them, and each of them, at any time between and including August 5, 2014 and
December 31, 2014 (the date of the closing of the Reorganization and Step 2 Acquisition) (the
“Class Period”), excluding Defendants, members of the immediate families of the Individual
Defendants, and any Person, firm, trust, corporation or other entity related to, controlled by, or affiliated with, any Defendant, and the legal representatives, heirs, successors, and assigns of any such excluded persons.
1.18 “Stipulation” means this Stipulation of Settlement and the exhibits attached hereto and incorporated herein by reference.
1.19 “Unknown Claims” means any claim with respect to the subject matter of the
Settled Claims that the Released Persons or Plaintiffs or members of the Settlement Class do not know or suspect exists in his, her, or its favor at the time of the release of the Settled Claims, including without limitation, those which, if known, might have affected the decision to enter into the Settlement or might have affected the decision not to object to the Settlement. With respect to any of the Settled Claims, the Parties stipulate and agree that upon the Effective Date, the Released
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Persons and Plaintiffs shall expressly and each member of the Settlement Class shall be deemed to have, and by operation of the Judgment shall have, expressly waived, relinquished, and released any and all provisions, rights, and benefits conferred by or under California Civil Code section
1542 (or any similar, comparable, or equivalent law or provision), 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.
The Released Persons and Plaintiffs acknowledge, and members of the Settlement Class shall be deemed to have acknowledged, that they may discover facts in addition to or different from those now known or believed to be true with respect to the Settled Claims, but that it is the intention of the Released Persons and Plaintiffs, and by operation of law the members of the Settlement Class, to completely, fully, finally, and forever extinguish and release any and all Settled Claims
(including Unknown Claims as defined in this paragraph), without regard to the subsequent discovery of additional or different facts. The Released Persons and Plaintiffs acknowledge, and the members of the Settlement Class by operation of law shall be deemed to have acknowledged, that the inclusion of Unknown Claims in the definition of Settled Claims was separately bargained for and was a key element of the Settlement and was relied upon by each and all of the Parties in entering into the Stipulation.
2. Settlement Consideration
2.1 As a result of, among other things, negotiations between and among the Parties, it was agreed that, in consideration for the full settlement and release of all Settled Claims (including
Unknown Claims), Walgreen included the Supplemental Disclosures in a Form 8-K filed with the
SEC on December 24, 2014, a copy of which is attached hereto as Exhibit A.
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2.2 The Parties agree and acknowledge that the Supplemental Disclosures conferred a substantial benefit on the Settlement Class. Defendants acknowledge that the pendency and prosecution of the Actions and the negotiations between Plaintiffs’ Counsel and Defendants’
Counsel were the sole factor in the decision to make the Supplemental Disclosures.
3. Preliminary Approval Order, Notice, and Settlement Hearing
3.1 As soon as reasonably practicable after execution of this Stipulation, Plaintiffs shall submit the Stipulation together with its exhibits to the Court and shall apply for entry of an order
(the “Preliminary Approval Order“), in all material respects in the form of Exhibit B hereto, requesting: (i) preliminary approval of the Settlement; (ii) preliminary certification of the
Settlement Class, for settlement purposes only; (iii) approval of the form, content, and mailing of the proposed Notice of the Settlement; and (iv) a date for a hearing on final approval of the
Settlement (the “Settlement Hearing”).
3.2 Notice to the Settlement Class shall consist of (i) the dissemination of a postcard, substantially in the form attached hereto as Exhibit B-1 (the “Summary Notice”), via United States mail, first class, postage pre-paid, to each Person who is shown on the records of Walgreen, its successors-in-interest or their respective transfer agents, to be a record holder of any share(s) of
Walgreen common stock or who held any such share(s) during the Class Period at his, her or its last known address, and (ii) the establishment of a website containing additional information regarding the proposed Settlement, including, at a minimum, the operative complaints in this action, the long-form notice attached hereto as Exhibit B-2, this Stipulation and attached exhibits, and, when available, the Preliminary Approval Order and the Final Judgment. WBA shall be responsible for the administration and dissemination of the Notice to the Settlement Class, including the payment of all costs and expenses related thereto.
