Black Box Corporation (NASDAQ:BBOX) today announced that the
United States District Court for the Western District of
Pennsylvania (the "District Court") has preliminarily approved the
previously-disclosed proposed settlement of In re Black Box
Corporation Derivative Litigation, Master File No. 2:06-CV-1531
JFC, a consolidated action of two substantially identical
stockholder derivative lawsuits originally filed in November 2006
against Black Box itself, as a nominal defendant, and several of
the Company’s current and former officers and directors, relating
to certain stock options issued during the period 1996-2002, and
related matters. The terms of the proposed settlement are described
in a Stipulation of Compromise and Settlement filed with the
Securities and Exchange Commission today on a Current Report on
Form 8-K.
Pursuant to the District Court’s preliminary approval order, the
Company is providing the following notice of the proposed
settlement:
* * *
UNITED STATES DISTRICT
COURT
WESTERN DISTRICT OF
PENNSYLVANIA
In re BLACK BOX
CORPORATIONDERIVATIVE LITIGATION
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)
)
)
No. 2:06-CV-01531-JFC
This Document Relates To: ALL
ACTIONS
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)
NOTICE OF PROPOSED SETTLEMENT
OF DERIVATIVE ACTION AND OF
SETTLEMENT HEARING
TO: ALL HOLDERS OF THE COMMON STOCK OF BLACK BOX
CORPORATION (“BLACK BOX” OR THE “COMPANY”) AS OF JANUARY 22,
2010. PLEASE READ THIS NOTICE CAREFULLY AND COMPLETELY.
YOUR RIGHTS WILL BE AFFECTED. IF YOU HOLD BLACK BOX
COMMON STOCK FOR THE BENEFIT OF ANOTHER, PLEASE TRANSMIT THIS
NOTICE TO THE BENEFICIAL OWNER
PLEASE NOTE THAT, BECAUSE THIS IS A SHAREHOLDER DERIVATIVE
ACTION AND NOT A CLASS ACTION, NO INDIVIDUAL STOCKHOLDER HAS A
RIGHT TO BE COMPENSATED AS A RESULT OF THE PROPOSED
SETTLEMENT.
YOU ARE HEREBY NOTIFIED that a proposed settlement (the
“Settlement”) has been reached with respect to In re Black Box
Corporation Derivative Litigation, Master File No. 2:06-CV-01531
JFC, in the United States District Court for the Western District
of Pennsylvania (the “Action”), which arises out of allegations of
backdating of stock options at the Company. The terms of the
Settlement are set forth in a Stipulation of Compromise and
Settlement dated January 22, 2010 (the “Stipulation”), which has
been filed as an exhibit to Black Box’s Current Report on Form 8-K
filed with the United States Securities and Exchange Commission on
February 1, 2010. If you owned Black Box Common Stock on January
22, 2010, and continue to own such Stock through the date of the
Settlement Hearing and entry of the Order of Dismissal and
Judgment, you may be considered to be a Current Black Box
Stockholder for purposes of the Settlement and your rights may be
affected by the Settlement. All capitalized terms used in this
Notice and not defined in this Notice shall have the meanings
and/or definitions set forth in the Stipulation.
PLEASE BE FURTHER ADVISED that, pursuant to an Order of the
United States District Court for the Western District of
Pennsylvania dated January 27, 2010, a hearing (the “Settlement
Hearing”) will be held on March 19, 2010, at 10:30 A.M. before The
Honorable Joy Flowers Conti, in Courtroom 5A of the United States
District Court for the Western District of Pennsylvania (the
“Court”), 3110 U.S. Courthouse, 7th Avenue and Grant Street,
Pittsburgh, Pennsylvania 15219. The purpose of the Settlement
Hearing is to (1) determine whether the Settlement, on the terms
and conditions provided for in the Stipulation, is fair,
reasonable, and adequate, and in the best interests of, Black Box
and Current Black Box Stockholders; (2) consider dismissal of the
Action with prejudice, with each party to bear its, his, or her own
costs (unless expressly stated otherwise in the Stipulation); (3)
consider ordering the Parties to dismiss and release, and enjoining
the Parties from prosecuting, any Released Claims (as defined in
the Stipulation); (4) consider Plaintiffs’ Counsels’ request for an
award of attorneys’ fees and expenses to be paid by Black Box; (5)
consider entry of an Order of Dismissal and Judgment in accord with
the foregoing and the Stipulation; and (6) hear and consider such
other matters as the Court may deem necessary and appropriate.
In accord with the proposed Settlement, the Company has made
certain changes to its stock option granting practices,
record-keeping practices, and governance practices as set forth in
the Stipulation. The Board of Directors of the Company has elected
an additional independent director who is expected to stand for
election by the Company’s stockholders at the next annual meeting.
