SETTLEMENT AGREEMENT
Exhibit 99.1
[Names and addresses of counsel
appear on signature page]
appear on signature page]
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN XXXX DIVISION
In re ATMEL CORPORATION DERIVATIVE LITIGATION |
Master File No. CV 06-4592-JF |
This Document Related To:
All Actions.
Settlement Agreement
Case No. 06-04592 JF
Case No. 06-04592 JF
This Agreement is entered into by, on behalf of, and among: plaintiffs in the Federal Action;
plaintiffs in the State Actions; the Settling Defendants; and nominal party Atmel Corporation.
This Agreement is intended to fully, finally, and forever resolve, discharge, and settle the
Settled Claims, upon and subject to the terms and conditions of this Agreement.
As used in this Agreement, the following terms shall have the meanings specified below:
1.1 “Actions” means the Federal Action and the State Actions.
1.2 “Agreement” means this settlement agreement, including all exhibits.
1.3 “Atmel” or the “Company” means Atmel Corporation and its subsidiaries.
1.4 “California Derivative Action” means the derivative actions now pending in the Superior
Court of the State of California, County of Santa Xxxxx, consolidated under the caption “In re
Atmel Corporation Derivative Litigation,” Master File No. 106-CV-06849.
1.5 “Counsel for Defendants” means the law firm of Xxxxxxxx & Xxxxxxxx; the law firm of
Xxxxxxx, Xxxxx & Xxxxxx; the law offices of Xxxxx Xxxxxx; and the law firm of Xxxxxx, Xxxxxxxxxx &
Xxxxxxxxx.
1.6 “Current Atmel Shareholder(s)” means all record and beneficial owners of Atmel common
stock and the representatives, trustees, executors, heirs, administrators, transferees, agents,
successors, or assigns of all such owners, immediate or remote, in each case solely in their
capacities as stockholders of Atmel as of December 18, 2009.
1.7 “Defendants” means Xxxxxx Xxxxxxxx, Xxxx Xxxxxxxx, Xxxxx X. Xxxxxx, Xxxxx Xxxxxxx Xxxx,
Xxxxx-Xxxxx Xx, Xxxxxx Xxxxx, Xxxx Xxxxxxx, Xxxx Xxxxxxx, X. Xxxxx Xxxxxx, Xxxxxx Xxxxxxx, Xxxxxx
Xxx, Xxxxx Xxxxxxxxx, Xxxxxx X. Xxxx, Xxxx Xxxx, Xxxxxx X. Xxxxxxxx, Xxxxxx Xxxxxx, Xxxxxx Xxxxxx,
X. Xxxxxxx Xxxx, Xxxxxxx Xxxxxx, Xxxxxx X. XxXxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx Der Xxxxxxxxx, Xxxx
Xxxxxxx, Xxxxxxx Xxxxxxxxx, and Xxxxxx Xxxx.
1.8 “Delaware Derivative Action” means the derivative action now pending in the Court of
Chancery of the State of Delaware, captioned “Xxxxxx Xxxxxx v. Xxxxxx X. Xxxx, et al.,” Civil
Action No. 4399-CC.
1
1.9 “Effective Date” means the first date by which all of the events set forth in paragraphs
10.2 to 10.12 have occurred.
1.10 “Federal Action” means the derivative actions now pending in the Federal Court and
consolidated under the caption “In re Atmel Corporation Derivative Litigation,” Master File No. CV
06-4592-JF.
1.11 “Federal Court” means the United States District Court for the Northern District of
California, San Xxxx Division.
1.12 “Federal Plaintiffs” means Xxxxxxx XxXxxxx, Xxxxx Xxxxxxxxx, Xxxxxxx Xxxxxx, Xxxxxxx X.
Xxxxx, and Xxxxxx Xxxxx.
1.13 “Federal Plaintiffs’ Counsel” means the law firm of Barroway Topaz Xxxxxxx Xxxxxxx &
Check, LLP, and Wolf Haldenstein Xxxxx Xxxxxxx & Xxxx.
1.14 “Final Federal Judgment” means the final judgment and order of dismissal in the Federal
Action as provided for in paragraph 7.1.
1.15 “Final State Judgments” means the orders dismissing each of the State Actions with
prejudice as provided for in paragraph 7.3.
1.16 “Non-Settling Defendant” means Xxxxx Xxxxxxx Xxxx.
1.17 “Notice of Proposed Settlement” means the Notice of Proposed Settlement provided for in
paragraph 6.1 and Exhibit B.
1.18 “Parties” means the Plaintiffs, Defendants, and Atmel.
1.19 “Party” means any one of the Parties.
1.20 “Person” means any individual, corporation, limited liability corporation, professional
corporation, partnership, limited partnership, limited liability partnership, association, joint
stock company, estate, trust, unincorporated association, government, or any political subdivision
or agency thereof.
1.21 “Plaintiffs” means the Federal Plaintiffs and State Plaintiffs.
1.22 “Plaintiffs’ Counsel” means the law firms of Barroway Topaz Xxxxxxx Xxxxxxx & Check, LLP,
Wolf Haldenstein Xxxxx Xxxxxxx & Xxxx, Xxxxxxx Xxxxx LLP, Xxxxxxxx &
2
Xxxxxxxx, Xxxxxxxx Xxxxx Xxxxxx Xxxxxx & Xxxxxxx LLP, Rigrodsky & Xxxx, and Xxxxx, Xxxxx &
Xxxxx.
1.23 “Preliminary Order” means the order preliminarily approving the Settlement, approving the
Notice of Proposed Settlement, and setting the settlement hearing as provided for in paragraph 6.1
of this Agreement.
1.24 “Released Persons” means the Settling Defendants and each of their successors, heirs,
executors, administrators, assigns, spouses, attorneys, legal representatives, any entity in which
any Settling Defendant has an interest, and each of Atmel’s past and present directors, officers,
agents, advisors, employees, affiliates, predecessors, parents, subsidiaries, divisions, and
related or affiliated entities. Notwithstanding anything to the contrary in this Agreement,
Released Persons shall not include the Non-Settling Defendant or any of his successors, heirs,
executors, administrators, and assigns.
1.25 “Settled Claims” means all claims, rights, demands, causes of action, liabilities, and
suits of any kind whatsoever, whether known or unknown, that have been, could have been, or in the
future might be asserted by Atmel, by any of the Plaintiffs individually or on behalf of Atmel, or
by any shareholder derivatively on Atmel’s behalf, based on, arising out of, or in any way relating
to: Atmel’s historical stock option granting practices between 1991 and 2006; Atmel’s restatement
of its financial reports in June 2007; any of the acts, failures to act, omissions,
misrepresentations, transactions, occurrences, or other matters alleged in any of the Actions; the
subject matter of the Actions; or any public disclosure regarding Atmel’s stock option grants
between 1991 and 2006.
1.26 “Settling Defendants” means Xxxxxx Xxxxxxxx, Xxxx Xxxxxxxx, Xxxxx X. Xxxxxx, Xxxxx-Xxxxx
Xx, Xxxxxx Xxxxx, Xxxx Xxxxxxx, Xxxx Xxxxxxx, X. Xxxxx Xxxxxx, Xxxxxx Xxxxxxx, Xxxxxx Xxx, Xxxxx
Xxxxxxxxx, Xxxxxx X. Xxxx, Xxxx Xxxx, Xxxxxx X. Xxxxxxxx, Xxxxxx Xxxxxx, Xxxxxx Xxxxxx, X. Xxxxxxx
Xxxx, Xxxxxxx Xxxxxx, Xxxxxx X. XxXxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx Der Xxxxxxxxx, Xxxx Xxxxxxx,
Xxxxxxx Xxxxxxxxx, and Xxxxxx Xxxx. Settling Defendants does not include the Non-Settling
Defendant.
