<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-12
Petco Animal Supplies, Inc.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
PETCO ANIMAL SUPPLIES, INC.
9125 REHCO ROAD
SAN DIEGO, CALIFORNIA 92121
(858) 453-7845
PROXY SUPPLEMENT
September 15, 2000
To our Stockholders:
We are sending this letter to supplement certain information in our
Proxy Statement, dated August 23, 2000, relating to the special meeting of
the stockholders of PETCO Animal Supplies, Inc. to be held on September 27,
2000, that we previously mailed to you. At the special meeting, you will be
asked to consider and vote upon the approval and adoption of an Agreement and
Plan of Merger, dated May 17, 2000, as amended, providing for the merger of
BD Recapitalization Corp. into PETCO. In the merger, each issued and
outstanding share of PETCO common stock will be canceled and converted
automatically into the right to receive $22.00 in cash, without interest or
any other payment thereon, with the following exceptions: 86,105 shares of
PETCO common stock will be retained by four members of PETCO's management and
additional shares will be retained by these members of PETCO's management and
other PETCO employees; treasury shares and shares of PETCO common stock owned
by BD Recapitalization Corp. or by any of PETCO's subsidiaries will be
canceled; and shares held by dissenting stockholders will be subject to
appraisal in accordance with Delaware law.
STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT AND THIS SUPPLEMENT
CAREFULLY IN DECIDING WHETHER TO VOTE FOR THE APPROVAL AND ADOPTION OF THE
MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT.
<PAGE>
PETCO believes that the following information would be beneficial to
PETCO stockholders in determining whether to vote for the approval and
adoption of the merger agreement and the transactions contemplated by the
merger agreement.
TERMINATION FEE
- PETCO and BD Recapitalization Corp. have agreed to amend the
merger agreement to reduce the amount of the termination fee
from $11 million to $5 million. A copy of this amendment to
the merger agreement is attached to this letter as Exhibit A.
- The disclosure captioned "Termination Fee" on page 54 of the
Proxy Statement and references to the termination fee on pages
8, 20, and 50 of the Proxy Statement are revised to indicate
that the termination fee has been reduced to $5 million.
OPINION OF FINANCIAL ADVISOR
TO THE SPECIAL COMMITTEE
- The disclosure captioned "Opinion Of Financial Advisor to the
Special Committee" on page 24 of the Proxy Statement is
supplemented to add the following disclosure:
In arriving at its opinion, DLJ also reviewed financial and other
information relating to PETCO's first quarter 2000 results that were in
PETCO's press release issued on May 17, 2000;
- The disclosure captioned "Comparable Publicly Traded Company
Analysis" on pages 26-27 of the Proxy Statement is restated in
its entirety to read as follows:
COMPARABLE PUBLICLY TRADED COMPANY ANALYSIS. DLJ analyzed the market
values and trading multiples of selected publicly traded retail companies
that DLJ believed were reasonably comparable to PETCO. These comparable
companies consisted of:
2
<PAGE>
- Barnes & Noble, Inc. - OfficeMax, Inc.
- Borders Group, Inc. - Pep Boys-Manny, Moe & Jack
- CSK Auto Corp. - PETsMART, Inc.
- Discount Auto Parts, Inc. - Sunglass Hut International, Inc.
- Guitar Center, Inc. - The Bombay Company, Inc.
- Linens 'n Things, Inc. - Trans World Entertainment Corp.
- Michaels Stores, Inc. - United Stationers, Inc.
- Musicland Stores Corp. - West Marine, Inc.
In examining these comparable companies, DLJ calculated the
enterprise value of each company as a multiple of its respective: (1) LTM
EBITDA and projected fiscal year 2000 EBITDA and (2) LTM EBIT. The
enterprise value of a company is equal to the value of its fully-diluted
common equity plus debt and the liquidation value of outstanding preferred
stock, if any, minus cash and the value of certain other assets, including
minority interests in other entities. LTM means the last twelve-month
period for which financial data for the company at issue has been reported.
EBITDA means earnings before interest expense, taxes, depreciation and
amortization. EBIT means earnings before interest expense and taxes. DLJ
also calculated the trading price of each company's stock as a multiple of
its respective LTM EPS and projected EPS for fiscal years 2000 and 2001.
