Full Press Release Details
OF CHANCERY OF THE STATE OF DELAWARE
of pendency AND PROPOSED settlement of
STOCKHOLDER DERIVATIVE ACTION, SETTLEMENT HEARING,
YOU HOLD COMMON STOCK OF PASSAGE BIO, INC. FOR THE BENEFIT OF ANOTHER, PLEASE PROMPTLY TRANSMIT THIS DOCUMENT TO SUCH BENEFICIAL
purpose of this Notice is to inform you of (i) the pendency of the above-captioned action (the "Action"), which was
brought in the Court of Chancery of the State of Delaware (the "Court") by a stockholder of Passage Bio, Inc. ("Passage"
or the "Company") asserting claims derivatively on behalf of the Company; (ii) the proposed settlement of the Action
(the "Settlement"), subject to Court approval and subject to other conditions of the Settlement being satisfied, as provided
for in a Stipulation and Agreement of Compromise, Settlement and Release dated December 13, 2023 (the "Stipulation"),
which was filed with the Court and is publicly available for review; and (iii) your right to participate in a hearing to be held
on March 4, 2024, at 1:30 p.m., before the Court at the Court of Chancery Courthouse, Leonard L. Williams Justice Center, 500 North
King Street, Wilmington, DE 19801 (the "Settlement Hearing"). The purposes of the Settlement Hearing are to determine whether
the Court should: (i) approve the proposed Settlement as fair, reasonable and adequate; (ii) dismiss the Action with prejudice;
(iii) enter an Order and Final Judgment approving the Settlement; (iv) approve a petition for an award of attorneys'
fees and expenses to Plaintiff's counsel in the Action; (v) approve a petition for a service award to Plaintiff; and (vi) hear
and determine any objections to the Settlement, Plaintiff's counsel's petition for attorneys' fees and expenses, or
to Plaintiff's petition for a service award.
Court directed that this Notice be mailed to you because Passage's records indicate that you are a Stockholder of Passage. The
Court has directed us to send you this Notice because you have a right to know about your options before the Court rules on the
proposed Settlement. Additionally, you have the right to understand how this Action generally affects your legal rights. The issuance
of this Notice is not an expression by the Court of any findings of fact or any opinion concerning the merits of any claim in the Action,
and the Court has not yet decided whether to approve the Settlement.
READ THIS NOTICE CAREFULLY AND IN ITS ENTIRETY. THIS NOTICE RELATES TO A PROPOSED SETTLEMENT OF THE LITIGATION REFERRED TO IN THE CAPTION
AND CONTAINS IMPORTANT INFORMATION REGARDING YOUR RIGHTS. IF THE COURT APPROVES THE PROPOSED SETTLEMENT, YOU WILL BE FOREVER BARRED FROM
CONTESTING THE FAIRNESS, REASONABLENESS OR ADEQUACY OF THE PROPOSED SETTLEMENT, AND FROM PURSUING THE RELEASED CLAIMS (as DEFINED BELOW).
Stipulation was entered into as of December 13, 2023 by and among Plaintiff Tara M Williams ("Plaintiff"); Defendants
Maxime Gowen, Athena Countouriotis, Sandip Kapadia, Saqib Islam, Thomas Woiwode, Liam Ratcliffe, and Derrell Porter (collectively, "Defendants");
and Nominal Defendant Passage. Plaintiff, Defendants, and Passage are collectively referred to herein as the "Parties."
Notice describes the rights you may have in the Action and pursuant to the Stipulation and what steps you may take, but are not required
to take, in relation to the Settlement. If the Court approves the Settlement, the Parties will ask the Court at the Settlement Hearing
to enter an Order and Final Judgment dismissing the Action with prejudice in accordance with the terms of the Stipulation.
purpose of this Notice is to explain the Action, the terms of the proposed Settlement, and how the Settlement affects the legal rights
of the Company's stockholders.
a derivative action, one or more people and/or entities who are current stockholders of a corporation sue on behalf of and for the benefit
of the corporation, seeking to enforce the corporation's legal rights.
described more fully below, current stockholders have the right to object to the proposed Settlement, the application by Plaintiff's
counsel for an award of fees and expenses and Plaintiff's application for a service award. They have the right to appear and be
heard at the Settlement Hearing, which will be held before The Honorable J. Travis Laster on March 4, 2024, at 1:30 p.m., Court
of Chancery Courthouse, Leonard L. Williams Justice Center, 500 North King Street, Wilmington, DE 19801 or as may be undertaken via a
remote proceeding such as Zoom or by telephone. At the Settlement Hearing, the Court will: (a) determine whether the proposed Settlement
should be approved as fair, reasonable and adequate; (b) determine whether the Court should finally approve the Stipulation and
enter the Order and Final Judgment as provided in the Stipulation and dismiss the Action with prejudice, thereby extinguishing and releasing
the Released Claims; (c) determine whether and in what amount an award of attorneys' fees (including expenses) should be paid
to Plaintiff's Counsel; (d) determine whether and in what amount a service award should be paid to Plaintiff; (e) hear
and determine any objections to the Settlement, Plaintiff's Counsel's petition for attorneys' fees (including expenses),
or Plaintiff's petition for a service award; and (e) rule on any other matters the Court may deem appropriate.
