Stipulation and Agreement of Settlement — Wilson v. Peloton

Record facts

U.S. District Court for the Eastern District of New York · No. 1:21-cv-02369-CBA-PK · Doc. 80 · 2023-04-17 · Docket on CourtListener

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UNITED STATES DISTRICT COURT 
EASTERN DISTRICT OF NEW YORK 
 
 
 
 
IN RE PELOTON INTERACTIVE, INC. 
SECURITIES LITIGATION 
 
Case No. 1:21-cv-02369-CBA-PK 
 
District Judge Carol B. Amon 
 
Magistrate Judge Peggy Kuo 
STIPULATION AND AGREEMENT OF SETTLEMENT 
This Stipulation and Agreement of Settlement dated as of April 17, 2023 (the 
“Stipulation”) is entered into between (a) Richard Neswick (“Lead Plaintiff”) on behalf of 
himself and members of the Settlement Class; and (b) Peloton Interactive, Inc. (“Peloton”), and 
John Foley, Jill Woodworth, Hisao Kushi, and Brad Olson (the “Individual  Defendants,” and 
with Peloton, the “Defendants,” and collectively with Plaintiff, the “Parties”), by and through 
their counsel of record, and embodies the terms and conditions of the settlement of the above-
captioned action (“Action”).1 Subject to the approval of the Court and the terms and conditions 
expressly provided herein, this Stipulation is intended to fully, finally, and forever compromise, 
settle, release, resolve, and dismiss with prejudice the Action and all Released Plaintiffs’ Claims 
(defined below) against Defendants. 
WHEREAS: 
A. 
On April 29, 2021, an initial putative securities class action lawsuit was filed in 
the United States District Court for the Eastern District of New York (“Court”), captioned Ashley 
Wilson, Individually and on behalf of all others similarly situated v. Peloton Interactive, Inc., 
 
