Full Press Release Details
UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
STIPULATION AND AGREEMENT OF COMPROMISE, SETTLEMENT, AND RELEASE
This Stipulation and Agreement of Compromise, Settlement, and Release (the "Stipulation") is entered into this 25th day of Mayl, 2022, by and among (i) co-lead plaintiffs in the above-captioned stockholder derivative action Melissa Cohen, Stanley M. Malone, and Michael Splaine (collectively, "Plaintiffs") (ii) individual defendants David J. Anderson, Colleen F. Arnold, George S. Barrett, Carrie S. Cox, Calvin Darden, Bruce L. Downey, Patricia A. Hemingway Hall, Akhil Johri, Clayton M. Jones, Michael C. Kaufmann, Gregory B. Kenny, Nancy Killefer, David P. King, and J. Michael Losh (collectively, "Individual Defendants") and (iii) nominal defendant Cardinal Health, Inc. ("Cardinal Health" or the "Company," and, together with the Individual Defendants, "Defendants"), constituting the parties (the "Parties" and, individually, a "Party") in the above-captioned action (the "Action"), by and through their respective undersigned counsel.
This Stipulation is intended to fully, finally, and forever compromise, resolve, discharge, release, and settle the Released Claims (defined below) and dismiss the Action with prejudice, upon the terms and subject to the conditions set forth herein.
A.Opioid-Related Litigation and Settlements
WHEREAS, in October 2008, Cardinal Health entered into a settlement agreement with the U.S. Department of Justice, Drug Enforcement Administration ("DEA") (the "2008 Settlement"), to settle administrative claims relating to the Company's distribution of controlled substances
WHEREAS, in connection with the 2008 Settlement, Cardinal Health agreed to, among other things, pay $34 million in settlement of claims or potential claims for civil penalties and maintain a compliance program designed to detect and prevent diversion of controlled substances as required under the Controlled Substances Act and applicable DEA regulations
WHEREAS, in May 2012, Cardinal Health entered into a settlement with the DEA (the "2012 Settlement") to resolve a DEA order initiating administrative proceedings to revoke the registration of a Cardinal Health distribution center in Lakeland, Florida (the "2012 Lakeland Order")
WHEREAS, in connection with the 2012 Settlement, Cardinal Health did not then agree to pay a fine, but the government reserved its right to seek civil fines based on the conduct alleged in the 2012 Lakeland Order
WHEREAS, in December 2016, Cardinal Health settled the government's reserved claims for civil fines in connection with the 2012 Settlement and agreed to pay the United States $34 million
WHEREAS, in December 2016, Kinray, LLC, a New York-based subsidiary of Cardinal Health, agreed to pay $10 million to settle a suit by the United States alleging that Kinray had failed to report suspicious orders placed by New York area pharmacies between January 1, 2011 and May 14, 2012
WHEREAS, on December 12, 2017, the U.S. Judicial Panel on Multi-District Litigation centralized and transferred pending federal opioid-related cases brought by state and local governments against Cardinal Health, McKesson Corporation ("McKesson"), AmerisourceBergen Corporation ("AmerisourceBergen"), and certain pharmaceutical and pharmacy companies, to Judge Dan Polster in the United States District Court for the Northern District of Ohio (the "MDL")
WHEREAS, in December 2019, Cardinal Health entered into a settlement agreement to resolve opioid-related claims by two Ohio counties, Summit and Cuyahoga
WHEREAS, in July 2021, a bench trial involving certain of the cases in the MDL concluded in West Virginia, and the parties in that suit are awaiting a verdict
WHEREAS, on July 21, 2021, Cardinal Health announced that it, McKesson, and AmerisourceBergen, had negotiated a proposed settlement agreement and settlement process that, if all conditions were satisfied, would result in the settlement of the vast majority of opioid lawsuits filed by state and local government entities (the "2021 Agreement")
WHEREAS, the 2021 Agreement was binding as of February 25, 2022 and effective as of April 2, 2022, and includes injunctive relief terms governing the settling distributors' controlled substance anti-diversion programs (the "Injunctive Relief Terms"), a copy of which is attached as Exhibit A, that have been or will be implemented on or before July 1, 2022
WHEREAS, prior to the filing of the Consolidated Amended Complaint in the Action (the "Amended Complaint") (ECF No. 35, PAGEID # 1715-1800), Plaintiffs obtained books and records from Cardinal Health pursuant to Section 1701.37 of the Ohio Revised Code
