ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO. 12-CV-447546CP

DATE: September 13, 2013

BETWEEN:

FRANK TUCCI

Plaintiff

– and –

SMART TECHNOLOGIES INC., APAX PARTNERS L.P., APAX PARTNERS EUROPE MANAGERS LTD., SCHOOL S.A.R.L., INTEL CORPORATION, DAVID A. MARTIN, NANCY L. KNOWLTON, SALIM NATHOO, ARVIND SODHANI, MICHAEL J. MUELLER, ROBERT C. HAGERTY and G.A. (DREW) FITCH

Defendants

Michael Robb and Emilie McLachlan Maxwell for the Plaintiff

Michael A. Eizenga, and Michael J. Paris for SMART Technologies Inc., APAX Partners L.P., APAX Partners Europe Managers Ltd., School S.a.r.l., David A. Martin, Nancy L. Knowlton, Salim Nathoo, Michael J. Mueller, Robert C. Hagerty and G.A. (Drew) Fitch

Linda L. Fuerst for the Defendants Intel Corporation and Arvind Sodhani

Proceeding under the Class Proceedings Act, 1992

HEARD: September 13, 2013

PERELL, J.

REASONS FOR DECISION

[1] This is a certified class action under the Class Proceedings Act, 1992, S.O. 1992, c. C.6. See Tucci v. Smart Technologies Inc., 2013 ONSC 802.

[2] Frank Tucci is the Representative Plaintiff. There is a similar class action in the United States. In these actions, the plaintiffs allege that the Canadian Prospectus and the U.S. Offering Materials for the initial public offering of SMART Technologies Inc., which was conducted in July, 2010 (the “IPO”) contained material misrepresentations and that the plaintiffs, and the Class members, suffered damages as a result of acquiring SMART’s securities at an artificially inflated price.

[3] Mr. Tucci initially asserted both common law and statutory claims. However, ultimately, he pursued only his claims under s. 130 of the Ontario Securities Act and the equivalent provisions of other Canadian securities legislation.

[4] On January 11, 2013, the United States District Court for the Southern District of New York certified the U.S. Action as a class proceeding. The U.S. action was certified on February 4, 2013.

[5] The parties have signed a Settlement Agreement, dated April 30, 2013. The settlement resolves the claims of the Class Members and provides for a Settlement Amount of USD$15,250,000.00.

[6] Mr. Tucci brings a motion for court approval of the settlement including its plan of allocation. Class Counsel bring a motion for approval of their legal fees.

[7] In the U.S. action, a motion to approve the Settlement Agreement has been scheduled for September 17, 2013.

[8] The Settlement Agreement provides for a synchronous approval process involving the Courts of both jurisdictions, a shared notice program, and a single claims administration, supervised by both Courts.

[9] The key terms of the Settlement Agreement are as follows:

• the Defendants pay USD$15,250,000.00 into an Escrow Account for the benefit of the Classes;

• there is no right of reversion, unless the Settlement Agreement is terminated in accordance with its terms;

• the Defendants cannot obtain credit for opt-outs, however, the Settlement Agreement does provide the Settling Defendants with a right to terminate the Settlement Agreement in the event that Class Members requesting exclusion from the Classes meet the conditions set forth in a confidential supplemental agreement;

• the Settlement Amount will be distributed, after payments of administrative costs, legal fees, and other expenses awarded by the Courts, among all Class Members that timely submit valid Claim Forms to the Claims Administrator; and

• in exchange for payment of the Settlement Amount, it is intended that the Defendants shall receive a full and final release from all Class Members.

[10] The Defendants did not and do not admit liability and would have contested the quantification of damages.

[11] A preliminary damages assessment for the Plaintiffs from their expert, Mr. Paul Mulholland, estimated that global damages sustained in this case could range from $80 million to $145 million, assuming liability and loss causation were proven. This range depended on a number of factors, but most particularly, how a class might be defined and which class members may be capable of proving a loss. Given the way the classes were ultimately defined in the two cases, Mr. Mulholland’s estimates represented the high end of what the plaintiffs could hope to achieve at trial.

