Caribou Coffee Company, Inc.
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Caribou Coffee Company, Inc. Securities Settlement
The lawsuit was settled for additional disclosures in the proxy statement. The following is a summary of the proceedings in the lawsuit: ‘The Action arises out of a merger agreement between and among Caribou and JAB pursuant to which JAB agreed to acquire all of the outstanding shares of Caribou. On December 17, 2012, Caribou announced that, pursuant to a definitive merger agreement (Merger Agreement), Caribou agreed to be acquired by JAB for $16.00 per share in cash for each share of Caribou common stock through a cash tender offer to purchase all outstanding shares of Caribou followed by a merger in which the remaining shares were to be canceled and converted into a right to receive cash (the Transaction). The Form 8-K that publicly discloses this event was filed on December 17, 2012, with the United States Securities and Exchange Commission (SEC) and is hereby incorporated herein by this reference together with all other publicly filed documents that relate to the Transaction. Documents and papers filed with the SEC may be viewed at www.sec.gov and by then following prompts. On December 21, 2012, JAB made an offer to purchase all shares of Caribou at a price of $16.00 per share on terms and conditions set forth in an Offer to Purchase that was publicly filed with the SEC as part of JAB Schedule TO filed publicly with the SEC (the Tender Offer). On December 21, 2012, Caribou filed a Solicitation and Recommendation Statement on Schedule 14D-9 (14D-9) with the SEC. Between December 18, 2012 and January 2, 2013, Plaintiffs Greentech Research LLC, James Randolph Richeson, Suketu Shah, Jay Schufman, Mary Arciero, Thomas McCormack, Delmar Bishop, and Ryan David Harrigill (together Plaintiffs), as shareholders of Caribou, filed or served various lawsuits in the Fourth Judicial District Court of Hennepin County, Minnesota alleging, among other things, that Caribou and its Board of Directors breached their fiduciary duties in connection with the consideration and approval of the Transaction, and that JAB aided and abetted those alleged breaches of fiduciary duty. These actions were consolidated into the Action by Order of the Court dated December 31, 2012. On December 21, 2012, Chief Judge Abrams entered an Order companioning the actions that had been filed and would be filed that related to the Transaction. The State Court Order is incorporated herein by this reference. Between December 21, 2012 and December 27, 2012, Plaintiffs filed Motions to, inter alia, consolidate the cases, appoint a leadership structure and expedite proceedings in connection with Plaintiffs efforts to preliminarily enjoin the Tender Offer. Between December 27, 2012 and December 31, 2012, the parties in the Litigation conferred regarding consolidation, a leadership structure, expedited proceedings, and a confidentiality agreement, and then jointly presented Judge Meyer with agreed proposed Orders on these issues. On December 31, 2012, Judge Meyer entered Orders, inter alia, consolidating Plaintiffs actions, appointing Plaintiff James Randolph Richeson as the Lead Plaintiff and Robbins Geller Rudman & Dowd LLP (Robbins Geller) as Lead Counsel and Reinhardt, Wendorf & Blanchfield as Liaison Counsel, setting forth a schedule regarding expedited proceedings, including a January 18, 2013 preliminary injunction hearing date, a list of documents to be produced by Defendants to Plaintiffs by January 4, 2013, and allowing plaintiffs to take the depositions of Defendants Gary A. Graves (Caribou Chairman) and Kip R. Caffey (Caribou Director) and a representative of Caribou financial advisor, Moelis & Company LLC (Moelis) prior to the hearing date. Judge Meyer Orders are incorporated herein by this reference. On or about January 4, 2013, Defendants produced documents to Plaintiffs pursuant to Judge Meyer Orders and a Confidentiality Agreement negotiated by the parties. On January 7, 2013, the parties began discussions regarding Plaintiffs demands for changes to the 14D-9 and to the Transaction, including shareholder dissenter rights in an effort to resolve the Action. 3 On January 10, 2013, Plaintiffs filed their motion for preliminary injunction and supporting papers. On January 11, 2013, Plaintiffs took the deposition of John Collins of Moelis, financial advisor to Caribou for the Transaction. On or around January 14, 2013, after difficult, extensive, detailed and very lengthy negotiations between the parties, the parties reached an agreement in principle for the settlement of the Action on certain terms and conditions, and entered into a memorandum of understanding (MOU) setting forth the material terms of the settlement. Pursuant to the MOU, on January 14, 2013, Caribou filed an Amended Schedule 14D-9 with the SEC containing, among other things, the additional disclosures agreed to in connection with the MOU and as reflected in Exhibit A thereto and providing modifications to the dissenters’ rights provision. On January 22, 2013, the Tender Offer closed in accordance with its terms. On January 24, 2013, JAB acquired the remaining shares of Caribou via a short-form merger that closed on January 24, 2013. The parties thereafter engaged in confirmatory discovery consisting of an additional production of documents and the depositions of three directors and/or officers of Caribou. Plaintiffs took the deposition of Gary Graves (former Chairman of the Caribou Board) on March 19, 2013, the deposition of Kip Caffey (former Caribou Director) on March 20, 2013 and the deposition of Michael Tattersfield (former President, Chief Executive Officer and Director of former Caribou) on March 21, 2013. On April 26, 2013, Plaintiffs counsel advised defendants counsel that Plaintiffs did not require any further confirmatory discovery. On or about June 24, 2013, while the Parties were negotiating the Stipulation, Defendants informed Plaintiffs that a potential conflict had been brought to their attention regarding their internal auditor, Ernst & Young. Plaintiffs sought additional confirmatory discovery from Defendants and issued a subpoena to Ernst & Young based on this new information. On October 7, 2013 and October 25, 2013, Ernst & Young produced documents in response to Plaintiffs subpoena. Plaintiffs continued to seek additional documents regarding the potential conflict after review of the Ernst & Young documents. On January 2, 2014 Defendants filed a motion for protective order. The motion for protective order was fully briefed and argued on January 16, 2014. On April 10, 2014, the Court issued an Order granting Defendants motion for protective order. After the Court issued the Order granting Defendants motion for protective order, the parties engaged in further negotiations and reached a full settlement of the Action on the terms and conditions set forth in the Stipulation (the Settlement), which Settlement the parties hereto believe is in the best interests of the parties, and each of them.’