EPS means earnings per share, or net income per fully-diluted share. All
historical data was derived from publicly available sources and all
projected data was obtained from Wall Street research reports and First
Call earnings estimates where available.
These comparable companies were selected by DLJ because, in DLJ's
judgment, they are primarily in the retailing business and have comparable
operations to PETCO. In addition, DLJ attempted to limit the comparable
companies selected to companies with enterprise values within a reasonable
range comparable to PETCO. In evaluating the selected publicly traded
retail companies the following information, among other information, was
reviewed:
3
<PAGE>
<TABLE>
<CAPTION>
SHARE ENTERPRISE LTM FY 2000 LTM LTM FY 2000 FY 2001
PRICE VALUE EBITDA EBITDA EBIT EPS EPS EPS
5/12/00 (MILLIONS)
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Barnes & Noble, Inc. $17.50 $1,557.3 4.1x 3.9x 6.1x 12.7x 10.9x 8.9x
Borders Group, Inc. 16.31 1,386.2 5.5 4.7 8.3 13.9 11.9 10.1
CSK Auto Corp. 13.75 998.1 5.8 5.5 7.2 8.1 5.8 4.8
Discount Auto Parts, Inc. 11.00 466.0 5.9 5.1 8.2 6.8 6.8 5.8
Guitar Center, Inc. 14.13 419.0 10.4 7.1 13.6 18.8 14.3 11.0
Linens 'n Things, Inc. 32.00 1,270.3 11.1 9.1 14.6 24.4 20.0 16.2
Michaels Stores, Inc. 43.50 1,626.5 8.9 7.3 13.1 21.6 17.9 14.8
Musicland Stores Corp. 7.06 406.3 2.8 2.8 3.8 4.3 4.4 3.9
OfficeMax, Inc. 5.50 717.9 4.3 4.6 9.7 17.7 28.9 14.1
Pep Boys-Manny, Moe & Jack 6.56 1,114.8 5.8 5.4 11.8 11.9 9.9 9.0
PETsMART, Inc. 2.38 500.9 3.9 3.3 5.8 7.2 5.8 4.5
Sunglass Hut International, Inc 7.13 463.6 5.8 4.9 8.8 12.3 11.1 8.9
The Bombay Company, Inc. 3.63 86.2 3.6 2.9 7.8 18.1 12.1 10.4
Trans World Entertainment Corp. 10.06 397.7 2.4 2.1 3.1 6.8 5.7 5.0
United Stationers, Inc. 35.38 1,522.7 6.9 6.6 8.0 13.8 12.4 10.8
West Marine, Inc. 8.88 248.0 7.1 6.2 12.0 17.4 12.0 8.8
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
DLJ's analysis of the comparable companies yielded the following multiple
ranges:
<TABLE>
<CAPTION>
LTM FY 2000 LTM LTM FY 2000 FY 2001
EBITDA EBITDA EBIT EPS EPS EPS
---------- ---------- ------- --------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
Average (1).......................... 5.8x 5.0x 8.9x 13.4x 11.2x 9.0x
Median............................... 5.8 5.0 8.3 13.2 11.5 8.9
High................................. 11.1 9.1 14.6 24.4 28.9 16.2
Low.................................. 2.4 2.1 3.1 4.3 4.4 3.9
</TABLE>
------------------
(1) Average excludes high and low values.
Based on an analysis of this data and PETCO's historical and projected
results for comparable periods, DLJ estimated a value per share of PETCO common
stock ranging from $16.00 to $18.00.
DLJ also analyzed the trading multiples of PETCO's closest comparable,
PETsMART, Inc. Based on an analysis of this data and PETCO's historical and
projected results for comparable periods, DLJ estimated a value per share of
PETCO, based on the trading multiples of PETsMART, Inc.'s common stock, ranging
from $7.00 to $13.50.