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3.3 The Parties will present the Settlement to the Court for hearing and final approval as set forth in Exhibit B attached hereto, and will use their individual and collective best efforts to obtain final approval of the Settlement and the dismissal of the Action with prejudice without costs to any Party, except as expressly provided herein.
4. Releases
4.1 Upon entry of the Judgment, Plaintiffs and members of the Settlement Class shall be deemed to have fully, finally, and forever settled, released, discharged, extinguished, and dismissed with prejudice, completely, individually, and collectively, the Settled Claims (including
Unknown Claims) against the Released Persons and shall forever be enjoined from prosecuting such claims; provided, however, that such release shall not affect any claims to enforce the terms of the Stipulation or the Settlement.
4.2 Upon entry of the Judgment, each of the Released Persons shall be deemed to have fully, finally, and forever settled, released, discharged, extinguished, and dismissed with prejudice, completely, individually, and collectively, all claims, including Unknown Claims, based upon or arising out of the commencement, prosecution, settlement or resolution of the Action or the Settled
Claims against Plaintiffs, Plaintiffs’ Counsel, and members of the Settlement Class and shall forever be enjoined from prosecuting such claims; provided, however, that such release shall not affect any claims to enforce the terms of the Stipulation or the Settlement.
5. Attorneys’ Fees and Expenses
5.1 After negotiating the substantive terms of the Settlement, the Parties negotiated an amount of attorneys’ fees and expenses that, subject to the terms and conditions of this Stipulation and approval by the Court, will be paid to Plaintiffs’ Counsel. As a result of those negotiations,
WBA will pay, or cause to be paid, on behalf of itself and for the benefit of Defendants, to
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Plaintiffs’ Counsel fees and expenses in the amount to be approved by the Court not to exceed
$370,000 in fees and expenses (inclusive of costs, disbursements, and expert and consulting fees)
(the “Fee Amount”). Any failure by the Court to approve the amount of such fees and expenses shall not affect the validity of the Settlement, the entry of the Judgment, or the occurrence of the
Effective Date. The Fee Amount shall be transferred to Pomerantz as custodian for all of Plaintiffs’
Counsel within twenty (20) business days after the later to occur of: (i) entry of the Judgment approving the proposed Settlement and dismissing the Action with prejudice; and (ii) an order awarding Plaintiffs’ Counsel such reasonable attorneys’ fees and expenses, pursuant to wiring instructions to be provided by Plaintiffs’ Counsel. Plaintiffs’ Counsel shall be solely responsible for the distribution of Plaintiffs’ attorneys’ fees and expenses. The Released Persons shall have no responsibility or liability whatsoever for the allocation of the fees and expenses award among
Plaintiffs’ Counsel in the Action. The Released Persons shall also have no responsibility or liability whatsoever with respect to the allocation of the fees and expenses award with respect to any other person, entity or firm who may assert some claim thereto, of any fees and expenses amount. Except as so specified in this Stipulation, the Released Persons shall bear no liability or responsibility for any expenses, costs, damages, or fees alleged or incurred by Plaintiffs, by any members of the Settlement Class, or by any of their attorneys, experts, advisors, agents or representatives.
5.2 In the event that the Effective Date does not occur, the Judgment is reversed or modified on appeal, or the order of the Court approving the Fee Amount is reversed or modified on appeal, then it shall be the joint and several obligation of Plaintiffs’ Counsel to make appropriate refunds or repayments to Walgreen (or its insurer(s) or successor(s)) of any portion of the Fee
Amount previously paid by Walgreen (or its insurer(s) or successor(s)) consistent with such
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reversal or modification, within ten (10) business days from receiving notice from counsel for
Defendants or from a court of appropriate jurisdiction. Plaintiffs’ Counsel each submit themselves to the jurisdiction of the Court for the purpose of enforcement of this paragraph.
6. Conditions of Settlement, Effect of Disapproval, Cancellation, or Termination
6.1 The Effective Date of the Settlement shall be conditioned on the occurrence of all of the following events:
(a) the Court enters the Judgment, in all material respects in the form of Exhibit
C attached hereto; and
(b) the Judgment, in all material respects in the form of Exhibit C attached hereto, becomes Final.