WHEREAS, between June 14, 2019 and January 13, 2020, Plaintiffs filed three separate derivative actions (the "Individual Actions") in this Court (1) Melissa Cohen v. Arnold, et al., Case No. 2 19-cv-2491 (2) Stanley M. Malone v. Anderson, et al., Case No. 2 19-cv-5442 and (3) Michael Splaine v. Anderson, et al., Case No. 2 20-cv-203
WHEREAS, on January 28, 2020, this Court entered an order consolidating the Individual Actions for all purposes into the Action, under the caption In re Cardinal Health, Inc. Derivative Litigation, Case No. 2 19-cv-2491
WHEREAS, on February 11, 2020, the Court appointed Gardy Notis, LLP and Kessler Topaz Meltzer Check, LLP as co-lead counsel for Plaintiffs ("Co-Lead Counsel"), Isaac Wiles Burkholder Teetor, LLC and Strauss Troy Co., LPA as co-liaison counsel for Plaintiffs, and Mark Troutman, Esq. as trial counsel for Plaintiffs in the Action, and on February 6, 2021, Troutman joined The Gibbs Law Group, LLP and remained as trial counsel for Plaintiffs in the Action
WHEREAS, on March 12, 2020, Plaintiffs filed the Amended Complaint
WHEREAS, on June 19, 2020, Defendants filed a motion to dismiss the Amended Complaint (the "Motion to Dismiss")
WHEREAS, the Parties fully briefed the Motion to Dismiss, and, on January 21, 2021, the Court held a hearing on the Motion to Dismiss
WHEREAS, on February 8, 2021, the Court issued an order granting in part and denying in part the Motion to Dismiss (ECF No. 58, PAGEID # 2218-2263) (i) dismissing Count II of the Amended Complaint alleging waste of corporate assets, and (ii) sustaining Count I of the Amended Complaint alleging that the Individual Defendants breached their fiduciary duties
WHEREAS, on March 25, 2021, United States Magistrate Judge Elizabeth A. Preston Deavers entered a Preliminary Pretrial Order (ECF No. 66, PAGEID # 2284-86), which, among other things, set certain deadlines for fact and expert discovery and other proceedings
WHEREAS, on March 26, 2021, Plaintiffs propounded their First Request for Production of Documents, to which the Individual Defendants and Cardinal Health each served responses and objections on June 10, 2021
WHEREAS, on April 7, 2021, Defendants each filed answers to the Amended Complaint and asserted various defenses with respect to Plaintiffs' claims, and the Individual Defendants further denied that any fiduciary breach took place
WHEREAS, between April 30, 2021 and December 1, 2021, Cardinal Health produced to Plaintiffs more than 15 million pages of documents
WHEREAS, on October 28, 2021, Plaintiffs propounded their First Set of Interrogatories on Cardinal Health, to which Cardinal Health served responses and objections on December 8, 2021
WHEREAS, the Parties engaged in numerous meet-and-confer sessions regarding various discovery matters and also began a discussion regarding a potential resolution of the Action
WHEREAS, on December 9, 2021, counsel for the Parties and representatives of Defendants' directors and officers liability insurers ("D O Insurers"), participated in a mediation session with the Hon. Daniel Weinstein (Ret.) and Jed D. Melnick, during which the Parties agreed in principle to settle the Action in return for a cash payment of one hundred twenty-four million dollars ($124,000,000), to be paid by the D O Insurers (the "Settlement Amount") to the Company
WHEREAS, after the substantive terms of the Settlement were agreed to, the Parties separately negotiated in good faith as to an appropriate Fee and Expense Award (defined below), and Cardinal Health has agreed, subject to approval of the Court, that Plaintiffs' Counsel (defined below) are entitled to a fee and expense award of 25% of the Settlement Amount for their role in prosecuting and settling the Action
WHEREAS, this Stipulation (together with the exhibits hereto) reflects the final and binding agreement by and among the Parties
WHEREAS, Plaintiffs continue to believe that their claims have merit but, based upon Plaintiffs' and Co-Lead Counsel's investigation and prosecution of the Action, Plaintiffs and Co-Lead Counsel have concluded that the terms and conditions of this Stipulation are fair, reasonable, and adequate to the Company and its stockholders
WHEREAS, Plaintiffs have agreed to settle and release the claims asserted in the Action pursuant to the terms and provisions of this Stipulation, after considering (i) the substantial financial benefit under the Settlement (ii) the comprehensive Injunctive Relief Terms already contemplated by the 2021 Agreement (iii) the uncertain outcome, inherent delays, and significant risks of continued litigation and (iv) the desirability of permitting the Settlement to be consummated as provided by the terms of this Stipulation
WHEREAS, each of the Individual Defendants have denied, and continue to deny, that he or she committed, attempted to commit, or aided and abetted in the commission of, any breaches of fiduciary duty owed to Cardinal Health, or any violation of law or wrongdoing whatsoever, and expressly maintains that, at all relevant times, he or she acted in good faith and in a manner that he or she reasonably believed to be in the best interests of Cardinal Health and its stockholders
