Twenty-First Century Fox 2013 Annual Report Download - page 43

Hearing”), and approved the form of Notice of Pendency of Derivative Action, Proposed Settlement of
Derivative Action, Settlement Hearing, and Right to Appear, which was distributed to holders of the Company’s
common stock in accordance with the Scheduling Order.
At the Settlement Hearing, the Court approved the settlement and entered a final judgment dismissing the
Consolidated Action. In connection therewith, the Court approved an attorneys’ fee award to plaintiffs’ counsel
of $28 million, payable from the $139 million settlement proceeds to be received by the Company. No
stockholder objected to either the settlement or the proposed fee award. The settlement became effective on
August 16, 2013, because as of that date, the dismissal of the Consolidated Action as well as the dismissals of
each of the Shields Litigation, the Iron Workers Litigation and the Stricklin Litigation (each as described below
under the heading “Shareholder Litigation—Southern District of New York”) were no longer subject to appeal.
On May 30, 2012, a purported stockholder of the Company filed a class action lawsuit in the Delaware
Court of Chancery on behalf of all non-U.S. stockholders of the Company’s Class B shares, captioned Första Ap-
Fonden v. News Corporation, et al. The plaintiff alleged that, by temporarily suspending 50% of the voting rights
of the Class B shares held by non-U.S. stockholders to remain in compliance with U.S. governing broadcast
licenses (the “Suspension”), the Company and the Board violated the Company’s charter and the General
Corporation Law of the State of Delaware (“DGCL”) and the directors breached their fiduciary duties, both in
approving the Suspension and in failing to monitor the Company’s ownership by non-U.S. stockholders. The
complaint named as defendants the Company and all directors of the Company at the time of the Suspension. The
complaint sought a declaration that the defendants violated the Company’s charter and the DGCL, a declaration
that the directors breached their fiduciary duties, a declaration that the Suspension is invalid and unenforceable,
an injunction of the Suspension, damages, fees, and costs. On June 11, 2012, the defendants filed an opening
brief in support of a motion to dismiss the complaint in its entirety. On August 2, 2012, the plaintiff filed a
Verified Amended and Supplemented Class Action Complaint (the “Amended and Supplemented
Complaint”). The Amended and Supplemented Complaint sought a declaration that the defendants violated the
Company’s charter and the DGCL, a declaration that the directors breached their fiduciary duties, a declaration
that the Suspension is invalid and unenforceable, an injunction of the Suspension, a declaration that non-U.S.
stockholders of the Company’s Class B shares are entitled to vote all of their shares on the Proposed Separation
Transaction, damages, fees, and costs. On August 28, 2012, the parties entered into a Memorandum of
Understanding providing for an agreement in principle to settle the lawsuit. The Memorandum of Understanding,
which was filed with the Court on September 5, 2012, provided in pertinent part: (i) within 5 business days after
receiving Court approval, the Company will file a petition with the FCC requesting permission to comply with
law governing broadcast licenses for any meeting of stockholders by (a) determining the number of shares held
by foreign stockholders that are present at the meeting and that would be entitled to vote but for the Suspension,
and (b) counting as votes cast all voted shares held by foreign stockholders, up to a total of 25% of the shares
voted; (ii) the Company’s Audit Committee will determine on at least an annual basis the total number of voting
shares held by non-U.S. citizens and will have the power to modify or eliminate any then-existing suspension; the
Company will disclose this information in its annual proxy materials and (iii) the Company will not consent to
amend, modify or terminate the Murdoch Family Interests agreement without prior approval of the Audit
Committee, which in the case of any vote related to the Proposed Separation Transaction, must be unanimous.
The settlement was subject to Court approval after notice to the stockholders and a hearing. The Stipulation of
Settlement was filed with the Court on November 30, 2012. On December 10, 2012, the Court entered a
Scheduling Order, which, among other things, set the settlement hearing for April 26, 2013, and approved the
form of Notice of Pendency of Class Action, Proposed Settlement of Class Action, Settlement Hearing, and Right
to Appear, which has been distributed to holders of the Company’s Class B Common Stock in accordance with
the Scheduling Order. At a hearing held on April 26, 2013, the Court approved the settlement and dismissed the
action with prejudice.
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