Notice of Class Action Settlement - Delaware

LEGAL NOTICE OF PROPOSED CLASS ACTION SETTLEMENT

IF YOU [HELD SHARES OF / WERE A STOCKHOLDER OF / OTHERWISE] [________________________________], A CLASS ACTION SETTLEMENT MAY AFFECT YOUR RIGHTS.

The [Court of Chancery / Superior Court] of the State of Delaware authorized this Notice. This is not a solicitation from a lawyer. You are not being sued.

Please read this Notice carefully. Your legal rights are affected whether or not you act.

CASE IDENTIFICATION

SUMMARY OF YOUR RIGHTS AND KEY DEADLINES

I. WHY DID YOU GET THIS NOTICE?

Records indicate you may be a member of a class affected by a proposed settlement of the litigation identified above. This Notice explains the lawsuit, the proposed Settlement and release, your rights and options, and the deadlines to act. The Court has directed that this Notice be given; it has not yet decided whether to approve the Settlement.

II. WHAT IS THIS LAWSUIT ABOUT?

The person(s) who sued are the "Class Representative(s)" or "Plaintiff(s)." The party or parties sued — [DEFENDANT NAME(S)] — are the "Defendant(s)."

Plaintiff alleges that Defendant(s) [breached fiduciary duties / [________________________________]] in connection with [the merger of / the transaction involving / [________________________________]]. Specifically:

☐ [________________________________]

☐ [________________________________]

☐ [________________________________]

Defendant(s) deny the claims and deny any wrongdoing or liability. The Court has not decided who is right. The parties agreed to settle to avoid the cost, risk, and delay of continued litigation.

III. THE PROPOSED SETTLEMENT

A. Who Is in the Class

The Court has [conditionally / for settlement purposes] certified the following Settlement Class:

Settlement Class: All [record and beneficial holders of common stock of [COMPANY] / persons who [________________________________]] during the period from [__/__/____] through [__/__/____], and their successors and assigns (the "Class Period").

Excluded from the Class: Defendants and their immediate families, affiliates, and legal representatives; and [________________________________].

B. Settlement Benefits / Consideration

• Relief provided ("the give"): [Supplemental disclosures regarding [________________________________] / monetary consideration of $[________________________________] / corporate-governance or therapeutic changes / [________________________________]].
• Estimated individual recovery (if monetary): approximately $[________________________________] per eligible Class Member (subject to the number of valid claims, if any).

C. The Release — What You Give Up ("the get")

If the Settlement is approved and becomes final, Class Members release the Defendants from the claims described in the Settlement Agreement. In general, you give up the right to sue for [________________________________]. The exact released claims — and the persons released — are stated in the Settlement Agreement and the Scheduling/Notice Order, available at [________________________________].

IV. YOUR OPTIONS AND DEADLINES

Option 1 — Submit a Claim (if required)

[If a claim is required:] Submit a Claim Form online at [________________________________] or by mail to the Settlement Administrator, postmarked by [__/__/____].

☐ Complete the Claim Form
☐ Attach any required proof: [________________________________]
☐ Sign and submit by the deadline

[If no claim is required:] No action is needed to receive a class-wide benefit if the Settlement is approved.

Option 2 — Exclude Yourself (Opt Out) [If Permitted]

[If the class is a non-opt-out class, delete this Option and state: "This is a mandatory (non-opt-out) class. You do not have the right to exclude yourself or to pursue these claims separately."]

[If opt-out is permitted:] Send a written request to the Settlement Administrator including your name, address, telephone number, the case name and C.A. number, a clear statement that you want to be excluded, and your signature. Postmarked by [__/__/____].

Settlement Administrator
[________________________________]
[________________________________]

Option 3 — Object to the Settlement

Any Class Member may object to the Settlement, the release, the requested attorney fees, or any service award. A written objection should include:

1. Your name, address, telephone number, and signature;
2. The case name and C.A. number;
3. Proof or a statement that you are a Class Member (e.g., your stock holdings during the Class Period);
4. The specific grounds for the objection and any supporting materials; and
5. Whether you (or your attorney) intend to appear at the Settlement Hearing.

File the objection with the Register in Chancery / Prothonotary and serve copies on Class Counsel and Defendants' Counsel (Section VI), as directed in the Scheduling Order, filed/postmarked by [__/__/____].

V. THE SETTLEMENT (FAIRNESS) HEARING

The Court will hold a hearing to decide whether the Settlement is fair, reasonable, and adequate and in the best interests of the Class, and to consider Class Counsel's application for attorney fees and expenses and any service award.

You are not required to attend; you may attend at your own expense. If you filed a timely objection and asked to be heard, you may request to speak. The date may change without further notice; check [________________________________] for updates.