[12] In the course of prosecuting the Action, the Plaintiffs learned that the Defendants had four insurance policies that were responsive to their claims. The aggregate coverage totalled $50 million.

[13] Class Counsel in Canada and in the United States recommend the settlement. Mr. Tucci has instructed Class Counsel to seek approval of the Settlement Agreement.

[14] The Plan of Allocation was designed to reflect the damages theories advanced in the Canadian and American actions and the measure of damages set forth in Section 11 of the United States Securities Act of 1933, 15 USC §77k.

[15] The Plan of Allocation contemplates a global settlement fund that may be accessed by both U.S. and Canadian Class Members. The Plan provides that a “Recognized Claim” will be calculated for each Class Member, depending on such factors as the date and quantum of purchase and sale of SMART securities. The Net Settlement Fund will be allocated among all Authorized Claimants whose Distribution Amount is USD$10.00 or greater. A Class Member’s Distribution Amount is determined by dividing his, her, or its Recognized Claim by the total Recognized Claims of all Authorized Claimants.

[16] The Settlement Amounts were received in the Escrow Account held with the Valley National Bank on June 14, 2013 and June 20, 2013, and have been accruing interest since that time. The Escrow Account contains USD$15,251,989.38 following payment for publication and distribution of the Notices and the accrual interest.

[17] On May 13, 2013, I approved the form, content, and manner of distribution of the Notice and Summary Notice for the settlement approval hearing.

[18] The U.S. Preliminary Approval Order was obtained on May 15, 2013. The Notices were published and disseminated in accordance with the court orders.

[19] Five Canadian Class Members asked to be excluded from the settlement. No Canadian Class Members objected to the settlement.

[20] There was one objector in the United States but the objection concerns the plan of allocation affecting American claimants and this objection does not provide a reason to disturb the approval of the Canadian class action settlement.

[21] Section 29(2) of the Class Proceedings Act, 1992 provides that a settlement of a class proceeding is not binding unless approved by the court. To approve a settlement of a class proceeding, the court must find that, in all the circumstances, the settlement is fair, reasonable, and in the best interests of the class: Fantl v. Transamerica Life Canada, [2009] O.J. No. 3366 (S.C.J.) at para 57; Farkas v. Sunnybrook and Women’s Health Sciences Centre, [2009] O.J. No. 3533 (S.C.J.), at para. 43; Kidd v. Canada Life Assurance Company, 2013 ONSC 1868.

[22] In determining whether a settlement is reasonable and in the best interests of the class, the following factors may be considered: (a) the likelihood of recovery or likelihood of success; (b) the amount and nature of discovery, evidence or investigation; (c) the proposed settlement terms and conditions; (d) the recommendation and experience of counsel; (e) the future expense and likely duration of litigation; (f) the number of objectors and nature of objections; (g) the presence of good faith, arm’s-length bargaining and the absence of collusion; (h) the information conveying to the court the dynamics of, and the positions taken by, the parties during the negotiations; and, (i) the nature of communications by counsel and the representative plaintiff with class members during the litigation. See: Fantl v. Transamerica Life Canada, supra at para 59; Corless v. KPMG LLP, [2008] O.J. No. 3092 (S.C.J.), at para. 38; Farkas v. Sunnybrook and Women’s Health Sciences Centre, supra, at para. 45; Kidd v. Canada Life Assurance Company, 2013 ONSC 1868.

[23] In my opinion, having regard to the various criteria set out above, the Settlement Agreement is fair, reasonable, and in the best interests of the Class Members. Accordingly, I approve the settlement, including the Plan of Allocation.

[24] I turn now to the matter of Class Counsel’s request for court approval of its counsel fee and litigation expenses.