1  
All terms with initial capitalization not otherwise defined herein shall have the meanings 
ascribed to them in ¶ 1 below. 
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John Foley, and Jill Woodworth, Case No. 1:21-cv-02369-CBA-PK, which was amended on 
May 6, 2021. ECF Nos. 1, 8. 
B. 
On May 24, 2021, Leigh Drori brought a securities class action lawsuit against the 
Defendants in the United States District Court for the Eastern District of New York, styled Leigh 
Drori, Individually and on behalf of all others similarly situated v. Peloton Interactive, Inc., 
John Foley, and Jill Woodworth, Case No. 1:21-cv-02925(CBA)(PK). On June 28, 2021, 
Richard Neswick filed a motion for (1) consolidation, (2) appointment as Lead Plaintiff, and (3) 
approval of Lead Counsel. ECF No. 25. 
C. 
On October 26, 2021, Magistrate Judge Peggy Kuo recommended that the motion 
be granted, that the actions be consolidated, that Richard Neswick be appointed as lead plaintiff, 
and that Faruqi & Faruqi, LLP be appointed as lead counsel. ECF No. 37. On November 16, 
2021, Judge Amon adopted the report and recommendation in full, consolidating the cases and 
appointing Plaintiff Richard Neswick as Lead Plaintiff and appointing Faruqi & Faruqi, LLP as 
Lead Counsel. 
D. 
On January 21, 2022, Lead Plaintiff filed an amended class action complaint (the 
“Complaint”). ECF No. 45. The Complaint asserted claims under Sections 10(b) and 20(a) of the 
Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 promulgated thereunder 
against Defendants, alleging that Defendants made materially false and misleading statements 
and omissions. The Complaint alleged, among other things, that the price of Peloton common 
stock was artificially inflated during the putative Class Period as a result of the allegedly false 
and misleading statements, and declined when the truth was alleged to have been revealed on 
March 18, 2021, April 17, 2021, and May 5, 2021. 
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E. 
On March 7, 2022, Defendants moved to dismiss the Complaint. ECF Nos. 51-52. 
On April 6, 2021, Lead Plaintiff opposed Defendants’ motion to dismiss (ECF No. 55), and on 
April 26, 2021, Defendants filed their reply in support of their motion (ECF No. 58). 
F. 
On June 8, 2022, the Court held oral arguments on the motion to dismiss, and 
reserved decision on the motion to dismiss.   
G. 
On December 15, 2022, while Defendants’ motion to dismiss remained pending, 
the Parties participated in a lengthy mediation session, conducted by David Murphy of Phillips 
ADR, a well-respected and highly experienced mediator and former securities litigator, to 
explore a potential negotiated resolution of the claims in the Action. The mediation involved an 
extended discussion about a potential resolution, and was preceded by the exchange of mediation 
statements and reply mediation statements. As a result of the December 15, 2022, mediation, the 
Parties reached an agreement-in-principle, subject to certain Confirmatory Discovery and Court 
approval, to settle and release the claims asserted against Defendants in the Action. The Parties 
memorialized their agreement in a Memorandum of Understanding (“MOU”). This Stipulation 
(together with the exhibits hereto) reflects the final and binding agreement between the Parties 
and supersedes the MOU. 
H. 
On December 15, 2022, the Parties filed a letter motion to stay the Action and 
vacate any pre-trial deadlines in light of the settlement-in-principle, ECF No. 77, which the 
Court granted on December 16, 2022.  
I. 
On or about January 16, 2023, Defendants commenced their production of 
documents in connection with the Confirmatory Discovery in order to confirm the adequacy of 
the Settlement.  
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J. 
Lead Plaintiff, through Lead Counsel, represents that it conducted a thorough 
investigation relating to the claims, defenses, and underlying events and transactions that are the 
subject of the Action. This process included reviewing and analyzing: (i) documents filed 
publicly by the Company with the SEC; (ii) publicly available information, including press 
releases, news articles, and other public statements issued by or concerning the Company and the 
Defendants; (iii) research reports issued by financial analysts concerning the Company; (iv) other 
publicly available information and data concerning the Company; (v) press releases; (vi) audio 
recordings and transcripts of interviews with the Defendant Brad Olson; (vii) Confirmatory 
Discovery, as defined in ¶ 1; and (viii) the applicable law governing the claims and potential 
defenses.  
K. 
Based upon their investigation, prosecution, and mediation of the Action, Lead 
Plaintiff and Lead Counsel have concluded that the terms and conditions of this Stipulation are 
fair, reasonable, and adequate to Lead Plaintiff and the other members of the Settlement Class, 
and in their best interests. Based on Lead Plaintiff’s direct oversight of the prosecution of this 
Action and with the advice of their counsel, Lead Plaintiff has agreed to settle this Action and 
release the Released Plaintiffs’ Claims pursuant to the terms and provisions of this Stipulation, 
after considering, among other things:  (a) the substantial financial benefit that Lead Plaintiff and 
the other members of the Settlement Class will receive under the proposed Settlement; (b) the 
significant risks and costs of continued litigation and trial; and (c) the desirability of permitting 
the proposed Settlement to be consummated as provided by this Stipulation.  
L. 
Defendants deny, and continue to deny, each and every one of the claims alleged 
by Lead Plaintiff in the Action on behalf of the Settlement Class, including all claims in the 
complaints filed in the Action. Defendants have asserted and continue to assert that their public 
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statements during the putative Class Period contained no material misstatements or omissions, 
and that at all times, they acted in good faith and in a manner they reasonably believed to be in 
accordance with all applicable rules, regulations, and laws. Accordingly, this Stipulation shall in 
no event be construed or deemed to be evidence of or an admission or concession on the part of 
any of the Defendants with respect to any claim or allegation of any fault or liability or 
wrongdoing or damage whatsoever, or any infirmity in the defenses that Defendants have, or 
could have, asserted. Nonetheless, Defendants have determined that it is desirable and beneficial 
to them that the Action be settled in the manner and upon the terms and conditions set forth in 
this Stipulation to avoid the further expense, inconvenience, and burden of this Action, the 
distraction and diversion of personnel and resources, and to obtain the conclusive and complete 
dismissal and/or release of this Action and Released Claims. Defendants expressly deny that 
Lead Plaintiff has asserted any valid claims as to any of them, and expressly deny any and all 
allegations of fault, liability, wrongdoing, or damages whatsoever.  
M. 
This Stipulation, whether or not consummated, or any proceedings relating to any 
settlement, or any of the terms of any settlement, whether or not consummated, shall in no event 
be construed as, or deemed to be evidence of, an admission or concession on the part of the 
Defendants, or any of them individually, with respect to any fact or matter alleged in the Action, 
or any claim of fault or liability or wrongdoing or damage whatsoever, or any infirmity in any 
claim or defense that has been or could have been asserted.  
N. 
Lead Plaintiff believes that the claims asserted in the Action have merit. Lead 
Plaintiff and Lead Counsel recognize, however, the expense and length of continued proceedings 
necessary to prosecute this Action, and have taken into account the uncertain outcome and the 
risk of litigation, especially in complex actions such as this Action, as well as the difficulties and 
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delays inherent in such litigation. Lead Counsel is mindful of the inherent problems of proof and 
possible defenses to the claims alleged in the Action. Based upon their evaluation, Lead Plaintiff 
and Lead Counsel believe that the Settlement set forth in this Stipulation confers substantial 
monetary benefits upon the Settlement Class and is in the best interests of the Settlement Class. 
This Stipulation shall in no event be construed or deemed to be evidence of or an admission or 
concession on the part of Lead Plaintiff of any infirmity in any of the claims asserted in the 
Action, or an admission or concession that any of the Defendants’ defenses to liability had any 
merit.   
NOW THEREFORE, it is hereby STIPULATED AND AGREED, by and among 
Lead Plaintiff (individually and on behalf of all other members of the Settlement Class) and 
Defendants, by and through their respective undersigned attorneys and subject to the approval of 
the Court pursuant to Rule 23(e) of the Federal Rules of Civil Procedure, that, in consideration of 
the benefits flowing to the Parties from the Settlement, all Released Plaintiffs’ Claims as against 
the Defendants’ Releasees and all Released Defendants’ Claims as against the Plaintiffs’ 
Releasees shall be fully, finally, and forever compromised, settled, released, discharged, and 
dismissed with prejudice, and without costs (except as provided in the Stipulation), upon and 
subject to the terms and conditions set forth below. 
DEFINITIONS 
1. 
As used in this Stipulation and any exhibits attached hereto and made a part 
hereof, the following capitalized terms shall have the following meanings: 
a. 
“Action” means the civil litigation captioned In re Peloton Interactive, Inc. 
Securities Litigation, No. 2:21-cv-02369-CBA-PK, pending in the United States District Court 
for the Eastern District of New York before the Honorable Carol Bagley Amon.   
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b. 
“Alternate Judgment” means a form of final judgment that may be entered 
by the Court herein but in a form other than the form of Judgment provided for in this 
Stipulation.  
c. 
“Authorized Claimant” means a Settlement Class Member who submits a 
Claim to the Claims Administrator that is approved by the Court for payment from the Net 
Settlement Fund pursuant to the terms of the Court-approved Plan of Allocation. 
d. 
 “Claim” means a paper claim submitted on a Proof of Claim Form or an 
electronic claim that is submitted to the Claims Administrator. 
e. 
“Claim Form” or “Proof of Claim Form” means the form, substantially in 
the form attached hereto as Exhibit A-3, that a Claimant must complete and submit should that 
Claimant seek to share in a distribution of the Net Settlement Fund. 
f. 
“Claimant” means a person or entity who or which submits a Claim to the 
Claims Administrator seeking to be eligible to share in the proceeds of the Net Settlement Fund. 
g. 
“Claims Administrator” means Epiq Systems, Inc., the firm retained by 
Lead Counsel, subject to approval of the Court, to administer the Settlement, including providing 
all notices approved by the Court to potential Settlement Class Members and processing Proof of 
Claim Forms. 
h. 
“Class Distribution Order” means an order entered by the Court authorizing 
and directing that the Net Settlement Fund be distributed, in whole or in part, to Authorized 
Claimants. 
i. 
“Class Period” means the period from September 11, 2020 to May 5, 2021, 
inclusive. 
j. 
“Company” or “Peloton” means Peloton Interactive, Inc. 
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k. 
“Complaint” means the Amended Class Action Complaint and Demand for 
Jury Trial filed by Lead Plaintiff in the Action on January 21, 2022. 
l. 
“Confirmatory Discovery” means the discovery that Lead Counsel 
undertook for the purpose of confirming the adequacy of the Settlement. 
m. 
“Court” means the United States District Court for the Eastern District of 
New York. 
n. 
“Defendants” means Peloton Interactive, Inc., John Foley, Jill Woodworth, 
Hisao Kushi, and Brad Olson, collectively.  
o. 
“Defendants’ Counsel” means Latham & Watkins LLP.   
p. 
“Defendants’ Releasees” means Defendants, and any and all of their related 
parties in any forum, including, without limitation, any and all of their current, former, or future 
parents, subsidiaries, affiliates, predecessors, successors, divisions, investment funds, joint 
ventures and general or limited partnerships, and each of their respective current or former 
officers, directors, trustees, partners, shareholders, owners, members, contractors, subcontractors, 
auditors, principals, agents, managing agents, employees, attorneys, accountants, investment 
bankers, underwriters, co-insurers or insurers in their capacities as such, as well as each of the 
Individual Defendants’ Immediate Family members, heirs, executors, personal or legal 
representatives, estates, beneficiaries, predecessors, successors and assigns.   
q. 
“Effective Date” with respect to the Settlement means the first date by 
which all of the events and conditions specified in ¶ 36 of this Stipulation have been met and 
have occurred or have been waived. 
r. 
“Escrow Account” means the separate escrow account designated and 
controlled by Lead Counsel at The Huntington National Bank, into which the Settlement Amount 
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shall be deposited and held in escrow under the control of Lead Counsel for the benefit of the 
Settlement Class pursuant to this Stipulation and subject to the jurisdiction of the Court. 
s. 
“Escrow Agent” means The Huntington National Bank or its successor. 
t. 
“Escrow Agreement” means the agreement between Lead Counsel and the 
Escrow Agent setting forth the terms under which the Escrow Agent shall maintain the Escrow 
Account. 
u. 
“Final” means, with respect to the Judgment or, if applicable, the Alternate 
Judgment, the occurrence of either of the following (whichever is earlier):  (i) if an appeal or 
review is not sought by any Person from the Judgment or the Alternative Judgment, the day 
following the expiration date of the time provided for filing or noticing any appeal under the 
Federal Rules of Appellate Procedure; or (ii) if an appeal or review is sought by any Person from 
the Judgment or Alternate Judgment, the day after such Judgment or Alternative Judgment is no 
longer subject to further judicial review, including upon appeal or review by a writ of certiorari. 
Any appeal or proceeding seeking judicial review pertaining solely to an order issued with 
respect to (i) attorneys’ fees, costs, or expenses, or (ii) the Plan of Allocation (as submitted or 
subsequently modified), shall not in any way delay or preclude the Judgment or Alternative 
Judgment from becoming Final, however. 
v. 
“Fee and Expense Application” means Lead Counsel’s application for an 
award of attorneys’ fees and payment of litigation expenses incurred in prosecuting the case, 
including any award of reasonable costs and expenses to Lead Plaintiff pursuant to 15 U.S.C § 
78u-4(a)(4) of the Private Securities Litigation Reform Act of 1995 (“PSLRA”). 
w. 
“Immediate Family” means, as defined in 17 C.F.R § 229.404, Instructions 