WHEREAS, each of the Individual Defendants deny the allegations made by Plaintiffs in the Action and deny that Plaintiffs, Cardinal Health, or its stockholders suffered any damage or were harmed as a result of any act, omission, or conduct by the Individual Defendants as alleged in the Action
WHEREAS, Cardinal Health believes that the Settlement is in the best interest of the Company, its stockholders, and its employees
WHEREAS, Defendants are entering into this Settlement for the benefit of Cardinal Health to eliminate the uncertain outcome, distraction, disruption, burden, and expense inherent in further litigation
WHEREAS, the Parties agree that this Stipulation (including the exhibits hereto) shall in no event be construed as, or deemed to be evidence of, an admission or concession by Defendants with respect to any claim of fault, liability, wrongdoing, or damage or any defect in the defenses that Individual Defendants have, or could have asserted and
WHEREAS, the Parties recognize and acknowledge that (i) Plaintiffs initiated, filed, and prosecuted this Action in good faith, (ii) Defendants defended the Action in good faith, and (iii) the terms of the Settlement and this Stipulation are fair, reasonable, and adequate to the Company and its stockholders.
NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED, by and among Plaintiffs (for themselves and derivatively on behalf of Cardinal Health), the Individual Defendants, and Cardinal Health, each by and through their respective undersigned counsel, that in exchange for the consideration set forth below and the benefits flowing to the Parties from the Settlement, and subject to the approval of the Court, the Action and the Released Claims (as defined below) shall be and hereby are fully, finally, and forever settled, compromised, discharged, relinquished, and released, and the Action shall be dismissed with prejudice as to all Defendants and claims, with full preclusive effect, as to all Parties, upon and subject to the terms and conditions of the Stipulation, as set forth below.
In addition to the terms defined elsewhere in this Stipulation, the following capitalized terms, used in this Stipulation, shall have the meanings specified below
1.1 "Action" means the above-captioned action, In re Cardinal Health, Inc. Derivative Litigation, Case No. 2 19-cv-2491, as set forth above.
1.2 "Business Day" means any day other than a day on which the Court is required to close.
1.3 "Cardinal Health" or the "Company" means Cardinal Health, Inc., as set forth above.
1.4 "Co-Lead Counsel" means the law firms of Kessler Topaz Meltzer Check, LLP and Gardy Notis, LLP.
1.5 "Current Company Stockholder" means any Person who owns Cardinal Health common stock, as of the close of trading on the date of this Stipulation.
1.6 "Court" means the United States District Court for the Southern District of Ohio.
1.7 "D O Insurers" means Defendants' directors and officers liability insurers, as set forth above.
1.8 "Effective Date" means the date by which all of the events and conditions specified in Section 5.1 have been met and have occurred.
1.9 "Fee and Expense Award" has the meaning ascribed to it in Section 4.1 below.
1.10 "Final" means the time when a Judgment that has not been reversed, vacated, or modified in any way is no longer subject to appellate review, either because of a disposition on appeal and conclusion of the appellate process (including potential writ proceedings) or because of passage of time for seeking appellate or writ review without action. More specifically, it is that situation when (i) no appeal or petition for review by writ has been filed and the time has passed for any notice of appeal or writ petition to be timely filed from the Judgment or (ii) if an appeal is taken, the court of appeal has either affirmed the Judgment or dismissed that appeal and the time for any reconsideration or further appellate review has passed or (iii) a higher court has granted further appellate review and that court has either affirmed the underlying Judgment or affirmed the court of appeal's decision affirming the Judgment or dismissing the appeal or writ proceeding, and the time for any reconsideration or further appellate review has passed. For purposes of this paragraph, an appeal or proceeding seeking subsequent judicial review pertaining solely to attorneys' fees or expenses or service awards, including any Fee and Expense Award, shall not in any way delay or preclude the Judgment from becoming Final. Any reference to the "Finality" of the Judgment shall incorporate the definition of Final in this paragraph.