1.27 “Settling Parties” means Plaintiffs, Settling Defendants, and Atmel.
3
1.28 “State Actions” means (a) the derivative actions now pending in the Superior Court of
the State of California, County of Santa Xxxxx, and consolidated under the caption “In re Atmel
Corporation Derivative Litigation,” Master File No. 106-CV-06849; (b) the derivative action now
pending in the Court of Chancery of the State of Delaware captioned “Xxxxxx Xxxxxx v. Xxxxxx X.
Xxxx, et al.,” Civil Action No. 4399-CC; (c) the petition for writ of mandate to compel inspection
and copying of books, records, and documents of Atmel Corporation now pending in the Superior Court
of the State of California, County of Santa Xxxxx, captioned “Xxxxxxx X. Xxxxxx v. Atmel
Corporation,” Case No. 107-CV-095929; and (d) the complaint to compel inspection of books and
records now pending in the Court of Chancery of the State of Delaware captioned “Xxxxx and Xxxx
Xxxxxx v. Atmel Corporation,” Case No. 4334-CC.
1.29 “State Courts” means the Superior Court of the State of California, County of Santa
Xxxxx, and the Court of Chancery of the State of Delaware.
1.30 “State Plaintiffs” means Xxxx Xxxxxxxxxx, Xxxxx and Xxxx Xxxxxx, Xxxxxx Xxxxxx, and
Xxxxxxx Xxxxxx.
1.31 “State Plaintiffs’ Counsel” means Plaintiffs’ Counsel other than Federal Plaintiffs’
Counsel.
2.1 On July 25, 2006, Atmel announced that its audit committee had initiated an independent
investigation “regarding the timing of Atmel stock option grants.” The investigation covered
Atmel’s stock option grants between March 19, 1991, and August 3, 2006. In June 2007, Atmel
restated its financial statements for the periods between 1993 and 2005 by approximately $116
million.
2.2 On July 27, 2006, Xxxxx Xxxxxxxxx filed a derivative action in the Federal Court against
certain current and former officers and directors of Atmel (Action No. C06-04592). Three
additional derivative actions were filed in the same court by Xxxxxxx Xxxxx (Action No. C06-4973),
Xxxxxxx Xxxxxx (Action No. C06-04680), and Xxxxxxx XxXxxxx (Action No. C08-01031). On October 4,
2006, these actions were consolidated under the caption In re Atmel Corp. Derivative Litig., Master
File No. CV 06-4592-JF. Xxxxxxxxx, Xxxxxx and Xxxxx were
4
appointed lead plaintiffs, and Barroway Topaz Xxxxxxx Xxxxxxx & Check, LLP, and Xxxx
Xxxxxxxxxxx Xxxxx Xxxxxxx & Xxxx, LLP, were appointed co-lead plaintiffs’ counsel in the Federal
Action.
2.3 On November 3, 2006, plaintiffs in the Federal Action filed a consolidated complaint. The
complaint alleged that the individual defendants violated accounting rules, company policy, federal
securities law, and state law “by intentionally manipulating Atmel stock option grants between
February 1994 and April 2003.” The complaint alleged that the individual defendants backdated
stock option grants, made false and misleading statements in Form 10-Ks, Form 10-Qs, proxy
statements, and Form 4s in order to conceal the backdating, engaged in xxxxxxx xxxxxxx, and engaged
in other conduct leading to Atmel’s June 2007 restatement. The Federal Action brought federal
securities claims under Sections 14(a), 20(a), 10(b), and Rule 10b-5 of the Securities Exchange
Act. It also brought claims for breach of fiduciary duty, aiding and abetting, unjust enrichment,
constructive fraud, corporate waste, breach of contract, and violation of California Corporations
Code section 25402.
2.4 On July 26, 2006, Xxxx Xxxxxxxxxx filed a shareholder derivative action in the Superior
Court of the State of California, County of Santa Xxxxx, against certain current and former
officers and directors of Atmel (Action No. 106-CV-068049). On August 18, 2006, Xxxxxx Xxxxxx
filed a shareholder derivative action in the same court (Action No. 106-CV-068049). On September
29, 2006, Xxxxxxxx Xxxxxxx Xxxxx, Xxxxxx X. Xxxxxx, Xx., Xxxxx X. Xxxxxx, and Xxxxxx Xxxxx filed a
shareholder derivative action in the same court (Action No. 106-CV-072097). These actions were
consolidated as Case No. 106-CV-068049. On February 20, 2007, Xxxx Xxxxxxxxxx was appointed lead
plaintiff and the law firm of Xxxxxxx Xxxxx LLP was appointed lead counsel in the California
Derivative Action. On April 23, 2007, the plaintiffs in the California Derivative Action filed a
consolidated complaint.
2.5 The California Derivative Action consolidated complaint alleged that certain current and
former officers and directors engaged in a “scheme dating back to at least 1993 and continuing to
at least 2005, whereby defendants caused or allowed Atmel insiders to manipulate their stock-option
grant dates so as to secretly maximize their profits from the stock options.”
5
The complaint also alleged that defendants violated corporate policies, accounting rules, and
California state law by engaging in stock option backdating and springloading, by making false and
misleading statements in Form 10-Ks and Form 10-Qs in order to conceal stock option manipulation,
and by engaging in other conduct leading to Atmel’s June 2007 restatement. The complaint also
alleged that, between 1996 and 2005, certain defendants engaged in illegal xxxxxxx xxxxxxx. The
California Derivative Complaint brought common law claims for unjust enrichment, breach of
fiduciary duty, abuse of control, gross mismanagement, corporate waste, accounting, rescission, and
constructive trust. It also brought statutory claims pursuant to California Corporations Code
sections 25402 and 25403.
2.6 On May 10, 2007, Xxxxxxx Xxxxxx and Xxxxxxxx Xxxxxx made a demand on Atmel’s board under
California Corporations Code section 1601 to inspect documents related to stock option backdating.
On October 9, 2007, Xxxxxxx Xxxxxx brought a verified petition for writ of mandate to compel
inspection and copying of books, records, and documents of Atmel in the Superior Court of the State
of California, County of Santa Xxxxx (Case No. 107-CV-095929).
2.7 On June 23, 2008, Xxxxx and Xxxx Xxxxxx made a demand on Atmel’s board for production of
certain books and records pursuant to Section 220 of the Delaware General Corporation Law. On
February 5, 2009, the Goldens filed a complaint in the Court of Chancery of the State of Delaware,
pursuant to 8 Del. C. section 220, to compel inspection of Atmel’s books and records.
2.8 On May 21, 2008, Xxxxxx Xxxxxx filed a request to dismiss his California derivative action
without prejudice. This request was entered on May 2, 2008. On May 21, 2008, Xxxxxx Xxxxxx made a
demand on Atmel’s board of directors for appointment of an independent committee to investigate (a)
the “involvement” of the defendants in Atmel’s “financial reporting process and granting of stock
options”; (b) “all stock options and any other compensation paid to [the defendants]”; (c) “the
amount of damages sustained by [Atmel] as a result of the [defendants’] breaches of fiduciary
duty”; (d) possible xxxxxxx xxxxxxx; and (e) “all costs to [Atmel] associated with the various
investigations of the Company.”