- The disclosure captioned "Discounted Cash Flow Analysis" on
page 28 of the Proxy Statement is supplemented to add the
following at the end of the paragraph:
To determine the discount rates for PETCO, DLJ first estimated the
weighted average cost of capital of PETCO at approximately 15% based on the
relationship of PETCO's common stock relative to the S&P 500 index and an
estimated total debt to enterprise value ratio of 25%. In DLJ's judgment, the
discount rates for PETCO were increased to 16% to 18% given (1) the recent
developments which DLJ believed increased the future risks of the Company,
including the purchase of IAMS by Proctor & Gamble and the threat of
Internet-based competition; and (2) PETsMART, Inc.'s weighted average cost of
capital, which was estimated at approximately 16% (PETsMART, Inc. was
considered because in DLJ's judgment it was the closest comparable to PETCO).
5
<PAGE>
LITIGATION
- The disclosure captioned "Litigation" on pages 39 and 40 of
the Proxy Statement and the disclosure captioned "Litigation
Related to the Merger" on page 9 of the Proxy Statement is
supplemented to add the following:
The parties to the class action lawsuits, filed during May 2000 as a
result of the proposed merger, have entered into a Memorandum of
Understanding with respect to a proposed settlement of such lawsuits.
The memorandum of understanding provides for: the reduction of the
termination fee set forth in Section 10.2 of the merger agreement from $11.0
million to $5 million; the mailing of this letter to PETCO's stockholders
containing the additional disclosures included above; and the full release of
the defendants and certain related or affiliated persons and extinguishes all
claims that have been, could have been or could be asserted by or on behalf
of any member of the class against the defendants which in any manner related
to the allegations, facts or other matters raised in the lawsuits or which
otherwise relate to the transactions contemplated by the merger agreement,
including the merger. The memorandum of understanding provides for the
payment of $750,000 in attorney's fees and up to $35,000 in expenses upon
final approval of the settlement of the actions. The final settlement of the
lawsuits, including the amount of attorneys' fees to be paid, is subject to
court approval and there can be no assurance that such approval will be
obtained.
The defendants to the lawsuits have denied that they have engaged in any
wrongdoing whatsoever, and have agreed to the memorandum of understanding to
eliminate the burden and expense of further litigation and to permit the
merger to proceed as scheduled.
The foregoing summary of the memorandum of understanding is qualified in
its entirety by the memorandum of understanding, a copy of which is attached to
this letter as Exhibit B.
6
<PAGE>
THE COMPANIES
- The disclosure captioned "SUMMARY-The Companies" on page 1 of
the Proxy Statement is revised to restate the disclosure
with respect to BD Recapitalization Holdings LLC to read:
BD Recapitalization Holdings LLC
301 Main Street, Suite 3330
Fort Worth, Texas 76102
Telephone: (817) 871-4000
BD Recapitalization Holdings LLC, a newly formed Delaware limited
liability company, was formed solely to acquire majority ownership of PETCO.
BD Recapitalization Holdings LLC is managed by Green Equity Investors III,
L.P., an affiliate of Leonard Green & Partners, L.P. and TPG Partners III,
L.P., an affiliate of Texas Pacific Group. Leonard Green & Partners, L.P.,
which we sometimes refer to as "Green," is a private merchant banking firm
specializing in organizing, structuring and sponsoring going private
transactions and recapitalizations of established public and private
companies. Texas Pacific Group, which we sometimes refer to as "TPG," is a
private firm that pursues public and private investment opportunities through
a variety of methods, including leveraged buyouts, joint ventures,
restructurings, bankruptcies and strategic public securities investments. BD
Recapitalization Holdings LLC has not carried on any activities to date other
than those activities incident to its formation and as contemplated by the
merger agreement. We sometimes refer to BD Recapitalization Corp., BD
Recapitalization Holdings LLC, Green Equity Investors III, L.P., TPG Partners
III, L.P. and certain persons that may be considered to control these
entities identified in "INFORMATION ABOUT GREEN AND TPG" on page 60,
collectively, as the "Holdings Parties."
