notice of pendency AND PROPOSED settlement OF derivative action – Form 8-K
notice of pendency AND PROPOSED settlement OF derivative action
TO: ALL RECORD HOLDERS AND BENEFICIAL OWNERS OF COMMON STOCK OF
IF YOU HELD COMMON STOCK FOR THE BENEFIT OF ANOTHER as of
The purpose of this Notice of Pendency and Proposed Settlement of Derivative Action (the "Notice") is to inform you of: (i) the pendency of the above-captioned action (the "Action"), which was brought in the
PLEASE READ THIS NOTICE CAREFULLY AND IN ITS ENTIRETY. THIS NOTICE RELATES TO A PROPOSED SETTLEMENT OF THE LITIGATION REFERRED TO IN THE CAPTION AND CONTAINS IMPORTANT INFORMATION REGARDING YOUR RIGHTS. IF THE COURT APPROVES THE SETTLEMENT, YOU WILL BE FOREVER BARRED FROM CONTESTING THE FAIRNESS, REASONABLENESS, OR ADEQUACY OF THE SETTLEMENT, AND FROM PURSUING THE RELEASED PLAINTIFF PArties' CLAIMS.
The Stipulation was entered into as of
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This Notice describes the rights you may have in the Action and pursuant to the Stipulation and what steps you may take, but are not required to take, in relation to the Settlement. If the Court approves the Settlement, Settling Parties will ask the Court at the Settlement Hearing to enter Final Judgment dismissing the Action with prejudice in accordance with the terms of the Stipulation.
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WHAT IS THE PURPOSE OF THIS NOTICE? |
The purpose of this Notice is to explain the Action, the terms of the proposed Settlement, and how the Settlement affects the legal rights of
As described more fully below, stockholders have the right to object to the proposed Settlement and the Fee and Expense Application by Plaintiff's Counsel for an award of reasonable fees and expenses (the "Fee and Expense Award"). Stockholders have the right to appear and be heard at the Settlement Hearing, which will be held before
The Court has reserved the right to adjouand reconvene the Settlement Hearing, including consideration of the Fee and Expense Application, without further notice of any kind other than oral announcement at the Settlement Hearing or any adjournment thereof, or notation on the docket in the Action. The Court has further reserved the right to approve the Settlement, according to the terms and conditions of the Stipulation, with such modifications as may be consented to by Settling Parties, or as otherwise permitted pursuant to the Stipulation, with or without future notice to
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WHAT IS THIS CASE ABOUT? WHAT HAS HAPPENED SO FAR? |
THE FOLLOWING RECITATION DOES NOT CONSTITUTE FINDINGS OF THE COURT AND SHOULD NOT BE UNDERSTOOD AS AN EXPRESSION OF ANY OPINION OF THE COURT AS TO THE MERITS OF ANY CLAIMS OR DEFENSES BY ANY OF SETTLING PARTIES. IT IS BASED ON STATEMENTS OF SETTLING PARTIES AND IS SENT FOR THE SOLE PURPOSE OF INFORMING YOU OF THE EXISTENCE OF THE ACTION AND OF A HEARING ON A PROPOSED SETTLEMENT SO THAT YOU MAY MAKE APPROPRIATE DECISIONS AS TO STEPS YOU MAY OR MAY NOT WISH TO TAKE IN RELATION TO THIS LITIGATION.
Between
On
On
On
On
On
On
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In
On
On
On
On
On
On
Between
Settling Defendants produced documents to Plaintiff, with the first production of documents on
On
On
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On
Plaintiff served numerous third-party subpoenas and obtained third-party document productions between
On
Beginning in
On
On
The Stipulation is intended fully, finally and forever to release, resolve, compromise, settle, and discharge the Released Claims and terminate the Action with prejudice. It is the intention of Plaintiff and Settling Defendants that the Settlement will release the Released Claims against Released Persons upon Final Approval of the Stipulation.
The entry by Settling Parties into the Stipulation is not, and shall not be construed as or deemed to be evidence of, an admission as to the merit or lack of merit of any Claims or defenses asserted in the Action.