6
2.9 On February 27, 2009, Xx. Xxxxxx filed the Delaware Derivative Action (Civil Action No.
4399-CC) alleging that Atmel’s board members had violated their fiduciary duties by failing to
respond appropriately to his demand and by failing to take appropriate steps “to recover the
damages Atmel suffered from the Individuals who engaged directly in a scheme to grant backdated
stock options.”
2.10 In September 2008 the Parties began to engage in settlement discussions. On September
22, 2008, Atmel provided the Federal Plaintiffs with non-public documents in anticipation of an
October 24, 2008 mediation. Atmel has subsequently provided to both the Federal Plaintiffs and
State Plaintiffs nearly 200,000 pages of documents.
2.11 On September 23, 2008, and on October 7, 2008, after reviewing both public and non-public
documents produced by Atmel, Federal Plaintiffs’ Counsel sent letters to counsel for Atmel
demanding certain monetary relief and corporate therapeutics.
2.12 On October 24, 2008 and November 18, 2008, the Parties participated in two all-day,
in-person mediations with the Xxxxxxxxx Xxxx X. Xxxxxxxx (Xxx.).
2.13 Over the next several months, the Parties continued to engage in extensive arm’s-length
settlement discussions, during which the issues were thoroughly discussed in a xxxxx exchange of
views on the merits of the claims and defenses. Plaintiffs’ Counsel conferred with Counsel for
Defendants on multiple occasions to discuss monetary relief and corporate governance reforms.
2.14 On April 6, 2009, the Parties participated in a third all-day, in-person mediation with
Judge Xxxxxxxx. After the third mediation, the Parties continued their negotiations with the
assistance of Judge Xxxxxxxx.
2.15 Notwithstanding these efforts, in June 2009 the Parties reached an impasse. The Parties
began to proceed with litigation and with discovery.
2.16 In October and November 2009, the Parties met and conferred in an effort to bridge their
differences and come to a resolution of the Actions. They discussed and negotiated the material
terms of a possible settlement.
7
2.17 As a result of these lengthy, arm’s-length settlement discussions, and with the
substantial assistance of Judge Xxxxxxxx as mediator, the Plaintiffs and the Settling Defendants
have agreed to settle the Actions on the terms and conditions set forth in this Agreement. Judge
Xxxxxxxx is familiar with the principal terms of this Agreement and has recommended to the Settling
Parties that they settle the Actions on these terms.
3.1 Plaintiffs believe that the claims they have asserted in the Actions on behalf of Atmel
have merit. However, Plaintiffs’ Counsel recognize and acknowledge the expense and length of
continued proceedings necessary to prosecute the Actions against the Settling 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 Actions, as well as the
difficulties and delays inherent in such litigation. Plaintiffs’ Counsel are also mindful of the
inherent problems of proof and possible defenses to the claims asserted in the Actions, or that may
be asserted. Based on their evaluation, Plaintiffs and Plaintiffs’ Counsel have determined that
the settlement set forth in the Agreement is in the best interests of the Plaintiffs, Atmel, and
Current Atmel Shareholders. Plaintiffs’ Counsel believe that the Settlement set forth in the
Agreement confers substantial benefits upon Atmel and Current Atmel Shareholders.
3.2 Settling Defendants have indicated their intent to vigorously contest each and every claim
in the Actions. Settling Defendants have consistently maintained that they acted in accordance
with governing laws at all times and that they had no involvement in the alleged wrongdoing.
Settling Defendants contend that they have also compiled testimony and documentary evidence from
which they are prepared to demonstrate that they had no involvement in the alleged wrongdoing. In
addition, there has been no finding whatsoever, by any court or agency, of any wrongdoing of any
kind on Settling Defendants’ part.
3.3 Settling Defendants nonetheless have concluded that it is in their best interests that the
Actions be settled on the terms and conditions set forth in this Agreement. Settling Defendants
reached that conclusion after considering the factual and legal issues in the Actions,
Settlement Agreement
Case No. 06-04592 JF
Case No. 06-04592 JF
8
the substantial benefits to Settling Defendants and to Atmel of a final resolution of the
Actions, the recommendations of Judge Xxxxxxxx, the expense that would be necessary to defend the
Actions through trial and through any appeals that might be taken, the benefits of disposing of
protracted and complex litigation, and the desire of Settling Defendants to conduct their business
unhampered by the distractions of continued litigation. Settling Defendants believe the Agreement
confers substantial benefits upon Atmel and Current Atmel Shareholders.
4. NO ADMISSION OF FAULT, LIABILITY, OR WRONGDOING
4.1 Settling Defendants enter into this Agreement without in any way acknowledging any
personal fault, liability, or wrongdoing of any kind. Settling Defendants continue vigorously to
deny all of the material allegations in the Actions, and assert that all claims in the Actions are
completely without merit.
4.2 Neither this Agreement, nor any of its terms or provisions, nor any of the negotiations or
proceedings connected with it, shall be construed as an admission or concession by Settling
Defendants of the truth of any of the allegations in the Actions, or of any liability, fault, or
wrongdoing of any kind.
4.3 Neither this Agreement, nor any of its terms or provisions, nor any of the negotiations or
proceedings connected with it, shall be referred to, offered as evidence, or received in evidence
in any pending or future civil, criminal, or administrative action or proceeding, except in a
proceeding to enforce this Agreement, to defend against the assertion of the Settled Claims, or as
otherwise required by law.
5.1 Within ten days after entry of the Preliminary Order, the Settling Defendants shall pay or
cause to be paid $9.65 million to Atmel.
5.2 The Settling Parties agree and acknowledge that Plaintiffs’ filing and prosecution of the
Actions, and the negotiations with Plaintiffs’ Counsel, were material factors in Atmel’s ability to
obtain the $9.65 million in monetary settlement payments set forth in paragraph 5.1, as well as
Atmel’s decision to implement the corporate governance reforms set forth in paragraph
Settlement Agreement
Case No. 06-04592 JF
Case No. 06-04592 JF
9
5.3. Atmel acknowledges that these monetary settlement payments and corporate governance
reforms confer substantial benefits upon Atmel and Current Atmel Shareholders.
5.3 The Settling Parties have conducted extensive negotiations over an extended period of time
and have reached agreement that, within thirty days of the Effective Date, Atmel shall, if it has
not done so already, adopt the corporate governance reforms set forth below.
