Twitter Announces Proposed Settlement of Shareholder Derivative Lawsuits

Rhea-AI Summary

Twitter (TWTR) announced a binding agreement to settle shareholder derivative lawsuits in Delaware courts. The settlement resolves all claims without any liability attributed to the company or its directors. Under the agreement, Twitter's insurers will pay $38 million for corporate purposes, while the Board will implement governance changes. The settlement awaits final court approval, with a hearing set for March 19, 2021. Shareholders may object to the settlement by February 26, 2021. This settlement aims to strengthen corporate governance and alleviate legal pressures on the company.

Positive

• Settlement resolves all claims against Twitter and directors without liability.
• Twitter receives $38 million from insurers for corporate use.
• Proposed governance changes may enhance company oversight moving forward.

Negative

• None.

SAN FRANCISCO, Jan. 25, 2021 /PRNewswire/ -- Twitter, Inc. (NYSE: TWTR) today announced that it has entered into a binding agreement to settle the shareholder derivative lawsuits pending in the Court of Chancery of the State of Delaware (the "Court") and the United States District Court for the District of Delaware against the Company and certain current and former directors and officers. The proposed settlement resolves all claims asserted against Twitter and the other named defendants in the derivative lawsuits without any liability or wrongdoing attributed to them personally or the Company.

Under the terms of the proposed settlement, the Twitter Board of Directors will adopt and implement certain corporate governance modifications. In addition, Twitter's insurers will pay the company $38 million to be used for general corporate purposes. The settlement will not require Twitter to make any payment, aside from covering certain administrative costs related to the settlement, such as those associated with publishing and mailing shareholder notice.

The settlement agreement is subject to final approval by the Court. The Court has scheduled the final approval hearing for March 19, 2021 at 11:00 a.m., Eastern Time, at the Court of Chancery of the State of Delaware, Leonard L. Williams Justice Center, 500 North King Street, Wilmington, Delaware 19801 (or by telephonic or video means as may be designated by the Court in the interest of public safety), to consider approval of the settlement agreement. Stockholders have the right to object to the settlement agreement. The deadline for the submission by stockholders of an objection to the settlement agreement is February 26, 2021, twenty-one calendar days prior to the hearing.

Additional information regarding the proposed settlement can be found in the below Summary Notice of Proposed Settlement of Stockholder Derivative Action and at www.twitter.com/i/en/landing/2021derivativesettlement.

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IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

ATUL VERMA, derivatively on behalf of Nominal Defendant, TWITTER, INC.,                                Plaintiff, v. RICHARD COSTOLO, ANTHONY NOTO, JACK DORSEY, MARJORIE SCARDINO, DAVID ROSENBLATT, EVAN WILLIAMS, PETER CURRIE, PETER FENTON, and PETER CHERNIN,                               Defendants,   -and- TWITTER, INC.,                               Nominal Defendant.	C.A. No. 2019-0509-PAF
BASSETT FAMILY TRUST, derivatively and on behalf of TWITTER, INC.,                                Plaintiff, v. RICHARD COSTOLO; ANTHONY NOTO; JACK DORSEY; PETER FENTON; DAVID ROSENBLATT; MARJORIE SCARDINO; EVAN WILLIAMS; PETER CHERNIN; PETER CURRIE; OMID KORDESTANI; PATRICK PICHETTE; DEBRA LEE; MARTHA LANE FOX; NGOZI OKONJO-IWEALA; BRET TAYLOR; ROBERT ZOELLICK;                                Defendants,   -and- TWITTER, INC., a Delaware corporation,                                Nominal Defendant.	C.A. No. 2019-0806-PAF

SUMMARY NOTICE OF PROPOSED SETTLEMENT OF
STOCKHOLDER DERIVATIVE ACTION

The Delaware Court of Chancery authorized this Notice.
This is not a solicitation from an attorney

TO: ALL RECORD HOLDERS AND BENEFICIAL OWNERS OF TWITTER, INC. ("TWITTER") COMMON STOCK (TICKER SYMBOL: TWTR) AS OF THE CLOSE OF BUSINESS ON DECEMBER 17, 2020 ("CURRENT TWITTER STOCKHOLDERS").

