http://www.businesswire.com/news/home/20091023005798/en
ATLANTA--(Business Wire)--
Cbeyond, Inc. (NASDAQ: CBEY) announced today that the Superior Court of Fulton
County, Georgia issued an order granting preliminary approval of the settlement
of the previously disclosed derivative lawsuit captioned In re Cbeyond, Inc.
Derivative Litigation. Although defendants continue to deny plaintiffs'
allegations, the Company believes it is in the best interests of its
stockholders to focus its attention on its business and put the matter behind
it. The settlement is subject to final approval by the Court. As described in
the attached Notice, the settlement provides, among other things, for payment of
fees and expenses incurred by plaintiffs` counsel in the amount of $200,000 that
will be paid by the Company's Directors` and Officers` insurance policy and will
have no impact on Cbeyond`s financial statements.
As a routine part of the settlement process, the Court has approved the
publication of the Notice of Settlement set out below which contains additional
details about the lawsuit and the settlement.
In the Superior Court of Fulton County State of Georgia, In re Cbeyond, Inc. Derivative Litigation, Civil Action No. 2008CV157216
To: All current record holders and beneficial owners of common stock of Cbeyond, Inc. ("Cbeyond" or the "Company") as of September 24, 2009 (each a "Current Cbeyond Stockholder"). PLEASE NOTE THAT THIS ACTION IS NOT A "CLASS ACTION" AND NO INDIVIDUAL CBEYOND STOCKHOLDER HAS THE RIGHT TO BE COMPENSATED AS RESULT OF THIS SETTLEMENT
PLEASE TAKE NOTICE that the above-captioned shareholder derivative litigation
(the "Action"), is being settled, subject to final Court approval. The terms of
the proposed settlement of the Action (the "Settlement") are set forth in a
Stipulation of Settlement dated September 24, 2009 (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.
All capitalized terms herein have the same meanings as set forth in the
Stipulation.
Generally, plaintiffs in the Action alleged inter alia, that between
approximately November 1, 2007 and February 2008, the Individual Defendants
caused the Company to issue materially false or misleading statements and
omissions concerning the Company`s financial well-being and future prospects.
Specifically, Plaintiffs alleged that the Individual Defendants failed to
disclose and/or purposely misled investors regarding Cbeyond`s customer
attrition rate (the "Churn Rate"), which was allegedly much higher than
disclosed by the Company through the Individual Defendants. Defendants have
denied, and continue to deny, any wrongdoing and deny further that the Company
or its stockholders were harmed or damaged by any conduct alleged in the Action.
The terms of the Settlement set forth in the Stipulation include: (1) the
adoption and/or implementation of a variety of corporate governance measures,
including measures that relate to and address many of the underlying issues in
the Action, including, but not limited to, disclosure of Company`s corporate
governance guidelines on the Company`s website; endeavoring to maintain three
directors on the Company`s Nominating and Corporate Governance Committee;
revisions to the Company`s Audit Committee Charter; revisions to the Company`s
indemnification agreements with the defendants named in the Action; and (2)
payment by Cbeyond's primary directors' and officers' liability insurance
carrier of Plaintiffs' Counsel's attorney fees and expenses in the amount of
$200,000, subject to Court approval (the "Fee and Expense Award").
A final settlement hearing (the "Settlement Hearing") will be held in the Action
on December 3, 2009, at 2:00 p.m. before the Hon. Melvin K. Westmoreland in
Courtroom 4A at the Superior Court of Fulton County, Georgia, 185 Central
Avenue, SW, Justice Center Tower, 30303, to determine: (1) whether the terms of
the Settlement should be approved as fair, reasonable and adequate, including
the payment of the Fee and Expense Award; and (2) whether the above-entitled
Action should be dismissed on the merits and with prejudice as to the Released
Persons.