1(a)(iii) and 1(b)(ii), children, stepchildren, parents, stepparents, spouses, siblings, mothers-in-
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law, fathers-in-law, sons-in-law, daughters-in-law, brothers-in-law, sisters-in-law and any 
persons (other than a tenant or employee) sharing the household. 
x. 
“Individual Defendants” means John Foley, Jill Woodworth, Hisao Kushi, 
and Brad Olson. 
y. 
“Judgment” means the final judgment, substantially in the form attached 
hereto as Exhibit B, to be entered by the Court approving the Settlement. 
z. 
“Lead Counsel” means Faruqi & Faruqi, LLP. 
aa. 
“Lead Plaintiff” means Richard Neswick. 
bb. 
“Litigation Expenses” means costs and expenses incurred in connection 
with commencing, prosecuting, and settling the Action (which may include the costs and 
expenses of Lead Plaintiff directly related to his representation of the Settlement Class), for 
which Lead Counsel intends to apply to the Court for payment or reimbursement from the 
Settlement Fund. 
cc. 
“Mediator” means David Murphy of Phillips ADR. 
dd. 
“MOU” means the memorandum of understanding dated December 15, 
2022, as finalized on December 19, 2022 in which the Parties memorialized their agreement-in-
principle to settle the Action. 
ee. 
“Net Settlement Fund” means the Settlement Fund less: (i) any Taxes; 
(ii) any Notice and Administration Costs; (iii) any Litigation Expenses awarded by the Court; 
(iv) any attorneys’ fees awarded by the Court; and (v) any other costs or fees approved by the 
Court. 
ff. 
“Notice” means the Notice of (I) Pendency of Class Action and Proposed 
Settlement; (II) Settlement Hearing; and (III) Motion for Attorneys’ Fees and Litigation 
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Expenses, substantially in the form attached hereto as Exhibit A-1, which will be posted on the 
settlement website and mailed or emailed to Settlement Class Members upon request.  
gg. 
“Notice and Administration Costs” means the costs, fees, and expenses that 
are incurred by the Claims Administrator and/or Lead Counsel in connection with: (i) providing 
the Notice of the proposed Settlement by mail, publication, and other means to the Settlement 
Class; and (ii) administering the Settlement, including but not limited to the Claims process, 
which includes receiving and reviewing claims, applying the Plan of Allocation, communicating 
with Persons regarding the Settlement and claims administration process, distributing the 
Settlement proceeds, as well as the costs, fees, and expenses incurred in connection with the 
Escrow Account. 
hh. 
“Parties” means Defendants and Lead Plaintiff, on behalf of himself and 
the Settlement Class. 
ii. 
“Person(s)” means any individual, corporation (including all divisions and 
subsidiaries), general or limited partnership, association, joint stock company, joint venture, 
limited liability company, professional corporation, estate, legal representative, trust, 
unincorporated association, government or any political subdivision or agency thereof, and any 
other business or legal entity, and, as applicable, their respective spouses, heirs, predecessors, 
successors-in-interest, representatives, and assigns. 
jj. 
“Plaintiffs’ Releasees” means (i) Lead Plaintiff, his attorneys, and all other 
Settlement Class Members; (ii) affiliates, current and former parents, subsidiaries, successors, 
predecessors, assigns, executors, administrators, representatives, attorneys, and agents of each of 
the foregoing in (i); and (iii) the current and former officers, directors, Immediate Family 
members, heirs, trusts, trustees, executors, estates, administrators, beneficiaries, agents, affiliates, 
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insurers, reinsurers, predecessors, successors, assigns, and advisors of each of the persons or 
entities listed in (i) and (ii), in their capacities as such. 
kk. 
“Plan of Allocation” means the proposed plan of allocation of the Net 
Settlement Fund, which shall be substantially in the form set forth in the Notice, or any other 
plan of distributing the Net Settlement Fund approved by the Court. 
ll. 
“Postcard Notice” means the postcard notice of (I) Pendency of Class 
Action and Proposed Settlement; (II) Settlement Hearing; and (III) Motion for Attorneys’ Fees 
and Litigation Expenses, substantially in the form attached hereto as Exhibit A-2, which is to be 
mailed to Settlement Class Members. 
mm. “Preliminary Approval Order” means the proposed Order Granting 
Preliminary Approval of Class Action Settlement, Approving Form and Manner of Notice, and 
Setting Date for Hearing on Final Approval of Settlement, substantially in the form attached 
hereto as Exhibit A. 
nn. 
“PSLRA” means the Private Securities Litigation Reform Act of 1995, 15 
U.S.C. §§ 77z-1, 78u-4, as amended. 
oo. 
“Released Claims” means all Released Defendants’ Claims and all 
Released Plaintiffs’ Claims. 
pp. 
“Released Defendants’ Claims” means all claims and causes of action of 
every nature and description, whether known or Unknown Claims, whether arising under federal, 
state, local, common, statutory, administrative, or foreign law, or any other law, rule, or 
regulation, at law or in equity, whether fixed or contingent, whether foreseen or unforeseen, 
whether accrued or unaccrued, whether liquidated or unliquidated, whether matured or 
unmatured, whether direct, representative, class, or individual in nature, that arise out of or relate 
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in any way to the institution, prosecution, or settlement of the claims against Defendants, which 
Defendants will release as against Plaintiffs’ Releasees upon the Effective Date. Released 
Defendants’ Claims shall not include:  (1) any claims relating to the enforcement of the 
Settlement; or (2) any claims against any Person or entity who or which submits a request for 
exclusion from the Settlement Class that is accepted by the Court. 
qq. 
“Released Plaintiffs’ Claims” means all claims, rights, causes of action, 
duties, obligations, demands, actions, debts, sums of money, suits, contracts, agreements, 
promises, damages and liabilities, whether known or Unknown Claims, contingent or non-
contingent, indirect or direct, or suspected or unsuspected, including any claims arising under 
federal or state statutory or common law or any other law, rule or regulation, whether foreign or 
domestic, that have been asserted, could have been asserted, or could be asserted in the future 
against Defendants or any of the Defendants’ Releasees that (i) arise out of or relate in any way 
to, or are based upon, the allegations, transactions, acts, facts, events, matters, occurrences, 
representations or omissions involved, set forth, alleged or referred to in the operative complaint 
in the Action or in any of the prior complaints, or (ii) in any way are based upon or related to, 
directly or indirectly, the purchase or sale or other acquisition or disposition, or holding, of 
Peloton securities during the Class Period.  For the avoidance of doubt, Released Plaintiffs’ 
Claims include, but are not limited to, any claims under the Securities Act of 1933 or the 
Securities Exchange Act of 1934, or the securities laws of any state or territory. The following 
claims are explicitly excluded from release:  (1) all claims related to the enforcement of the 
Settlement; (2) asserted derivatively purportedly on behalf of Peloton in In re Peloton 
Interactive, Inc. Derivative Litigation, Case No. 1:21-cv-02862-CBA-PK (E.D.N.Y), In re 
Peloton Interactive, Inc. Stockholder Derivative Litigation, Case No. 2022-1051-KSJM (Del. 
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Ch.), or Manzella v. Cortese, et al., Case No. 2023-0224-KSJM (Del. Ch.) (together, the 
“Derivative Actions”); (3) asserted by plaintiff in its June 25, 2022 complaint filed in Robeco 
Capital Growth Funds v. Peloton Interactive, Inc., Case No. 21-cv-9582 (S.D.N.Y.) (“SDNY 
Action”), or any amended complaint properly filed in the SDNY Action in which that plaintiff 
asserts allegations that are substantially similar to those made in the June 25, 2022 complaint 
(which, for the avoidance of doubt, shall not include any claims that both (a) were asserted in the 
Complaint or any prior complaint in this Action, and (b) were not asserted in the June 25, 2022 
complaint in the SDNY Action); or (4) any claims of any person or entity who or which submits 
a request for exclusion from the Settlement that is accepted by the Court. Nothing in this 
Settlement shall waive any arguments or defenses Defendants may assert in, in connection with, 
or otherwise related to any other litigation or matter, including, but not limited to, the Derivative 
Actions or the SDNY Action.   
rr. 
“Releasee(s)” means each and any of the Defendants’ Releasees and each 
and any of the Plaintiffs’ Releasees.  
ss. 
“Releases” means the releases set forth in ¶¶ 6-7 of this Stipulation. 
tt. 
“Settlement” means the resolution of the Action in accordance with the 
terms and provisions set forth in this Stipulation. 
uu. 
“Settlement Amount” means the total principal amount of thirteen million, 
nine-hundred and fifty thousand U.S. Dollars ($13,950,000.00) in cash. 
vv. 
“Settlement Class” means all persons or entities who purchased or 
otherwise acquired Peloton securities during the Class Period, and were damaged thereby.  
Excluded from the Settlement Class are (i) Defendants, (ii) current and former officers and 
directors of Peloton; (iii) members of the immediate family of each of the Individual Defendants; 
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(iv) all subsidiaries and affiliates of Peloton and the directors and officers of Peloton and their 
respective subsidiaries or affiliates; (v) all persons, firms, trusts, corporations, officers, directors, 
and any other individual or entity in which any Defendant has a controlling interest; (vi) the legal 
representatives, agents, affiliates, heirs, successors-in-interest or assigns of all such excluded 
parties; and (vii) any persons or entities who properly exclude themselves by filing a valid and 
timely request for exclusion.  
ww. “Settlement Class Member” means each person who or entity which is a 
member of the Settlement Class. 
xx. 
“Settlement Fund” means the Settlement Amount plus any and all interest 
earned thereon while in the Escrow Account. 
yy. 
“Settlement Hearing” means the hearing set by the Court under 
Rule 23(e)(2) of the Federal Rules of Civil Procedure to consider final approval of the 
Settlement. 
zz. 
“Summary Notice” means the Summary Notice of (I) Pendency of Class 
Action and Proposed Settlement; (II) Settlement Hearing; and (III) Motion for Attorneys’ Fees 
and Litigation Expenses, substantially in the form attached hereto as Exhibit A-4, to be published 
as set forth in the Preliminary Approval Order. 
aaa. “Taxes” means: (i) all federal, state and/or local taxes of any kind 
(including any interest or penalties thereon) on any income earned by the Settlement Fund; and 
(ii) the expenses and costs incurred by Lead Counsel in connection with determining the amount 
of, and paying, any taxes owed by the Settlement Fund (including, without limitation, expenses 
of tax attorneys and accountants). 
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bbb. “Unknown Claims” means any Released Plaintiffs’ Claims which any Lead 
Plaintiff or any other Settlement Class Member does not know or suspect to exist in his, her, or 
its favor at the time of the release of such claims, and any Released Defendants’ Claims that any 
Defendant does not know or suspect to exist in his, her, or its favor at the time of the release of 
such claims, which, if known by him, her, or it, might have materially affected his, her, or its 
decision(s) with respect to this Settlement. With respect to any and all Released Claims, the 
Parties stipulate and agree that, upon the Effective Date of the Settlement, Lead Plaintiff and 
Defendants shall expressly waive, and each of the other Settlement Class Members shall be 
deemed to have waived, and by operation of the Judgment or the Alternate Judgment, if 
applicable, shall have expressly waived, any and all provisions, rights, and benefits conferred by 
any law of any state or territory of the United States, or principle of common law or foreign law, 
which is similar, comparable, or equivalent to California Civil Code §1542, which provides: 
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS 
THAT THE CREDITOR OR RELEASING PARTY DOES 
NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER 
FAVOR AT THE TIME OF EXECUTING THE RELEASE 
AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE 
MATERIALLY AFFECTED HIS OR HER SETTLEMENT 
WITH THE DEBTOR OR RELEASED PARTY. 
Lead Plaintiff, other Settlement Class Members, Defendants, or any of Defendants’ Releasees 
may hereafter discover facts, legal theories, or authorities in addition to or different from those 
which any of them now knows or believes to be true with respect to the subject matter of the 
Released Claims, but Lead Plaintiff and Defendants shall expressly, fully, finally, and forever 
waive, compromise, settle, discharge, extinguish, and release, and each Settlement Class 
Member shall be deemed to have waived, compromised, settled, discharged, extinguished, and 
released, and upon the Effective Date and by operation of the Judgment or Alternative Judgment 
shall have waived, compromised, settled, discharged, extinguished, and released, fully, finally, 
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and forever, any and all Released Claims, known or unknown, suspected or unsuspected, 
contingent or absolute, accrued or unaccrued, apparent or unapparent, which now exist, or 
heretofore existed, or may hereafter exist, without regard to the subsequent discovery or 
existence of such different or additional facts, legal theories, or authorities. Lead Plaintiff and 
Defendants acknowledge, and each of the other Settlement Class Members shall be deemed by 
operation of law to have acknowledged, that the foregoing waiver was separately bargained for 
and a material element of the Settlement. 
CLASS CERTIFICATION 
2. 
Solely for purposes of the Settlement, Defendants stipulate and agree to:  
(a) certification of the Action as a class action pursuant to Rules 23(a) and 23(b)(3) of the 
Federal Rules of Civil Procedure on behalf of the Settlement Class; (b) appointment of Lead 
Plaintiff as Class Representative for the Settlement Class; and (c) appointment of Lead Counsel 
as Class Counsel for the Settlement Class pursuant to Rule 23(g) of the Federal Rules of Civil 
Procedure. 
PRELIMINARY APPROVAL OF SETTLEMENT 
3. 
Within five (5) business days of execution of this Stipulation, and by no later than 
April 17, 2023, Lead Plaintiff will move for preliminary approval of the Settlement, 
authorization to provide notice of the Settlement to the Settlement Class, and the scheduling of a 
hearing for consideration of final approval of the Settlement, which motion shall be unopposed 
by Defendants. Concurrently with the motion for preliminary approval, Lead Plaintiff shall apply 
to the Court for, and Defendants shall agree to, entry of the Preliminary Approval Order, 
substantially in the form attached hereto as Exhibit A. 
 