Court has reserved the right to adjourn or continue the Settlement Hearing, including consideration of the application by Plaintiff's
counsel for an award of attorney's fees and expenses and/or Plaintiff's application for a service award, without further
notice to you other than by announcement at the Settlement Hearing or any adjournment thereof, or notation on the docket in the Action.
The Court has further reserved the right to approve the Settlement, at or after the Settlement Hearing, with such modifications as may
be consented to by the Parties and without further notice of any kind.
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 THIS LITIGATION.
April 22, 2022, Plaintiff served a demand to inspect the Company's books and records pursuant to 8 Del. C. 220
(the "Section 220 Demand");
August 26, 2023, Plaintiff filed an action in this Court to enforce the Section 220 Demand, captioned Williams v. Passage
Bio, C.A. 2022-0762-JTL (Del. Ch.) (the "220 Action");
January 24, 2023, Plaintiff dismissed the 220 Action and filed a Verified Stockholder Derivative Complaint (the "Complaint")
in this Court, purportedly on behalf of Passage and against the Defendants. The Complaint alleges that the Defendants breached their
fiduciary duty of loyalty by granting and accepting allegedly excessive and unfair compensation in each of 2020 and 2021;
the filing of the Action, the Parties have engaged in arm's-length negotiations, through counsel, to attempt to reach a settlement
of the claims asserted by Plaintiff in the Action.
order to avoid the uncertainty of litigation, possible appeals, and further legal expenses, the Parties desire to end the Action, and
to compromise and settle the Action in its entirety.
September 6, 2023, after months of negotiations, Plaintiff and Defendants reached an agreement in principle to settle all of the
claims asserted in the Action on the terms set forth in Exhibit A to the Stipulation and detailed below.
Parties executed the Stipulation on December 13, 2023.
forth below is a summary of the principal terms of the proposed Settlement, as agreed to by the Parties, subject to the approval of the
Court. The following statements are a summary, and reference is made to the Stipulation and Exhibit A thereto, which are publicly
available, for a full and complete statement of the terms of the Settlement.
consideration for the full settlement and release of the Released Claims (as defined below), and subject to the terms and conditions
set forth in the Stipulation, Defendants shall implement within ten (10) days of entry of Final Judgment and maintain until at least
December 31, 2027 the following Corporate Governance Reforms (the "Reforms"), which are fully set forth in Exhibit A
shall pay, or shall cause to be paid, the reasonable and necessary costs and expenses incurred in providing this Notice to the Public
Stockholders (the "Notice Costs").
Settlement set forth in the Stipulation reflects the results of the Parties' negotiations and the terms of the Stipulation, and
an agreement-in-principle was reached only after arm's-length negotiations.
and Plaintiff's Counsel thoroughly considered the facts and law underlying the claims asserted in the Action. Plaintiff's
agreement to settle the Action is not intended to be and shall not be construed as an admission or concession concerning the relative
strength or merit of the claims. However, Plaintiff and Plaintiff's Counsel also recognize the significant risk, expense, and length
of continued proceedings necessary to prosecute the Action through trial and possible appeals, and took these factors into account.
believes that the Released Claims had merit when filed and continue to have merit, and Plaintiff is settling the Released Claims because
Plaintiff believes that the Settlement will provide substantial value to the Company and its stockholders. Plaintiff has concluded that
the Settlement is fair, reasonable, and in the best interests of the Company and its stockholders, and that it is reasonable to pursue
the Settlement based on the terms and procedures outlined in the Stipulation.
light of the changes to Passage's practices and procedures for non-employee director compensation, and on the basis of information
available to them, including publicly available information, Plaintiff and Plaintiff's Counsel have determined that the proposed
Settlement is fair, reasonable, adequate, and in the best interests of Passage. The Settlement provides the needed changes to the Company's
non-employee director compensation practices and procedures without the risk that continued litigation could result in obtaining similar
or lesser relief after continued extensive and expensive litigation, including trial and possible appeals, the outcome of which is inherently
have denied, and continue to deny, that they have committed or threatened to commit any violations of law, breaches of duty, breaches
of contract, or other wrongdoing toward the Company, Plaintiff, or anyone else concerning any of the claims, allegations, or requests
for relief set forth in the complaints filed in this Action. Defendants have agreed to the Settlement solely because they consider it
desirable that the claims against them in the Action be settled and dismissed with prejudice in order to, among other things, (i) avoid
the substantial expense, inconvenience and distraction of continued litigation, and (ii) avoid any possibility of a finding of liability,
however remote, and finally put to rest the claims asserted against the Defendants in the Action.
the Settlement is approved, the Court will enter a Final Order and Judgment ("Judgment") approving the Settlement in accordance
with the Stipulation, at which time the Action will be dismissed with prejudice on the merits. The first date by which such order is