1.11 "Individual Defendants" means David J. Anderson, Colleen F. Arnold, George S. Barrett, Carrie S. Cox, Calvin Darden, Bruce L. Downey, Patricia A. Hemingway Hall, Akhil Johri, Clayton M. Jones, Michael C. Kaufmann, Gregory B. Kenny, Nancy Killefer, David P. King, and J. Michael Losh, as set forth above.
1.12 "Judgment" means the final order and judgment to be rendered by the Court, in all material respects substantially in the form attached as Exhibit B hereto.
1.13 "Notice" means the Notice of Pendency and Proposed Settlement of Stockholder Derivative Action, Settlement Hearing, and Right to Appear, substantially in the form attached as Exhibit C hereto.
1.14 "Parties" means Plaintiffs, Individual Defendants, and Cardinal Health, as set forth above. "Party" means, individually, any of the Parties, as set forth above.
1.15 "Person" means an individual, corporation, limited liability corporation, professional corporation, partnership, limited partnership, limited liability partnership, association, joint stock company, estate, legal representative, trust, unincorporated association, government or any political subdivision or agency thereof, or any other business or legal entity.
1.16 "Plaintiffs" means Melissa Cohen, Stanley M. Malone, and Michael Splaine, as set forth above.
1.17 "Plaintiffs' Counsel" means the law firms of Gardy Notis, LLP, Kessler Topaz Meltzer Check, LLP, Strauss Troy Co., LPA, Isaac Wiles Burkholder Teetor, LLC, and The Gibbs Law Group, LLP.
1.18 "Preliminary Approval Order" means the order to be entered by the Court, in all material respects substantially in the form attached as Exhibit D hereto, including, among other things, preliminarily approving the terms and conditions of the Settlement as set forth in this Stipulation, directing that notice be provided to Current Company Stockholders, and scheduling a Settlement Hearing to consider whether the Settlement, the proposed Fee and Expense Award, and service awards to Plaintiffs should be finally approved and whether the Judgment should be entered.
1.19 "Related Persons" means past or present family members, spouses, heirs, trusts, trustees, executors, estates, administrators, beneficiaries, distributees, foundations, agents, employees, fiduciaries, partners, partnerships, general or limited partners or partnerships, joint ventures, member firms, limited liability companies, corporations, parents, subsidiaries, divisions, affiliates, associated entities, stockholders, principals, officers, directors, managing directors, members, managing members, managing agents, representatives, predecessors, predecessors-in-interest, successors, successors-in-interest, assigns, financial or investment advisors, advisors, consultants, investment bankers, entities providing any fairness opinion, underwriters, brokers, dealers, lenders, commercial bankers, attorneys, personal or legal representatives, accountants, insurers, co-insurers, reinsurers, and associates.
1.20 "Released Claims" means, collectively, the Released Defendant Claims and the Released Plaintiff Claims.
1.21 "Released Defendant Claims" means any and all claims, rights, demands, obligations, controversies, debts, disputes, damages, losses, causes of action, issues, liabilities, and charges of any kind or nature whatsoever, whether in law or equity, including both known claims and Unknown Claims, suspected or unsuspected, accrued or unaccrued, fixed or contingent, liquidated or unliquidated, matured or unmatured, foreseen or unforeseen, whether arising under federal or state statutory or common law, or any other law, rule, or regulation, whether foreign or domestic, that
Defendants have or could have asserted against the Released Plaintiffs or their counsel, arising out of, relating to, based upon, or involving the institution, prosecution, or settlement of the claims asserted against the Individual Defendants provided, however, that the Released Defendant Claims shall not include (1) any claims arising out of, based upon, or relating to the enforcement of the Settlement or this Stipulation, or (2) any claims by Defendants related to insurance coverage or the right to indemnification.