PLEASE READ THIS NOTICE CAREFULLY AND IN ITS ENTIRETY. YOUR RIGHTS WILL BE AFFECTED BY THIS LITIGATION. THIS NOTICE RELATES TO A PROPOSED SETTLEMENT AND DISMISSAL OF STOCKHOLDER DERIVATIVE LITIGATION AND CONTAINS IMPORTANT INFORMATION REGARDING YOUR RIGHTS. YOUR RIGHTS MAY BE AFFECTED BY LEGAL PROCEEDINGS IN THIS ACTION.

IF THE COURT APPROVES THE SETTLEMENT AND DISMISSAL OF THE ACTION, CURRENT TWITTER STOCKHOLDERS WILL BE FOREVER BARRED FROM CONTESTING THE APPROVAL OF THE PROPOSED SETTLEMENT AND FROM PURSUING THE SETTLED CLAIMS.

THE COURT HAS MADE NO FINDINGS OR DETERMINATIONS WITH RESPECT TO THE MERITS OF THE ACTION. THE RECITATION OF THE BACKGROUND AND CIRCUMSTANCES OF THE SETTLEMENT CONTAINED HEREIN DOES NOT CONSTITUTE THE FINDINGS OF THE COURT. IT IS BASED ON REPRESENTATIONS MADE TO THE COURT BY COUNSEL FOR THE PARTIES.

PLEASE TAKE NOTICE that the above-captioned stockholder derivative actions are being settled, and the parties have entered into an Amended Stipulation and Agreement of Settlement, dated December 17, 2020 (the "Stipulation"). The terms of the proposed Settlement are set forth in the Stipulation, and all capitalized terms herein have the same meaning as defined in the Stipulation. This notice should be read in conjunction with, and is qualified in its entirety by reference to, the text of the Stipulation, which has been filed with the Court. A further notice describing the Derivative Actions along with the text of the Stipulation is available for review as an exhibit to a Form 8-K filed with the SEC by Twitter on January 25, 2021 and is also available at twitter.com/i/en/landing/2021derivativesettlement.

In consideration of the proposed Settlement, the Individual Defendants will cause their insurance carriers to pay $38 million in cash to Twitter. Additionally, Twitter's Board will adopt, implement, and maintain changes to Twitter's corporate governance.

IF YOU ARE A CURRENT RECORD BENEFICIAL OWNER OF TWITTER COMMON STOCK AS OF DECEMBER 17, 2020, YOUR RIGHTS MAY BE AFFECTED BY PROCEEDINGS IN THIS LITIGATION.

On March 19, 2021 at 11:00 a.m., a hearing (the "Settlement Hearing") will be held before the Honorable Paul A. Fioravanti, Jr at the Court of Chancery of the State of Delaware (the "Court"), Leonard L. Williams Justice Center, 500 North King Street, Wilmington, Delaware 19801 (or by telephonic or video means as may be designated by the Court in the interest of public safety) to: (a) determine whether the Settlement is fair, reasonable, and adequate to Plaintiffs, Twitter, and its stockholders, and should be approved by the Court; (b) determine whether a Final Order and Judgment should be entered dismissing with prejudice the Derivative Actions and extinguishing and releasing the Released Claims; (c) determine whether the application by Plaintiffs' Counsel for an award of attorneys' fees and reimbursement of litigation expenses ("Fee and Expense Application"), and for a service award to each of the five named Plaintiffs ("Service Award Application"), should be approved; (d) hear and consider any objections to the Settlement or the Fee and Expense Application and the Service Award Application to be submitted by Plaintiffs' Counsel; and (e) consider any other matters concerning the Settlement that may properly be brought before the Court. The Court may adjourn the date of the Settlement Hearing without further notice to Current Twitter Stockholders, and the Settlement Hearing may be continued by the Court at the Settlement Hearing, or at any adjourned session thereof, without further notice.

