«SUPREME COURT OF THE NEW YORK COUNTY OF ONElDA PAUL PARSHALL,on behalf of himself and those similarly situated, Plaintiff; Index No.: CA2015-577 v. ...»
SUPREME COURT OF THE NEW YORK
COUNTY OF ONElDA
PAUL PARSHALL,on behalf of himself
and those similarly situated,
Plaintiff; Index No.: CA2015-577
RICHARD B. MYERS, NANCY E.
RYAN,PATRICIA D. CAPRIO,
MICHAEL R. KALLET, JOHN E.
HASKELL, RODNEY D. KENT,
RALPH L. STEVENS, GERALD N.
YOLK,FRANK O. WHITE, JR., JOHN
A. WIGHT, DANIEL L. MANEEN,
ERIC E. STICKELS, ONEIDAFINANCIAL CORP., and
COMMUNITY BANK SYSTEMS,INC..
STIPULATION AND AGREEMENT OF
WHEREAS,on Febniary 24, ?015, defendant Oneida Financial Corp. ('`Oneida") announced that on February 24, 2U I5, a definitive Agreement and Plan of Merger ("Merger A~reemenr'} was unanimously approved by the respective boards ofdirectors of'Community Bank System, Inc.("Comnulnity Bank System")and Oneida. Under the terms ofthe Mereer A~~reement, 60% of Oneida's common stock will be converted into Community Bank System common stock and remaining 40% will be exchanged for cash. Oneida's stockholders will have the option to elect to receive in exchange for each share of Oneida's common stock, either (i) 0.5635 shares of Community Bank System's common stock,(ii) $20.00 in cash for each Oneida common share, or (iii) a combination of Community Sank System common stock and cash (60%stock,40% cash), subject to proration to enstiire that, in the aggregate, 60% of Oneida's common stock is converted into Community Bank System common stock and 40% is converted into the right to receive cash (the "Proposed Transaction" or the ``Merger").
WHEREAS,on March 4,?015 Plaintiff Parshall filed a shareholder action alleging, pursuant to the Merger Agreement, that the directors of Oneida breached their fiduciary duties to Oneida's stockholders by failing to take adequate steps to ensure that the Oneida's stockholders receive adequate, fair and maximum consideration under the circumstances and by engineering the Merger to the benefit of themselves and/or Comm►,inity Bank System without regard to Oneida"s stockholders and Community Bank System aided and abetted the alleged breaches of fiduciary duty by Oneida's directors.
WHEREAS,on March 13, 2015, plaintiff Solak filed a second shareholder action alleging, pursuant to the Merger Agreement, that the directors of Oneida breeched their- fiduciary duties to Oneida's stockholders by failin~ to take adequate steps to ensure that the Oneida's stockholders receive adec1uate, fair and maximum consideration under the circumstances, by en~ine~ring the Merger to the benefit of themselves and/or Community Bank System without rebard to Oneida's stockholders and Community Bank System aided and abetted the alleged breaches of fiduciary duty by Oneida"s directors.
States Securities and Exchange Commission a Registration Statement on Form S-4 (the "Registration Statement");
WHEREAS, on April 9, 2015, Plaintiff Parshall and F'l~intiff Sol~k each filed an Amended Complaint all~~ring breaches of fiduciary duty for failing (a) to maximize shareholder value, and (b) to disclose all material infornlation to Oneida's stockholders related to the process undertaken by the Oneida board of directors to sell the company and the financial analysis and fairness opinion provide by Oneida's financial advisor, Keefe, Bruyette &Woods, Inc.('`KBW").
WHEREAS,on April 10, ?015, Plaintiffs Solak and Parsh~ll moved to consolidate the related shareholder actions and to have Brodsky &Smith, LLC("Brodsky &Smith")and Ryan & Maniskas, LLP ("Ryan & Maniskas") appointed as Co-Lead Counsel.