6.2 If either or both of the conditions specified in paragraph 6.1 above are not satisfied, then the Stipulation shall be canceled and terminated unless Plaintiffs’ Counsel and Defendants’
Counsel mutually agree in writing to proceed with the Settlement within fifteen (15) business days after receiving notice that either or both conditions are not satisfied.
6.3 The Settlement and the Stipulation shall be null and void and of no force and effect if the Effective Date does not occur for any reason. In such event, the Parties shall return to their respective litigation positions in the Action as of the time immediately prior to the date of the execution of the MOU, as though it were never executed or agreed to, and the MOU and the
Stipulation shall not be deemed to prejudice in any way the positions of the Parties with respect to the Action, or to constitute an admission of fact by any Party, shall not entitle any Party to recover any costs or expenses incurred in connection with the implementation of the MOU, the Stipulation or the Settlement, and neither the existence of the MOU, the Stipulation nor their respective contents shall be admissible in evidence or be referred to for any purposes in the Action, or in any litigation or judicial proceeding, other than to enforce the terms hereof.
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6.4 In the event that the Effective Date does not occur for any reason, Plaintiffs and
Plaintiffs’ Counsel reserve their right to file a motion seeking payment of their attorneys’ fees and expenses based upon the benefits of the Supplemental Disclosures, and the Defendants reserve the right to oppose any such motion.
7. Miscellaneous Provisions
7.1 All proceedings in the Action, except for those proceedings related to the
Settlement, shall be stayed until the resolution of all such Settlement-related proceedings.
7.2 The Parties: (i) acknowledge that it is their intent to consummate this agreement; and (ii) agree to cooperate to the extent reasonably necessary to effectuate and implement all terms and conditions of the Stipulation and to exercise their best efforts to accomplish the foregoing terms and conditions of the Stipulation.
7.3 The Parties intend this Settlement to be a final and complete resolution of all disputes between them with respect to the Action. The Parties agree that the Settlement was negotiated in good faith by the Parties, and reflects a settlement that was reached voluntarily after consultation with competent legal counsel.
7.4 The provisions contained in the Stipulation shall not be deemed a presumption, concession, or admission by any Defendant of any fault, liability, or wrongdoing as to any facts or claims that have been or might be alleged in the Action, or in any other action or proceeding.
7.5 Neither this Stipulation nor the Settlement contained therein, nor any act performed or document executed pursuant to or in furtherance of this Stipulation or the Settlement: (i) is or may be deemed to be or may be used as an admission of, or evidence of, the validity or lack thereof of any Settled Claim, or of any wrongdoing or liability of the Defendants or any Released Person; or (ii) is or may be deemed to be or may be used as an admission of, or evidence of, any fault or
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omission of any of the Defendants or any Released Person, in any civil, criminal, or administrative proceeding in any court, administrative agency, or other tribunal. The Released Persons may file this Stipulation and/or the Judgment in any action that may be brought against them in order to support a defense or counterclaim based on principles of res judicata, collateral estoppel, release, good faith settlement, judgment bar, or reduction, or any other theory of claim preclusion or issue preclusion or similar defense or counterclaim.
7.6 Subject to the order of the Court, pending final determination of whether the
Settlement provided for in the Stipulation should be approved, Plaintiffs and all members of the
Settlement Class, or any of them, are barred and enjoined from commencing, prosecuting, instigating, or in any way participating in the commencement, prosecution, or instigation of any action asserting any Settled Claims (including Unknown Claims), either directly, representatively, derivatively, or in any other capacity, against any Released Person. If any Settled Claims
(including Unknown Claims) are asserted against any Released Person in any court prior to Final
Court approval of the Settlement, the Parties shall cooperate in obtaining the withdrawal or dismissal of such related litigation, including, where appropriate, joining in any motion to dismiss such litigation.
7.7 Each Party severally acknowledges that no promise, inducement, or agreement not expressed herein has been made to it or him or her, that the Stipulation contains the entire agreement between or among the Parties concerning the matters described in the Stipulation, and, except as expressly provided herein, that there are no third-party beneficiaries to the Stipulation.