INFORMATION ABOUT GREEN AND TPG
- The disclosure captioned "INFORMATION ABOUT GREEN AND TPG" on
page 60 of the Proxy Statement is revised to restate the
disclosure with respect to BD Recapitalization Holdings LLC by
replacing the third paragraph with the following:
BD Recapitalization Holdings LLC is managed by Green Equity Investors
III, L.P. ("GEI III"), a Delaware limited
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<PAGE>
partnership that is an affiliate of Green, and TPG Partners III, L.P. ("TPG
III"), a Delaware limited partnership that is an affiliate of TPG. GEI III is
a private investment fund specializing in organizing, structuring and
sponsoring going private transactions and recapitalizations of established
public and private companies. TPG III is a private investment fund that
pursues public and private investment opportunities through a variety of
methods, including leveraged buyouts, joint ventures, restructurings,
bankruptcies and strategic public securities investments.
ACTING UPON THE UNANIMOUS RECOMMENDATION OF A SPECIAL COMMITTEE OF THE
BOARD OF DIRECTORS, CONSISTING SOLELY OF DIRECTORS WHO ARE NOT OFFICERS OR
EMPLOYEES OF PETCO, AND WHO HAVE NO FINANCIAL INTEREST IN THE PROPOSED MERGER
DIFFERENT FROM THE INTERESTS OF PETCO STOCKHOLDERS GENERALLY, THE BOARD OF
DIRECTORS OF PETCO HAS UNANIMOUSLY DETERMINED THAT THE TERMS OF THE MERGER
ARE ADVISABLE, AND ARE FAIR TO, AND IN THE BEST INTERESTS OF, PETCO
STOCKHOLDERS. THE BOARD OF DIRECTORS AND THE SPECIAL COMMITTEE UNANIMOUSLY
RECOMMEND THAT YOU VOTE FOR THE APPROVAL AND ADOPTION OF THE MERGER AGREEMENT
AND THE TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT.
Your vote is important. If you have not yet voted or if you wish to change
your vote, please complete, sign and return the accompanying proxy card in the
enclosed envelope as promptly as possible.
If you have any questions about the merger or the information contained in
this letter, you should contact our proxy solicitor:
D.F. King & Co., Inc.
77 Water Street, 20th Floor
New York, NY 10005
Banks and brokers call: (212) 269-5550
All other call toll-free: (800) 290-6429
Sincerely,
/s/ BRIAN K. DEVINE
--------------------------
Brian K. Devine
Chairman, President
and Chief Executive Officer
8
<PAGE>
EXHIBIT A
FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER
This FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER, dated as of
September 15, 2000 (this "First Amendment"), is entered into by and between
PETCO Animal Supplies, Inc., a Delaware corporation (the "Company"), and BD
Recapitalization Corp., a Delaware corporation ("MergerSub").
R E C I T A L S
WHEREAS, the Company and MergerSub entered into that certain Agreement
and Plan of Merger, dated as of May 17, 2000 (the "Merger Agreement");
WHEREAS, the Company and MergerSub wish to amend the Merger Agreement
to reduce the Termination Fee (as defined in Section 10.2 of the Merger
Agreement); and
WHEREAS, the Special Committee (as defined in the Merger Agreement),
the Board of Directors of the Company and the sole stockholder of MergerSub have
each approved and adopted this First Amend ment and have approved the
transactions contemplated hereby.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. SECTION 10.2(a). Section 10.2(a) of the Merger Agreement is
amended to reduce the Termination Fee (as defined in the Merger Agreement) from
$11 million to $5 million.
2. RELATIONSHIP TO MERGER AGREEMENT. Consistent and in
accordance with Section 11.3 of the Merger Agreement, the parties hereto
acknowledge that, other than as expressly provided in this First Amendment, this
First Amendment shall have no effect on the rights, obligations, duties
(fiduciary or otherwise) or remedies available or due under the Merger Agreement
or applicable law, whether legal, equitable or otherwise.
A-1
<PAGE>
3. GOVERNING LAW. This First Amendment shall
be governed by and construed in accordance with the laws of the State of
Delaware.
4. COUNTERPARTS. This First Amendment may be executed in one or
more counterparts which, when taken together, shall constitute one and the same
instrument.
A-2
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment
to be duly executed by their respective authorized officers as of the day and
year first above written.