 
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DUE DILIGENCE 
4. 
The Settlement is subject to the completion of Confirmatory Discovery, which 
Lead Plaintiff began conducting following the execution of the MOU and will continue to 
conduct, in accordance with a separate Confidential Agreement for Confirmatory Discovery, for 
a period of approximately one-hundred and twenty (120) days following January 16, 2022, upon 
which date Defendants began producing documents.  As part of Confirmatory Discovery, the 
Parties conferred in good faith upon an appropriate set of documents reasonably necessary for 
Lead Plaintiff to confirm and determine that the Settlement is fair, reasonable, and adequate to 
the Settlement Class.  Defendants produced a substantial number of pages of documents, and 
Peloton has agreed to make one or more current employees knowledgeable about the subjects of 
Lead Plaintiff’s allegations available for an untranscribed interview prior to the time that Lead 
Plaintiff will move for final approval of the Settlement. Information provided during 
Confirmatory Discovery is subject to a separate confidentiality agreement and may only be used 
to evaluate and effectuate the Settlement, and shall not be disclosed, filed with the Court, or 
attached as an exhibit to any complaint, form the basis of any complaint, or be attached to any 
other document. 
RELEASE OF CLAIMS 
5. 
The obligations incurred pursuant to this Stipulation are (a) subject to approval by 
the Court, and the Judgment (or Alternative Judgment) reflecting such approval becoming Final; 
and (b) in consideration of the full and final disposition of the Action with respect to the 
Releasees and any and all Released Claims provided for herein.  
6. 
Pursuant to the Judgment (or the Alternate Judgment, if applicable), without 
further action by anyone, upon the Effective Date of the Settlement, Lead Plaintiff and each of 
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19 
the other Settlement Class Members, on behalf of themselves, and their respective heirs, 
executors, administrators, predecessors, successors, and assigns, in their capacities as such, shall 
be deemed to have, and by operation of law and of the judgment shall have, fully, finally, and 
forever compromised, settled, released, resolved, relinquished, waived, and discharged each and 
every Released Plaintiffs’ Claim against Defendants and the Defendants’ Releasees, and shall 
forever be barred, enjoined, and precluded from prosecuting any or all of the Released Plaintiffs’ 
Claims against any of the Defendants or the Defendants’ Releasees.   
7. 
Pursuant to the Judgment (or the Alternate Judgment, if applicable), without 
further action by anyone, upon the Effective Date of the Settlement, Defendants, on behalf of 
themselves, and their respective heirs, executors, administrators, predecessors, successors, and 
assigns, in their capacities as such, shall be deemed to have, and by operation of law and of the 
judgment shall have, fully, finally, and forever compromised, settled, released, resolved, 
relinquished, waived, and discharged each and every Released Defendants’ Claim against Lead 
Plaintiff and the other Plaintiffs’ Releasees, and shall forever be barred and enjoined from 
prosecuting any or all of the Released Defendants’ Claims against any of the Plaintiffs’ 
Releasees.  
8. 
Notwithstanding ¶¶ 6-7 above, nothing in the Judgment (or the Alternate 
Judgment, if applicable), shall bar any action by any of the Parties to enforce or effectuate the 
terms of this Settlement, including the Stipulation or the Judgment (or Alternate Judgment, if 
applicable).   
THE SETTLEMENT CONSIDERATION 
9. 
In exchange for the full and Final settlement of the Released Plaintiffs’ Claims 
against Defendants and the other Defendants’ Releasees, Defendants and/or their insurers shall 
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pay or cause to be paid the Settlement Amount into the Escrow Account within twenty (20) 
business days of the later of:  (1) the final approval of the Settlement by the Court; or (2) the 
Escrow Agent having provided to Defendants’ Counsel at Latham & Watkins LLP (a) a Form 
W-9 for the escrow account, (b) a completed wire transfer, ACH transfer, or similar anti-fraud 
payment request form signed by an authorized representative of the Escrow Account, and (c) all 
required wire and check funding instructions and information including payee name, telephone 
and e-mail contact information and a physical address for the Escrow Agent.  If the Settlement 
Amount is not timely paid to the Escrow Agent, and is not subject to a good faith dispute 
between the Parties as to whether the Settlement Amount is due, Lead Plaintiff may terminate the 
Settlement, but only if (a) Lead Counsel has notified Defendants’ Counsel in writing of Lead 
Counsel’s intention to terminate the Settlement, and (b) the entire Settlement Amount is not 
transferred to the Escrow Agent within ten (10) business days after Lead Counsel has provided 
such written notice.  If there is a dispute as to whether the Settlement Amount is due into the 
Escrow Account, any such dispute shall be resolved by the Mediator in accordance with ¶ 64 
herein.   
10. 
The Settlement Amount is an all-in settlement number, meaning that it includes 
all attorneys’ fees to Lead Counsel, administrative costs, expenses, Settlement Class Member 
benefits, Lead Plaintiff awards, reimbursement of Lead Plaintiff’s time and expenses pursuant to 
the Private Securities Litigation Reform Act, as well as any other costs, expenses, or fees of any 
kind whatsoever associated with this Action, the Settlement, or the resolution of this matter. 
Defendants shall bear their own costs and expenses in connection with the Settlement, including 
costs, expenses, and fees of their counsel; the costs of providing their transfer records for 
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purposes of notice (see ¶ 22 below); and the costs of providing notice under the Class Action 
Fairness Act of 2005 (“CAFA”), 28 U.S.C. §1715(b) (see ¶ 23 below).   
11. 
Other than the all-in Settlement Amount as described in ¶ 9, Defendants (and 
Defendants’ Releasees) shall have no obligation to make any other payments, including into the 
Escrow Account or to any Settlement Class Member pursuant to this Stipulation. 
USE OF SETTLEMENT FUND 
12. 
The Settlement Fund shall be used to pay or reimburse: (a) any Taxes; (b) any 
Notice and Administration Costs; (c) any Litigation Expenses awarded by the Court; (d) any 
attorneys’ fees awarded by the Court; and (e) any other costs and fees approved by the Court. 
The balance remaining in the Settlement Fund, that is, the Net Settlement Fund, shall be 
distributed to Authorized Claimants as provided in ¶¶ 24-34 below. 
13. 
Except as provided herein or pursuant to orders of the Court, the Net Settlement 
Fund shall remain in the Escrow Account prior to the Effective Date. All funds held by the 
Escrow Agent shall be deemed to be in the custody of the Court and shall remain subject to the 
jurisdiction of the Court until such time as the funds shall be distributed or returned pursuant to 
the terms of this Stipulation and/or further order of the Court. At the written direction of Lead 
Counsel, the Escrow Agent shall invest any funds in the Escrow Account exclusively in 
instruments or accounts backed by the full faith and credit of the United States Government or 
fully insured by the United States Government or an agency thereof, including a United States 
Treasury Fund or bank account that is either (a) fully insured by the Federal Deposit Insurance 
Corporation (“FDIC”), or (b) secured by instruments backed by the full faith and credit of the 
United States Government. The Escrow Agent shall reinvest the proceeds of these instruments or 
accounts as they mature in similar instruments or accounts at their then-current market rates. 
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14. 
The Parties agree that the Settlement Fund is intended to be a Qualified 
Settlement Fund within the meaning of Treasury Regulation § 1.468B-1 and that Lead Counsel, 
as administrators of the Settlement Fund within the meaning of Treasury Regulation § 1.468B-
2(k)(3), shall be solely responsible for filing or causing to be filed all informational and other tax 
returns as may be necessary or appropriate (including, without limitation, the returns described in 
Treasury Regulation § 1.468B-2(k)) for the Settlement Fund. Lead Counsel shall also be 
responsible for causing payment to be made from the Settlement Fund of any Taxes owed with 
respect to the Settlement Fund. The Defendants and Defendants’ Releasees shall not have any 
liability or responsibility for any such Taxes. Lead Counsel, as administrators of the Settlement 
Fund within the meaning of Treasury Regulation § 1.468B-2(k)(3), shall timely make such 
elections as are necessary or advisable to carry out this paragraph, including, as necessary, 
making a “relation back election,” as described in Treasury Regulation § 1.468B-1(j), to cause 
the Qualified Settlement Fund to come into existence at the earliest allowable date, and shall take 
or cause to be taken all actions as may be necessary or appropriate in connection therewith. 
15. 
All Taxes shall be paid out of the Settlement Fund, and shall be timely paid, or 
caused to be paid, by Lead Counsel and without further order of the Court. Any tax returns 
prepared for the Settlement Fund (as well as the election set forth therein) shall be consistent 
with the previous paragraph and in all events shall reflect that all Taxes on the income earned by 
the Settlement Fund shall be paid out of the Settlement Fund as provided herein. Defendants and 
Defendants’ Releasees shall have no responsibility or liability for the acts or omissions of Lead 
Counsel or their agents with respect to the payment of Taxes, as described herein. 
16. 
The Settlement is not a claims-made settlement. After the Effective Date, no 
Defendant, Defendants’ Releasee, or any other person or entity (including Defendants’ insurance 
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23 
carriers) who or which paid any portion of the Settlement Amount shall have any right to the 
return of the Settlement Fund or any portion thereof for any reason whatsoever, and shall not 
have any responsibility or liability should claims made exceed the amount available in the 
Settlement Fund for payment of such claims. The Defendants and Defendants’ Releasees shall 
not be responsible or liable for the loss of any portion of the Settlement Fund, nor shall they have 
any liability, obligation, or responsibility for the payment of Claims, Taxes, legal fees, or any 
other expenses payable from the Settlement Fund, including those in Paragraph ¶ 12.  
17. 
Notwithstanding that the Effective Date has not yet occurred, Lead Counsel may 
pay from the Escrow Account the actual Notice and Administration Costs and Taxes, which shall 
not exceed $655,000 (the “Notice Amount”), without further order of the Court.  For the 
avoidance of doubt, the Notice Amount is part of the Settlement Amount.  The Notice and 
Administration Costs will be advanced by the Claims Administrator and paid from the Escrow 
Account following final approval. 
ATTORNEYS’ FEES AND LITIGATION EXPENSES 
18. 
Lead Counsel will apply to the Court for an award of attorneys’ fees incurred in 
prosecuting the Action to be paid solely from (and out of) the Settlement Fund. Lead Counsel 
also will apply to the Court for reimbursement or payment of Litigation Expenses, which may 
include a request for reimbursement of Lead Plaintiff’s costs and expenses directly related to his 
representation of the Settlement Class, to be paid solely from (and out of) the Settlement Fund. 
Lead Counsel’s application for attorneys’ fees and/or Litigation Expenses is not the subject of 
any agreement between Defendants and Lead Plaintiff other than what is set forth in this 
Stipulation.  Defendants shall take no position with respect to any fee and expense application, 
except to the extent that application seeks to impose obligations on Defendants that are 
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24 
inconsistent with this Stipulation, including the timing of Defendants paying or causing to be 
paid the Settlement Amount into the Escrow Account.   
19. 
Any attorneys’ fees and Litigation Expenses that are awarded by the Court shall 
be paid to Lead Counsel promptly after entry of the Order awarding such attorneys’ fees and 
expenses and entry of the Judgment, notwithstanding the existence of any timely filed objections 
thereto, or potential appeal therefrom, or collateral attack on the Settlement or any part thereof, 
subject to Lead Counsel’s obligation to make appropriate refunds or repayments to the 
Settlement Fund, plus accrued interest at the same net rate as is earned by the Settlement Fund, if 
the Settlement does not become Final or if, as a result of any appeal or further proceedings, the 
award of attorneys’ fees and/or expenses is reduced or reversed and such order becomes Final. 
Lead Counsel shall make the appropriate refund or repayment in full no later than fifteen (15) 
business days after receiving from Defendants’ counsel or from a court of competent jurisdiction 
notice of any such reduction of the award of attorneys’ fees and/or Litigation Expenses by a non-
appealable order or termination of the Settlement. The procedure for and the allowance or 
disallowance by the Court of any attorneys’ fees or Litigation Expenses are not part of the 
Settlement set forth in this Stipulation, and are separate from the Court’s consideration of the 
fairness, reasonableness, and adequacy of the Settlement set forth in the Stipulation. Any 
disapproval or modification of an application for an award of attorneys’ fees and/or Litigation 
Expenses by the Court shall not affect the enforceability of this Stipulation, provide any of the 
