In re Silicon Storage Technology, Inc. Derivative Litigation

Filing 152

ORDER PRELIMINARILY APPROVING DERIVATIVE SETTLEMENT AND PROVIDING FOR NOTICE (granting 148 ). Signed by Judge Jeremy Fogel on 2/19/2010. (jflc2, COURT STAFF) (Filed on 2/19/2010)

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[PROPOSED] ORDER PRELIMINARILY APPROVING DERIVATIVE SETTLEMENT AND PROVIDING FOR NOTICE MASTER FILE NO. C 06-04310 JF
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**E-Filed 2/19/2010**

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION In re SILICON STORAGE TECHNOLOGY, INC., DERIVATIVE LITIGATION _____________________________________ This Document Relates To: ALL ACTIONS. Master File No. C 06-04310 JF -----------------[PROPOSED] ORDER PRELIMINARILY APPROVING DERIVATIVE SETTLEMENT AND PROVIDING FOR NOTICE EXHIBIT C

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WHEREAS, the Settling Parties have made an application, pursuant to Federal Rule of Civil Procedure 23.1, for an Order (i) preliminarily approving the proposed settlement (the "Settlement") of the above-captioned consolidated shareholder derivative action (the "Action"), in accordance with a Stipulation of Settlement dated February 1, 2010 and the exhibits thereto (the "Stipulation"), and (ii) approving for distribution the Notice of Settlement; WHEREAS, the Stipulation sets forth the terms and conditions for the Settlement, including but not limited to: (i) dismissal of the Action with prejudice and the release of certain claims against the Released Persons; and (ii) an award of attorneys' fees and costs to Plaintiffs' Counsel in the Actions, upon the terms and conditions set forth in the Stipulation; WHEREAS, the Settlement appears to be the product of serious, informed, non-collusive negotiations and falls within the range of possible approval; WHEREAS, all capitalized terms contained herein shall have the same meanings as set forth in the Stipulation unless otherwise specified herein; and WHEREAS, this Court, having considered the Stipulation and all documents, evidence and arguments of the Settling Parties in support of preliminary approval of the Settlement and the Stipulation: NOW THEREFORE, IT IS HEREBY ORDERED: 1. This Court does hereby preliminarily approve, subject to further consideration at the

Settlement Hearing described below, the Stipulation and the Settlement set forth therein, including the terms and conditions for: (a) a proposed Settlement and dismissal of the Action with prejudice as to the Released Persons; and (b) an award of attorneys' fees and costs to Plaintiffs' Counsel in the Actions, upon the terms and conditions set forth in the Stipulation. 2. 4/9/2010 A hearing (the "Settlement Hearing") shall be held before this Court on _______, 9:00 2010 at ____ a.m. in Courtroom 3 of the United States District Court for the Northern District of California, San Jose Division, 280 South First Street, San Jose, CA 95113, to consider:

[PROPOSED] ORDER PRELIMINARILY APPROVING DERIVATIVE SETTLEMENT AND PROVIDING FOR NOTICE MASTER FILE NO. C 06-04310 JF
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(a)

whether the terms and conditions of the Settlement provided for in the

Stipulation are fair, reasonable, adequate and in the best interests of Silicon Storage Technology, Inc. ("SSTI") and current SSTI stockholders; (b) whether an Order and Judgment as provided for in paragraph 5.3 of the

Stipulation should be entered; (c) (d) whether to award attorneys' fees and expenses to Plaintiffs' Counsel; and such other matters as the Court may deem necessary and appropriate.

The Court approves, as to form and content, the notice annexed as Exhibit B hereto,

and finds that the distribution and publication of the Notice of Settlement and the Stipulation substantially in the manner and form set forth in paragraph 5.2 of the Stipulation meets the requirements of Federal Rule of Civil Procedure 23.1 and due process, is the best notice practicable under the circumstances, and shall constitute due and sufficient notice to all Persons entitled thereto of all matters relating to the Settlement. 4. Not later than ten (10) days following entry of this Order, SSTI shall cause the

Notice of Settlement substantially in the form annexed as Exhibit B hereto and the Stipulation to be: (a) published on its website, such that visitors to the website home page will readily find a hyperlink to the Notice of Settlement and Stipulation; (b) filed with the Securities and Exchange Commission via a Form 8-K; and (c) published once in Investor's Business Daily. 5. All costs incurred in the filing and publication of the Notice of Settlement shall be

paid by SSTI and SSTI shall undertake all administrative responsibility for filing and publication of the Notice of Settlement. 6. At least fourteen (14) days prior to the Settlement Hearing, SSTI's counsel shall

serve on Co-Lead Counsel and file with the Court proof, by affidavit or declaration, of such filing and publication of the Notice of Settlement. 7. All current SSTI stockholders shall be bound by all orders, determinations and

judgments in the Action concerning the Settlement, whether favorable or unfavorable to current SSTI shareholders.
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8.

