Summary Notice of Pendency of Derivative Action, Proposed Settlement of Derivative Action, Settlement Hearing and Right to Appear in Buerger v. Apfel, C.A. No. 6539-VCL (Del. Ch.)

WILMINGTON, Del., Sept. 10, 2018 /PRNewswire/ -- All current stockholders of Fragrancenet.com, Inc. (the "Company" or "FGNT") at the close of business on August 31, 2018 are hereby notified that the Plaintiffs and Defendants in the above-captioned derivative lawsuit (the "Action" or the "Derivative Action") have entered into a proposed settlement (the "Settlement").

PLEASE BE FURTHER ADVISED that pursuant to an Order of the Court of Chancery of the State of Delaware (the "Court of Chancery"), dated SEPTEMBER 4, 2018, a hearing (the "Settlement Hearing") will be held on OCTOBER 24, 2018, at 2:00 p.m., before The Honorable J. Travis Laster, in the Court of Chancery, New Castle County Courthouse, 500 North King Street, Wilmington, Delaware 19801.  The purposes of the Settlement Hearing are (i) to determine whether the terms and conditions of the proposed Settlement provided for in the Stipulation of Settlement executed on August 27, 2018 (the "Stipulation") are fair, reasonable, adequate, and in the best interests of FGNT and its stockholders; (ii) to determine whether Judgment should be entered dismissing with prejudice the claims asserted in the Derivative Action by Plaintiffs on behalf of the Company, upon the conditions set forth in the Stipulation and described in this Notice, and considering the application by Plaintiffs' Counsel for an award of attorneys' fees and expenses; (iii) to hear and determine any objections to the Settlement or the application by Plaintiffs' Counsel for an award of attorneys' fees and expenses; (iv) to determine whether Plaintiffs and their Counsel have adequately represented the interests of the Company and its stockholders; and (v) to consider other such matters as the Court deems appropriate.

The Action and the Settlement address claims alleging that certain directors of the Company breached their fiduciary duties, wasted the Company's assets and unjustly enriched themselves through certain transactions described in the Second Amended Verified Derivative Complaint filed on October 23, 2017, which include claims relating to the employment and severance agreements of Dennis Apfel, Jason Apfel, and Eric Apfel (the "Apfels") and certain transactions between the Company and certain entities controlled by the Apfels, among other claims.  Defendants believe that they have substantial defenses to the claims against them, and each of the Defendants denies and continues to deny all allegations of wrongdoing and denies liability on any of the claims asserted in the Action.

Under the Settlement, the parties have agreed to vote in favor of a transaction whereby B&S Group, S.A. ("B&S Group") will acquire all issued and outstanding equity in the Company based on an aggregate fully diluted equity value of $115 million, subject to various adjustments and subject to Jason and Eric Apfel rolling over a significant portion of their equity into the surviving entity.  The equity interests of all minority shareholders would be purchased in cash upon closing of the proposed transaction.  The terms of the Merger Agreement are on file with the Court of Chancery in this Action.

Additionally, at closing, the Apfels will waive $4 million of cash merger consideration payable to them and direct payment of such $4 million to all non-Apfel-affiliated minority shareholders based on the number of shares held by each minority holder.  If the settlement becomes final, the Company will pay or cause to be paid the award of attorneys' fees and expenses, if such an award is entered by the Court.  The cost of any attorneys' fees and expenses awarded effectively will reduce the amount of merger consideration received by all shareholders. 

ANY STOCKHOLDER OF THE COMPANY WHO WISHES TO CONTEST THE SETTLEMENT OR THE APPLICATION BY PLAINTIFFS' COUNSEL FOR AN AWARD OF ATTORNEYS' FEES AND EXPENSES MAY DO SO BY FOLLOWING THE PROCEDURE SET FORTH IN PARAGRAPHS 61–63 OF THE NOTICE OF PROPOSED SETTLEMENT OF DERIVATIVE CLAIMS, SETTLEMENT HEARING, AND RIGHT TO APPEAR (the "Notice").  The Notice, the Stipulation, and the Court of Chancery's Scheduling Order are available on the Company's website at http://www.fragrancenet.com/f/net/investorrelations.html.

PLEASE DO NOT CONTACT THE COURT OR THE REGISTER IN CHANCERY.

BY ORDER OF THE COURT OF CHANCERY OF THE STATE OF DELAWARE

SOURCE Fragrancenet.com, Inc.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains certain "forward-looking statements." Forward-looking statements can be identified by the fact that they relate to future actions, performance or results rather than relating strictly to historical or current facts. However, actual results may differ materially from current expectations or beliefs due to the risks, uncertainties and other factors that affect the Company, including, among others:

• risks relating to the Settlement of the Action;
• failure to satisfy or waive conditions to the closing of the transaction whereby B&S Group will acquire all issued and outstanding equity in the Company (the "Transaction");
• risks relating to the value of the shares of the Company's common stock;
• legal proceedings that may be instituted in connection with the Transaction;
• the adverse effect on the business of the Company of uncertainty surrounding the Transaction; and
• other risks relating to the consummation of the Transaction and the risk that the Transaction will not be consummated within the expected time period or at all.

The Company believes that the assumptions on which its forward-looking statements are based are reasonable. However, the Company cannot assure you that the actual results or developments it anticipates will be realized or, if realized, that they will have the expected effects on its business or operations. Forward-looking statements speak only as of the date of this press release. Except as required by applicable law or regulation, the Company undertakes no obligation to update or revise any forward-looking statements contained in this press release, whether as a result of new information, future events or otherwise.

SOURCE Fragrancenet.com

Related Links

http://www.fragrancenet.com