WHEREAS,on or about Apri124, 2015, Plaintiff Colvin filed a shareholder action alleging, pursuant to the Merger Agreement, that the directors of Oneida breached their fiduciai-y duties to Oneida's stockholders by failing to take adequate steps to ensure that Oneida's stockholders receive adequate, fair and maximum consideration under the circumstances, by engineering the Merger' to the benefit of themselves and/or Community Bank System without
breaches of fiduciary duty by Oneida's directors.
WHEREAS, Plaintiff Colvin and Defendants agreed to stay Action 3 pendin~~ a resolution of Action 1 and Action ?.
WHEREAS, Plaintiffs Solak and Parshall prepaz~ed a motion for expedited discovet-y end proceedings, but ultimately dici not file it as the parties' good faith negotiations ultimately led to a stipulated expedited briefing and hearing schedule, and an exchange of discovery on an expedited basis, which was approved by the court.
WHEREAS, counsel for Plaintiffs Solak and Parshall conducted discovery on an expedited basis by, amonb other things, deposing three witnesses:(i) defendant Michael R. Kallet, Cl~ainnan of the Board of~ Directors and Chief Executive Officer of Oneida;(ii) defendant Rodney D. Kent, an independent director of Oneida and member of the Mer~~er Committee f~nned to evaluate the Proposed Transaction; and (iii) Robin Suskind, a representative of KBW, Oneida's financial advisor for the Proposed Transaction. Counsel for Plaintiffs Solak and Parshall also reviewed over 13,000 pages of non-public documents, including minutes of Board meetings, presentations by KBW and forecast material provided by Oneida, among other documents.
WHEREAS, Plaintiffs Solak and P~rshall filed their motion for preliminary injunction on May 26, ?015, and Defendants filed their opposition to the motion for- preliminary injunction nn June 4, 2015.
WHEREAS, counsel for the Plaintiffs and counsel for Defendants engaged in arm's-length nebotiations regarding a potential settlement of the Actions beginning nn June 5, ?015.
WHEREAS,on June 9,?015, counsel reached an agreement in principle, set forth
among the Plaintiff in each action, on behalf of himself or herself and the Settlement Class (as defined below) of persons nn behalf of whom each Plaintiff has brou~~ht the Actions, and Defendants, on the terms end subject to the conditions set forth below.
filing with the SEC on Form 8-K.
WHEREAS, Defendants acknowledge that these Supplemental Disclosures were the result of the efforts of Plaintiffs' counsel and the complaints made by Plaintiffs.
Company was held at which the Oneida shareholders, among other things, voted on a proposal to adopt the Merger Agreement, with the majority voting in favor of the Proposed Transaction.
WHEREAS, the Proposed Transaction has not yet closed and is awaiting certain required regulatory approvals.
class action pursuant to New York Civil Practice Law and Rules ("CPLR") §~ 901 and 902 for Settlement purposes oi11y, as set forth in ~~~; 3-4 below;
WHEREAS, Plaintiffs' Counsel have conducted an investigation and pursued discovery relating to the claims and the underlying events and transactions alleged in the Actions, have analyzed the evidence adduced during their investibation and discovery, and have researched the applicable law with respect to the claims of Plaintiffs and the Class against the Defendants and the potential defenses thereto;
WHEREAS, based upon their investigation, discovery and analysis, Plaintiffs and Plaintiffs' Col~nsel have concluded that the terms and conditions of this Stipulation are fair, reasonable, adequate, and in the best interests of Plaintiffs and the putative Settlement Class, and have agreed to settle the claims raised, or that could have been raised, in the Actions pursuant to the teens and conditions of this Stipulation, after considering: (i) the benefits that Plaintiffs and the other members o~f the Class will receive from the Settlement; (ii) the attendant risks of litigation; (iii) the dine and expense that would be incurred by further litigation; and (iv) the desirability of permitting the Settlement to be consummated as provided by the terms of this Stipulation;
lack of any merit of any of the claims asserted in the Actions;
WHEREAS, Defendants have vigorously denied, and continue to deny vigorously all allegations of wrongdoing, fault, liability or damage to any of the respective Plaintiffs or the Settlement Class (defined below and the certification of which is only considered in connection with the contemplated Settlement); deny that they engaged in any improper behavior, wrongdoing, or committed any violation of law; deny that any disclosures in connection with the Proposed Transaction (including in the Definitive Proxy) are in any way deficient; believe t11at they acted properly at all times; believe that the Actions his no merit (both with respect to the requested injunctive relief and to damages); and maintain that they have committed no disclosure violations or any other breach of duty whatsoever in connection with the Proposed Transaction
