Met-Pro Corporation Securities Settlement
The lawsuit was settled for supplemental disclosures in the proxy statement mailed to shareholders. The following is a summary of the proceedings in this lawsuit: ‘On April 22, 2013, Met-Pro and CECO Environmental Corporation (CECO) announced that they had entered into an Agreement and Plan of Merger (the Merger Agreement), dated as of April 21, 2013, pursuant to which, following approval by vote of Met-Pro shareholders, Met- Pro would be merged with and into CECO, and shareholders of Met-Pro stock could elect to receive $13.75 in cash and/or shares in CECO common stock, with the overall elections subject to proration such that approximately 53% of Met-Pro shares would be exchanged for cash and 47% for stock (the Merger). On May 1, 2013, Plaintiff, by and through his counsel, sent a litigation demand letter to the current Met-Pro Board of Directors in connection with the Merger, describing: (i) the factual basis for the allegations of wrongdoing, (ii) how such alleged wrongdoing is harmful to the Company, and (iii) requesting that the Board take remedial action. Between May 8 and May 14, 2013, counsel for Defendants contacted Plaintiff counsel to discuss Plaintiff May 1, 2013 demand letter. On May 14, 2013, counsel for Defendants delivered a letter by email to Plaintiff counsel indicating that Defendants were evaluating Plaintiff demand. On May 23, 2013, Met-Pro and CECO filed a Form S-4 Registration Statement with the U.S. Securities and Exchange Commission (the SEC) in connection with the Merger (the Registration Statement). On May 29, 2013, after consulting with a financial advisor, Plaintiff counsel resumed discussions concerning Plaintiff demand with counsel for Defendants and, among other things, requested the production of certain non-public information related to the Merger Between May 29 and June 14, 2013, the respective counsel for the Parties discussed the necessity and scope of information requested by Plaintiff. The Parties to the Class Action, by and through their undersigned counsel, entered into a Confidentiality Agreement Governing the Production and Exchange of Confidential Documents, dated as of June 14, 2013 (the Confidentiality Agreement). Between June 18 and 27, 2013, Met-Pro voluntarily produced to Plaintiff counsel approximately 900 pages of internal, confidential and highly confidential, non-public documents, including, among other things, board presentation materials, board minutes, and bankers books. On June 28, 2013, after reviewing the documents produced by Defendants and relevant publicly available information, and several consultations with the financial advisor retained by Plaintiff counsel who had likewise reviewed certain internal documents produced by Defendants as well as other relevant information, Plaintiff, by and through his counsel, sent a letter to counsel for Defendants demanding, among other things, certain supplemental disclosures to the Registration Statement.On July 1, 2013, Defendants, by and through their counsel, delivered a letter to Plaintiff rejecting his June 28, 2013 demand. On July 3, 2013, Met-Pro and CECO amended the Registration Statement by filing a Form S-4/A with the SEC (Amended Registration Statement). On July 8, 2013, Plaintiff commenced this Class Action by filing a complaint against Defendants alleging, among other things, that Defendants violated Â§Â§ 14(a) and Section 20(a) of the Securities Exchange Act of 1934, and Rule 14a-9 promulgated thereunder, by issuing a Registration Statement and an Amended Registration Statement that omitted material facts, and that the Individual Defendants breached their fiduciary duties by agreeing to sell the Company for inadequate consideration pursuant to a flawed sales process. Between July 9 and July 20, 2013, the Parties engaged in extensive arm-length negotiations regarding Plaintiff settlement demands, including demands for further disclosures. On July 20, 2013, the Parties reached an agreement-in-principle to settle the Class Action and executed a Memorandum of Understanding (the MOU) containing the terms of that agreementin- principle. Among other things, the MOU set forth the Parties agreement-in-principle that, in consideration for the full and final settlement and dismissal with prejudice of the Class Action and the release of any and all Released Claims (as defined below), Defendants would make certain additional disclosures (the Supplemental Disclosures,which are attached as Exhibit A to the Stipulation and Agreement of Compromise and Settlement executed on February 25, 2014 (the Stipulation), to be included in the Joint Proxy Statement/Prospectus to be filed with the SEC and mailed to Met-Pro shareholders. In addition, pursuant to the terms of the MOU, Defendants also agreed to provide additional reasonable discovery, including depositions of certain key witnesses (with one deposition to take place at least 10 days prior to the Met-Pro shareholder vote in connection with the Merger) to allow Plaintiff to confirm the fairness, reasonableness and adequacy of the proposed Settlement (the Confirmatory Discovery). Defendants made the Supplemental Disclosures in the Schedule 14A Definitive Joint Proxy Statement/Prospectus filed with the SEC on July 25, 2013 and mailed to Met-Pro shareholders on August 1, 2013 (Definitive Proxy). Plaintiff and Defendants believe that the Supplemental Disclosures were filed and mailed with more than sufficient time to permit Met-Pro shareholders to review the Supplemental Disclosures and consider that information in connection with voting on the Merger. Following the MOU, Plaintiff conducted additional discovery to confirm the fairness and reasonableness of the settlement, including taking the depositions of: (i) Raymond De Hont, President, Chief Executive Officer, and a director of Met-Pro, on August 15, 2013; and (ii) Samuel Tinaglia, a designee of William Blair & Company, L.L.C. (Blair), Met-Pro financial advisor in connection with the Merger, on October 2, 2013. Plaintiff counsel believe that the testimony of Messrs. De Hont and Tinaglia further supports that the terms and conditions of the proposed Settlement are fair, reasonable, and adequate, and in the best interests of Met-Pro and the members of the Class because as a result of Defendants public disclosure of the Supplemental Disclosures, Met-Pro shareholders were able to make a fully informed decision with respect to whether or not to vote their shares in favor of the Merger. On August 26, 2013, at an annual shareholder meeting of Met-Pro shareholders, Met-Pro shareholders voted to approve the Merger, which closed the following day. The Parties entered into the Stipulation and Agreement of Compromise and Settlement, which sets forth the terms and conditions of the Settlement, on February 25, 2014.