CINAR Announces Settlement of Claims.Business Editors MONTREAL & NEW YORK--(BUSINESS WIRE)--May 3, 2002 CINAR Corporation announced today that it has entered into two separate settlement agreements with certain executive officers of its subsidiaries, ending two lawsuits filed against CINAR in 2000 by the officers and former stockholders of Carson-Dellosa Publishing Company and HighReach Learning, Inc. The two groups of plaintiffs had asserted various claims arising out of the acquisition by CINAR of Carson-Dellosa and HighReach, respectively, including breaches of United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. federal securities laws, North Carolina North Carolina, state in the SE United States. It is bordered by the Atlantic Ocean (E), South Carolina and Georgia (S), Tennessee (W), and Virginia (N). Facts and Figures Area, 52,586 sq mi (136,198 sq km). Pop. securities laws, common law fraud and common law negligent misrepresentation misrepresentation In law, any false or misleading expression of fact, usually with the intent to deceive or defraud. It most commonly occurs in insurance and real-estate contracts. False advertising may also constitute misrepresentation. . They had sought to obtain rescission The abrogation of a contract, effective from its inception, thereby restoring the parties to the positions they would have occupied if no contract had ever been formed. By Agreement of the transactions, damages (including punitive damages Monetary compensation awarded to an injured party that goes beyond that which is necessary to compensate the individual for losses and that is intended to punish the wrongdoer. ) and costs. Accordingly, CINAR has entered into a settlement agreement with Stephen T. Carson, Patricia L. Carson and Janet B. Dellosa, who sold all of the outstanding common stock of Carson-Dellosa to CINAR in 1997 for approximately US$38,151,000 (US$22,000,000 in cash and 930,570 limited voting Limited voting is a voting system in which electors have fewer votes than there are positions available. The positions are awarded to the candidates who receive the most votes absolutely. shares of CINAR). This settlement agreement provides that: (i) CINAR will pay the three plaintiffs an aggregate amount of US$13,250,000, of which US$7,000,000 has been paid yesterday and the balance is payable in two interest bearing instalments of US$3,125,000 payable in March 2003 and March 2004; (ii) the parties will enter into mutual releases and agree to the dismissal of the lawsuit; (iii) the three plaintiffs will surrender 673,070 shares of the share capital of CINAR directly or indirectly beneficially owned or controlled by them; and (iv) new 5-year employment agreements will be entered into by two of the plaintiffs and CINAR Education. In addition, CINAR has entered into a settlement agreement with Phillip G. Kelley, Kathy H. Kelley, Michael G. Mayberry and Sharon H. Mayberry, who sold all of the outstanding common stock of HighReach to CINAR in 1998 for approximately US$25,000,000 (US$18,000,000 in cash and 422,000 limited voting shares of CINAR). This settlement agreement provides that: (i) CINAR will pay the four plaintiffs an aggregate amount of US$6,600,000, of which US$4,000,000 has been paid yesterday and the balance is payable in three interest bearing instalments of approximately US$867,000 payable in September 2002, March 2003 and March 2004 (subject to prepayment Prepayment 1. The payment of a debt obligation prior to its due date. 2. The excess payment over a scheduled debt repayment amount. Notes: 1. Examples include deferred expenses such as rent and early loan repayments. 2. being required in certain circumstances); (ii) the parties will enter into mutual releases and agree to the dismissal of the lawsuit; (iii) the four plaintiffs will surrender 341,500 shares of the share capital of CINAR directly or indirectly beneficially owned or controlled by them (excluding a small number of shares acquired prior to the acquisition of HighReach); and (iv) new 5-year employment agreements will be entered into by two of the plaintiffs and CINAR Education. CINAR Corporation is an integrated entertainment and education company involved in the development, production, post-production and worldwide distribution of non-violent, quality programming and educational products for children and families. Visit CINAR's website at www.cinar.com. This release may include information that could constitute forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provision of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 (U.S.). Forward-looking statements are identified by words such as "believe", "anticipate", "expect", "intend", "plan", "will", "may" and other similar expressions. Actual results or conditions may differ from those anticipated by these and other forward-looking statements. Such forward-looking statements are subject to a number of known or unknown risks and uncertainties. |
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