a. | Pursuant to Atmel’s Stock Option, RSU, and Performance Share Granting Policy (“Stock Option Policy”) all stock options (including new hire and promotion grants) shall be priced as of the fifteenth day of the month on or after the approval date, or the next trading day if the market is not open on the fifteenth day of the month (for example, options with an approval date between March 16 and April 15 would have a pricing date of April 15). | ||
b. | With the exception of CEO-approved grants, discussed immediately below, (i) the board of directors, or the compensation committee of the board, shall approve all option grants and determine the grantees, amounts, dates, and prices of all stock options, and (ii) no additions or changes to the grantees, amounts, dates, or prices shall be made after a grant is approved without securing the prior approval of the board of directors or compensation committee of the board. | ||
c. | Atmel’s CEO may award grants for new hires and promotions at the director level or below (excluding refresh grants) provided that these grants meet the following requirements: (a) they must be approved in advance by the Vice President of Human Resources or his or her delegate and the employee’s manager; (b) they must be approved (before or after) by the Chief Legal Officer (“CLO”), or his or her delegate; (c) no more than 100,000 options may be awarded to a single individual in a single grant, and no more than 150,000 options may be awarded to any one individual in any twelve-month period; (d) grants must be consistent with the Stock Option Policy then in effect; and (e) copies of the CEO’s written |
Settlement Agreement
Case No. 06-04592 JF
Case No. 06-04592 JF
10
approvals must be provided to the compensation committee of the board of directors on at least an annual basis. | |||
d. | The compensation committee of the board of directors shall be comprised of independent directors who must meet NASDAQ’s independence requirements, the non-employee director definition of Rule 16b-3 of the Securities Exchange Act of 1934, and the outside director definition of section 162(m) of the Internal Revenue Code of 1986. | ||
e. | The CLO or his or her delegate shall attend any and all meetings of the board of directors or its compensation committee at which options are granted and shall make reasonable efforts to prepare minutes of any such meeting within thirty days of the date of the meeting, absent extenuating circumstances. | ||
f. | Any options granted by unanimous written consent shall (i) expressly state the identity of each option recipient and the number of options granted to each recipient; (ii) show the name and date of approval of each director; and (iii) state the method of transmission by which each director communicated his or her written consent. | ||
g. | Awards granted as “performance based compensation” within the meaning of section 162(m) of the tax code shall be administered by a committee of two or more independent directors. | ||
h. | Atmel’s stock option plan provides that, with the exception of options granted pursuant to a merger or other corporate transaction, the exercise prices of all stock options shall be at least 100% of the closing price of the Company’s stock on the date of grant. | ||
i. | Atmel’s Stock Option Policy shall comply with applicable legal requirements. |
Settlement Agreement
Case No. 06-04592 JF
Case No. 06-04592 JF
11
j. | Atmel shall account properly for all stock options granted under its Stock Option Policy and create appropriate documentation of the proper accounting for those options. Atmel will retain board committee minutes and unanimous written consents in which stock option grants are approved (including lists of the approved grants) for four years. | ||
k. | Atmel shall regularly monitor the option process and its compliance with the Stock Option Policy using the following monitoring mechanisms: (1) Atmel shall hold regular meetings among its stock administrator, outside counsel, and a representative of the legal department, at which questions relating to options shall be addressed; (2) Atmel shall have a Stock Administration Oversight Committee comprised of members of its finance, legal, and HR teams, and outside counsel, which will hold regular meetings to review Atmel’s stock administration policies and procedures; and (3) Atmel’s corporate controller or principal accounting officer shall periodically review Atmel’s stock option grants. | ||
l. | At least annually, the audit committee of the board of directors shall meet with Atmel’s internal auditors and/or independent auditors to review and approve the Company’s accounting for stock-based compensation, and to consider any concerns raised by such auditors regarding the Company’s internal controls pertaining to stock-based compensation. |
m. | Two-thirds (2/3) of Atmel’s directors shall be independent directors. If a board member resigns or is removed from the board, the percentage of independent directors may fall below two-thirds until a replacement has been found or the size of the board has been reduced. | ||
n. | The Corporate Governance and Nominating Committee shall certify, by resolution, that each of the independent directors is independent. Each |
Settlement Agreement
Case No. 06-04592 JF
Case No. 06-04592 JF
12
independent director shall notify the Corporate Governance and Nominating Committee if his or her status as an independent director has changed. | |||
o. | In the event Atmel does not have separate independent chairman and chief executive officer positions, it will appoint a lead independent director. | ||
p. | The compensation and audit committees of Atmel’s board of directors shall have standing authorization to obtain legal or other advisors of their choice and to incur reasonable expenses in connection with obtaining services from those advisors. Those advisors shall report directly to the committee that engaged them. | ||
q. | In the event that the Company determines to restate any of its financial reports, the audit committee or a special committee comprised of independent directors may consider whether the restatement resulted from intentional misconduct on the part of a Company officer or director. If that committee determines that the restatement resulted from intentional misconduct by any Company officer or director, then the committee may also consider whether it would be in the Company’s best interests to seek to recover that portion of any incentive payment made to such individual, pursuant to an incentive plan adopted by the board, that was expressly tied to financial performance metrics that were restated (i.e., excluding salary, board retainer fees, and other financial payments not expressly determined by the financial results that were restated). |
r. | The corporate governance provisions set out in this agreement shall remain in effect for a minimum of three years from the date of this agreement, unless: (i) they come into conflict with any applicable state or federal statute, rule, regulation, listing standard, or case law, in which case the Company may modify the affected provisions in order to comply with the statute, rule, regulation, listing |
Settlement Agreement
Case No. 06-04592 JF
Case No. 06-04592 JF
13
standard or case law; or (ii) the Company determines they should be modified, in the best interests of the Company, because of or in response to, among other things, extraordinary corporate transactions or potential transactions, changes to accounting rules or recommendations from the Company’s internal or external auditors, and/or other business, governance, litigation, risk management, or liability mitigation needs. Any determination to modify the corporate governance provisions prior to the expiration of three years from the date of this agreement shall: (i) be made by a majority of the independent members of the Company’s board of directors, and (ii) be promptly disclosed in the Company’s next Form 10-Q or 10-K filing, a Form 8-K filing, a press release, or on the Company’s external website. |
6.1 Federal Plaintiffs’ Counsel agree to apply to the Federal Court for entry of a Preliminary
Order, substantially in the form of Exhibit A to this Agreement, as soon as practicable after the
execution of this Agreement.
7.1 Federal Plaintiffs’ Counsel and Counsel for Settling Defendants agree to apply to the
Federal Court for entry of a Final Federal Judgment, substantially in the form of Exhibit C to this
Agreement, as soon as practicable after entry of the Preliminary Order.
7.2 Within ten days after execution of this Agreement, State Plaintiffs’ Counsel shall notify
each of the State Courts of this Agreement and shall apply to each of the State Courts for a stay
of all proceedings pending entry of the Final Federal Judgment.
7.3 Within ten days after entry of the Final Federal Judgment, State Plaintiffs’ Counsel shall
seek dismissal with prejudice of their respective State Actions and shall use their best efforts to
secure the Final State Judgments.
Settlement Agreement
Case No. 06-04592 JF
Case No. 06-04592 JF
14
8.1 As of the Effective Date, Atmel, the Plaintiffs (individually and derivatively on behalf
of Atmel and all Current Atmel Shareholders), and the Settling Defendants shall be deemed to have,
and by operation of the Final Federal Judgment shall have, fully, finally, and forever released and
discharged the Released Persons from all Settled Claims and from all claims arising out of or
relating to the defense, settlement, or resolution of the Actions as against the Settling
Defendants.
8.2 As of the Effective Date, each of the Released Persons shall be deemed to have, and by
operation of the Final Federal Judgment shall have, fully, finally, and forever released and
discharged Plaintiffs and Plaintiffs’ Counsel from all claims arising out of, relating to, or in
connection with the institution, prosecution, assertion, settlement, or resolution of the Actions
or the Settled Claims.
8.3 The Settling Parties acknowledge that the Settled Claims may include claims, rights,
demands, causes of action, liabilities, or suits that are not known or suspected to exist as of the
Effective Date. The Settling Parties nonetheless release all such claims against the Released
Persons. The Settling Parties waive, with respect to the Settled Claims, the rights afforded by
California Civil Code Section 1542, 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 Settling Parties also waive any rights or benefits afforded by any similar statute or law of
California or any other jurisdiction.
8.4 Nothing in this Agreement shall in any way impair or restrict the rights of any of the
Parties to enforce the terms of the Agreement. In addition, nothing in this Agreement shall limit
or otherwise affect the rights,
if any, of any of the Defendants to receive indemnification or advancement of legal expenses
arising from law and/or statute, or any existing written agreements.