Plaintiff and Plaintiff's Counsel have conducted discovery relating to the events and transactions underlying Plaintiff's claims. Plaintiff and Plaintiff's
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Counsel believe that they have meritorious claims and could prevail at trial. Nevertheless, based upon their evaluation of Settling Parties' claims and defenses, Plaintiff and Plaintiff's Counsel have determined that the Settlement terms set forth in the Stipulation are fair, reasonable, and adequate and that the Settlement confers substantial benefits upon
Settling Defendants deny any and all allegations of wrongdoing, fault, liability or damage whatsoever. Specifically, Settling Defendants deny that they breached any duties. Settling Defendants also maintain that they have meritorious defenses to all claims alleged in the Action and could prevail at trial. Settling Defendants also deny that
Settling Parties recognize that the Action has been filed and prosecuted by Plaintiff in good faith and defended by Settling Defendants in good faith and further that the terms of the Settlement as set forth herein, were negotiated at arm's length, were negotiated in good faith, and reflect an agreement reached voluntarily, based on the recommendation of a neutral mediator and after consultation with experienced legal counsel.
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WHAT ARE THE TERMS OF THE SETTLEMENT? |
In consideration for the full and final release, settlement, and discharge of any and all Released Claims against Released Persons upon Final Approval, Settling Parties have agreed to the following consideration:
Director Defendants shall, jointly and severally, provide to
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of the Stipulation, which shall have the total value set forth in Section 2.6 of the Stipulation.
Director Defendants shall retuthe Settlement Options in the form of (i) cash ("Returned Cash"), (ii) unrestricted common shares of
The value of each Returned Option shall be the difference between the Settlement Stock Price and the actual strike price of each Returned Option.
For purposes of determining the amount of Returned Cash, each Settlement Option shall be converted to an amount of Returned Cash by calculating the difference between the Settlement Stock Price and the Total Weighted Average Strike Price, as defined in Section 1.28 of the Stipulation (approximately
For purposes of determining the amount of Returned Stock, each Settlement Option shall be converted to a number of Returned Shares by calculating the difference between the Settlement Stock Price and the Total Weighted Average Strike Price, divided by the Settlement Stock Price, regardless of the price of
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Using the valuation methods set forth in the Stipulation, Director Defendants shall deliver to
Director Defendants, jointly and severally, shall cause the Settlement Option Amount (using the valuation methods set forth in Section 2 of the Stipulation) to be provided to
Director Defendants shall forego permanently the 2021 and 2022 Foregone Options (to the extent Director Defendants served on the
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This Action was brought as a derivative action on behalf of and for the benefit of
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WHAT WILL HAPPEN IF THE SETTLEMENT IS APPROVED? |
If the Settlement is approved, the Court will enter the Final Judgment, at which time the Action against Settling Defendants shall be dismissed with prejudice. The foregoing dismissal is without fees or costs, except as expressly provided in the Stipulation.
Upon the Effective Date, Plaintiff and
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liability companies, corporations, predecessors, predecessors-in-interest, successors, successors-in-interest, assigns, financial or investment advisors, advisors, consultants, investment bankers, entities providing any fairness opinion, underwriters, brokers, dealers, financing sources, lenders, commercial bankers, attorneys, personal or legal representatives, accountants, associates, and insurers, coinsurers, and re-insurers shall thereupon be deemed to have fully, finally, and forever released, settled, and discharged Released Settling Defendant Parties from and with respect to every one of Released Plaintiff Parties' Claims, and shall thereupon be forever barred and enjoined from commencing, instituting, prosecuting, or continuing to prosecute any Released Plaintiff Parties' Claims against any Released Settling Defendant Parties.
Upon the Effective Date, Settling Defendants and, as applicable, their respective past, present, or future family members, spouses, heirs, trusts, trustees, executors, estates, administrators, beneficiaries, distributees, foundations, agents, employees, fiduciaries, partners, partnerships, general or limited partners or partnerships, joint ventures, limited liability companies, corporations, predecessors, predecessors-in-interest, successors, successors-in-interest, assigns, financial or investment advisors, advisors, consultants, investment bankers, entities providing any fairness opinion, underwriters, brokers, dealers, financing sources, lenders, commercial bankers, attorneys, personal or legal representatives, accountants, associates, and insurers, coinsurers, and re-insurers shall thereupon be deemed to have fully, finally, and forever released, settled, and discharged Released Plaintiff Parties and
The contemplated releases given by Settling Parties in the Stipulation extend to Released Claims that Settling Parties did not know or suspect to exist at the time of the release, which if known, might have affected the decision to enter into this Settlement.