Parties with the right to cancel or terminate the Settlement, or impose an obligation on 
Defendants to increase the compensation paid in connection with the Settlement. Any appeal 
relating to an award of attorneys’ fees or expenses will not affect the finality of the Settlement, 
the Judgment, or the Releases provided herein. 
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20. 
Lead Counsel shall allocate the attorneys’ fees between themselves. Defendants 
and Defendants’ Releasees shall have no responsibility for or liability whatsoever with respect to 
the allocation or award of attorneys’ fees or Litigation Expenses. The attorneys’ fees and 
Litigation Expenses that are awarded to Lead Counsel shall be payable solely from the 
Settlement Fund in the Escrow Account.  
NOTICE AND SETTLEMENT ADMINISTRATION 
21. 
As part of the Preliminary Approval Order, Lead Counsel shall seek appointment 
of a Claims Administrator. The Claims Administrator shall administer the Settlement, including 
but not limited to the process of receiving, reviewing, and approving or denying Claims, under 
Lead Counsel’s supervision and subject to the jurisdiction of the Court. With the sole exception 
of Defendants’ obligation to pay (or cause to be paid) the Settlement Amount into the Escrow 
Account as provided for in ¶ 9, none of the Defendants, nor any other Defendants’ Releasees, 
shall have any responsibility for, interest in, authority, or liability whatsoever with respect to:  (i) 
the selection of the Claims Administrator, (ii) any act, omission, or determination by Lead 
Counsel or the Claims Administrator, or any of their respective designees, in connection with the 
administration of the Settlement or otherwise; (iii) the Plan of Allocation; (iv) the management, 
investment, or disbursement of the Settlement Fund, (v) the determination, administration, 
calculation, or payment of any Claims asserted against the Settlement Fund, (v) any loss suffered 
by, or fluctuation in value of, the Settlement Fund, or (vi) the payment or withholding of any 
Taxes, expenses, and/or costs incurred in connection with the taxation of the Settlement Fund, 
distributions or other payments from the Escrow Account, or the filing of any federal, state, or 
local returns.  
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22. 
In accordance with the terms of the Preliminary Approval Order to be entered by 
the Court, Lead Counsel shall cause the Claims Administrator to mail the Postcard Notice to 
those members of the Settlement Class as may be identified through reasonable effort. Lead 
Counsel shall also cause the Claims Administrator to post the Notice and Claim Form on the 
settlement website as well as cause the Claims Administrator to have the Summary Notice 
published in accordance with the terms of the Preliminary Approval Order to be entered by the 
Court. For the purposes of identifying and providing notice to the Settlement Class, within five 
(5) business days of the date of entry of the Preliminary Approval Order, Defendants shall 
provide or cause to be provided to the Claims Administrator in electronic format (at no cost to 
the Settlement Fund, Lead Counsel, or the Claims Administrator) a list (consisting of names, 
addresses, and e-mail addresses (if available)) of holders of Peloton’s publicly traded common 
stock during the Class Period, to the extent that information is available to Peloton from its 
transfer agent. 
23. 
No later than ten (10) calendar days following the filing of this Stipulation with 
the Court, Defendants shall serve the notice required under CAFA § 1715. Defendants are solely 
responsible for the costs of the CAFA notice and administering the CAFA notice.  At least seven 
(7) calendar days before the Settlement Hearing, Defendants shall cause to be served on Lead 
Counsel and filed with the Court proof, by affidavit or declaration, of compliance with CAFA § 
1715(b).   
24. 
The Claims Administrator shall receive Claims and determine first, whether the 
Claim is a valid Claim, in whole or part, and second, each Authorized Claimant’s pro rata share 
of the Net Settlement Fund based upon each Authorized Claimant’s recognized Claim compared 
to the total recognized Claims of all Authorized Claimants (as set forth in the Plan of Allocation 
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27 
set forth in the Notice attached hereto as Exhibit A-1, or in such other plan of allocation as the 
Court approves).   
25. 
The Plan of Allocation proposed in the Notice is not a necessary term of the 
Settlement or of this Stipulation and it is not a condition of the Settlement or of this Stipulation 
that any particular plan of allocation be approved by the Court. Lead Plaintiff and Lead Counsel 
may not cancel or terminate the Settlement (or this Stipulation) based on this Court’s or any 
appellate court’s ruling with respect to the Plan of Allocation or any other plan of allocation in 
this Action. No Defendant, nor any other Defendants’ Releasee, shall have any involvement with 
or liability, obligation, or responsibility whatsoever for the Plan of Allocation or the application 
of the Court-approved plan of allocation.   
26. 
Any Settlement Class Member who does not submit a valid Claim will not be 
entitled to receive any distribution from the Net Settlement Fund, but will otherwise be bound by 
all of the terms of this Stipulation and the Settlement, including the terms of the Judgment or, the 
Alternate Judgment, if applicable, to be entered in the Action and the Releases provided for 
herein and therein, and will be permanently barred and enjoined from bringing any action, claim, 
or other proceeding of any kind against the Defendants or Defendants’ Releasees with respect to 
the Released Plaintiffs’ Claims in the event that the Effective Date occurs with respect to the 
Settlement. 
27. 
Lead Counsel shall be responsible for supervising the administration of the 
Settlement and the disbursement of the Net Settlement Fund subject to Court approval. Lead 
Counsel shall have the right, but not the obligation, to waive what they deem to be formal or 
technical defects in any Claims submitted in the interests of achieving substantial justice. No 
Defendant nor any of Defendants’ Releasees shall have any involvement in the administrative 
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decisions of the Claims Administrator or Lead Counsel with respect to the Claims received in 
connection with the Settlement.  
28. 
For purposes of determining the extent, if any, to which a Settlement Class 
Member shall be entitled to be treated as an Authorized Claimant, the following conditions shall 
apply: 
a. 
Each Claimant shall be required to submit a Claim in paper form, 
substantially in the form attached hereto as Exhibit A-3, or in electronic form, in accordance with 
the instructions for the submission of such Claims, and supported by such documents as are 
designated therein, including proof of the Claimant’s loss, or such other documents or proof as 
the Claims Administrator or Lead Counsel, in their discretion, may deem acceptable; 
b. 
All Claims must be submitted by the date set by the Court in the 
Preliminary Approval Order and specified in the Notice. Any Settlement Class Member who 
fails to submit a Claim by such date shall be forever barred from receiving any distribution from 
the Net Settlement Fund or payment pursuant to this Stipulation (unless by Order of the Court 
such Settlement Class Member’s Claim is accepted), but shall in all other respects be bound by 
all of the terms of this Stipulation and the Settlement, including the terms of the Judgment or 
Alternate Judgment, if applicable, and the Releases provided for herein and therein, and will be 
permanently barred and enjoined from bringing any action, claim, or other proceeding of any 
kind against any Defendants or Defendants’ Releasees with respect to any Released Plaintiffs’ 
Claim. Provided that it is mailed by the Claim-submission deadline, a Claim Form shall be 
deemed to be submitted when postmarked, if received with a postmark indicated on the envelope 
and if mailed by first-class mail and addressed in accordance with the instructions thereon. In all 
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other cases, the Claim Form shall be deemed to have been submitted on the date when actually 
received by the Claims Administrator; 
c. 
Each Claim shall be submitted to and reviewed by the Claims 
Administrator who shall determine in accordance with this Stipulation and the plan of allocation 
the extent, if any, to which each Claim shall be allowed, subject to review by the Court pursuant 
to subparagraph (e) below as necessary; 
d. 
Claims that do not meet the submission requirements may be rejected. Prior 
to rejecting a Claim in whole or in part, the Claims Administrator shall communicate with the 
Claimant in writing, to give the Claimant the chance to remedy any curable deficiencies in the 
Claim submitted. The Claims Administrator shall notify, in a timely fashion and in writing, all 
Claimants whose Claim the Claims Administrator proposes to reject in whole or in part, setting 
forth the reasons therefor, and shall indicate in such notice that the Claimant whose Claim is to 
be rejected has the right to a review by the Court if the Claimant so desires and complies with the 
requirements of subparagraph (e) below; and 
e. 
If any Claimant whose Claim has been rejected in whole or in part desires 
to contest such rejection, the Claimant must, within twenty (20) calendar days after the date of 
mailing of the notice required in subparagraph (d) above or a lesser time period if the Claim was 
untimely, serve upon the Claims Administrator a notice and statement of reasons indicating the 
Claimant’s grounds for contesting the rejection along with any supporting documentation, and 
requesting a review thereof by the Court. If a dispute concerning a Claim cannot be otherwise 
resolved, Lead Counsel shall thereafter present the request for review to the Court. Defendants 
shall not take a position on the administrative determinations of the Claims Administrator.  
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29. 
Each Claimant shall be deemed to have submitted to the jurisdiction of the Court 
with respect to the Claimant’s Claim, including but not limited to, all releases provided for 
herein and in the Judgment or Alternative Judgment, and the Claim will be subject to 
investigation and discovery under the Federal Rules of Civil Procedure; provided, however, that 
such investigation and discovery shall be limited to that Claimant’s status as a Settlement Class 
Member and the validity and amount of the Claimant’s Claim. No discovery shall be allowed on 
the merits of this Action (including any discovery from Defendants) or of the Settlement in 
connection with the processing of Claims. 
30. 
Lead Counsel will apply to the Court, on notice to Defendants’ Counsel, for a 
Class Distribution Order:  (a) approving the Claims Administrator’s administrative 
determinations concerning the acceptance and rejection of the Claims submitted; (b) approving 
payment of any unpaid administration fees and expenses associated with the administration of 
the Settlement from the Escrow Account; and (c) if the Effective Date has occurred, directing 
payment of the Net Settlement Fund to Authorized Claimants from the Escrow Account. 
31. 
Payment pursuant to the Class Distribution Order shall be final and conclusive 
against all Claimants and the Settlement Class. All Settlement Class Members whose Claims are 
not approved by the Court for payment shall be barred from participating in distributions from 
the Net Settlement Fund, but otherwise shall be bound by all of the terms of this Stipulation and 
the Settlement, including the terms of the Judgment or Alternate Judgment, if applicable, to be 
entered in this Action and the Releases provided for herein and therein, and will be permanently 
barred and enjoined from bringing any action against any and all Defendants’ Releasees with 
respect to any and all of the Released Plaintiffs’ Claims. 
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32. 
Upon request by Defendants’ Counsel or Defendants, the Claims Administrator 
and/or Lead Counsel shall provide Defendants with records relating to the notices that were 
distributed, the Proofs of Claim received by the Claims Administrator, the Proofs of Claims 
allowed by the Claims Administrator, and the payments made by the Claims Administrator. 
33. 
No person or entity shall have any claim against Lead Plaintiff, Lead Counsel, the 
Claims Administrator, Defendants, Defendants’ Counsel, or Defendants’ Releasees, or any other 
agent designated by Lead Counsel, Defendants, or Defendants’ Releasees and/or their respective 
counsel, arising from distributions made substantially in accordance with the Stipulation, the 
plan of allocation approved by the Court, or any order of the Court. Lead Plaintiff and 
Defendants, and their respective counsel, and Lead Plaintiff’s expert and all other Releasees shall 
have no liability whatsoever for the investment or distribution of the Settlement Fund or the Net 
Settlement Fund, the Plan of Allocation, or the determination, administration, calculation, or 
payment of any claim or nonperformance of the Claims Administrator, the payment or 
withholding of Taxes (including interest and penalties) owed by the Settlement Fund, or any 
losses incurred in connection therewith. 
34. 
All proceedings with respect to the administration, processing and determination 
of Claims and the determination of all controversies relating thereto, including disputed 
questions of law and fact with respect to the validity of Claims, shall be subject to the 
jurisdiction of the Court. All Settlement Class Members, other Claimants, and Parties to this 
Stipulation expressly waive trial by jury (to the extent any such right may exist) and any right of 
appeal or review with respect to such determinations.  
 