Settlement Agreement
Case No. 06-04592 JF
Case No. 06-04592 JF
15
9.1 After negotiation of the material terms of the Settlement, Atmel’s counsel and Plaintiffs’
Counsel engaged in an arm’s-length negotiation regarding attorneys’ fees, costs, and reimbursement
of expenses to be paid to Plaintiffs’ Counsel for the substantial benefits conferred upon Atmel as
a part of the proposed settlement.
9.2 As a result of this arm’s-length negotiation, Atmel has agreed to pay, subject to court
approval, attorneys’ fees and expenses in the aggregate amount of $4.94 million.
9.3 The payment by Atmel of attorneys’ fees and expenses pursuant to paragraph 9.2 shall
constitute full and complete compensation for the substantial benefits provided by Plaintiffs’
Counsel in the Actions and shall resolve any and all claims for attorneys’ fees and expenses
arising out of the Actions.
9.4 Atmel shall, within ten days after entry of the Final Federal Judgment, pay the attorneys’
fees and expenses provided for in paragraph 9.2 to Wolf Haldenstein and Barroway Topaz as receiving
agents for Plaintiffs’ Counsel. Plaintiffs’ Counsel shall be responsible for allocation of the
fees and expenses to Plaintiffs’ Counsel based upon each counsel’s contribution to the institution,
prosecution, and resolution of the Actions.
9.5 Upon payment of the attorneys’ fees and expenses pursuant to paragraphs 9.2 and 9.4,
neither Atmel nor the Settling Defendants shall have any further liability for payment of
Plaintiffs’ attorneys’ fees, costs, or expenses in the Actions and shall have no responsibility
for, and no liability whatsoever with respect to, the division or allocation of the fee award by,
among, or with respect to any person, entity, or law firm who may assert some claim to any
attorneys’ fees or expenses. Except as expressly provided, Plaintiffs and Plaintiffs’ Counsel
shall bear their own fees, costs, and expenses, and no Released Person shall assert any claim for
expenses, costs, or fees against any Plaintiff or Plaintiffs’ Counsel.
9.6 Xxxxxxxx & Xxxxxxxx may request Court approval of an incentive fee award to plaintiff
Xxxxxx Xxxxxx not to exceed the aggregate amount of $5,000, to be paid from money set aside for the
payment of Plaintiffs’ Counsel’s attorneys’ fees and expenses as provided for in paragraph 9.2.
Settling Defendants and Atmel will not to oppose this request.
Settlement Agreement
Case No. 06-04592 JF
Case No. 06-04592 JF
16
9.7 In the event the Effective Date does not occur, or the fees and expenses payment provided
for by paragraph 9.2 is not approved by the Court, each Plaintiffs’ Counsel represents and warrants
that it will, within ten
days of written request, repay any excess amounts to Atmel. Federal Plaintiffs’ Counsel agree
to be jointly and severally liable for all such amounts, and State Plaintiffs’ Counsel agree to be
severally liable for all such amounts.
10.1 The settlement of the Actions shall become effective on the date that all of the events
set forth in paragraphs 10.2 through 10.12 have occurred.
10.2 Plaintiffs’ Counsel and Counsel for the Settling Defendants have executed this Agreement.
10.3 The Federal Court shall have entered the Preliminary Order.
10.4 Atmel’s board of directors shall have, in the exercise of its business judgment, approved
the Agreement as fair, reasonable, and adequate, and in the best interests of Atmel and Current
Atmel Shareholders, and Atmel shall have executed this Agreement.
10.5 The Settling Defendants shall have paid, or caused to be paid, $9.65 million to Atmel.
10.6 The Federal Court shall have entered the Final Federal Judgment.
10.7 Atmel shall have paid attorneys’ fees and expenses to Plaintiffs’ Counsel as provided in
paragraph 9.2.
10.8 The State Courts each shall have entered Final State Judgments.
10.9 The time to appeal from the Final Federal Judgment, the Final State Judgments, and any
interim order in the Actions shall have expired.
10.10 If any appeal is taken from the Final Federal Judgment, the Final State Judgments, or
any interim order in the Actions, the appeal either shall have been dismissed or shall have
resulted in affirmance of the judgment or order.
10.11 If a ruling or decision is entered by an appellate court with respect to the Final
Federal Judgment, the Final State Judgments, or any interim order in the Actions, the time to
petition for a writ of certiorari with respect to the ruling or decision shall have expired.
Settlement Agreement
Case No. 06-04592 JF
Case No. 06-04592 JF
17
10.12 If a petition for a writ of certiorari with respect to the Final Federal Judgment, the
Final State Judgments, or any interim order in the Actions is filed, the petition shall have been
denied or dismissed, or, if granted, shall have resulted in affirmance of the judgment or order.
11.1 If any of the conditions set forth in paragraphs 10.2 through 10.12 does not occur, then
the Agreement shall have no further force or effect. In that event, the Settling Parties shall
revert to their respective positions as of the date immediately prior to the execution of this
Agreement, as though the Agreement had never been executed.
12.1 The Settling Parties acknowledge that it is their intent to consummate this Agreement,
and agree to cooperate to the extent reasonably necessary to effectuate and implement all terms and
conditions of the Agreement and to exercise their best efforts to accomplish the foregoing terms
and conditions of the Agreement.
12.2 The Settling Parties intend this Agreement to be a final and complete resolution of all
disputes between them with respect to the Actions. The Agreement compromises claims that are
contested and shall not be deemed an admission by any of the Parties as to the merits of any claim,
allegation, or defense. The Settling Parties further agree that the claims are being settled
voluntarily after consultation with competent legal counsel.
12.3 This Agreement constitutes the entire agreement among the Settling Parties and no
representations, warranties, or inducements have been made to any of the Settling Parties
concerning the Agreement other than the representations, warranties, and covenants contained and
memorialized in the Agreement.
12.4 The Agreement may be amended or modified only by a written instrument signed by
Plaintiffs’ Counsel and Counsel for Settling Defendants. Amendments and modifications may be made
without notice to Current Atmel Shareholders unless notice is required by the Court.
12.5 The Agreement shall be subject to, governed by, and construed and enforced pursuant to,
the laws of the State of Delaware.
Settlement Agreement
Case No. 06-04592 JF
Case No. 06-04592 JF
18
12.6 Plaintiffs’ Counsel represent that they have the full authority of each of their
respective plaintiffs to execute this Agreement, and Counsel for Settling Defendants represent that
they have the full authority of the Settling Defendants to execute this Agreement.
12.7 This Agreement may be executed in one or more counterparts, which together shall be
deemed one original agreement. A complete set of counterparts, either originally executed or
copies, shall be filed with the Court.
12.8 The Settling Parties agree that all discovery and other proceedings in the Actions shall
be stayed as of the date of entry of the Preliminary Order, until further order of the Court,
except as may be necessary to implement the settlement of the Actions or comply with the terms of
this Agreement.
12.9 Within thirty days after the Effective Date, the Settling Parties will dispose of all
documents designated confidential or highly confidential as provided for in the Stipulated
Confidentiality Agreement And Order entered on March 13, 2009.
12.10 The Settling Parties agree that any rule of construction, to the effect that any
ambiguities are to be construed against the drafting parties, shall not be employed in
interpretation of the Agreement.