Pending final determination of whether the Settlement should be approved, no

current SSTI shareholder shall commence or prosecute against any of the Released Persons any action or proceeding in any court or tribunal asserting any of the Released Claims. 9. All papers in support of the Settlement and the award of attorneys' fees and

expenses shall be filed with the Court and served at least seven (7) calendar days prior to the Settlement Hearing. 10. Any current record holders and beneficial owners of common stock of SSTI as of

February 1, 2010 may appear at the Settlement Hearing either in person or through counsel retained at the shareholder's expense and show cause, if he, she or it has any reason why the terms of the Settlement should not be approved as fair, reasonable and adequate, or why a judgment should not be entered thereon, provided, however, unless otherwise ordered by the Court, no current SSTI stockholder shall be heard or entitled to contest the approval of all or any of the terms and conditions of the Settlement, or, if approved, the Judgment to be entered thereon approving the same, unless that Person has, at least fourteen (14) days prior to the Settlement Hearing, filed with the Clerk of the Court at the address below and served on the following counsel (delivered by hand or sent by first class mail) appropriate proof of stock ownership, along with written objections, including the basis therefore, and copies of any papers and briefs in support thereof: Clerk of the Court United States District Court Northern District of California San Jose Division 280 South First Street San Jose, CA 95113 Counsel for Plaintiffs Nichole Browning BARROWAY TOPAZ KESSLER MELTZER & CHECK, LLP 580 California Street, Suite 1750 San Francisco, CA 94104 Betsy Manifold WOLF HALDENSTEIN ADLER FREEMAN & HERZ LLP Symphony Towers
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750 B Street, Suite 2770 San Diego, CA 92101 Counsel for SSTI William Freeman COOLEY GODWARD KRONISH LLP Five Palo Alto Square 3000 El Camino Real Palo Alto, CA 94306-2155 Counsel for Defendants Tsuyoshi Taira, Yasushi Chikagami, Ronald Chwang, Bing Yeh and Yaw Wen Hu Matthew J. Jacobs MCDERMOTT, WILL & EMERY LLP 275 Middlefield Road, Suite 100 Menlo Park, CA 94025-4004 Counsel for Defendant Jeffrey Garon Howard S. Caro HOGAN & HARTSON LLP 525 University Avenue, 4th Floor Palo Alto, California 94301 Any SSTI stockholder who does not make his, her or its objection in the manner provided herein 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 Settlement as incorporated in the Stipulation and to the award of attorneys' fees and expenses to Plaintiffs' Counsel, unless otherwise ordered by the Court, but shall otherwise be bound by the Judgment to be entered and the releases to be given. 11. All proceedings and all further activity regarding or directed towards this Action,

including but not limited to the pending motions to dismiss and any discovery, shall be stayed and suspended until further order of this Court, except as to such actions as may be necessary to implement the Settlement or this Order. 12. Neither the Stipulation nor the Settlement, nor any act performed or document

executed pursuant to or in furtherance of the Stipulation or the Settlement: (a) is or may be deemed to be or may be offered, attempted to be offered or used in any way by the Settling Parties as a presumption, a concession or an admission of, or evidence of, any fault, wrongdoing or liability of
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the Settling Parties or of the validity of any Released Claim; or (b) is intended by the Settling Parties to be, or may be, offered or received as evidence or used by any other Person in any other actions or proceedings, whether civil, criminal or administrative. The Released Persons may file the Stipulation and/or the Judgment in any action that may be brought against them in order to support a defense or counterclaim based on principles of res judicata, collateral estoppel, full faith and credit, release, standing, good faith settlement, judgment bar or reduction, or any other theory of claim preclusion or issue preclusion or similar defense or counterclaim; and any of the Settling Parties may file the Stipulation and documents executed pursuant and in furtherance thereto in any action to enforce the Settlement. 13. The Court reserves the right to adjourn the date of the Settlement Hearing or modify

any other dates set forth herein without further notice to SSTI stockholders, and retains jurisdiction to consider all further applications arising out of or connected with the Settlement. The Court may approve the Settlement, with such modifications as may be agreed to by the Settling Parties, if appropriate, without further notice to the current SSTI stockholders. IT IS SO ORDERED. 2/19/2010 DATED: _______________ _________________________________________ THE HONORABLE JEREMY FOGEL UNITED STATES DISTRICT JUDGE

[PROPOSED] ORDER PRELIMINARILY APPROVING DERIVATIVE SETTLEMENT AND PROVIDING FOR NOTICE MASTER FILE NO. C 06-04310 JF
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