 
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TERMS OF THE JUDGMENT 
35. 
If the Settlement contemplated by this Stipulation is approved by the Court, Lead 
Counsel and Defendants’ Counsel shall request that the Court enter a Judgment, substantially in 
the form attached hereto as Exhibit B. 
CONDITIONS OF SETTLEMENT AND EFFECT OF  
DISAPPROVAL, CANCELLATION, OR TERMINATION 
 
36. 
The Effective Date of the Settlement shall be deemed to occur on the occurrence 
or waiver of all of the following events: 
a. 
the Court has entered the Preliminary Approval Order, substantially in the 
form set forth in Exhibit A attached hereto, as required by ¶ 3 above; 
b. 
Defendants have not exercised their option to terminate the Settlement 
pursuant to the provisions of this Stipulation; 
c. 
Lead Plaintiff has not exercised his option to terminate the Settlement 
pursuant to the provisions of this Stipulation;  
d. 
the Court has approved the Settlement as described herein, following notice 
to the Settlement Class and a hearing, as prescribed by Rule 23 of the Federal Rules of Civil 
Procedure, and entered the Judgment;  
e. 
the Settlement Amount has been deposited into the Escrow Account in 
accordance with the provisions of ¶ 9 above; and  
f. 
the Judgment has become Final, or the Court has entered an Alternate 
Judgment and none of the Parties seek to terminate the Settlement and the Alternate Judgment 
has become Final. 
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37. 
Upon the occurrence of all of the events referenced in ¶ 36 above, any and all 
remaining interest or right of Defendants in or to the Settlement Fund, if any, shall be absolutely 
and forever extinguished and the Releases herein shall be effective. 
38. 
If (i) Defendants exercise their right to terminate the Settlement as provided in 
this Stipulation and the Settlement is thereafter terminated on that basis; (ii) Lead Plaintiff 
exercises his right to terminate the Settlement as provided in this Stipulation and the Settlement 
is thereafter terminated on that basis; (iii) the Court disapproves the Settlement; or (iv) the 
Effective Date as to the Settlement otherwise does not occur, then: 
a. 
The Settlement and the relevant portions of this Stipulation shall be 
canceled and terminated; 
b. 
Lead Plaintiff and Defendants shall revert to their respective litigation 
positions in the Action on December 14, 2022, and the Parties shall jointly apply to the Court to 
reinstate Defendants’ motion to dismiss and the Parties’ motion-to-dismiss briefing, which the 
Court had dismissed as moot on February 23, 2023 in light of the Parties’ agreement-in-principle 
to enter into this Settlement, which the Court would then decide on the merits.  If not reinstated 
by the Court, then Defendants shall be entitled to refile a motion to dismiss; 
c. 
Neither Lead Plaintiff nor Defendants will use or rely on any statement, 
document, admission, or agreement concerning the Settlement and/or settlement discussions in 
the Action, and Lead Plaintiff and Lead Counsel shall not use or rely on any statement, 
document, or information provided to Lead Plaintiff or Lead Counsel in connection with 
Confirmatory Discovery; and 
d. 
The terms and provisions of this Stipulation, with the exception of ¶ 39 and 
¶¶ 17, 19, 41, 42, and 63, shall have no further force and effect with respect to the Parties and 
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34 
shall not be used in the Action or in any other proceeding for any purpose, and any Judgment (or 
Alternate Judgment, if applicable), or order entered by the Court in accordance with the terms of 
this Stipulation shall be treated as vacated, nunc pro tunc; and  
e. 
Within ten (10) business days of the Settlement Effective Date failing to 
occur, Lead Plaintiff shall direct that the Settlement Fund (including accrued interest thereon, 
and any change in value as a result of the investment of the Settlement Fund, Taxes paid or due, 
Notice and Administration Costs actually incurred and paid or payable, and any funds received 
by Lead Counsel consistent with ¶ 19 above) be refunded by the Escrow Agent to Defendants (or 
such other persons or entities as Defendants may direct). In the event that the funds received by 
Lead Counsel consistent with ¶ 19 above have not been refunded to the Settlement Fund within 
the ten (10) business days specified in this paragraph, those funds shall be refunded by the 
Escrow Agent to Defendants (or such other persons or entities as Defendants may direct) 
immediately upon their deposit into the Escrow Account consistent with ¶ 19 above. 
39. 
If one of the following subparts in this ¶ 39 occurs, then it is further stipulated and 
agreed that Defendants, provided they unanimously agree, and Lead Plaintiff, provided he 
agrees, shall each have the right to terminate the Settlement and this Stipulation, by providing 
written notice of their election to do so (“Termination Notice”) to the other Parties to this 
Stipulation within thirty (30) calendar days of such event, in which case the provisions of ¶ 38 
above shall apply:  (a) the Court’s final refusal to enter the Preliminary Approval Order in any 
material respect; (b) the Court’s final refusal to approve the Settlement or any material part 
thereof; (c) the Court’s final refusal to enter the Judgment (or Alternate Judgment) in any 
material respect as to the Settlement; (d) the Judgment is modified or reversed in any material 
respect by an order from the United States Court of Appeals for the Second Circuit or the United 
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35 
States Supreme Court; or (e) the Alternate Judgment is modified or reversed in any material 
respect by an order from the United States Court of Appeals for the Second Circuit or the United 
States Supreme Court. For the avoidance of doubt, however, any decision or proceeding, whether 
in this Court or any appellate court, with respect to an application for attorneys’ fees or 
Litigation Expenses or with respect to any plan of allocation shall not be considered material to 
the Settlement, shall not affect the finality of any Judgment or Alternate Judgment, if applicable, 
and shall not be grounds for termination of the Settlement. 
40. 
In addition to the grounds set forth in ¶ 39 above, Peloton shall also have the 
unilateral right to terminate the Settlement in the event that the Termination Threshold (defined 
below) has been reached.   
a. 
Simultaneously herewith, Defendants’ Counsel and Lead Counsel are 
executing a confidential supplemental agreement (“Supplemental Agreement”). The 
Supplemental Agreement sets forth certain conditions under which Peloton shall have the option 
to terminate the Settlement and render the Stipulation null and void in the event that requests for 
exclusion from the Settlement Class exceed certain agreed-upon criteria (the “Termination 
Threshold”). The Parties agree to maintain the confidentiality of the Supplemental Agreement, 
which shall not be filed with the Court, and its terms shall not be disclosed in any other manner 
(other than the statements herein and in the Notice, to the extent necessary, or as otherwise 
provided in the Supplemental Agreement) unless the Court otherwise directs or a dispute arises 
between Lead Plaintiff and Defendants concerning its interpretation or application. If submission 
of the Supplemental Agreement is required for resolution of a dispute or is otherwise ordered by 
the Court, the Parties will use their best reasonable efforts to have the Supplemental Agreement 
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36 
submitted to the Court in camera or under seal, and will request that the Court afford it 
confidential treatment.  
b. 
The Preliminary Approval Order, attached hereto as Exhibit A, shall 
provide that requests for exclusion shall be received no later than twenty-one (21) calendar days 
prior to the Final Settlement Hearing.   
c. 
In the event of a termination of the Settlement pursuant to the 
Supplemental Agreement, the Stipulation shall become null and void and of no further force and 
effect, with the exception of provisions ¶¶ 17, 19, 39, 41, 42, and 63, which shall continue to 
apply.   
NO ADMISSION OF WRONGDOING 
41. 
The MOU, this Stipulation (whether or not consummated and whether or not 
approved by the Court), including the exhibits hereto, and the Plan of Allocation contained 
therein (or any other plan of allocation that may be approved by the Court), and any discussion, 
communication, negotiation, proceeding, or agreement relating to the Stipulation, the Settlement, 
or any matter arising in connection with settlement discussions, negotiations, proceedings, or 
agreements, shall not be offered or received against or to the prejudice of the Parties or their 
respective counsel, for any purpose other than to enforce the terms of the Stipulation or the 
Settlement, and in particular: 
a. 
do not constitute, and shall not be offered or received against or to the 
prejudice of any of the Defendants or Defendants’ Releasees as evidence of, or construed as, or 
deemed to be evidence of any presumption, concession, or admission by Defendants or 
Defendants’ Releasees with respect to the truth of any fact alleged by Lead Plaintiff, or the 
validity or infirmity of any claim that was or could have been asserted in this Action or in any 
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37 
other litigation, including but not limited to Released Plaintiffs’ Claims, or of any liability, 
negligence, fault, or other wrongdoing of any kind of any of the Defendants or Defendants’ 
Releasees or any other person or entity whatsoever; do not constitute, and shall not be offered or 
received against or to the prejudice of Defendants as evidence of a presumption, concession, or 
admission of any fault, misrepresentation, or omission with respect to any statement or written 
document approved or made by Defendants, or against or to the prejudice of Lead Plaintiff, or 
any other member of the Settlement Class as evidence of any infirmity in the Lead Plaintiff’s 
claims, or the other members of the Settlement Class;  
b. 
do not constitute, and shall not be offered or received against or to the 
prejudice of Defendants, Lead Plaintiff, any other member of the Settlement Class, or their 
respective counsel, as evidence of a presumption, concession, or admission with respect to any 
liability, damages, negligence, fault, infirmity, or wrongdoing, or in any way referred to for any 
other reason against or to the prejudice of any of the Defendants, Lead Plaintiff, other members 
of the Settlement Class, or their respective counsel, in any other civil, criminal, or administrative 
action or proceeding, other than such proceedings as may be necessary to effectuate the 
