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IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
NOTICE OF PENDENCY OF DERIVATIVE AND CLASS ACTION,
PROPOSED SETTLEMENT, AND SETTLEMENT HEARING
PLEASE READ THIS NOTICE CAREFULLY AND IN ITS ENTIRETY. THIS NOTICE RELATES TO A PROPOSED SETTLEMENT OF A LAWSUIT AND CONTAINS IMPORTANT
INFORMATION. YOUR RIGHTS WILL BE AFFECTED BY THESE LEGAL PROCEEDINGS IN THIS LITIGATION. IF THE COURT APPROVES THE PROPOSED SETTLEMENT, YOU WILL BE FOREVER BARRED FROM CONTESTING THE FAIRNESS OF THE PROPOSED SETTLEMENT OR PURSUING THE RELEASED
CLAIMS (AS DEFINED BELOW).
IF YOU HELD COMMON STOCK OF THE COMPANY AS OF THE CLOSE OF BUSINESS ON JUNE 12, 2024 FOR A BENEFICIAL
OWNER, PLEASE TRANSMIT THIS DOCUMENT PROMPTLY TO SUCH BENEFICIAL OWNER.
The purpose of this Notice is to inform you of a proposed settlement (the
Settlement ) of the action captioned Camac Fund, LP v. Wagner, et al., 2023-0817-MTZ (the Action ), pending before the Court of Chancery of the State of Delaware (the
Court ), and of a hearing to be held before the Court, in the Leonard L. Williams Justice Center, 500 North King Street, Wilmington, Delaware 19801 on Tuesday, July 30, 2024 at 11 a.m. (or remotely by such means as the Court may
order) (the Settlement Hearing ). The purpose of the Settlement Hearing is to determine: (a) whether the Court should approve the Settlement; (b) whether the Court should enter an Order and Final Judgment dismissing the claims
asserted in the Action on the merits and with prejudice as to Plaintiff Camac Fund, LP ( Plaintiff or Camac ), the Company, the Class (defined below), and the Company s stockholders, and effectuating the releases described
below; (c) whether the Court should grant the application of Plaintiff for an award of attorneys fees and expenses actually incurred by it in connection with investigating and pursuing the claims asserted in the Action (and to reimburse
Plaintiff for the attorneys fees and expenses already paid to its counsel); and (d) such other matters as may properly come before the Court.
This Notice will inform you of how, if you so choose, you may enter your appearance in the Action or object to the Settlement
and may have your objection heard at the Settlement Hearing.
THE FOLLOWING RECITATION DOES NOT CONSTITUTE FINDINGS OF THE COURT AND
SHOULD NOT BE UNDERSTOOD AS AN EXPRESSION OF ANY OPINION OF THE COURT AS TO THE MERITS OF ANY CLAIMS OR DEFENSES BY ANY OF THE PARTIES. IT IS BASED ON STATEMENTS OF THE PARTIES AND IS SENT FOR THE SOLE PURPOSE OF INFORMING YOU OF THE EXISTENCE OF
THE ACTION AND OF A HEARING ON A PROPOSED SETTLEMENT SO THAT YOU MAY MAKE APPROPRIATE DECISIONS AS TO STEPS YOU MAY, OR MAY NOT, WISH TO TAKE IN RELATION TO THE ACTION.
BACKGROUND AND DESCRIPTION OF THE ACTION
On August 1, 2023, Forte announced that: (i) it had entered into a Securities Purchase Agreement dated July 28,
2023, for a private placement with certain qualified buyers, institutional accredited investors and certain executive officers, senior management, and members of the Forte Board of the Directors (the Board ) pursuant to which the Company
agreed to sell 15,166,957 shares of common stock of the Company at a purchase price of $1.006 per share, and 9,689,293 pre-funded warrants to purchase common stock at a price of $1.005 per pre-funded warrant (the Private Placement ); (ii) the Private Placement had closed on July 31, 2023; and (iii) the gross proceeds of the Private Placement were approximately $25 million.
