Healthcare Services Group, Inc. Announces Settlement of Shareholder Derivative Lawsuits - Seite 3

As part of the Settlement, HCSG’s Board has agreed to adopt, or to maintain where already implemented, certain corporate governance measures set forth in full at Exhibit A attached to the Settlement. HCSG acknowledges that the Board’s decision to implement these corporate governance measures is substantially due to the institution, prosecution, and settlement of the Derivative Matters. HCSG further acknowledges that the corporate governance measures are significant and extensive and confer substantial benefits upon the Company and Current HCSG Shareholders.

III. DEFENDANTS’ DENIALS OF WRONGDOING AND LIABILITY

The Individual Defendants have denied and continue to deny that they have committed or attempted to commit any violations of law, any breach of fiduciary duty owed to HCSG, or any wrongdoing whatsoever. Without admitting the validity of any of the claims Plaintiffs have asserted in the Derivative Actions, or any liability with respect thereto, the Individual Defendants and HCSG have concluded that it is desirable that the claims be settled on the terms and subject to the conditions set forth herein. Defendants are entering into this Settlement because it will eliminate the uncertainty, distraction, disruption, burden, risk, and expense of further litigation. Further, Defendants acknowledge that the Settlement is fair, reasonable, adequate, and in the best interests of HCSG and Current HCSG Shareholders.

Neither this Stipulation, nor any of its terms or provisions, nor entry of the Judgment, nor any document or exhibit referred or attached to this Stipulation, nor any action taken to carry out this Stipulation, is or may be construed or used as evidence of the validity of any of Plaintiffs’ Released Claims (defined herein), or as an admission by or against Defendants of any fault, wrongdoing, or concession of liability whatsoever.

IV. SETTLEMENT HEARING

On June 8, 2022, the Court entered an amended order preliminarily approving the Settlement contemplated therein, and providing for notice to be posted by a Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission, via press release and also, along with the Stipulation, on the “Investors” section of the Company’s website, (the “Amended Preliminary Approval Order”). The Amended Preliminary Approval Order further provides that the Court will hold a hearing (the “Settlement Hearing”) on July 26, 2022 at 12 p.m. before the Honorable Wendy Beetlestone in Courtroom 10A of the United States District Court for the Eastern District of Pennsylvania, 5614 U.S. Courthouse, 601 Market Street, Philadelphia, PA 19106, pursuant to Federal Rule of Civil Procedure 23.1, to among other things: (1) determine whether the proposed Settlement is fair, reasonable, and adequate and in the best interests of the Company and its shareholders; (2) consider any objections to the Settlement submitted in accordance with the Notice; (3) determine whether a Judgment substantially in the form attached as Exhibit D to the Stipulation should be entered dismissing all claims in the Derivative Actions with prejudice and releasing the Released Claims against the Released Parties; (4) determine whether the agreed-to Fee and Expense Award to Plaintiffs’ Counsel of attorneys’ fees and the reimbursement of expenses should be approved as fair, reasonable, and adequate; (5) determine whether the Service Awards for Plaintiffs should be approved as fair and reasonable; and (6) consider any other matters that may properly be brought before the Court in connection with the Settlement.