Settlement Agreement
Case No. 06-04592 JF
Case No. 06-04592 JF
19
Dated: December 9, 2009 | BARROWAY TOPAZ XXXXXXX
XXXXXXX & CHECK, LLP XXXX X. XXXXX XXXXXXX XXXXXXXX XXXX XXX |
|||
By: | /s/ XXXX X. XXXXX | |||
XXXX X. XXXXX | ||||
000 Xxxx xx Xxxxxxx Xxxx Xxxxxx, XX 00000 Telephone: (000) 000-0000 Facsimile: (000) 000-0000 Co-Lead Counsel for Plaintiffs Xxxxxxx X. Xxxxx, Xxxxxxx XxXxxxx, and Xxxxx Xxxxxxxxx |
||||
Dated: December 9, 2009 | XXXX HALDENSTEIN XXXXX XXXXXXX
& XXXX llp XXXXXXX X. XXXXXXXX XXXXXXXX X. XXXXXX XXXXX X. XXXXXXXX |
|||
By: | /s/ XXXXX X. XXXXXXXX | |||
XXXXX X. XXXXXXXX | ||||
Symphony Towers 000 X Xxxxxx, Xxxxx 0000 Xxx Xxxxx, Xxxxxxxxxx 00000 Telephone: (000) 000-0000 Facsimile: (000) 000-0000 Co-Lead Counsel for Plaintiffs, Counsel for Xxxxxxx X. Xxxxx |
||||
Settlement Agreement
Case No. 06-04592 JF
Case No. 06-04592 JF
20
Dated: December 9, 2009 | XXXXXXX XXXXX, LLP XXXXX X. XXXXXXX XXXX X. XXXXX |
|||
By: | /s/ XXXX X. XXXXX | |||
XXXX X. XXXXX | ||||
000 X Xxxxxx, Xxxxx 0000 Xxx Xxxxx, XX 00000 Telephone: (000) 000-0000 Facsimile: (000) 000-0000 Lead Counsel for Plaintiffs in the California Derivative Action |
||||
Dated: December 9, 2009 | XXXXXXXXX & XXXX, P.A. XXXX X. XXXXXXXXX XXXXX X. XXXX |
|||
By: | /s/ XXXXX X. XXXX | |||
XXXXX X. XXXX | ||||
000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 000 Xxxxxxxxxx, XX 00000 Telephone: (000) 000-0000 Facsimile: (000) 000-0000 XXXXX, XXXXX & XXXXX XXXXX X. XXXXX 0 Xxxx 00xx Xxxxxx Xxx Xxxx, XX 00000 Telephone: (000) 000-0000 Facsimile: (000) 000-0000 Attorneys for Plaintiffs Xxxxx and Xxxx Xxxxxx |
||||
Settlement Agreement
Case No. 06-04592 JF
Case No. 06-04592 JF
21
Dated: December 9, 2009 | XXXXXXXX XXXXX XXXXXX XXXXXX & XXXXXXX XXXXXX X. XXXXX III |
|||
By: | /s/ XXXXXX X. XXXXX XXX | |||
XXXXXX X. XXXXX III | ||||
000 Xxxx Xxxxxxxx Xxxxx 0000 Xxx Xxxxx, XX 00000 Telephone: (000) 000-0000 Facsimile: (000) 000-0000 Attorneys for Plaintiff Xxxxxxx X. Xxxxxx |
||||
Dated: December 9, 2009 | XXXXXXXX & XXXXXXXX XXXXXXX X. XXXXXXXX |
|||
By: | /s/ XXXXXXX X. XXXXXXXX | |||
XXXXXXX X. XXXXXXXX | ||||
00000 Xxxxx Xxxxxxxxxxxx Xxxxxx Xxxxxxxx Xxxx, Xxxxxxxx 00000 Telephone: 000.000.0000 Facsimile: 405.239.2112 0000 Xxxxx Xxxxxx Xxxxx 000 Xxxxxx, Xxxxx 00000 Attorneys for Plaintiff Xxxxxx Xxxxxx |
||||
Settlement Agreement
Case No. 06-04592 JF
Case No. 06-04592 JF
22
Dated: December 9, 2009 | XXXXXXXX & XXXXXXXX llp XXXXXX X. XXXXX XXXXXXX X. XXXXXXX XXXXX XXXXXX |
|||
By: | /s/ XXXXXX X. XXXXX | |||
XXXXXX X. XXXXX | ||||
755 Page Mill Road Palo Alto, California 00000-0000 Telephone: (000) 000-0000 Facsimile: (000) 000-0000 Attorneys for Defendants Xxxxx-Xxxxx Xx, Xxxxxx Xxxxx, Xxxx Xxxxxxx, Xxxx Xxxxxxx, X. Xxxxx Xxxxxx, Xxxxxx Xxxxxxx, Xxxxxx Xxx, Xxxxx Xxxxxxxxx, Xxxxxx X. Xxxx, Xxxx Xxxx, Xxxxxx X. Xxxxxxxx, Xxxxxx Xxxxxx, Xxxxxx Xxxxxx, X. Xxxxxxx Xxxx, Xxxxxxx Xxxxxx, Xxxxxx X. XxXxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx Der Xxxxxxxxx, Xxxx Xxxxxxx, Xxxxxxx Xxxxxxxxx, Xxxxxx Xxxx, and Nominal Defendant Atmel Corporation |
||||
Dated: December 9, 2009 | XXXXXXX XXXXX & XXXXXXX LLP XXXX X. XXXXXX XXXXX X. WON XXXXXXX X. XXXX XXXX XXXXXXX |
|||
By: | /s/ XXXX X. XXXXXX | |||
XXXX X. XXXXXX | ||||
Xxxx Building, 30th Floor 000 Xxxxxxxxxx Xxxxxx Xxx Xxxxxxxxx, XX 00000 Telephone: (000) 000-0000 Facsimile: (000) 000-0000 Attorneys for Defendants Xxxx Xxxxxxxx and Xxxxxx Xxxxxxxx |
||||
Settlement Agreement
Case No. 06-04592 JF
Case No. 06-04592 JF
23
Dated: December 9, 2009 | XXXXXX & XXXX, APC XXXXX X. XXXXXX XXX X. XXXX |
|||
By: | /s/ XXXXX X. XXXXXX | |||
XXXXX X. XXXXXX | ||||
00 Xxxxx Xxxxx Xxxxxx, Xxxxx 000 Xxx Xxxx, XX 00000-0000 Telephone: (000) 000-0000 Facsimile: (000) 000-0000 Attorneys for Defendant Xxxxx Xxxxxx |
||||
Settlement Agreement
Case No. 06-04592 JF
Case No. 06-04592 JF
24
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN XXXX DIVISION
In re ATMEL CORPORATION DERIVATIVE LITIGATION |
Master File No. CV 06-4592-JF | |
This Document Related To:
|
SETTLEMENT AGREEMENT | |
All Actions.
|
EXHIBIT A |
[PROPOSED] ORDER PRELIMINARILY
APPROVING SETTLEMENT AND PROVIDING FOR NOTICE
APPROVING SETTLEMENT AND PROVIDING FOR NOTICE
Exhibit A
Case No. 06-04592 JF
Case No. 06-04592 JF
This matter came on for hearing on December 18, 2009. The Settling Parties have made
application, pursuant to Federal Rule of Civil Procedure 23.1, for an order: (i) preliminarily
approving the proposed settlement of the above-captioned shareholder derivative action and the
related State Actions pending in the Superior Court of the State of California, County of Santa
Xxxxx, and the Court of Chancery of the State of Delaware, in accordance with the Settlement
Agreement dated December 9 (the “Agreement”) and (ii) approving for distribution of the Notice of
Settlement.