1.22 "Released Defendant Persons" means, collectively, each and all of the Individual Defendants and the Company, and their respective attorneys, and each and all of their respective Related Persons.
1.23 "Released Persons" means, collectively, the Released Defendant Persons and the Released Plaintiffs. "Released Person" means, individually, any of the Released Persons.
1.24 "Released Plaintiff Claims" means any and all claims, rights, demands, obligations, controversies, debts, disputes, damages, losses, causes of action, issues, liabilities, and charges of any kind or nature whatsoever, whether in law or equity, including both known claims and Unknown Claims, suspected or unsuspected, accrued or unaccrued, fixed or contingent, liquidated or unliquidated, matured or unmatured, foreseen or unforeseen, whether arising under federal or state statutory or common law, or any other law, rule, or regulation, whether foreign or domestic, that (i) were asserted in any of the complaints filed in the Action, or (ii) could have been, or could be, asserted by Cardinal Health directly, by Plaintiffs directly, or by Plaintiffs or any Cardinal Health stockholder derivatively on behalf of Cardinal Health, against the Released Defendant Persons in any court, tribunal, forum, or proceeding, concerning, arising from, relating to, based upon, or involving, in any way whatsoever, any of the facts, allegations, practices, events, claims, disclosures, non-disclosures, occurrences, representations, statements, matters, transactions, conduct, actions, failures to act, omissions, or circumstances that were alleged or referred to in any of the complaints filed in the Action or in the prosecution or settlement of the Action, including but not limited to any and all such claims that were, could have been, or could be asserted by Cardinal Health, Plaintiffs or any other Cardinal Health stockholder derivatively on behalf of Cardinal Health, concerning, arising from, or relating to Cardinal Health's liabilities associated with settled, pending, or future litigation or claims of any nature concerning, arising from, or relating to the underlying facts, conduct, events, occurrences, transactions, or allegations set forth or referred to in any of the complaints, including the Amended Complaint, filed in the Action provided, however, that the Released Plaintiff Claims shall not include any claims arising out of, based upon, or relating to the enforcement of the Settlement or this Stipulation. For the avoidance of doubt, the Released Plaintiff Claims do not cover, settle, or release any direct claims held by any current, former, or future Cardinal Health stockholder other than Plaintiffs, including any claims asserted under the federal or state securities laws.
1.25 "Released Plaintiffs" means each and all of the Plaintiffs and their respective attorneys, and each and all of their respective Related Persons.
1.26 "Settlement" means the settlement by and among the Parties on the terms and conditions set forth in this Stipulation.
1.27 "Settlement Amount" means one hundred twenty four million dollars ($124,000,000) in cash to be paid by Defendants' D O Insurers.
1.28 "Settlement Hearing" means the hearing to be held by the Court upon duly given notice to review this Stipulation and its exhibits, as well as the application for the Fee and Expense Award, and determine whether the Settlement should be finally approved, whether the Fee and Expense Award should be finally approved, whether service awards to Plaintiffs should be paid from any such award, and whether the Judgment should be entered.
1.29 "Summary Notice" means the Summary Notice of Pendency and Proposed Settlement of Stockholder Derivative Action, substantially in the form attached as Exhibit E hereto.
1.30 "Unknown Claims" means any Released Claims that any of the Parties or any Cardinal Health stockholder does not know or suspect to exist in his, her, or its favor at the time of the release of such claims, including claims which, if known by him, her, or it, might have affected his, her, or its decision to settle or the terms of his, her, or its settlement with and releases provided to the other Parties, or might have affected his, her, or its decision not to object to this Settlement. With respect to any and all Released Claims, the Parties stipulate and agree that, upon the Effective Date, the Parties shall expressly waive, and, with respect to Released Plaintiff Claims that could have been or could be asserted derivatively on behalf of the Company, all other Cardinal Health stockholders by operation of the Judgment shall have expressly waived, the provisions, rights, and benefits of California Civil Code 1542, or any other law of the United States or any state or territory of the United States, or principle of common law or foreign law that is similar, comparable, or equivalent to Section 1542, which provides
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.