On August 10, 2023, Camac filed a Verified Complaint (the Original Complaint ) in this Action against the
Individual Defendants and certain of the institutional investors in the Private Placement (the Institutional Investors ). In the Original Complaint, Camac alleged that the Individual Defendants breached their fiduciary duties in
connection with the Private Placement because the sole purpose of the Private Placement was to entrench the Board and prevent Camac s two nominees (Michael G. Hacke and Chris McIntyre) from winning election to Forte s eight-member Board at
the 2023 annual meeting of stockholders scheduled for September 19, 2023. Camac further alleged that prior decisions of the Board, including with respect to adopting a stockholder rights agreement, expanding the size of the Board and adding new
directors, adopting severance agreements for Forte s officers in the event of a change-in-control, and initiating an at-the-market offering of Forte stock, supported Camac s claims.
alleged that the Institutional Investors aided and abetted the alleged breaches of fiduciary duty by the Individual Defendants in connection with the Private Placement. Along with the Original Complaint, Camac filed a Motion to Expedite and Motion
for Preliminary Injunction
in which it asked the Court to expedite proceedings and schedule a preliminary injunction hearing in advance of the 2023 annual meeting to consider its request to enjoin the counting of votes
cast by the Institutional Investors at the 2023 annual meeting.
On August 16, 2023, certain of the defendants filed
motions to dismiss the Original Complaint.
On August 17, 2023, following briefing and oral argument, the Court
issued an oral ruling granting, in part, the Motion to Expedite. The Court held that Camac was permitted to take expedited discovery but declined to schedule a preliminary injunction hearing in advance of the 2023 annual meeting. Instead, the Court
ordered the Parties to confer and submit a proposed schedule for a hearing on the motions to dismiss and the motion for preliminary injunction promptly following the 2023 annual meeting.
On September 1, 2023, Camac voluntarily dismissed without prejudice the Institutional Investors, specifically defendants
Fred Alger Management, LLC, BVF Partners L.P., Farallon Capital Management, L.L.C., Perceptive Advisors LLC, and Tybourne Capital (US) LLC.
On September 8, 2023, the Court granted the remaining parties Stipulation and [Proposed] Scheduling Order Governing
Defendants Motion to Dismiss, pursuant to which Camac withdrew its request for a preliminary injunction and the parties agreed to stay all discovery pending the outcome of Defendants motion to dismiss the Original Complaint.
On September 19, 2023, Forte held its 2023 annual meeting. Forte s two nominees (Lawrence Eichenfield, M.D., and
Paul A. Wagner, Ph.D.) won reelection to the Board.
On October 23, 2023, Camac filed its Verified Amended
Class Action and Derivative Complaint (the Amended Complaint ). Count I is styled as a direct claim on behalf of a class of Forte stockholders for breach of fiduciary duty against the Individual Defendants for approving the Private
Placement and the sequencing of the Annual Meeting and record date. Count II is styled as a derivative claim on behalf of nominal defendant Forte and its stockholders against the Individual Defendants for wrongful dilution.
The Amended Complaint further alleges facts regarding the Board s adoption of the rights agreement, addition of directors to the Board, adoption of severance agreements for executives, and initiation of the at-the-market offering as support for Camac s claims.
2023, Defendants moved to dismiss the Amended Complaint.
On April 15, 2024, following briefing and oral argument,
the Court denied Defendants motion to dismiss the Amended Complaint.
On April 30, 2024, the Court entered an
order granting the Parties Stipulation and [Proposed] Order Governing Case Schedule, which provided for expedited proceedings in advance of trial to be held on July 29-31, 2024.
Expedited discovery ensued, including extensive written discovery and multiple document productions from the Parties and
certain non-parties to the Action totaling over 28,000 pages.
briefed Defendants motion to quash third-party subpoenas that Camac had issued, which the Court denied on May 17, 2024. Camac also filed a motion to strike one of Defendants affirmative defenses and filed an opening brief in support
thereof. Defendants filed an answering brief in response to the motion to strike on May 28, 2024.
On June 4, 2024, the Parties reached an
agreement-in-principle to settle the claims asserted in the Action, subject to execution of the Stipulation (defined below) and related papers and Court approval, and
agreed to stay proceedings while the Parties negotiated the terms of the Stipulation and finalized the Settlement. The Parties informed the Court of their
agreement-in-principle the same day.
Following an analysis of the strengths and weaknesses of the claims asserted in the Action, including
review and analysis of the written and document discovery Camac received in the Action, Camac has determined that the terms of the Settlement are fair, reasonable, adequate, and in the best interests of the Company, the Class (defined below), and
the Company s stockholders, and that it is reasonable to pursue a settlement of the Action based upon those terms and the procedures outlined in the Stipulation and Agreement of Settlement, Compromise, and Release (the Stipulation ).
