RIM Announces Definitive Settlement to End Derivative Litigation
Waterloo, ON - Research In Motion (“RIM”) (Nasdaq: RIMM; TSX: RIM) and the Trustees of Ironworkers Ontario Pension Fund (“Ironworkers”) today announced that they have entered into a definitive settlement agreement to resolve the previously disclosed application commenced by the Ironworkers with respect to RIM’s historical option granting practices.
Pursuant to the settlement, RIM has agreed to adopt additional corporate governance measures to supplement the measures announced by RIM on March 5, 2007. These additional measures are intended to further enhance the performance of RIM’s Compensation Committee and compensation procedures and RIM’s corporate governance generally. They include a commitment to exclude independent directors from the receipt of stock options, the preparation of a Compensation Committee Charter by an independent corporate governance expert for the Compensation Committee’s consideration, and certain refinements to the rules governing Board and Committee meetings relating to executive compensation.
In addition, consistent with their earlier voluntary agreement, as described in RIM’s March 5, 2007 press release, to contribute up to $5 million each to defray the costs incurred by RIM in connection with the management-initiated voluntary review of RIM’s historical stock option granting practices, RIM’s co-CEO’s, Jim Balsillie and Mike Lazaridis, have agreed as part of the settlement to pay RIM a further $2.5 million each to defray the costs incurred by RIM.
Under the settlement, each of the respondents to the application and each of the defendants in the proposed derivative action denied the allegations made against them by the Ironworkers. The Ironworkers also have acknowledged the extraordinary success and shareholder value achieved by RIM during the period covered by the allegations made by Ironworkers in its application, and that the additional corporate governance measures and the measures agreed to be adopted by RIM as announced by RIM on March 5, 2007 sufficiently and appropriately address Ironworkers’ stated concerns regarding RIM’s compensation practices.
The settlement is subject to approval by the Ontario Superior Court of Justice. A settlement approval hearing has been scheduled to be heard on November 5, 2007.
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