PETCO ANIMAL SUPPLIES, INC.
By: /s/ James M. Myers
-------------------------------
Name: James M. Myers
Title: Senior Vice President
and Chief Financial
Officer
BD RECAPITALIZATION CORP.
By: /s/ John G. Danhakl
-------------------------------
Name: John G. Danhakl
Title: President
A-3
<PAGE>
EXHIBIT B
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
IN RE PETCO ANIMAL SUPPLIES, INC. :
SHAREHOLDERS LITIGATION : Civil Action No. 18056NC
MEMORANDUM OF UNDERSTANDING
WHEREAS, on May 17, 2000, PETCO Animal Supplies, Inc. ("PETCO" or the
"Company") announced the signing of a definitive merger agreement (the "Merger
Agreement") with a company organized by Leonard Green & Partners, L.P. and Texas
Pacific Group ("B.D. Recapitalization Corp."), whereby PETCO's stockholders will
receive $22.00 per share in cash in a transaction with a total value of
approximately $600 Million including assumed debt (the "Proposed Transaction");
WHEREAS, plaintiffs subsequently filed three lawsuits in Delaware,
which were consolidated under the above caption by order of the Court on June
14, 2000 (the "Consolidated Action"), alleging, among other things, that the
Proposed Transaction was unfair;
WHEREAS, a putative consolidated class action alleging substantial
similar claims relating to the Proposed Transaction is also pending in the
courts of the state of California relating to the Proposed Transaction (the
"California Action"), on
B-1
<PAGE>
behalf of the same class of persons already certified by this Court in the
Consolidated Action; and
WHEREAS, counsel for plaintiffs have negotiated with counsel for
defendants in an effort to reach a settlement of the Consolidated Action;
NOW THEREFORE, the parties to the Consolidated Action have reached an
agreement providing for the settlement of the Consolidated Action on the terms
and subject to the conditions set forth below (the "Settlement"):
1. PETCO and BD Recapitalization Corp. have
agreed to amend the Merger Agreement to
reduce the amount of the termination fee
from $11 million to $5 million.
2. The proxy materials dated August 23, 2000
shall be promptly supplemented to include
certain additional disclosure which has
been discussed with counsel for the
plaintiffs and which shall be agreed to by
counsel for all parties.
3. Plaintiffs may conduct such reasonable
additional discovery as the parties agree
is appropriate and necessary to confirm the
fairness and reasonableness of the terms of
this Settlement.
4. The parties to the Consolidated Action will
attempt in good faith to agree upon and
execute an appropriate Stipulation
B-2
<PAGE>
of Settlement of the Consolidated Action
(the "Stipulation") and such other
documentation as may be required in order to
obtain final Court approval of the
Settlement and the dismissal of the
Consolidated Action, and such Stipulation
shall be executed and submitted to the Court
of Chancery for approval at the earliest
practicable time. The Stipulation shall
expressly provide, among other things, that:
a. the defendants have denied, and continue to
deny, that they have committed or aided and
abetted in the commission of any violation
of law or engaged in any of the wrongful
acts alleged in the complaints;
b. the defendants are entering into the
Stipulation because the proposed Settlement
would eliminate the burden and expense of
further litigation;
c. Plaintiffs' actions have caused the
amendments to the Merger Agreement and the
supplemental disclosures described herein;
and
d. plaintiffs' counsel, having made a thorough
investigation of the facts, believe that the
proposed Settlement is fair, reasonable and
adequate and in the best interests of
plaintiffs
B-3
<PAGE>
and the proposed class.