of fiirther litigation, and without admittinb the validity of any allegations oracle in the Actions, or any liability with respect thereto (and such allegations being specifically denied), have concluded that it is desirable that the claims against them be settled and dismissed on the teams reflected in this StipL~lation; and WHEREAS, the Plaintiffs and Defendants (collectively, the "Parties'") recognize the time and expense that would he incurred by further liti~~ation and the uncertainties inherent in such litigation;
consideration of the benefits afforded herein, that the Actions shall be compromised, settled, released anti dismissed with prejudice, upon and subject to the following tet~ns and conditions, and further s~ibject to the approval of the Court and pursuant to CPLR ~ 901, ~ 902,
and ~ 908:
Claims (as defined below) against the Released Parties (defined below) end the dismissal with prejudice of the Actions, the Defendants made the Supplemental Disclosures to the Definitive Proxy as set forth on a Form 8-K filed by Oneida with the SEC on June 10, ?015 and attached hereto as Exhibit A. Asset forth in the Fonn 8-K, the Supplemental Disclosures contain additional infornlation including, but not limited to, the following: (a) the reasons for the Board's vote in favor of the Merger A;reement; (U) information used by KBW concerning whether other companies expz-essed interest in a potential transaction with Oneida in the months leading up to the Proposed Transaction; (c) selected financial inforniation concerning Oneida"s "size peer'"
coneerninb the information used by KBW to calculate the discounted cash flow for Oneida; (e) selected financial information used by KBW concerning Community Bank System's ``peer' group used by KBW in the Seleetecl Companies Aricrlvsis Corrifnunzty Bcinlc; aild (f) additional Oneida financial projections for the years 2015 through 2U 19.
2. Without admitting any wrongdoinb, Defendants acknowled;e that the filing and prosecution of the Actions and discussions with Plaintiffs' Counsel in the Actions were the sole cause for the Supplemental Disclosures. Plaintiffs' Counsel have proposed, reviewed, commented nn and approved the Supplemental Disclosures.
3. For Settlement purposes only, the Parties agree that the Aetions shall be consolidated and conditionally cer-~ified as a class action pursuant to CPLR ~~ 901 and 902 on behalf of a settlement class (the "Settlement Class") consisting of all record and beneficial owners of Oneida common stock durin~~ the period beginning oil February ?4, 2015 through and including June 17, ?015 (the "Settlement Class Period"). Members of the Settlement Class are referred to as "Settlement Class Members''. Excluded from the Settlement Class are Defendants, the officers, directors, affiliates, anti family members of any of the Defendants, and any entity in which any Defendant has or had a controlling interest, and their respective successors-ininterest, s«ccessors, predecessors-in-interest, predecessors, representatives, ti~lstees, executors, administrators, estates, heirs, assibns, or transferees, iinmedi~te and remote, anci any person or entity acting fc~r or on behalf of, or claiming under, any of them, and each of them, only in their capacity as such. The Settlement Class shall be a mandatory non-opt out Class with respect to all claims for injunctive, declaratory and other ec~uit~ble relief.
4. The Settlement Class will be preliminarily certified, only in connection with this Stipulation, upon t11e Court's entry of the Order prelimin~Y-ily ~pprovinb Settlement and providing for notice (the ``Preliminary Approval Order"), substantially in the form attached hereto ~s Exhibit B. The certification of the Class shall be binding only with respect to this Stipulation. In the event that this Stipulation is terminated pursuant to its terms, the certification of the Class shall be deemed vacated, the Actions shall proceed as though the Class had never been certified, and no reference to the certification of the Class shall be made by the Parties for any p~~rpose, except as expressly authorized by the terms of this Sti~uiation. If the Stipulation is terminated, Defendants reserve the right to oppose certification of ally cl~iss in future proceedings.