Item 8.01 Other Events
As previously disclosed,
On
The description of the Settlement Agreement contained herein is not complete and
is qualified in its entirety by reference to the full text of the Stipulation of
Settlement, which will be made available once it is finalized and executed.
Additional information regarding the Settlement Agreement also will be disclosed
in upcoming public filings in the
Each of the defendants has denied and continues to deny that any of them have committed any wrongdoing, violation of law or breaches of any duty of any kind. The Settlement Agreement includes no admission of wrongdoing or settlement payment by any of the individual defendants.
Among others, the Settlement Agreement contains the following financial and non-financial terms, which will become effective upon final approval by the Court:
· An insurance-funded settlement fund of
to members of the Putative Class pursuant to an allocation and claims distribution process to be proposed by the plaintiffs and approved by the Court;
· Directors Jacullo, Kamin and Rucker agree to extend their previously-disclosed
standstill commitments (see Company's Form 8-K dated January 10, 2020 ) until at leastJune 1, 2023 ;
· The Company will continue to provide OTC disclosure at or above the level
characterized as "Pink Sheet: Current Tier" for until the earlier of three years after the effective date of the Settlement Agreement or until such time as the individual defendants no longer serve on the Board of Directors of the Company (the "Board");
· All shares purchased by Messrs. Kamin and Jacullo or entities affiliated with
thembetween October 23 and November 8, 2019 shall be voted in the same proportion as the vote of shares held by Outside Stockholders (as defined by the Settlement Agreement) for three years from the date of purchase or until sold;
· The Company's Insider Trading Policy shall be modified to extend the period
before insiders can begin trading after a public announcement of material information;
· Subject to stockholder approval, the Company's Certificate of Incorporation and
Bylaws will be amended to expand the approval rights of public shareholders who are not directors and officers and to establish an Independent Transaction Committee of the Board of Directors, which shall initially be comprised ofMark Bonney andLinda Solheid (subject to their election to the Board at the Company's 2020 Annual Meeting of Shareholders);
·
Independent Transaction Committee for a period of three years (subject to his election to the Board at the Company's 2020 Annual Meeting of Shareholders); and
· Mutual releases between the Plaintiffs, the settlement class, the Company and
the individual defendants.
The Company expects Plaintiffs' counsel to apply to the Court for an award of attorney's fees in connection with the settlement of the derivative claims. Unless otherwise agreed beforehand, the Company will have the right to object to the amount of any fee award sought by Plaintiffs. The Company's insurers have agreed to cover the anticipated fee award to Plaintiffs' attorneys.
Forward Looking Statements
This report includes "forward looking statements" within the meaning of the
"safe harbor" provisions of the United States Private Securities Litigation
Reform Act of 1995. Forward looking statements may be identified by the use of
words such as "will", "anticipate", "believe", "expect", "estimate", "plan",
"outlook", and "project" and other similar expressions that predict or indicate
future events or trends or that are not statements of historical matters. These
forward looking statements include any statements regarding negotiation,
execution and court approval of the terms of the Settlement Agreement. Forward
looking statements are based on information available at the time those
statements are made and/or management's good faith belief as of that time with
respect to future events, and are subject to inherent risks and uncertainties
that could cause actual performance or results to differ materially from those
expressed in or suggested by the forward looking statements. The Company does
not intend, and undertakes no duty, to update this information to reflect future
events or circumstances. Investors are referred to the most recent reports filed
with the
Additional Information
In connection with the 2020 Annual Meeting of Shareholders (the "Annual
Meeting"), the Company has filed, on
Participants in the Solicitation
The Company, its directors and executive officers and employees may be deemed
"participants" in the solicitation of proxies from shareholders of the Company
in connection with the Annual Meeting. Information regarding the persons who
may, under the rules of the
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