Opinion
No. C-01-0684 WHA
December 9, 2003
ORDER AND FINAL JUDGMENT
This matter came before the Court for hearing on October 15, 2003 ("Final Approval Hearing") pursuant to the Order of this Court, dated July 3, 2003, on the application of the parties for approval of the settlement of this shareholder derivative action, as contained in the Stipulation of Settlement, dated as of January 31, 2003 ("the Stipulation"). At the Final Approval Hearing, the Court advised the parties that the Court would consider modifications to the settlement prior to issuing a ruling. A modified settlement was presented to the Court on or about October 31, 2003 and supplemented on November 14, 2003, pursuant to an Order of the Court dated November 10, 2003, requesting that the parties recommend a procedure by which al interested parties could monitor the progress of the proposed corporate governance policies. On November 21, 2003, the Court issued an Order granting final approval of the settlement as modified by the submissions of October 31 and November 14.
Due and adequate notice having been given to the Critical Path, Inc. ("Critical Path" or "the Company") shareholders, and the Court having considered all papers filed and proceedings in this action and otherwise being fully informed and good cause appearing therefore, IT IS HEREBY ORDERED, ADJUDGED AND DECREED that:
1. This Court has jurisdiction over the subject matter of this litigation and over all parties to the litigation. Capitalized terms herein are the same as those used in the Stipulation.
2. Pursuant to Fed.R.Civ.P. 23.1 ("Rule 23.1"), this Court hereby approves as fair, reasonable and adequate, the revised settlement of this action, consisting of (1) the adoption and subsequent reporting by the Company of the corporate governance policies attached as Exhibit A to the Stipulation; (2) a cash payment to Nominal Defendant Critical Path of $330,000, to be paid by the Company's insurance carrier, on defendants' behalf; and (3) payment of $320,000 in fees and costs to Co — Lead Derivative Counsel. A follow up report on the corporate governance policies will be included in the audit committee's report in the annual proxy statement for the next five years. The report will be prepared by an officer of the company and be reviewed and approved by the chair of the audit committee.
3. This litigation and all claims contained therein, as well as all of the Released Claims, are dismissed with prejudice as to the Derivative Plaintiffs and as against the Released Persons. The parties are to bear their own costs, except as otherwise provided herein.
4. Upon the Effective Date hereof, the Derivative Plaintiffs shall be deemed to have, and by operation of the Judgment shall have, fully, finally, and forever released, relinquished and discharged all Released Claims (including Unknown Claims) against the Released Persons.
5. All Critical Path shareholders are hereby forever barred and enjoined from prosecuting the Released Claims against the Released Persons.
6. Upon the Effective Date, each of the Released Persons shall be deemed to have, and by operation of this Judgment shall have, fully, finally, and forever released, relinquished and discharged Derivative Plaintiffs and Co — Lead Derivative Counsel from all claims (including Unknown Claims), arising out of, relating to, or in connection with the institution, prosecution, assertion, settlement or resolution of this litigation or the Released Claims.
7. The mailing of the Notice of Pendency Of Shareholder Derivative Action and Proposed Settlement to Critical Path shareholders, and dissemination of the Press Release Announcing Pendency and Settlement Of Derivative Action, constitute the best notice practicable under the circumstances, and satisfy the requirements of Rule 23.1 and the requirements of due process.
8. Neither the settlement of this action nor any act performed or document executed pursuant to or in furtherance thereof (i) is or may be deemed to be or may be used as an admission of, or evidence of, the validity of any Released Claim, or of any wrongdoing or liability of the Individual Defendants or the Nominal Defendant, or (ii) is or may deemed to be or: may be used as an admission of, or evidence of, any fault or omission of any of the Individual Defendants or the Nominal Defendant in any civil, criminal or administrative proceeding in any court, administrative agency or other tribunal.
9. The payment of attorneys' fees and reimbursement of expenses to Co — Lead Derivative Counsel in the aggregate amount of $320,000, to be paid by the Company's insurance carrier, on defendants' behalf, is fair and reasonable.
10. The parties are directed to consummate the terms of the settlement, and jurisdiction over all matters relating to the consummation of the settlement is reserved in this Court.
11. The Court finds that during the course of the litigation, the Settling Parties and their respective counsel at all times complied with the requirements of Fed.R.Civ.P. 11.
12. In the event that the settlement does not become effective as that term is defined in the Stipulation, then this Judgment shall be rendered null and void to the extent provided by and in accordance with the Stipulation and shall be vacated and, in such event, all orders entered and releases delivered in connection herewith shall be null and void to the extent provided by and in accordance with the Agreement.
13. There being no reason for delay, the Clerk of the Court is hereby directed, pursuant to Fed.R.Civ.P. 54, to enter this Order as a final judgment.
IT IS SO ORDERED.