공시 • Oct 02
Align Technology, Inc. Announces Court Grants Preliminary Approval of Settlement to Resolve All Outstanding Shareholder Derivative Litigation
Align Technology, Inc. (Align) announced that the U.S. District Court for the Northern District of California has granted preliminary approval of a settlement to resolve shareholder derivative litigation that has been pending since 2019. Under the terms of the settlement, plaintiffs will dismiss the lawsuits and release their claims. Align and the defendants deny any wrongdoing and are not making any monetary payments, other than a potential award of $575,000 in attorney’s fees to plaintiffs’ counsel, covered by insurance. A notice approved by the court regarding the settlement is attached. TO: All Persons And Entities who held Align Technology, Inc. Common stock as of January 12, 2024: PLEASE READ THIS NOTICE CAREFULLY AND IN ITS ENTIRETY. This Notice relates to a proposed settlement (“Settlement”) of the following actions: Tran v. Hogan, et al., Case No. 5:19-cv-00202-LHK (N.D. Cal.), Dooley v. Hogan, et al., Case No. 5:19-cv-00525-LHK (N.D. Cal.), Nguyen v. Hogan, et al., Case No. 5:19-cv-00543-LHK (N.D. Cal.), together consolidated as In re Align Technology, Inc. Derivative Litigation, Case No. 5:19-cv-00202-LHK (N.D. Cal.) (together the “Federal Derivative Action”), the derivative action, Abbas v. Hogan, et al., Case No. 19-CV-346429 (Santa Clara Cnty. Super. Ct.), and the books and records action, McCall v. Align Technology, Inc., Case No. 19-CV-360501 (Santa Clara Cnty. Super. Ct.) (together the “State Court Actions”). If the Court approves the proposed Settlement, you, Align, and all Current Align Stockholders will be forever barred from contesting the fairness, adequacy, and reasonableness of the proposed Settlement and from pursuing the Released Plaintiffs’ Claims. In consideration of the Settlement and the releases provided therein, and subject to the terms and conditions of the Stipulation, the Settling Parties have agreed to the following Settlement Consideration for Align: The company will adopt and maintain the following reforms, which shall remain in effect for at least three (3) years after the Court’s final approval of the Settlement, including but not limited to the following: (i) the Company will formalize its management-level Disclosure Committee by adopting a management-level Disclosure Committee Charter; (ii) the Disclosure Committee will now be comprised of the Chief Financial Officer, Chief Legal Officer, the EVP Global Human Resources and the head of Investor Relations; (iii) the Company increased the number of directors on the Audit Committee by adding an independent director who has expertise in cybersecurity; (iv) the Company will partner with a well-regarded university, such as Yale University or Harvard University, or outside counsel of its choosing for regular Board trainings conducted at least annually; (v) the Company enhanced its disclosures in its Form 10-K filings concerning human capital; (vi) the Company amended its Audit Committee Charter to include new obligations; (vii) the Compensation Committee will continue to review and make recommendations to the Board periodically regarding the stock ownership guidelines applicable to the Executives and the Board; (viii) the Compensation Committee will continue to periodically review the human capital management strategies, programs and policies; (ix) the Compensation Committee will continue to periodically review and report to the Board on non-CEO Executive development and succession planning; (x) the Company amended its Corporate Governance Guidelines to include that in the Nominating and Governance Committee’s annual review of the skills and characteristics required of members of the Board, the Committee shall also consider gender and ethnic diversity and Compensation and Human Capital Committee will report to the Board on the succession planning for executive officers below the level of the CEO; (xi) After adoption of its Global Speak Up Policy, Align increased the frequency and circumstances under which conduct that may be inconsistent with Align’s Global Code of Conduct is brought to the attention of the Board; (xii) the Company made certain membership changes to its Executive Management Committee; (xiii) the Company appointed a Global Compliance & Ethics Officer, a Vice President of Global Antitrust & Competition, and a Chief Legal Regulatory Officer; (xiv) the Company launched a new Global Code of Conduct, including a revised Free and Fair Competition section; (xv) the Company made certain changes to its annual proxy statement, including the use of a board diversity matrix; (xvi) the Company expanded training regarding Regulation FD and insider trading, expanded notifications it provides regarding the trading window, and adopted additional controls to refine access to material nonpublic information; and (xvii) the former President and Chief Executive Officer, Thomas M. Prescott, retired from the Board effective May 19, 2021, increasing the percentage of independent directors from 81% to 90%. Subject To Approve the Court, Plaintiffs’ Counsel will seek a Fee and Expense Award not to exceed $575,000. Defendants shall cause their insurers to pay the full amount of any Fee and Expense Award awarded by the Court. Plaintiffs’ Counsel also may apply to the Court for a service award of up to $2,000 for each of the five Plaintiffs, only to be paid upon Court approval, and to be paid from Plaintiffs’ Counsel’s Fee and Expense Award. The Court has scheduled a Final Approval Hearing, to be held on February 4, 2025, at 2:00 p.m., either in person at the United States District Court for the Northern District of California, San Jose Courthouse, Courtroom 5 – 4th Floor, 280 South 1st Street, San Jose, CA 95113, or by telephone or video conference (in the discretion of the Court), to consider whether the Judgment, substantially in the form of Exhibit E to the Stipulation, should be entered: (i) approving the terms of the Settlement as fair, reasonable, and adequate; (ii) releasing all Released Claims against the Released Persons fully and finally, including dismissing with prejudice the Federal Derivative Action pursuant to the terms of the Stipulation; and (iii) approving the amount of attorneys’ fees and expenses and of any service awards to the five Plaintiffs. The Court reserves the right to approve the Settlement, Plaintiffs’ Counsels’ request for a Fee and Expense award, and/or any other matter related to the Settlement at or after the Final Approval Hearing without further notice to Current Align Stockholders.