7.8 The Stipulation may be executed in counterparts by any of the signatories hereto, including by e-mail in PDF format or by telecopier, and as so executed shall constitute one agreement.
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7.9 The Stipulation and Settlement contemplated by it shall be governed by and construed in accordance with the laws of the State of Illinois without regard to conflict of laws principles. The Court shall have exclusive jurisdiction over any dispute arising out of or relating in any way to this Settlement Stipulation, and the Parties further waive any right to demand a jury trial as to any such dispute.
7.10 Should any part of the Stipulation be rendered or declared invalid by a court of competent jurisdiction, and except as expressly provided herein to the contrary, such invalidation of such part or portion of the Stipulation should not invalidate the remaining portions thereof, and they shall remain in full force and effect.
7.11 Plaintiffs represent and warrant that none of the claims or causes of action that are or could have been asserted in the Action have been assigned, encumbered, or in any manner transferred in whole or in part.
7.12 All of the Exhibits to this Stipulation are material and integral parts hereof and are fully incorporated herein by reference.
7.13 The Stipulation may be amended or modified only by a written instrument signed by or on behalf of all Parties or their respective successors in interest.
7.14 Each counsel or other Person executing the Stipulation or any of its Exhibits on behalf of any party hereto warrants that such Person has the full authority to do so.
7.15 The Parties submit to the jurisdiction of the Court for purposes of implementing and enforcing the settlement embodied in this Stipulation.
7.16 This Stipulation shall be binding upon, and inure to the benefit of, the successors and assigns of the parties hereto.
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7.17 All agreements made and orders entered during the course of the Action relating to the confidentiality of information shall survive this Stipulation.
IN WITNESS WHEREOF, the Parties hereto have caused the Stipulation to be executed, as indicated below, by their duly authorized attorneys.
EXECUTED AND AGREED on July 2, 2015:
/s/ Patrick V. Dahlstrom /s/ James Ducayet Patrick V. Dahlstrom POMERANTZ LLP James Ducayet Tenth South LaSalle Street Kristen Seeger Suite 3505 SIDLEY AUSTIN LLP Chicago, IL 60603 One South Dearborn Telephone: (312) 377-1181 Chicago, IL 60603 Facsimile: (312) 377-1184 Telephone: (312) 853-7000 Facsimile: (312) 853-7036 Counsel for Plaintiff Hays Counsel for Defendants
POMERANTZ LLP Gustavo F. Bruckner /s/ Stephen DiPrima 600 Third Avenue, 20th Floor Stephen DiPrima New York, NY 10016 Benjamin Klein Telephone: (212) 661-1100 WACHTELL, LIPTON, ROSEN & KATZ Facsimile: (212) 661-8665 51 West 52nd Street New York, NY 10019 Of Counsel for Plaintiff Hays Telephone: (212) 403-1000 Facsimile: (212) 403-2000
FRIEDMAN OSTER PLLC Of Counsel for Defendants Jeremy Friedman Spencer Oster 240 East 79th Street, Suite A New York, NY 10075 Telephone: (888) 529-1108
Of Counsel for Plaintiff Hays
LAW OFFICE OF ALFRED G. YATES, JR., P.C. Alfred G. Yates 519 Allegheny Building 429 Forbes Avenue Pittsburgh, PA 15219 Telephone: (412) 391-5164 Facsimile: (412) 471-1033
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Of Counsel for Plaintiff Hays
/s/ Vincent L. DiTommaso Vincent L. DiTommaso Peter S. Lubin DITOMMASO LUBIN, P.C. 17 W220 22nd Street, Suite 410 Oakbrook Terrace, IL 60181 Telephone: (630) 333-0000 Facsimile: (630) 333-0333
Counsel for Plaintiff Potocki
LEVI & KORSINSKY, LLP Joseph E. Levi Julia J. Sun 30 Broad Street, 24th Floor New York, NY 10004 Telephone: (212) 363-7500 Facsimile: (866) 367-6510
Of Counsel for Plaintiff Potocki
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