SupportSoft, Inc. Shareholder Derivative Litigation
Plaintiff Charles White commenced this action on December 19, 2005. Plaintiff’s allegations are contained in his Second Amended Complaint, filed October 27, 2006. In summary, Plaintiff alleged that, during the period January 16, 2004 through October 1, 2004 (the “Relevant Period”), defendants Radha R. Basu, Manuel Diaz, Kevin C. Eichler, Edward S. Russell, and James Thanos (“Defendants”) damaged SupportSoft by causing the Company to issue false and misleading statements in documents filed with the Securities and Exchange Commission (“SEC”), and in press releases and conference calls, in order to conceal problems that were arising in SupportSoft’s business.
Please click to view a PDF copy of the Second Amended Shareholder Derivative Complaint in White v. Basu, et al., No. Civ. 451677, Superior Court of California For The County of San Mateo, filed October 27, 2006.
A proposed Settlement, which is subject to Court approval, requires the Company to adopt targeted changes to the Company’s corporate governance designed to address the allegations of the complaint. The changes include, among others, (i) the addition of four new directors and a new management team; (ii) separation of the roles of Chairman and CEO; (iii) adoption of a requirement that 75% of the board of directors shall be independent; (iv) a quarterly review by the Audit Committee of the board of directors of the Company’s financial statements, including specifically a review of conversions of customer agreements from ratable term contracts to perpetual contracts; (v) adoption of a Disclosure Committee charter and a requirement that sales personnel, as well as legal and financial personnel, quarterly certify to the Disclosure Committee the information they have relevant to the Company’s business and financial statements, and, separately to acknowledge additionally once that they are familiar with the Company’s Code of Ethics; and (vi) a new insider trading policy requiring pre-clearance of all trades by Section 16 officers, which includes a provision pursuant to which the General Counsel may refer violators to the Board for legal action seeking disgorgement.
A detailed discussion of the twenty-four agreed upon corporate governance changes is contained in Plaintiff’s brief in support of approval of the settlement, filed with the Court November 13, 2007.
You may click on the embedded links to view PDF copies of the Memorandum of Points and Authorities In Support Of Plaintiff's Motion For Approval Of Derivative Settlement And Award Of Attorneys' Fees, Expenses And Incentive Award, the Stipulation of Settlement, including Exhibit A -- Corporate Governance Changes, Exhibit B -- Proposed Order and Final Judgment, Preliminary Approval Order, Notice, and the Declaration of Juden Justice Reed In Support Of Plaintiff's Motion For Approval Of Derivative Settlement And Award Of Attorneys' Fees, Expenses and Incentive Award.