provisions of this Stipulation; 
c. 
do not constitute, and shall not be offered or received against or to the 
prejudice of any of the Lead Plaintiff or Plaintiffs’ Releasees, as evidence of, or construed as, or 
deemed to be evidence of any presumption, concession, or admission by any of the Plaintiffs’ 
Releasees that any of their claims are without merit, that any of the Defendants’ Releasees had 
meritorious defenses, or that damages recoverable under the Complaint would not have exceeded 
the Settlement Amount or with respect to any liability, negligence, fault, or wrongdoing of any 
kind, or in any way referred to for any other reason as against any of the Plaintiffs’ Releasees, in 
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38 
any arbitration proceeding or other civil, criminal, or administrative action or proceeding, other 
than such proceedings as may be necessary to effectuate the provisions of this Stipulation; and  
d. 
do not constitute, and shall not be construed against any of the Releasees as 
an admission, concession, or presumption that the consideration to be given hereunder represents 
the amount which could be or would have been recovered after trial; provided, however, that if 
this Stipulation is approved by the Court, the Parties and the Releasees and their respective 
counsel may refer to it to effectuate the protections from liability granted hereunder or otherwise 
to enforce the terms of the Settlement. 
MISCELLANEOUS PROVISIONS 
42. 
All of the exhibits attached hereto are hereby incorporated by reference as though 
fully set forth herein. Notwithstanding the foregoing, in the event that there exists a conflict or 
inconsistency between the terms of this Stipulation and the terms of any exhibit attached hereto, 
the terms of the Stipulation shall prevail. 
43. 
Peloton warrants, as to the payments made or to be made on behalf itself, that at 
the time of entering into this Stipulation and at the time of such payment it, or to the best of their 
knowledge any persons or entities contributing to the payment of the Settlement Amount, was 
not insolvent, nor will the payment required to be made by or on behalf of them render them 
insolvent, within the meaning of and/or for the purposes of the United States Bankruptcy Code, 
including §§ 101 and 547 thereof. This representation is made by Peloton and not by its counsel. 
44. 
In the event of the entry of a final order of a court of competent jurisdiction 
determining the transfer of money to the Settlement Fund or any portion thereof by or on behalf 
of Defendants to be a preference, voidable transfer, fraudulent transfer or similar transaction and 
any portion thereof is required to be returned, and such amount is not promptly deposited into the 
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39 
Settlement Fund by others, then, at the election of Lead Plaintiff, Lead Plaintiff and Defendants 
shall jointly move the Court to vacate and set aside the Releases given and the Judgment or 
Alternate Judgment, if applicable, entered in favor of Defendants and the other Releasees 
pursuant to this Stipulation, in which event the Releases and Judgment, or Alternate Judgment, if 
applicable, shall be null and void, and the Parties shall be restored to their respective positions in 
the litigation as provided in ¶ 38(b) above and any cash amounts in the Settlement Fund (less any 
Taxes paid, due or owing with respect to the Settlement Fund and less any Notice and 
Administration Costs actually incurred, paid or payable) shall be returned as provided in ¶ 38(e) 
above. 
45. 
The Parties intend this Stipulation and the Settlement to be a final and complete 
resolution of all disputes asserted or which could be asserted by Lead Plaintiff and any other 
Settlement Class Members against the Defendants or Defendants’ Releasees with respect to the 
Released Plaintiffs’ Claims. Lead Plaintiff and Defendants agree that each has complied fully 
with the strictures of Rule 11 of the Federal Rules of Civil Procedure, and the proposed 
Judgment will contain a statement to reflect this compliance. The Parties agree that the amounts 
paid and the other terms of the Settlement were negotiated at arm’s length and in good faith by 
the Parties, including through a mediation process supervised and conducted by David Murphy, 
and reflect the Settlement was reached voluntarily after extensive negotiations and consultation 
with experienced legal counsel, who were fully competent to assess the strengths and weaknesses 
of their respective clients’ claims or defenses. 
46. 
The Parties agree that except as expressly provided herein, or as may otherwise be 
required by law (including in the Company’s public disclosures and filings with the U.S. 
Securities and Exchange Commission), in response to any media inquiry regarding the fact of 
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40 
settlement or the terms of the Settlement, or regarding the amount of any payments made or 
claims released pursuant to the Settlement, the Parties shall state only that the matter was 
resolved through settlement and shall provide no further comment, explanation, or description of 
the Settlement, other than a statement that the Settlement is in the best interests of the Parties, the 
terms of which are publicly available. In addition, pending final settlement approval, each of the 
Parties shall not directly or indirectly, individually or in concert with others, engage in any 
conduct or make, or cause to be made, any statement, observation, or opinion, or communicate 
any information (whether oral or written) that is calculated to or is likely to have the effect of in 
any way as to the other Party: (i) undermining, defaming, or otherwise in any way reflecting 
adversely or detrimentally upon Lead Plaintiff, Defendants, Defendants’ Releasees, or any of 
Peloton’s current and former directors, officers, employees, representatives, or affiliates; or (ii) 
accusing or implying that Lead Plaintiff, Defendants, Defendants’ Releasees, or any of Peloton’s 
current and former directors, officers, employees, representatives, or affiliates engaged in any 
wrongful, unlawful, or improper conduct. 
47. 
The terms of the Settlement, as reflected in this Stipulation, may not be modified 
or amended, nor may any of its provisions be waived except by a writing signed on behalf of 
both Lead Plaintiff and Defendants (or their successors-in-interest). 
48. 
The headings herein are used for the purpose of convenience only and are not 
meant to have legal effect. 
49. 
The administration and consummation of the Settlement as embodied in this 
Stipulation shall be under the authority of the Court, and the Court shall retain jurisdiction for the 
purpose of entering orders providing for awards of attorneys’ fees and Litigation Expenses to 
Lead Counsel and enforcing the terms of this Stipulation, including the Plan of Allocation (or 
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41 
such other plan of allocation as may be approved by the Court) and the distribution of the Net 
Settlement Fund to Settlement Class Members. 
50. 
The waiver by one Party of any breach of this Stipulation by any other Party shall 
not be deemed a waiver of any other prior or subsequent breach of this Stipulation. 
51. 
This Stipulation and its exhibits and the Supplemental Agreement constitute the 
entire agreement among Lead Plaintiff and Defendants concerning the Settlement. All Parties 
acknowledge that no other agreements, representations, warranties, or inducements have been 
made by any Party hereto concerning this Stipulation, its exhibits, the Settlement, or the 
Supplemental Agreement other than those contained and memorialized in such documents. 
52. 
This Stipulation may be executed in one or more counterparts, including by 
signature transmitted electronically via a .pdf/.tif image of the signature transmitted via email. 
All executed counterparts and each of them shall be deemed to be one and the same instrument. 
53. 
Without further order of the Court, the Parties may agree to reasonable extensions 
of time to carry out any of the provisions of this Stipulation. 
54. 
This Stipulation shall be binding upon and inure to the benefit of the successors 
and assigns of the Parties, including any and all Releasees and any corporation, partnership, or 
other entity into or with which any Party hereto may merge, consolidate, or reorganize. 
55. 
The construction, interpretation, operation, effect, and validity of this Stipulation, 
the Supplemental Agreement, and all documents necessary to effectuate the Settlement shall be 
governed by the internal laws of New York without regard to conflicts of laws, except to the 
extent that federal law requires that federal law govern. 
56. 
Any action arising under or to enforce this Stipulation or any portion thereof, shall 
be commenced and maintained only in the Court. 
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42 
57. 
This Stipulation shall be interpreted in a neutral manner and shall not be 
construed more strictly against one Party than another merely by virtue of the fact that it, or any 
part of it, may have been prepared by counsel for one of the Parties, it being recognized that it is 
the result of arm’s-length negotiations between the Parties and all Parties have contributed 
substantially and materially to the preparation of this Stipulation. 
58. 
All counsel and any other person executing this Stipulation and any of the 
exhibits hereto, or any related Settlement documents, warrant and represent that they have the 
full authority to do so and that they have the authority to take appropriate action required or 
permitted to be taken pursuant to the Stipulation to effectuate its terms. 
59. 
Lead Counsel and Defendants’ Counsel agree to cooperate fully with one another 
in seeking Court approval of the Preliminary Approval Order and the Settlement, as embodied in 
this Stipulation, and to use best efforts to promptly agree upon and execute all such other 
documentation as may be reasonably required to obtain final approval by the Court of the 
Settlement. 
60. 
If any Party is required to give notice to another Party under this Stipulation, such 
notice shall be in writing and shall be deemed to have been duly given upon receipt of hand 
delivery, with a copy sent via email transmission, or alternatively, email transmission, with 
confirmation of receipt and such confirmation shall not be unreasonably withheld. Notice shall 
be provided as follows: 
If to Lead Plaintiff or Lead Counsel: 
Faruqi & Faruqi LLP 
Attn:  James M. Wilson, Jr. 
685 Third Avenue, 26th Floor 
New York, NY 10017 
Telephone: (212) 983-9330 
Fax: (212) 983-9331 
Email: jwilson@faruqilaw.com 
 