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED AS FOLLOWS:
1. The Court, for purposes of this Preliminary Order, adopts the definitions set forth in
paragraphs 1.1 through 1.31 of the Agreement.
2. The Court preliminarily approves the settlement of the Actions set forth in this Agreement
as falling within the range of possible approval and meriting submission to Current Atmel
Shareholders for consideration.
3. Not later than ten days following entry of this Order, Atmel shall cause a Notice of
Proposed Settlement, substantially in the form of Exhibit B to the Agreement, to be filed with the
Securities and Exchange Commission (“SEC”) on Form 8-K. Atmel shall also file a copy of this
Agreement as an exhibit to the Form 8-K.
4. Not later than ten days following entry of this Order, Atmel shall issue a press release
regarding the Agreement and shall post a link to the Notice of Proposed Settlement on its website.
5. Not later than ten days following entry of this Order, Atmel shall cause a summary notice
of proposed settlement to be published in Investors Business Daily. Atmel shall bear the costs of
this advertisement.
6. The Court finds that dissemination of information regarding the proposed settlement in the
manner set out in this Order constitutes the best notice practicable under the circumstances and
complies fully with Rule 23.1 of the Federal Rules of Civil Procedure and the United States
Constitution.
Exhibit A
Case No. 06-04592 JF
Case No. 06-04592 JF
1
7. A settlement hearing shall be held on
, at the United States District
Court for the Northern District of California, 000 Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, at which
the Court will determine: (i) whether the terms of the Agreement should be approved as fair,
reasonable, and adequate; (ii) whether the separately negotiated payment of Plaintiffs’ Counsel’s
attorneys’ fees and expenses should be approved; and (iii) whether the above-entitled action should
be dismissed on the merits and with prejudice. The Court may adjourn or continue the hearing
without further notice to Current Atmel Shareholders.
8. Any Current Atmel Shareholder who objects to the settlement of the Actions, or to the
separately negotiated payment of Plaintiffs’ Counsel’s attorneys’ fees and expenses, shall have a
right to appear and be heard at the settlement hearing. Any such person must file with the Court
and deliver to Plaintiffs’ Counsel a written notice of objection postmarked on or before
. The objection should be accompanied by proof of ownership of Atmel stock, and
shall contain a plain statement of the person’s objections, along with any documents or other
evidence the person wishes the Court to consider. Only Shareholders who have filed and delivered
valid and timely written notices of objection will be entitled to be heard at the hearing, unless
the Court orders otherwise. Federal Plaintiffs’ Counsel shall provide copies of any and all such
notices of objection to Counsel for Defendants at least five business days before the settlement
hearing.
9. Any Current Atmel Shareholder who does not make an objection in the manner provided herein
shall be deemed to have waived any such objection.
10. All discovery and other proceedings in the Actions are hereby stayed and/or enjoined until
further order of the Court, except as may be necessary to implement the settlement of the Actions
or comply with the terms of this Agreement.
11. Atmel, Settling Defendants, and all Current Atmel Shareholders are hereby barred from
commencing or prosecuting any direct or representative action asserting any of the Settled Claims
against any of the Released Persons unless and until the Agreement is terminated according to its
terms.
Exhibit A
Case No. 06-04592 JF
Case No. 06-04592 JF
2
12. The Court may, for good cause, extend any of the deadlines set forth in the Order without
further notice to Current Atmel Shareholders.
13. Neither this Preliminary Order, nor any of its terms or provisions, nor any of the
negotiations or proceedings connected with it, shall be referred to, offered as evidence, or
received in evidence in any pending or future civil, criminal, or administrative action or
proceedings, except in a proceeding to enforce the Preliminary Order, to defend against the
assertion of the Settled Claims, or as otherwise required by law.
Dated:
|
||||||
THE XXXXXXXXX XXXXXX XXXXX | ||||||
UNITED STATES DISTRICT JUDGE |
Exhibit A
Case No. 06-04592 JF
Case No. 06-04592 JF
3
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN XXXX DIVISION
In re ATMEL CORPORATION DERIVATIVE LITIGATION |
Master File No. CV 06-4592-JF | |
This Document Related To:
|
SETTLEMENT AGREEMENT | |
All Actions.
|
EXHIBIT B |
NOTICE OF PROPOSED SETTLEMENT
Exhibit B
Case No. 06-04592 JF
Case No. 06-04592 JF
NOTICE OF SETTLEMENT OF LITIGATION
TO: ALL CURRENT HOLDERS OF ATMEL CORPORATION COMMON STOCK AS OF DECEMBER 18, 2009: |
PLEASE TAKE NOTICE THAT a number of federal and state derivative actions, and actions seeking
the production of company books and records, now pending against certain present and former
officers and directors of Atmel Corporation, are being settled.
The terms of the settlement: (i) provide a direct financial benefit to Atmel Corporation of
$9.65 million; (ii) provide for the adoption and/or implementation of a variety of corporate
governance enhancements, particularly in the way Atmel grants and documents grants of employee
stock option awards; (iii) provide for the payment by Atmel of plaintiffs’ counsels’
attorneys’ fees, costs, and expenses in the amount of $4.94 million; and (4) the dismissal
with prejudice of all the actions and releases of all claims against the settling defendants.
SUMMARY OF THE ACTIONS BEING SETTLED: The cases being settled are the following:
The derivative actions now pending in the United States District Court for the Northern
District of California under the caption “In re Atmel Corporation Derivative Litigation,”
Master File No. CV 06-4592-JF.
The derivative actions now pending in the Superior Court of the State of California, County of
Santa Xxxxx, under the caption “In re Atmel Corporation Derivative Litigation,” Master File
No. 106-CV-06849.
The derivative action now pending in the Court of Chancery of the State of Delaware, under the
caption “Xxxxxx Xxxxxx v. Xxxxxx X. Xxxx, et al.,” Civil Action No. 4399-CC.
The petition for writ of mandate to compel inspection and copying of books, records, and
documents of Atmel Corporation now pending in the Superior Court of the State of California,
County of Santa Xxxxx, captioned “Xxxxxxx X. Xxxxxx v. Atmel Corporation,” Case No.
107-CV-095929.
The complaint to compel inspection of books and records now pending in the Court of Chancery
of the State of Delaware captioned “Xxxxx and Xxxx Xxxxxx v. Atmel Corporation,” Case No.
4334-CC.
The derivative actions being settled allege that certain present and former officers and
directors of Atmel Corporation violated accounting rules, company policy, federal securities
law, and state law by intentionally manipulating Atmel stock option grants between 1991 and
2005. The actions allege that options were backdated, and that Atmel made false and
misleading statements in public reports and filings in order to conceal the backdating. The
actions also alleged various claims for xxxxxxx xxxxxxx, violations of federal and state
securities laws, breaches of fiduciary duty, aiding and abetting, unjust enrichment,
constructive fraud, corporate waste, breach of contract, abuse of control, gross
mismanagement, accounting, rescission, constructive trust, and violation of California
Corporations Code sections 25402 and 25403. All of the defendants denied each and every
allegation in the actions.
Exhibit B
Case No. 06-04592 JF
Case No. 06-04592 JF
1
The actions to compel production of company books and records seek to compel Atmel to produce
various documents and company records relating to the company’s stock option grants between
1991 and 2005, along with related financial reporting and accounting documents. Atmel denied
each and every allegation in those actions.
