EFI Issues Notice Regarding Settlement of Litigation
Press release from the issuing company
FOSTER CITY, Calif. (July 13, 2008) Electronics For Imaging, Inc. (“EFI”) today issued the following notice related to the class and derivative litigation about the Company's historic stock option granting practices:
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN RE: ELECTRONICS FOR IMAGING, INC.
C.A. No. 2797-VCL
NOTICE OF PENDENCY OF CLASS AND DERIVATIVE ACTION,PROPOSED SETTLEMENT OF CLASS AND DERIVATIVE ACTION,SETTLEMENT HEARING AND RIGHT TO APPEAR
1. ALL CURRENT RECORD OR BENEFICIAL HOLDERS OF ELECTRONICS FOR IMAGING, INC. COMMON STOCK;
2. ALL RECORD OR BENEFICIAL HOLDERS OF ELECTRONICS FOR IMAGING STOCK WHO HELD SUCH STOCK FROM APRIL 7, 2003 THROUGH MAY 28, 2003;
3. ALL RECORD OR BENEFICIAL HOLDERS OF ELECTRONICS FOR IMAGING STOCK WHO HELD SUCH STOCK FROM APRIL 12, 2004 THROUGH JUNE 3, 2004; AND
4. ALL RECORD OR BENEFICIAL HOLDERS OF ELECTRONICS FOR IMAGING STOCK WHO HELD SUCH STOCK FROM APRIL 17, 2006 THROUGH JUNE 7, 2006.
YOU ARE HEREBY NOTIFIED that the plaintiffs and defendants in the above-captioned class and derivative lawsuit (the “Action”) have entered into a proposed settlement of the Action (the “Settlement”).
PLEASE BE FURTHER ADVISED that pursuant to an Order of the Court of Chancery of the State of Delaware, dated June 26, 2008, a hearing (the “Settlement Hearing”) will be held on September 4, 2008, at 11:00 a.m., before The Honorable Stephen P. Lamb, in the Court of Chancery of the State of Delaware, New Castle County Courthouse, 500 North King Street, Wilmington, DE 19801. The purpose of the Settlement Hearing is: (a) to determine whether a Stipulation of Settlement dated June 23, 2008 (the “Stipulation”), and the terms and conditions of the Settlement proposed in the Stipulation, are substantively and procedurally fair, reasonable, adequate and in the best interests of Electronics For Imaging, Inc. (“EFI” or the “Company”), its shareholders, and the members of the Class; (b) to determine whether final judgment should be entered dismissing the Action as to all defendants named therein and their related parties with prejudice (the “Judgment”); (c) to hear and determine any objections to the Settlement; (d) if the Court approves the Stipulation and the Settlement and enters the Judgment, to determine whether it should award attorneys’ fees and expenses to plaintiffs’ attorneys pursuant to the application described herein; and (e) to hear such other matters as the Court may deem necessary and appropriate.
The Action and Settlement address claims alleging that certain present and former directors and executive officers of EFI (collectively, “Individual Defendants”) breached their fiduciary duties to the Company and to its shareholders. Each of the Individual Defendants as well as EFI denies and continues to deny all allegations of wrongdoing and deny liability on the claims asserted in the Action.
Pursuant to the Settlement, certain Defendants have agreed to cancel, return or reprice certain mispriced and other stock options. EFI’s primary insurance carrier will pay EFI five million dollars ($5,000,000), and certain Defendants will contribute their rights to an additional $19 million in insurance proceeds. In addition, pursuant to the Settlement, EFI has agreed to implement certain corporate governance reforms.
If the Settlement is approved, the Action will be dismissed with prejudice and the Defendants will be released by Plaintiffs, the Class, EFI and its shareholders from all claims that were or could have been alleged in the Action. The Settlement will also terminate a similar case pending in federal court in California which has been stayed in deference to the Action.
At or before the Settlement Hearing, Plaintiffs’ counsel will apply to the Court for an award of attorneys’ fees in the amount of $2,961,244.38 and expenses in the amount of $115,171.42, to be paid solely by EFI.
If you currently own EFI common stock or if you are a member of the Class, your rights may be affected by the Settlement. ANY INVESTOR WHO OWNS EFI COMMON STOCK WHO WISHES TO CONTEST EITHER THE SETTLEMENT OR THE APPLICATION FOR FEES AND EXPENSES BY PLAINTIFFS’ COUNSEL, MAY DO SO BY FOLLOWING THE PROCEDURE SET FORTH IN PARAGRAPH 21 OF THE NOTICE OF PENDENCY OF CLASS AND DERIVATIVE ACTION, PROPOSED SETTLEMENT OF CLASS AND DERIVATIVE ACTION, SETTLEMENT HEARING AND RIGHT TO APPEAR UNDER THE HEADING “RIGHT TO APPEAR AND OBJECT.”
If you have not received a detailed Notice of Pendency of Class and Derivative Action, Proposed Settlement of Class and Derivative Action, Settlement Hearing and Right to Appear, you may obtain copies by contacting the Notice Administrator at Gilardi & Co. LLC, P.O. Box 5100, Larkspur, CA 94977-5100, telephone: 1-800-447-7657.
PLEASE DO NOT CONTACT THE COURT OR THE REGISTER IN CHANCERY.
Dated: July 11, 2008
BY ORDER OF THE COURT OF CHANCERY OF THE STATE OF DELAWARE
John Ritchie, 650-357-3500
Chief Financial Officer
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