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43 
If to Defendants:  
Latham & Watkins LLP 
Attn: Michele D. Johnson 
650 Town Center Drive, 20th Floor 
Costa Mesa, CA 92926 
Telephone: (714) 755-8113 
Fax: (202) 637-2201 
Email: michele.johnson@lw.com 
and 
Latham & Watkins LLP 
Attn: Andrew B. Clubok 
555 Eleventh Street, NW, Suite 1000 
Washington, DC 20004 
Telephone: (202) 637-2200 
Fax: (202) 637-2201 
Email: andrew.clubok@lw.com 
 
61. 
Except as otherwise provided herein, each Party shall bear its own costs. 
62. 
Whether or not the Stipulation is approved by the Court and whether or not the 
Stipulation is consummated, or the Effective Date occurs, the Parties and their counsel shall use 
their best efforts to keep all private and confidential settlement discussions, negotiations, draft 
settlement agreements and any related documents, and mediation submissions and 
communications that occurred in connection with the Stipulation confidential. 
63. 
All agreements made and orders entered during the course of this Action relating 
to the confidentiality of information shall survive this Settlement. 
64. 
If any disputes arise out of the finalization of the Settlement documentation or the 
Settlement itself, those disputes will be resolved by David Murphy first by way of telephonic or 
video mediation and, if unsuccessful, then by way of final, binding, non-appealable resolution. 
65. 
No opinion or advice concerning the tax consequences of the proposed Settlement 
to individual Settlement Class Members is being given or will be given by the Parties or their 
counsel; nor is any representation or warranty in this regard made by virtue of this Stipulation. 
Each Settlement Class Member’s tax obligations, and the determination thereof, are the sole 
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44 
responsibility of the Settlement Class Member, and it is understood that the tax consequences 
may vary depending on the particular circumstances of each individual Settlement Class 
Member. 
IN WITNESS WHEREOF, the Parties hereto have caused this Stipulation to be 
executed, by their duly authorized attorneys, as of April 17, 2023. 
LATHAM & WATKINS LLP 
 
By: Whitney B. Weber 
Whitney B. Weber  
505 Montgomery Street, Suite 2000 
San Francisco, CA  94111 
Telephone: (415) 391-0600 
Fax: (415) 395-8095 
Email: whitney.weber@lw.com 
 
Attorneys for Defendants Peloton Interactive, 
Inc., John Foley, Jill Woodworth, Hisao Kushi, 
and Brad Olson 
 
FARUQI & FARUQI, LLP 
 
By: James M. Wilson, Jr. 
James M. Wilson, Jr. 
685 Third Avenue, 26th Floor 
New York, NY 10017 
Telephone: (212) 983-9330 
Facsimile: (212) 983-9331 
jwilson@faruqilaw.com 
 
Counsel for Lead Plaintiff and Lead Counsel for 
the Settlement Class 
 
 
 
 
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