The Parties and each Cardinal Health stockholder may hereafter discover facts in addition to or different from those which he, she, or it now knows or believes to be true with respect to the subject matter of the Released Claims, known or unknown, suspected or unsuspected, contingent or non-contingent, whether or not concealed or hidden, which now exist, or heretofore have existed upon any theory of law or equity, but the Parties and each Cardinal Health stockholder derivatively on behalf of the Company shall expressly, fully, finally, and forever settle and release, and upon the Effective Date and by operation of the Judgment shall have settled and released, fully, finally, and forever, any and all Released Claims as applicable without regard to the subsequent discovery or existence of such different or additional facts. The Parties acknowledge, and the Cardinal Health stockholders shall be deemed by operation of the Judgment
to have acknowledged, that the foregoing waiver was separately bargained for and is a key element of the Settlement of which this release is a part.
2.SETTLEMENT CONSIDERATION
2.1 In consideration for the full and final release, settlement, and discharge of any and all Released Plaintiff Claims against the Released Defendant Persons and the dismissal with prejudice of the Action on the terms and conditions set forth in this Stipulation
(a) Defendants shall cause their D O Insurers to pay the Settlement Amount, less any Fee and Expense Award paid to Plaintiffs' Counsel pursuant to Section 4.2, to the Company, by wire transfer or check at the option of the D O Insurers, no later than twenty (20) Business Days after the later of (1) the Court's order approving the Settlement and entering the Judgment pursuant to Section 5.1(a)-(b) and (2) receipt of payee information, check and or wire instructions as applicable, and tax identification information for the payment from the Company and
(b) to the extent the Settlement is terminated or cancelled pursuant to any of the conditions set forth in Section 5.2, the Company shall make a full refund to the D O Insurers of the payment the Company received under Section 2.1(a), no later than twenty (20) Business Days after the Settlement has been so terminated or cancelled, and such refund will be distributed to the D O Insurers in accordance with the provisions of separate funding agreements between Defendants and the D O Insurers entered into in connection with the Settlement.
2.2 Defendants' D O Insurers' payment of the Settlement Amount as provided in Sections 2.1(a) and 4.2 of this Stipulation shall constitute full and final satisfaction of all of the Released Plaintiff Claims. Defendants' sole monetary obligation under the Settlement shall be to cause to be paid the Settlement Amount by their D O Insurers as provided in this Stipulation, and they shall not be liable for any other amounts, including any Court-awarded attorneys' fees and litigation expenses to Plaintiffs' Counsel, which shall be paid, if awarded, out of the Settlement Amount.
3.SUBMISSION OF THE SETTLEMENT TO THE COURT FOR APPROVAL
3.1 As soon as practicable after this Stipulation has been executed, Plaintiffs' Counsel shall submit this Stipulation, together with its exhibits, to the Court and file a motion for preliminary approval of the Settlement, requesting, among other things (i) preliminary approval of the Settlement set forth in this Stipulation and entry of the Preliminary Approval Order substantially in the form attached as Exhibit D hereto (ii) approval of the method of providing notice to Current Company Stockholders and approval of the forms of Notice and Summary Notice attached as Exhibits C and E hereto and (iii) a date for the Settlement Hearing.
3.2 The proposed Preliminary Approval Order provides that, within ten (10) Business Days following the entry of a Preliminary Approval Order (the "Notice Date"), the Company shall (i) file a Form 8-K with the SEC that includes the
Notice as an attachment (ii) post this Stipulation and the Notice on the investor relations section of the Company's website until the Effective Date of the Settlement and (iii) issue a press release on PR Newswire or other equivalent national press release service that includes the Summary Notice. The proposed Preliminary Approval Order also provides that, within ten (10) Business Days of the Notice Date, the Company shall cause the Summary Notice to be published in The Wall Street Journal. The Company shall assume all administrative responsibility for and will pay any and all costs of notice of the Settlement by these methods, regardless of whether the Court approves the Settlement or the Effective Date fails to occur. Neither Plaintiffs nor Plaintiffs' Counsel shall be responsible for any costs of notice of the Settlement, except that Co-Lead Counsel shall also make copies of the Notice and Summary Notice available on their respective websites, and shall bear the administrative responsibility for such posting and any costs thereof.
3.3 The Parties believe the content and manner of the Notice and Summary Notice, as set forth in Sections 3.1 and 3.2, constitutes adequate and reasonable notice pursuant to applicable law and due process.