5. The Stipulation will further provide for,
among other things,
a. the entry of a judgment in appropriate form,
dismissing the Consolidated Action with
prejudice and barring, among other things,
any claims known or unknown that have been,
could have been, or in the future can or
might be asserted in the complaint in the
Consolidated Action, or in any court,
tribunal or proceeding, (including but not
limited to any claims arising under federal,
state or common law, including the federal
securities laws and any state disclosure
law), by or on behalf of any member of the
class, whether individual, class,
derivative, representative, legal,
equitable, or any other type or in any other
capacity against defendants or any of their
families, parent entities, associates,
affiliates or subsidiaries and each and all
of their respective past and present
officers, directors, stockholders,
principals, representatives, employees,
attorneys, financial or investment advisors,
consultants, accountants, investment
bankers, commercial bankers, lenders,
advisors or agents, heirs,
B-4
<PAGE>
executors, trustees, beneficiaries, general
or limited partners or partnerships,
members, personal representatives, estates,
administrators, predecessors, successors and
assigns (collectively, the "Released
Persons") which have been or could have been
asserted arising out of or relating in any
manner to the allegations, facts or any
other matter whatsoever set forth in or
otherwise related, directly or indirectly
to the complaints, the Consolidated Action,
the proxy materials, any public filings or
statements by defendants relating to the
merger, the California Actions, or the
Proposed Transaction (the "Settled Claims");
and
b. the delivery of releases of the Settled
Claims in an appropriate form releasing any
claims for violation of federal, state or
common law.
6. It is the intention of the parties to
extinguish all such Settled Claims and
consistent with such intentions, the
releasing parties waive their rights to the
extent permitted by state law, federal law
or principle of common law, which may have
the effect of limiting the release set forth
above.
7. This Memorandum of Understanding and the
proposed
B-5
<PAGE>
Settlement described herein shall not be
legally binding upon any party unless and
until the Stipulation is executed. The
Settlement described herein shall be
subject to the approval of the Court of
Chancery. Should a Stipulation not be
executed or not be consummated in
accordance with the terms described herein,
the proposed Settlement shall be null and
void and of no force and effect, and shall
not be deemed to prejudice in any way the
position of any party with respect to this
litigation. In such event, neither the
existence of this Memorandum of
Understanding nor its contents shall be
admissible in evidence or shall be referred
to for any purpose in this litigation or in
any other litigation or proceeding.
8. Upon final approval of the settlement of the
Consolidated Action (including any appeals),
PETCO will not oppose plaintiffs' counsel
application for an allowance of $750,000 in
fees and up to $35,000 in documented
expenses. PETCO shall be responsible for the
costs of Notice with respect to the
settlement.
9. Counsel for the plaintiff class has
conferred with counsel
B-6
<PAGE>
for plaintiffs in the California Actions,
and, upon approval of the Stipulation of
Settlement by the Court of Chancery, the
California Actions will be dismissed with
prejudice.
10. This Memorandum of Understanding may be
signed in counterparts.
DATED: September 14, 2000
/s/ Norman M. Monhait
----------------------------------------
Norman M. Monhait, Esquire
Carmella P. Keener, Esquire
Rosenthal, Monhait, Gross & Goddess P.A.
Mellon Bank Center
Suite 1401
Post Office Box 1070
Wilmington, Delaware 19801
Attorneys for Plaintiffs
B-7
<PAGE>
/s/ David C. McBride
----------------------------------------
David C. McBride, Esquire
Young, Conaway, Stargatt & Taylor, LLP
Rodney Square North
Post Office Box 391
Wilmington, Delaware 19801
Attorneys for Defendants
Andrew G. Galef, James F. McCann and
Peter M. Starrett
/s/ Daniel A. Dreisbach
----------------------------------------
Daniel A. Dreisbach, Esquire
Richards, Layton & Finger
One Rodney Square
Post Office Box 551
Wilmington, Delaware 19801
Attorneys for Defendants
Petco Animal Supplies, Inc., Brian K.
Devine and Richard J. Lynch, Jr.
B-8
<PAGE>
/s/ Jon E. Abramczyk
----------------------------------------
Jon E. Abramczyk, Esquire
Morris, Nichols, Arsht & Tunnell
1201 North Market Street
Post Office Box 1347
Wilmington, Delaware 19801
Attorneys for Defendant
Texas Pacific Group
/s/ Edward P. Welch
----------------------------------------
Edward P. Welch, Esquire
Randolph Herndon, Esquire
Steven Dargitz, Esquire
Skadden, Arps, Slate, Meagher & Flom
LLP
One Rodney Square
Post Office Box 636
Wilmington, Delaware 19801
Attorneys for Defendant
Leonard Green Partners, L.P.
B-9