With respect to any and all Released Claims, Settling Parties shall be deemed to have waived any and all provisions, rights, and benefits conferred by any law of
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or equivalent provision of any law of any state or territory of
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.
Settling Parties and Current Stockholders shall be deemed by operation of law to have acknowledged that the foregoing waiver was separately bargained for and is a key element of the Settlement.
Settling Parties acknowledge that they may discover facts in addition to or different from those that they now know or believe to be true with respect to the Released Claims, but that it is their intention to fully, finally, and forever settle any and all such Released Claims, known or unknown, suspected or unsuspected, without regard to the subsequent discovery or existence of such additional or different facts, to the fullest extent permitted by law.
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WHAT ARE THE PARTIES' REASONS FOR THE SETTLEMENT? |
The Settlement set forth in the Stipulation reflects the results of Settling Parties' negotiations and the final terms of their agreement, which was reached only after arm's-length negotiations among Settling Parties, who were all represented by counsel with extensive experience and expertise in derivative litigation.
This Settlement is not evidence of the validity or invalidity of any claims or defenses in the Action or any other actions or proceedings, or of any wrongdoing by any of Settling Defendants or of any damages or injury to Plaintiff and
Plaintiff believes that the Released Plaintiff Parties' Claims had merit when filed and continue to have merit, and Plaintiff is settling the Plaintiff's Claims because it believes that the Settlement will provide substantial value to
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Settling Defendants have denied, and continue to deny, all allegations of wrongdoing, fault, liability, or damage with respect to all claims asserted or that could be asserted in the Action or any other action, in any court or tribunal, relating to the Relevant Period Director Compensation, including any allegations that Settling Defendants have committed any violations of law, that they have acted improperly in any way, and that they have any liability or owe any damages of any kind to Plaintiff and
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HOW WILL THE ATTORNEYS BE PAID? |
Plaintiff's Counsel will submit a Fee and Expense Application to the Court. Settling Parties acknowledge and agree that any Fee and Expense Award in connection with the Settlement shall be paid by
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WHEN AND WHERE WILL THE SETTLEMENT HEARING BE HELD? DO I HAVE THE RIGHT TO APPEAR AT THE SETTLEMENT HEARING? |
The Court will consider the Settlement and all matters related to the Settlement, including the Fee and Expense Application, at the Settlement Hearing. The Settlement Hearing will be held before
At the Settlement Hearing, any
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reasonable, and adequate and in the best interests of
Renaissance Centre
(302) 984-6300
Counsel for Plaintiff
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Kevin M.
(302) 651-7700
Attorneys for Defendants
(302) 655-5000
Attorneys for Nominal Defendant
Unless the Court otherwise directs, any Person who fails to object in the manner described above shall be deemed to have waived and forfeited any and all rights such Person may otherwise have to object to the Settlement and/or any Fee and Expense Award to Plaintiff's Counsel (including any right of appeal) and shall be forever barred from raising such objection in the Action or any other action or proceeding.
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CAN I SEE THE COURT FILINGS? |
This Notice does not purport to be a comprehensive description of the Action, the allegations related thereto, the terms of the Settlement, or the Settlement Hearing. For a more detailed statement of the matters involved in the Action, you may inspect the pleadings, the Stipulation, the Orders entered by the Court, and other papers filed in the Action at the
Tel.: (212) 231-1500
(212) 789-1340
Renaissance Centre
(302) 984-6300.
DO NOT CALL OR WRITE THE COURT OR THE OFFICE OF THE REGISTER IN CHANCERY REGARDING THIS NOTICE
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NOTICE TO PERSONS OR ENTITIES HOLDING RECORD OWNERSHIP ON BEHALF OF OTHERS |
Brokerage firms, banks, and other persons or entities who held shares of
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(a) download copies of this Notice from www.TeslaDetroitDerivativeAction.com and promptly forward the copies of the Notice to all such beneficial owners; or (b) promptly provide a list of the names and addresses of all such beneficial owners to KCC, who will promptly send copies of the Notice to such beneficial owners. Copies of this Notice may be obtained by calling KCC toll-free at (866) 573-0260; or emailing [email protected]; or mailing
BY ORDER OF THE COURT OF CHANCERY OF THE
Dated:
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