3.4 The Parties agree to request that the Court hold a hearing in the Action no earlier than sixty (60) days after notice is given, at which time the Court will consider and determine whether the Judgment, substantially in the form of Exhibit B hereto, should be entered (i) approving the terms of the Settlement as fair, reasonable, and adequate (ii) dismissing with prejudice the Action (iii) ruling upon Plaintiffs' application for a Fee and Expense Award and (iv) ruling upon Plaintiffs' request for service awards.
3.5 Pending the Effective Date, the Parties agree that all proceedings and discovery in the Action shall be stayed (except as otherwise provided herein and in the proceedings necessary to effectuate the consummation and final approval of the Settlement) and not to initiate any other proceedings other than those related to the Settlement itself. The Parties shall not file, prosecute, instigate, or in any way participate in the commencement or prosecution of any of the Released Claims. The Parties shall cooperate to secure a postponement of any response deadline, hearing, or trial date(s) in the Action while this Settlement is under consideration by this Court.
4.FEE AND EXPENSE AWARD
4.1 In recognition of Plaintiffs' Counsel's role in prosecuting and settling the Action, Cardinal Health agrees that Co-Lead Counsel should receive a fee and expense award totaling 25% of the Settlement Amount, subject to Court approval (the "Fee and Expense Award"). Plaintiffs and Plaintiffs' Counsel agree not to request any greater amount be awarded to Plaintiffs' Counsel by the Court and not to seek the payment of attorneys' fees and expenses from any person or entity other than Cardinal Health or Defendants' D O Insurers. Co-Lead Counsel also intend to seek Court approval of service awards for Plaintiffs of $2,500 each, which, if approved, will be paid out of the Fee and Expense Award.
4.2 The Parties acknowledge and agree that any Fee and Expense Award in connection with the Settlement shall be paid by Defendants' D O Insurers to Co-Lead Counsel, via wire transfer or check at the option of the D O Insurers,
from the Settlement Amount, no later than twenty (20) Business Days after the later of (i) the date of entry of the Court's order awarding such fees and expenses and (ii) receipt of payee information, check and or wire instructions as applicable, and tax identification information for the payment from Co-Lead Counsel. Any Fee and Expense Award shall be paid out of, and not be in addition to, the Settlement Amount.
4.3 The payment of any Fee and Expense Award to Co-Lead Counsel shall be subject to the joint and several obligation of Co-Lead Counsel to
(a) in the event the Settlement is terminated or cancelled pursuant to Section 5.2, make full refund of any such payment to the D O Insurers, which will be distributed to the D O Insurers in accordance with instructions to be provided by the Individual Defendants' counsel consistent with the provisions of separate funding agreements between Defendants and the D O Insurers entered into in connection with the Settlement and
(b) in the event the Fee and Expense Award is reduced or reversed as a result of any appeal or further proceedings on remand or successful collateral attack and such order reducing or reversing the award has become final, pay to Cardinal Health, in accordance with instructions to be provided by Cardinal Health's counsel, the portion of any such reduction or reversal.
4.4 Co-Lead Counsel, in their sole discretion, shall be responsible for distributing the Fee and Expense Award among Plaintiffs' Counsel. Any fees or expenses associated with Co-Lead Counsel's distribution of the Fee and Expense Award shall be borne solely by Co-Lead Counsel. Defendants and their respective counsel shall have no responsibility for, and no liability whatsoever with respect to, the distribution or allocation of the Fee and Expense Award. Any dispute regarding the distribution or allocation of the Fee and Expense Award shall have no effect on the Settlement or the Releases.
4.5 Except as otherwise provided herein or except as provided pursuant to indemnification or insurance rights, each of the Parties shall bear his, her, or its own costs, expenses, and attorneys' fees.
4.6 The amount of any Fee and Expense Award shall be subject to Court approval. The Court may consider and rule upon the fairness, reasonableness, and adequacy of the Settlement independently of the consideration of any Fee and Expense Award. Any changes by any court, including this Court, to the negotiated amount of any Fee and Expense Award, or to any service awards, will not otherwise affect the Finality of the Judgment or the validity of the Settlement, and the Parties' obligations under the Settlement (except with respect to the payment of attorneys' fees and expenses) shall not be conditioned on the resolution of, nor any ruling regarding, any Fee and Expense Award, including any service awards. Any orders or proceedings relating to any request for a Fee and Expense Award or service award, or any appeal from any order or proceedings relating thereto, shall not affect the validity of the