CIRCUIT COURT OF THE FIFTEENTH JUDICIAL DISTRICTPALM BEACH COUNTY, FLORIDA
|JOSEPH KLOSS, derivatively on behalf of||CASE NO.: 502010CA018594XXXXMB|
|VITACOST.COM, INC.,||CIVIL DIVISION: AO|
|Plaintiff,||SUMMARY NOTICE OF STIPULATION AND AGREEMENT OF SETTLEMENT|
|vs. IRA P. KERKER, RICHARD P. SMITH, STEWART GITLER, ALLEN S. JOSEPHS, DAVID N. ILFELD, LAWRENCE A. PABST, ERAN EZRA and ROBERT G. TRAPP,|
To resolve the Action, the Current Board has agreed to adopt and implement a series of certain corporate governance “best practices” which directly address the allegations in the Action, including, but not limited to, creation and implementation of a new Insider Trading Policy involving greater controls over the purchase and sale of officers and directors’ personally-held stock, including mandating entrance into a 10b5-1 trading plan, blind trust, or similar arrangement for such persons, and formation of a Governance and Corporate Compliance Committee to ensure Company compliance with all requirements and obligations under Delaware General Corporate Law (“DGCL”). In addition, the Settling Parties request that the Court recognize and quiet title to all outstanding shares of Vitacost stock on certain recognized dates. The Settling Parties also request that the Court deem the certificate of incorporation of Vitacost to be the valid and effective certificate of incorporation of the Company until validly amended in accordance with applicable DGCL and the corporation’s certificate of incorporation and bylaws. The Current Board, Plaintiffs and the Demand Shareholder have agreed that these measures will “substantially benefit” the Company, and in fact, with respect to some of the measures, may have the effect of preserving the current equity interests of Vitacost stockholders.Even though they are entering into the Settlement, the Settling Defendants expressly state that they continue to deny that they breached any fiduciary duties to the Company, and that no Vitacost Purchaser was harmed or damaged in any way as a result of the conduct alleged in the Action, or by the Demand Shareholder. If the Court approves the Settlement, the Settling Parties shall be released from all claims relating to, or stemming from the Action. The releases the Settling Parties will receive upon final Settlement approval are explained in detail in the Stipulation. On May 27, 2011 at 10:30 a.m., a hearing (the “Settlement Hearing”) will be held before Judge Thomas H. Barkdull, III at Main Judicial Center, 205 N. Dixie Highway, West Palm Beach, Florida 33401, to determine: (1) whether the terms of the Stipulation should be approved as fair, reasonable, and adequate; (2) whether the manner and form of notice fully satisfied the requirements of Florida Revised Statute Section 607.07401(4) and due process; (3) whether the Court should enter final judgment dismissing the claims asserted in the Action with prejudice; (4) whether all Released Claims against the Released Persons should be fully and finally released; (5) whether the Court should recognize and quiet title to all outstanding shares and options of Vitacost stock on certain recognized dates; (6) whether to recognize and deem valid the Company’s certificate of incorporation; (7) whether the payment of Counsels’ attorneys’ fees and expenses in the amount of $3.5 million should be approved (“Fee Amount”); (8) whether the Plaintiff and Demand Shareholder should receive a Special Award of $5,000 each, payable out of the Fee Amount; and (9) such other matters as the Court may deem appropriate.
If you are a current Vitacost stockholder (and will continue to own your stock as of the date of the Settlement Hearing) who objects to the Settlement, the Order and Final Judgment to be entered in the Action, the Fee Amount and/or the Special Awards, or who otherwise wishes to be heard, you may appear in person or by attorney at the Settlement Hearing and present evidence or argument that may be proper and relevant; provided, however, that, except for good cause shown, no Person shall be heard and no papers, briefs, pleadings or other documents submitted by any Person shall be considered by the Court unless not later than seven (7) days prior to the Settlement Hearing such Person files with the Court and serves upon counsel listed below: (a) a written notice of intention to appear; (b) a statement of such Person’s objections to any matters before the Court; (c) the grounds for such objections and the reasons that such Person desires to appear and be heard, as well as all documents or writings such Person desires the Court to consider; (d) the name[s] of any witness(es) the Person plans on calling at the Settlement Hearing and the likely subject(s) of their testimony; and (e) proof of current ownership of Vitacost stock and/or options as well as documentary evidence of when such ownership was acquired. Such filings shall be served upon the following counsel:
|Robert B. Weiser Brett D. Stecker Jeffrey J. Ciarlanto THE WEISER LAW FIRM, P.C. 121 N. Wayne Ave., Suite 100 Wayne, PA 19087 Telephone: (610) 225-2677 Facsimile: (610) 225-2678 Settlement Counsel and Attorneys for Plaintiff||Jonathan M. Stein THE LAW OFFICE OF JONATHAN M. STEIN 120 E. Palmetto Park Road, Suite 420 Boca Raton, FL 33432 Telephone: (561) 961-2244 Facsimile: (561) 750-5964 Attorneys for Plaintiff|
|Douglas J. Clark L. David Nefouse WILSON SONSINI GOODRICH & ROSATI, P.C. 650 Page Mill Road Palo Alto, CA 94304 Telephone: (650) 493-9300 Facsimile: (650) 493-6811 Attorneys for Vitacost and the Current Board Paul R. Bessette Michael J. Biles GREENBERG TRAURIG, LLP 300 West 6th Street, Suite 2050 Austin, TX 78701 Telephone: (512) 320-7200 Facsimile: (512) 320-7210 Counsel for Vitacost, Richard P. Smith, Stewart Gitler, Allen S. Josephs, David N. Ilfeld, Lawrence A. Pabst, Eran Ezra and Robert G. Trapp||Sigrid S. McCawley, Esq. 401 East Las Olas Blvd, Suite 1200 Fort Lauderdale, Fl 33301 Telephone: (954) 356-0011 Facsimile: (954) 356-0022 Attorneys for Defendant Ira P. Kerker|
DO NOT CALL THE COURT OR VITACOST REGARDING THIS NOTICE.