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Am I being sued? |
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No, you are not. |
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What is this litigation about? |
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During March 2005, Xybernaut announced that it would be unable to file its 2004 annual report and announced that it had discovered material weaknesses in its internal controls with regards to expense reimbursement, revenue recognition, and monitoring business risks.
In April 2005, Xybernaut announced the conclusions of an internal investigation. Xybernaut also announced that Grant Thornton had resigned as auditor, Edward G Newman and Steven A Newman, along with certain other employees were asked to leave the company, and the U.S. Attorney’s Office was investigating the company.In May 2005, NASDAQ delisted Xybernaut. In July 2005, Xybernaut filed a bankruptcy petition.
The Complaint alleges that one or more of the Original Defendants 1) failed to disclose rampant nepotism within the company; 2) failed to disclose use of Company funds for personal expenses; 3) issued false and misleading statements concerning Xybernaut’s business and prospects; and/or 4) misled investors about fund raising through private placements of Xybernaut stock.
Defendants deny and continue to deny that they have committed any act or omission giving rise to any liability or violation of law.
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Why is the Action a Class Action? |
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This is a Class Action because Lead Plaintiffs sued on behalf of others who purchased Xybernaut common stock in the open market during the Class Period. The Court will resolve the issues for all Settlement Class Members, except for those who exclude themselves from the Settlement Class. |
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Why is there a settlement? |
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The Co-Lead Counsel recommend the Settlement to the Settlement Class, based on their evaluation of the claims asserted, the procedural posture of the Action, including the June 8, 2007 order dismissing all claims against two of the defendants originally named in the Action, the evidence developed, and the damages that might be proven by the Settlement Class. Lead Plaintiffs have agreed to settle the claims raised in the Action pursuant to the terms and provisions of the Stipulation and Agreement of Settlement dated October 24, 2007 and filed with the Court, after considering (a) the substantial benefit to the Class that will be received as a result of this Settlement, compared to the expense and the inherent problems of proof under and possible defenses to the federal securities law violations asserted in the Action; and (b) Defendants’ ability to fund a settlement, if the litigation continues to proceed. |
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How do I know if I am part of the Settlement? |
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Under the Settlement, you are a Class Member if you purchased shares of Xybernaut common stock on the open market between May 10, 2002 and April 8, 2005, inclusive. If one of your mutual funds owns shares of Xybernaut common stock, that alone does not make you a Settlement Class Member. If you sold Xybernaut common stock between May 10, 2002 and April 8, 2005, inclusive, that alone does not make you a Settlement Class Member. Excluded from the Settlement are Xybernaut Corporation, officers and directors of Xybernaut Corporation, Defendants, member of the families of each of these individuals, and representatives and agents of such individuals. Please refer to the Notice for full details regarding participation in the Settlement. |
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How many people are there in this class action? |
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Class counsel believes that thousands of people are members of the class. |
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Do I have to pay anything? |
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No, you do not have to pay anything.
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What should I do? |
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We cannot offer any advice as to what you should do. That said, you have five options:
First, you may submit a claim form. This is the only way to participate in the proposed settlement. You must complete and mail your claim form, along with appropriate supporting documentation to the Claims Administrator, no later than February 19, 2008.
Second, you may exclude yourself. If you exclude yourself, you will receive no payment from the settlement, however, you will preserve your right to participate in any other lawsuit against the Defendants regarding the legal claims in this lawsuit. If you wish to exclude yourself, you must do so before January 31, 2008.
Third, you may object to the Settlement. If you wish to object to any part of the Settlement, you must submit your request in writing by January 31, 2008.
Fourth, you may attend the Fairness Hearing. You may ask to speak in Court regarding the fairness of the Settlement or any aspect of the Settlement. The Fairness Hearing will occur on February 20, 2008.
Finally, you may do nothing. If you do nothing, you will be bound by the terms of the Settlement, but will not receive a payment from the Settlement.
For additional details regarding your rights and options, please refer to the Notice. |
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What type of supporting documentation is acceptable? |
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There are several documents that you may use to appropriately show proof of your purchases, sales, and holdings when filing your claim. This list includes: brokerage statements, transaction confirmation slips, and some tax documents received from your brokerage firm that clearly shows the dates, quantities, and prices of said transactions or holdings. The documentation should also clearly show identifying information that would link that document to the claimant. For assistance in obtaining these documents, please talk with your brokerage firm. We will not accept your claim form without valid documentation. |
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How much will I receive? |
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The Settlement will create a fund consisting of $6,300,000 in cash plus accrued interest The Settlement fund will be used for the settlement of the Action, the payment of taxes, settlement administration costs, and attorney’s fees and expenses. Lead Plaintiffs’ financial expert calculates that approximately 73.9 million shares of Xybernaut common stock traded on the open market during the Class Period. Assuming that all members of the Settlement Class who held affected shares elect to participate in the Settlement, Lead Plaintiffs estimate that the recovery will be approximately $0.09 per share. The fees and expenses requested by Co-Counsel will amount to an average of $0.03 per damaged share. |
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Should I get my own lawyer? |
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You do not have to hire your own lawyer because class counsel is working on your behalf. If you want your own lawyer, you can hire one at your own expense. If you want to file your own case, you must ask to be excluded from the class action. Please refer to the question above, “What should I do?” or the Notice for additional details. |
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What is the Settlement Fairness Hearing? |
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The Court will hold a Fairness Hearing on February 20, 2008 at 10:00 a.m., at the Albert V. Bryan U.S. Courthouse, 401 Courthouse Square, Alexandria, Virginia. At the Fairness Hearing, the Court will consider:
- whether this Action satisfies the applicable prerequisites for class action treatment under Rule 23 of the Federal Rules of Civil Procedure;
- whether the terms of the Settlement are fair, reasonable and adequate, and in the best interests of the Settlement Class;
- whether to approve the Plan of Allocation;
- whether to enter the Order and Final Judgment as provided under the Stipulation;
- whether to approve the application of Co-Lead Counsel for an award of attorneys’ fees and expenses; and
- such other matters as the Court may deem appropriate. If there are objections, the Court will consider them.
At or after the Fairness Hearing, the Court will decide whether to approve the Settlement. We do not know how long these decisions will take, please be patient. |
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Do I have to attend the Settlement Hearing? |
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No, you do not. |
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Where can I get more information? |
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| You can call the Claims Administrator toll free at 1-888-633-9346, or write to:
Xybernaut Securities Litigation Settlement
c/o Analytics, Incorporated Claims Administrator
P.O. Box 2007
Chanhassen, MN 55317-2007
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