IF YOU ARE A HOLDER OF ATMEL CORPORATION COMMON STOCK AS OF DECEMBER 18, 2009, YOUR RIGHTS MAY
BE AFFECTED BY THE PROPOSED SETTLEMENT.
ON , 2010, AT
A.M., a hearing will be held before the United States District
Court for the Northern District of California, 2112 Xxxxxx X. Xxxxxxx Federal Building and
United States District Courthouse, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxxxxxxxxx 00000, to determine:
(i) whether the terms of the settlement should be approved as fair, reasonable, and adequate;
(ii) whether the actions should be dismissed on the merits and with prejudice; and (iii)
whether the payment of plaintiffs’ counsels’ attorneys’ fees, costs, and expenses should be
approved.
If you are a holder of Atmel Corporation common stock as of December 18, 2009, and you wish to
object to the terms of the settlement, the dismissal of the actions with prejudice, or the
payment of plaintiffs’ counsels’ attorneys’ fees, costs, and expenses, you may appear and be
heard at the hearing.
Any shareholder who wishes to object, or appear at the hearing, must submit a written
objection to the Court, and deliver a copy of the objection to plaintiffs’ counsel on or
before . The objection should be accompanied by proof of ownership of Atmel
stock, and must contain a plain statement of the person’s objections, along with any documents
or other evidence the person wishes the Court to consider.
Only shareholders who have filed and delivered valid and timely written notices of objection
will be entitled to be heard at the hearing, unless the Court otherwise so orders. Any
shareholder who does not make an objection in the manner provided above shall be deemed to
have waived any such objection.
Objections should be filed with the clerk of the Court and served upon plaintiffs’ counsel as
follows:
Clerk of the Court
United States District Court
Northern District of California
2112 Xxxxxx Xxxxxxx Federal Building and U.S. Courthouse
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
United States District Court
Northern District of California
2112 Xxxxxx Xxxxxxx Federal Building and U.S. Courthouse
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Xxxx Xxxxx
XXXXXXXX TOPAZ XXXXXXX XXXXXXX & CHECK, LLP
000 Xxxx xx Xxxxxxx Xxxx
Xxxxxx, XX 00000
(000) 000-0000
XXXXXXXX TOPAZ XXXXXXX XXXXXXX & CHECK, LLP
000 Xxxx xx Xxxxxxx Xxxx
Xxxxxx, XX 00000
(000) 000-0000
Exhibit B
Case No. 06-04592 JF
Case No. 06-04592 JF
2
ADDITIONAL INFORMATION: You may obtain additional information by inspecting the settlement
agreement on file in the office of the Clerk of the Court during regular business hours or by
contacting Xx. Xxxxx at the address set forth above.
Exhibit B
Case No. 06-04592 JF
Case No. 06-04592 JF
3
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN XXXX DIVISION
In re ATMEL CORPORATION DERIVATIVE LITIGATION |
Master File No. CV 06-4592-JF | |
This Document Related To:
|
SETTLEMENT AGREEMENT | |
All Actions.
|
EXHIBIT C |
[PROPOSED] FINAL FEDERAL JUDGMENT
AND ORDER OF DISMISSAL
AND ORDER OF DISMISSAL
Exhibit C
Case No. 06-04592 JF
Case No. 06-04592 JF
This matter came on for hearing on
, 2010. The Court has considered the
Settlement Agreement (the “Agreement”) and all oral and written objections and comments
received regarding the proposed settlement, and has reviewed the record in the Federal Action.
Good cause appearing,
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED AS FOLLOWS:
1. The Court, for purposes of this Final Federal Judgment and Order of Dismissal of the
Federal Action, adopts the definitions set forth in paragraphs 1.1 through 1.31 of the
Agreement.
2. The Court has jurisdiction over the subject matter of the Federal Action and personal
jurisdiction over the Federal Plaintiffs, all Current Atmel Shareholders, Atmel, and the
Defendants.
3. During the course of the litigation, the Settling Parties and their respective counsel
at all times complied with the requirements of Federal Rule of Civil Procedure 11.
4. The Court finds that the distribution of the Notice of Proposed Settlement as provided
for in the Preliminary Order constituted the best notice practicable under the circumstances
and fully complied with Rule 23.1 of the Federal Rules of Civil Procedure and with the United
States Constitution, and the requirements of due process under state law.
5. The Court approves the settlement of the Actions as set forth in the Agreement as fair,
reasonable, and adequate to Atmel and all Current Atmel Shareholders pursuant to Rule 23.1 of
the Federal Rules of Civil Procedure. The Settling Parties are hereby ordered to consummate
the settlement in accordance with its terms set forth in the Agreement.
6. As to all Settling Defendants, the Federal Action is dismissed on the merits and with
prejudice. The Federal Action is not dismissed as to the Non-Settling Defendant.
7. As of the Effective Date, Atmel, the Plaintiffs (individually and derivatively on behalf of
Atmel and all Current Atmel Shareholders), and the Settling Defendants shall be deemed to have, and
by operation of this judgment shall have, fully, finally, and forever released and discharged the
Released Persons from all Settled Claims and from all claims arising out of or relating to the
defense, settlement, or resolution of the Actions as against the Settling Defendants.
Exhibit C
Case No. 06-04592 JF
Case No. 06-04592 JF
1
8. As of 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 and discharged
Plaintiffs and Plaintiffs’ Counsel from all claims arising out of, relating to, or in connection
with the institution, prosecution, assertion, settlement, or resolution of the Actions or the
Released Claims.
9. Plaintiffs, Atmel, and Current Atmel Shareholders are permanently barred and enjoined
from instituting or prosecuting, in any capacity, any action or proceeding against any of the
Released Persons that involves or asserts any of the Settled Claims.
10. As of the Effective Date, the Settling Defendants, the Non-Settling Defendant, and all
other persons and entities shall be deemed to be, and by operation of this judgment shall be,
permanently barred, enjoined, and restrained from commencing, prosecuting, or asserting against
any of the Settling Defendants any claim for contribution or indemnity that is related to,
based upon, or arises out of the Settled Claims, regardless of whether such claim for
contribution or indemnity is asserted as a claim, cross-claim, counterclaim, third-party claim,
or in any other manner, in any court, arbitration, administrative agency, or forum. All such
claims are hereby extinguished, discharged, satisfied, and unenforceable.
11. This Order shall not limit or otherwise affect the rights, if any, of any of the
Defendants (a) to receive indemnification or advancement of legal expenses arising from law
and/or statute, or any existing written agreements, or (b) to enforce the terms of this
Agreement.
12. The Court reserves exclusive and continuing jurisdiction over the Federal Action, the
Federal Plaintiffs, all Current Atmel Shareholders, Atmel, and the Settling Defendants for the
purposes of supervising the implementation, enforcement, construction, and interpretation of
the Agreement, the Preliminary Order, and this Judgment.
13. Neither this Final Federal Judgment, nor any of its terms or provisions, nor any of
the negotiations or proceedings connected with it, shall be referred to, offered as evidence,
or received in evidence in any pending or future civil, criminal, or administrative action or
proceedings, except in a proceeding to enforce this judgment, to defend against the assertion
of the Settled Claims, or as otherwise required by law.
Exhibit C
Case No. 06-04592 JF
Case No. 06-04592 JF
2
Dated:
|
||||||
THE XXXXXXXXX XXXXXX XXXXX UNITED STATES DISTRICT JUDGE |
Exhibit C
Case No. 06-04592 JF
Case No. 06-04592 JF
3