For purposes of the Settlement, Class means the class of all record holders and beneficial owners of Forte
common stock who held such stock from the period of July 28, 2023, through and including September 19, 2023 (except as limited by the following sentence), and their heirs, assigns, transferees, and successors-in-interest, in each case solely in their capacity as holders or owners of Company common stock. Excluded from the Class are (i) the Individual Defendants; and (ii) any Individual
Defendant s immediate family members (meaning any children, stepchildren, grandchildren, parents, stepparents, spouses, and siblings) (collectively, the Excluded Parties and each an Excluded Party ).
At all times, Defendants have denied, and continue to deny, all allegations of wrongdoing in the Action, including without
limitation that they have committed any breaches of fiduciary duty, that they have violated Delaware law, or that Plaintiff or the Company and its stockholders have suffered any damages. Defendants expressly maintain that they have at all times
complied with their fiduciary and legal duties.
Although Defendants believe that they have strong defenses to the claims
asserted in the action, Defendants entered into the Stipulation because the Settlement will eliminate the burden, expense, distraction, and uncertainties inherent in further litigation.
SETTLEMENT CONSIDERATION
Class-Wide Settlement Consideration. Subject to approval of the Settlement by the Court, the Parties agree that:
Camac Standstill and Reimbursement of Out-of-Pocket Expenses.
Effective upon the Effective Date (as defined below):
(a) Plaintiff s and the Settlement Class s Releases. The Plaintiff and Settlement
Class Releasors shall fully, finally, and forever release and discharge each and all of the Defendant Released Parties from any and all of Plaintiff s and the Settlement Class s Released Claims.
Plaintiff and Settlement Class Releasors means Camac, including its principals, directors,
officers, executives, limited and general partners, attorneys, heirs, assigns, transferees, and successors, and the members of the Class, and their heirs, assigns, transferees, and successors, in each case solely in their capacity as holders or
owners of Company common stock.
Defendant Released Parties means each and all of the
Defendants and the Institutional Investors (including affiliated entities that invested in the Private Placement), and each of their respective principals, directors, officers, executives, limited and general partners, members, managers, attorneys,
agents, representatives, insurers and reinsurers, heirs, assigns, transferees, and successors.
Plaintiff s and the Settlement Class s Released Claims means any and all claims,
demands, rights, liabilities, losses, obligations, duties, damages, costs, debts, expenses, interest, penalties, sanctions, fees, attorneys fees, actions, potential actions, causes of action, suits, agreements, judgments, decrees, matters,
issues and controversies of any kind, nature, or description whatsoever, whether known or unknown, disclosed or undisclosed, accrued or unaccrued, apparent or not apparent, foreseen or unforeseen, matured or not matured, suspected or unsuspected,
liquidated or not liquidated, fixed or contingent, including Unknown Claims (defined below), whether based on state, local, foreign, federal, statutory, regulatory, common, or other law or rule (including all claims within the exclusive jurisdiction
of the federal courts, such as, but not limited to, federal securities claims), that are, have been, could have been, could now be, or in the future could, can, or might be asserted in the Action, or in any other court, tribunal, or proceeding by
the Settlement Class Releasors, or any other Forte stockholder, derivatively on behalf of the Company, or by Forte directly, or any direct claims that could be asserted by Plaintiff, against
the Defendant Released Parties (defined above), which are based upon, arise out of, relate in any way to, or involve, directly or indirectly, any of the actions, transactions, occurrences, statements, representations, misrepresentations, omissions,
allegations, facts, practices, events, claims, or any other matters, things, or causes whatsoever, or any series thereof, that arise out of or relate in any way to the Action or any matters raised in the Action, including but not limited to
Camac s 2023 proxy contest, the Private Placement, and the 2023 annual meeting, except that the foregoing released claims do not include (i) any claims relating to the enforcement of the Settlement (including any agreements or provisions
of agreements identified in this Stipulation as surviving the Settlement), (ii) any claims between Forte and/or the Individual Defendants and their respective insurers or any right to indemnification or advancement belonging to any present or former
officer or director of Forte, and (iii) the claims asserted or any defenses thereto in Forte Biosciences, Inc. v. Camac Fund, LP, et al., No. 3:23-cv-02399-DCG (N.D. TX) (the Texas Action ).
(b) Defendants Releases. The Defendant Releasors shall fully, finally, and forever release and
discharge each and all of the Plaintiff Released Parties from any and all of Defendants Released Claims.
Defendant Releasors means Defendants and each of their respective heirs, assigns, transferees, and
Plaintiff Released Parties means each and all of Forte, Camac, and each members
of the Class, and each of their respective parents, subsidiaries, affiliates, officers, directors, members or managers, and each of their respective trusts, trustees, executors, estates, administrators, beneficiaries, distributees, foundations,