If you are a Current Cbeyond Stockholder, your rights may be affected by the
Settlement. Any Current Cbeyond Stockholder who objects to the Settlement or any
of its terms, or who otherwise wishes to be heard, may appear in person or
through counsel at the Settlement Hearing and present evidence or argument that
may be proper and relevant; provided, however, that no person other than
Plaintiffs` counsel and Defendants` counsel shall be heard and no papers,
briefs, pleadings or other documents submitted by any such Person shall be
received and considered by the Court (unless the Court in its discretion shall
thereafter otherwise direct, upon application of such person and for good cause
shown), unless not later than fourteen (14) days prior to the Settlement Hearing
such Person:
A. files with the Clerk of the Superior Court of Georgia, Fulton County, 185 Central Avenue, Suite T-4655, Atlanta, Georgia 30303, a written objection containing (1) the
name of the case and case number; (2) the Person`s name, address and telephone number; (3) the number of shares of Cbeyond common stock the Person owns; (4) the date(s)
of purchase of such shares, and a statement as to whether the Person will own such shares as of the date of the Settlement Hearing; (5) a detailed statement of the basis
for the Person`s objections to or comments upon the Settlement, Plaintiffs` Counsel`s request for attorneys` fees and reimbursement of expenses, or any other matter
before the Court; (6) any supporting papers, including all documents and writings that the person desires the Court to consider; (7) a representation as to whether the
Person intends to appear at the Settlement Hearing; (8) a representation as to whether the Person plans on calling any witness(es) at the Settlement Hearing; and (9) the
identities of any witness(es) the Person plans to call at the Settlement Hearing; and
B. on or before the date of such filing, serves the same documents by first class mail upon the following counsel of record:
PLAINTIFFS` COUNSEL CBEYOND`S COUNSEL
Robin Winchester Michael J. Farris
BARROWAY TOPAZ KESSLER LATHAM & WATKINS LLP
MELTZER & CHECK, LLP
Sears Tower, Suite 5800
280 King of Prussia Road
233 South Wacker Drive
Radnor, PA 19087
Chicago, IL 60606
Scott P. Hilsen
ALSTON & BIRD LLP
1201 West Peachtree Street
One Atlantic Center
Atlanta, GA 30309
Unless the Court otherwise directs, no Person shall be entitled to object to the
approval of the Settlement, to any Judgment entered thereon, to the attorneys`
fees and expenses, or to otherwise to be heard, except by serving and filing a
written objection and supporting papers and documents as prescribed above. Any
Current Cbeyond Stockholder who fails to object in the manner and within the
time prescribed above shall be deemed to have waived the right to object
(including the right to appeal) and forever shall be barred, in this proceeding
or in any other proceeding, from raising such objection and will be barred for
all time by the Order and Final Judgment of the Court.Current Cbeyond
Stockholders who have no objection to the Settlement do not need to appear at
the Settlement Hearing or take any other action.
This Notice describing the Action was published as a Company Current Report on
Form 8-K on October 23, 2009, and filed with the United States Securities and
Exchange Commission (the "SEC") on that date. You may obtain a copy of this
Notice by referring to the SEC`s website at http://www.sec.gov.
If you have questions regarding the proposed Settlement, please do not call or
write the Court. Questions may be directed to:
PLAINTIFFS` COUNSEL
Robin Winchester
BARROWAY TOPAZ KESSLER
MELTZER & CHECK, LLP
280 King of Prussia Road
Radnor, PA 19087
PLEASE DO NOT CONTACT THE COURT REGARDING THIS NOTICE
About Cbeyond
Cbeyond, Inc. (NASDAQ: CBEY) is a leading provider of IT and communications
services to more than 46,000 small businesses throughout the United States.
Recently named as the sixth fastest growing technology company by Forbes
magazine, and added to Standard & Poor`s Small Cap S&P 600 Index, Cbeyond offers
more than 30 productivity-enhancing applications including local and
long-distance voice, broadband Internet, mobile, BlackBerry(R), broadband laptop
access, voicemail, email, web hosting, fax-to-email, data backup, file-sharing
and virtual private networking. Cbeyond delivers these services over a 100
percent private all IP network. For more information on Cbeyond, visit
www.cbeyond.net.
CBEY-G
Cbeyond, Inc.
Kurt Abkemeier
Vice President, Finance and Treasurer
678-370-2887
Kurt.abkemeier@cbeyond.net
Copyright Business Wire 2009
