sTec Inc. Shareholder Litigation Website
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Welcome to the sTec Inc. Shareholder Litigation Website

This website has been established to provide general information related to the sTec Inc. Shareholder Litigation ("sTec"). The capitalized terms used on this website, and not defined herein, shall have the same meanings ascribed to them in the Declaration of David E Bower in Support of Motion for Prelimary Approval of Settlement dated May 19, 2014.

On June 23, 2013, defendant sTec, Inc. ("sTec" or the "Company") announced that it had entered into an Agreement and Plan of Merger with Western Digital Corporation and Lodi Ventures, Inc., a wholly-owned subsidiary of Western Digital Corporation (collectively, "WDC"), under which holders of sTec's common stock would receive $6.85 per share in cash (the "Merger"). Thereafter, between June 26, 2013 and July 11, 2013, seven shareholders ("Plaintiffs") filed the Shareholder Actions as purported class action lawsuits, on behalf of themselves and all similarly situated sTec shareholders, in the Superior Court of the State of California, County of Orange, against sTec, the members of sTec's Board of Directors (the "Individual Defendants"), and WDC (sTec, the Individual Defendants and WDC together, "Defendants"). The Shareholder Actions generally allege that the Individual Defendants breached their fiduciary duties in connection with the Merger and that WDC aided and abetted the alleged breaches of fiduciary duty.

As a direct result of the prosecution of the Action and the extensive negotiations between the Settling Parties, a proposed Settlement has been reached under the following terms:

Without admitting any wrongdoing, Defendants acknowledge that the filing and prosecution of the Action by, and negotiations and discussions with, Plaintiffs' Counsel were a significant factor in sTec's decision to make the additional disclosures in a Form 8-K filed by sTec with the SEC on or about September 4, 2013, and attached hereto as Exhibit A. A summary of the disclosures included in the Form 8-K is as follows: (i) additional information regarding the background of the Merger; (ii) additional information regarding the financial forecasts utilized by sTec in connection with the Merger; (iii) additional information regarding the fairness opinion of BofA Merrill Lynch, the Company's financial advisor in connection with the Merger; (iv) additional information regarding BofA Merrill Lynch's Selected Publicly Traded Companies Analysis; (v) additional information regarding BofA Merrill Lynch's Selected Precedent Transactions Analysis; and (vi) additional information regarding litigation related to the Merger and pending shareholder derivative actions purportedly filed on behalf of the Company.
Plaintiffs agree that the dissemination of the additional disclosures by sTec provided sufficient notice and time for sTec shareholders to access, review, understand, and evaluate the additional disclosures prior to the shareholder vote at the special meeting of sTec shareholders held on September 12, 2013.
The Settling Parties agree, for purposes of this Settlement only, to the certification of a non-opt-out Settlement Class under § 382 of the California Code of Civil Procedure. In the event that the Settlement does not become Final for any reason, Defendants reserve the right to oppose certification of any class in future proceedings.
Following agreement on all substantive provisions of the Settlement, counsel for Plaintiffs and counsel for Defendants entered into discussions as to whether the parties might also agree, subject to the approval of the Court, on an amount of attorneys' fees and expenses that might be paid to counsel for Plaintiffs. As a result of those discussions, Defendants have agreed that Plaintiffs may apply to the Court for an award of attorneys' fees, inclusive of all litigation expenses, in an amount of $580,000. The Court will consider any application for fees and litigation expenses in connection with its consideration of the Settlement.
The Settlement Class includes all persons who owned sTec, Inc. common stock from and including June 23, 2013 through and including September 12, 2013, the date of the closing of the merger, including any and all of their successors-in-interest, predecessors, representatives, trustees, executors, administrators, heirs, assigns or transferees, and any person acting on behalf of, or claiming under, any of them, and each of them.

A settlement hearing will be held on August 18, 2014, at 1:30 p.m., before the Honorable Gail A. Andler, Superior Court Judge, in Department CX101, Superior Court of the State of California, County of Orange, Civil Complex Center, 751 West Santa Ana Blvd., Santa Ana, California 92701 (the "Settlement Hearing"). The purpose of the Settlement Hearing will be to determine: (a) whether the Court should certify the Class; (b) whether the Court should approve the proposed Settlement as fair, reasonable, adequate, and in the best interests of the Settlement Class; (c) whether the Court should enter an Order and Final Judgment dismissing the claims asserted in the Action on the merits and with prejudice as against Plaintiffs and the Settlement Class and effectuating the releases described below; (d) whether the Court should grant the application of Plaintiffs' Counsel for an award of attorneys' fees and reimbursement of litigation expenses; and (e) such other matters as may properly come before the Court.

Although the information in this website is intended to assist you, it does not replace the information contained in the Notice of Proposed Settlement of Class Action and Hearing and Stipulation of Settlement, both of which can be found and downloaded by clicking on the Case Documents tab above. We recommend that you read the Notice and other relevant case documents carefully.