VI. CLASS COUNSEL AND ATTORNEY FEES

The Court has [appointed / will consider appointing] the following as Class Counsel:

[________________________________]
[Firm Name]
[Address]
Telephone: [________________________________]
Email: [________________________________]

Class Counsel will apply to the Court for an award of attorney fees and expenses of up to $[________________________________] [or up to [____]% of the benefit conferred], and a service award up to $[________________________________] to each Class Representative. The Court will independently determine the amounts. You may retain your own lawyer at your own expense.

Defendants' Counsel: [________________________________], [Address].

VII. HOW TO GET MORE INFORMATION

• Settlement Website: [________________________________]
• Telephone: [________________________________]
• Mail: Settlement Administrator, [________________________________]
• Court file: Review the papers with the Register in Chancery (Court of Chancery) or the Prothonotary (Superior Court), [________________________________], Delaware.

Please do not contact the Court, the Register in Chancery, or the Prothonotary with questions about the Settlement.

DATED: [__/__/____]

BY ORDER OF THE [COURT OF CHANCERY / SUPERIOR COURT] OF THE STATE OF DELAWARE

Delaware Practice Notes

• Governing rule. Stockholder, fiduciary, and other equitable class actions are litigated in the Court of Chancery under Court of Chancery Rule 23; damages class actions are litigated in the Superior Court under Superior Court Civil Rule 23. Both rules provide, in subsection (e), that class claims "shall not be dismissed or compromised without the approval of the Court," and that notice of the proposed dismissal or compromise "shall be given to all members of the class in such manner as the Court directs." Notice and conduct-of-action provisions appear in Rule 23(c)-(d).
• Independent, robust approval. The Court of Chancery does not rubber-stamp settlements. It independently determines whether a class settlement is fair, reasonable, and adequate and in the best interests of the class, weighing factors such as the strength of the claims, the benefit obtained, the risks and expense of continued litigation, and the views of counsel. See Polk v. Good, 507 A.2d 531 (Del. 1986); Barkan v. Amsted Indus., Inc., 567 A.2d 1279 (Del. 1989).
• Trulia scrutiny of disclosure settlements (CRITICAL). In In re Trulia, Inc. Stockholder Litig., 129 A.3d 884 (Del. Ch. 2016), Chancellor Bouchard rejected a "disclosure-only" merger settlement and announced heightened scrutiny of such deals. Going forward, the Court will be "disfavor[ably]" disposed toward disclosure settlements unless (1) the supplemental disclosures address a "plainly material" misrepresentation or omission, and (2) the release is narrowly circumscribed to disclosure claims and fiduciary-duty claims concerning the sale process. The Court measures the "give" (relief) against the "get" (release) and recognizes that the settlement-approval proceeding is non-adversarial, requiring the Court to scrutinize the bargain even absent objectors. Accord In re Riverbed Tech., Inc. S'holders Litig., 2015 WL 5458041 (Del. Ch. 2015). A notice describing a broad release in a disclosure case invites rejection; describe the release narrowly and accurately.
• Mootness fees. After Trulia, much deal litigation resolves not by settlement but by the defendant voluntarily mooting disclosure claims and the plaintiff seeking a mootness fee in an adversarial fee application — a different procedural posture that does not use this class-settlement notice. Confirm whether your matter is a true class settlement or a mootness-fee resolution.
• Due process / "best notice." Notice must satisfy due process under Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950) — the best notice practicable, including individual notice (often via record holders, brokers, and nominees) to identifiable members.
• Opt-out vs. mandatory class. Many Chancery stockholder class settlements are non-opt-out (certified under the (b)(1)/(b)(2) analogs) because they confer classwide equitable relief and a release. Damages classes under the (b)(3) analog carry opt-out rights. Confirm the certification basis and adjust the opt-out section accordingly.
• Unsettled / flag. The precise application of Trulia to non-disclosure (e.g., monetary) settlements, the breadth of permissible releases, and mootness-fee standards continue to develop. Confirm the current text of the applicable Rule 23 and recent Chancery guidance before filing.

Sources and References

• Del. Ct. Ch. R. 23(c), (d), (e) (Delaware Court of Chancery Rules, courts.delaware.gov)
• Del. Super. Ct. Civ. R. 23(e) (Delaware Superior Court Civil Rules)
• In re Trulia, Inc. Stockholder Litig., 129 A.3d 884 (Del. Ch. 2016)
• In re Riverbed Tech., Inc. S'holders Litig., 2015 WL 5458041 (Del. Ch. Sept. 17, 2015)
• Polk v. Good, 507 A.2d 531 (Del. 1986); Barkan v. Amsted Indus., Inc., 567 A.2d 1279 (Del. 1989)
• Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950)

This Notice template is for informational purposes only and does not constitute legal advice. The Delaware Court of Chancery independently scrutinizes class settlements and releases and rejects disclosure-only settlements absent a plainly material disclosure and a narrow release. Consult experienced Delaware counsel before use.