Two insurers and one Defendant, the Company’s former Chief
Financial Officer, will pay money to Black Box in connection with
the Settlement. Additionally, various previously-issued stock
options have been voluntarily repriced or have terminated,
including options issued to the Company’s former Chief Executive
Officer who served as CEO during the period 1998 through May, 2007
(“CEO”). The Settlement also will resolve related litigation and
claims between the Company and its former CEO, and the Company will
make a monetary payment to the former CEO in connection with the
Settlement. All parties to the Settlement, including the Company,
agree that the Settlement materially benefits Black Box and Current
Black Box Stockholders.
If the Settlement is approved, the Action will be dismissed with
prejudice against all Defendants, including Black Box, and the
Defendants, including Black Box, will be released by plaintiffs,
Black Box, Current Black Box Stockholders (derivatively on behalf
of Black Box), and each of the Defendants (other than Black Box) in
the Action, as applicable, from any and all claims that were or
could have been alleged in the Action and that arise from the facts
and events forming the basis of the Action.
At the Settlement Hearing, Plaintiffs’ Counsel will seek Court
approval of their agreement with the Company, whereby, subject to
Court approval, the Company has agreed to pay Plaintiffs’ Counsel
$1,600,000 for their attorneys’ fees, including reimbursement of
expenses (the “Fee Award”) for their efforts in filing,
prosecuting, and settling the Action. Plaintiffs’ Counsel have
prosecuted the Action on a contingent fee basis, and they have not
yet been paid any fees, nor have they been reimbursed for their
out-of-pocket expenses.
Any Current Black Box Stockholder who will continue to own Black
Box Common Stock through the date of entry of the Order of
Dismissal and Judgment who objects to the Settlement of the Action
or the terms thereof, the judgment to be entered in the Action,
and/or the Fee Award, or otherwise wishes to be heard, may appear
personally or by counsel at the Settlement Hearing and present
evidence or argument that may be proper and relevant; provided,
however, that no such evidence or argument may be considered,
except by order of the Court for good cause shown, unless, no later
than March 4, 2010, copies of (i) a written notice of intention to
appear, identifying the name, address, and telephone number of the
objector or other person wishing to be heard and, if represented,
their counsel; (ii) proof that the objecting person is a Current
Black Box Stockholder, such as account statements or other
documentation showing the date(s) such person acquired his, her, or
its shares of Black Box common stock, and a statement as to whether
the person will own Black Box common stock as of the date of entry
of the Order of Dismissal and Judgment; (iii) a statement as to
whether the objecting person intends to appear at the Settlement
Hearing; and (iv) a detailed statement of such person’s objections
to any matters before the Court, including copies of any papers
such person intends the Court to consider and the names of any
witness(es) such person plans to call to testify at the Settlement
Hearing; and (v) a detailed statement of such person’s specific
objections to any matter before the Court; are filed with the Court
and served by hand or overnight delivery upon the following
counsel:
Michael J. Hynes
BARROWAY TOPAZ
KESSLER MELTZER
& CHECK, LLP
280 King of Prussia Road
Radnor, PA 29087
Plaintiffs’ Counsel
Thomas R. Johnson
K&L GATES LLP
Henry W. Oliver Building
535 Smithfield Street
Pittsburgh, PA 15222
Black Box Corporation Counsel
Any person who fails to object in the manner set forth above
shall be deemed to have waived the right to object (including any
right of appeal) and shall be forever barred from raising such
objection in this or any other action or proceeding, unless the
Court orders otherwise.
Current Black Box Stockholders who have no objection do not
need to appear at the Settlement Hearing or take any other
action. If you are a Current Black Box Stockholder, you will
be bound by the Order of Dismissal and Judgment of the Court, and
you will be deemed to have released any and all claims that have or
could have been brought in the Action.
The foregoing description of the Settlement is not intended to
be comprehensive and is a summary of the Settlement. For a complete
description of the Settlement terms, please see the Stipulation,
which is available as an exhibit to Black Box’s Current Report on
Form 8-K filed with the United States Securities and Exchange
Commission on February 1, 2010, and which is available through the
Black Box website at
http://www.blackbox.com/about/investor-relations/sec.aspx.
If you have any questions regarding the Settlement or the
Action, please direct your inquiries to Plaintiffs’ counsel,
Michael J. Hynes, Barroway Topaz Kessler Meltzer & Check, LLP,
280 King of Prussia Road, Radnor, Pennsylvania 29087, Telephone:
610-667-7706 or toll free: 1-888-229-7706.
PLEASE DO NOT CALL OR DIRECT ANY
INQUIRIES TO THE COURT.
Dated: February 1, 2010 BY ORDER OF THE
COURT
* * *
About Black Box
Black Box is the world’s largest technical services company
dedicated to designing, building and maintaining today’s
complicated data and voice infrastructure systems. Black Box
services more than 175,000 clients in 141 countries with 194
offices throughout the world. To learn more, visit the Black Box
Web site at http://www.blackbox.com.
Black Box® and the Double Diamond logo are registered trademarks
of BB Technologies, Inc. All third party trademarks appearing in
this press release are acknowledged to be the property of their
respective owners.
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