[25] The Retainer Agreement provides that Class Counsel may seek fees of up to 25% of the amount of any recovery obtained on behalf of a class, plus disbursements and applicable taxes.

[26] The Settlement Agreement stipulates that U.S. Lead Counsel and Canadian Counsel, in combination, will not seek in excess of 25% of the Settlement Amount, in addition to reimbursement for Litigation Expenses, not to exceed USD$550,000.00.

[27] Based essentially on the proportions of the global class, Canadian and American Class Counsel have agreed on the allocation of the contingency fee for the class actions. It appears that the Canadian Class is relatively small in comparison to the class certified in the U.S. Action. The top 100 purchasers in the IPO accounted for approximately 97% of the shares sold, and of these, Canadian institutional purchasers accounted for 13.4% of the shares. The balance were purchased by Americans. This evidence formed the basis of a negotiated fee arrangement between Canadian Class Counsel and U.S. Lead Counsel, which provides that Canadian Class Counsel will seek approval of fees in the amount of 25% of 15% of the Settlement Amount.

[28] Canadian Class Counsel was assisted by a U.S. class actions lawyer in the development and prosecution of this matter. Gilman Law LLP, formerly Gilman & Pastor, provided Canadian Class Counsel with assistance with factual research, identification of experts, and U.S. It is proposed that Class Counsel’s fee request be reduced by the amount to be paid to Gilman Law LLP, such that the fee requested for class counsel and the fee requested for Gilman Law LLP (characterized as an agent’s fee) amount to 25% of USD$2,287,500.00 (15% of the total settlement amount).

[29] Accordingly, Class Counsel requests approval of fees in the amount of USD$486,093.75, plus the agent’s fee of USD$85,781.25.

[30] Class Counsel have docketed time in excess of $495,000.00 (excluding applicable taxes) and financed disbursements totalling approximately $80,000.00 (excluding interest and applicable taxes).

[31] The fairness and reasonableness of the fee awarded in respect of class proceedings is to be determined in light of the risk undertaken by the lawyer in conducting the litigation and the degree of success or result achieved: Parsons v. Canadian Red Cross Society, 2000 22386 (ON SC), [2000] O.J. No. 2374 (S.C.J.), at para. 13; Smith v. National Money Mart, 2010 ONSC 1334, [2010] O.J. No. 873 (S.C.J.), at paras. 19-20; Fischer v. I.G. Investment Management Ltd., [2010] O.J. No. 5649 (S.C.J.), at para 25.

[32] Factors relevant in assessing the reasonableness of the fees of class counsel include: (a) the factual and legal complexities of the matters dealt with; (b) the risk undertaken, including the risk that the matter might not be certified; (c) the degree of responsibility assumed by class counsel; (d) the monetary value of the matters in issue; (e) the importance of the matter to the class; (f) the degree of skill and competence demonstrated by class counsel; (g) the results achieved; (h) the ability of the class to pay; (i) the expectations of the class as to the amount of the fees; and (j) the opportunity cost to class counsel in the expenditure of time in pursuit of the litigation and settlement: Smith v. National Money Mart, supra, at paras. 19-20; Fischer v. I.G. Investment Management Ltd., supra, at para 28.

[33] Having regard to these various factors, I approve Class Counsel’s request for approval of its legal fees.

Perell, J.

Released: September 13, 2013

COURT FILE NO. 12-CV-447546CP

DATE: September 13, 2013

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

FRANK TUCCI

Plaintiff

‑ and ‑

SMART TECHNOLOGIES INC., APAX PARTNERS L.P., APAX PARTNERS EUROPE MANAGERS LTD., SCHOOL S.A.R.L., INTEL CORPORATION, DAVID A. MARTIN, NANCY L. KNOWLTON, SALIM NATHOO, ARVIND SODHANI, MICHAEL J. MUELLER, ROBERT C. HAGERTY and G.A. (DREW) FITCH

Defendants

REASONS FOR DECISION

Perell, J.

Released: September 13, 2013.