Any Current Twitter Stockholder as of December 17, 2020 shall have the right to appear and to be heard at the Settlement Hearing. However, no stockholder shall be heard at the Settlement Hearing unless, at least twenty-one (21) calendar days prior to the date of the Settlement Hearing, such stockholder has filed with the Court and delivered to counsel for the Settling Parties a written notice of objection in accordance with the requirements below. Only stockholders who have filed and delivered validly and timely written notices of objection will be entitled to be heard at the Settlement Hearing unless the Court orders otherwise.

Any written notice of objection must contain the following information:

(a) a written and signed notice of intention to appear, which states the name, address, telephone number, and email address (if available) of the objector and, if represented, of his, her, or its counsel;

(b) proof that the objector owned Twitter common stock as of the date of the execution of the Stipulation and continues to hold such shares; and

(c) a written, detailed statement of the Person's objections to any matter before the Court, and the specific grounds therefor or the reasons why such Person desires to appear and to be heard, as well as all documents and writings which such Person desires the Court to consider, including any legal and evidentiary support.

If you wish to object to the settlement, you must file a written objection setting forth the grounds for such objection and the information listed above with the Court on or before 21 calendar days before the Settlement Hearing, with service to: (a) counsel to Plaintiff the Bassett Family Trust, Thomas A. Uebler, McCollom D'Emilio Smith Uebler LLC, Little Falls Centre Two, 2751 Centerville Road, Suite 401, Wilmington, Delaware 19808; (b) counsel to Plaintiff Atul Verma, Robert K. Beste, Smith Katzenstein & Jenkins LLP, 1000 N. West St. #501, Wilmington, Delaware 19899; (c) counsel to Plaintiffs Jim Porter, Ernesto Espinoza, and Francis Fleming, Blake A. Bennett, Cooch and Taylor, P.A., The Nemours Building, 1007 N. Orange St., Suite 1120, Wilmington, Delaware 19801; (d) counsel to Defendants, Raymond J. DiCamillo, Richards, Layton & Finger, P.A., 920 North King Street, Wilmington, Delaware 19801.

Unless the Court orders otherwise, your objection will not be considered unless it is timely filed with the Court and delivered to the above counsel. Any Person who fails to object in the manner provided shall be deemed to have waived such objection and shall forever be foreclosed from making any objection to the fairness, reasonableness, or adequacy of the proposed settlement as set forth in the Stipulation and the Judgment, or to the award of attorneys' fees and expenses to Plaintiffs' Counsel, unless otherwise ordered by the Court. Current Twitter Stockholders who have no objection to the settlement do not need to appear at the Settlement Hearing or take any other action.

Inquiries may be made to Plaintiffs' Counsel: (a) counsel to Plaintiff the Bassett Family Trust, Thomas A. Uebler, McCollom D'Emilio Smith Uebler LLC, Little Falls Centre Two, 2751 Centerville Road, Suite 401, Wilmington, Delaware 19808; (b) counsel to Plaintiff Atul Verma, Robert K. Beste, Smith Katzenstein & Jenkins LLP, 1000 N. West St. #501, Wilmington, Delaware 19899; or (c) counsel to Plaintiffs Jim Porter, Ernesto Espinoza, and Francis Fleming, Blake A. Bennett, Cooch and Taylor, P.A., The Nemours Building, 1007 N. Orange St., Suite 1120, Wilmington, Delaware 19801.

DO NOT CALL OR WRITE THE COURT OR THE OFFICE OF
THE REGISTER IN CHANCERY REGARDING THIS NOTICE.

Dated: December 28, 2020

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SOURCE Twitter, Inc.