Exhibit 99.(c)(2)
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
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ROBERT PLUMPE,
Plaintiff, Civil Action No. 16807-NC
-against-
PETER CASTELLANA, JR., JOSEPH CASTELLANA, STEPHEN R. BOKSER,
ARNOLD B. BECKER, and WESTERN BEEF, INC.,
Defendants.
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MEMORANDUM OF UNDERSTANDING
WHEREAS, on November 16, 1998, Western Beef, Inc. ("Western" or the
"Company") announced that Cactus Acquisition, Inc., ("Cactus"), an entity formed
by the Castellana family, proposed to acquire approximately 1,550,000 Western
shares, representing the 28% of the common stock of Western not owned by Cactus
or its affiliates for $7.50 per share;
WHEREAS, thereafter the above-captioned action (the "Action") was
commenced as a class action on behalf of plaintiff and all other public
stockholders of Western other than cactus or its affiliates challenging the
fairness of the proposed transaction and the independence of the two Western
directors, including Stephen R. Bokser, who were designated a Special Committee
of the Board to determine the fairness of the proposed transaction to the
stockholders of Western;
WHEREAS, subsequent to the commencement of the Action, the Company
announced that defendant Bokser would no longer serve as an evaluator of the
proposed transaction;
WHEREAS, plaintiff's counsel have retained financial experts,
obtained relevant documents from defendants and from public sources, and
engaged in discussions and negotiations with counsel for the Company and
counsel for the individual defendants with regard to the resolution of the
Action.
NOW THEREFORE, IT IS HEREBY AGREED among the parties hereto that the
following sets forth the terms of their agreement in principle to settle the
Action:
1. Cactus will pay $8.75 for each share of Western that the Castellana
family does not own;
2. The parties to the Action agree that the increased cash
consideration of $8.75 per share which Cactus has agreed to pay to acquire the
publicly owned shares of Western Beef constitutes fair, adequate and reasonable
consideration for the shares and the settlement of all claims which were raised
or could have been raised by plaintiff in the Action. Defendants further agree
that the pendency of the litigation was a significant factor in the decision to
increase the consideration from $7.50 per share to $8.75 per share, and that
Cactus and its affiliates took into account the desirability of satisfactorily
addressing the claims asserted in the Action in agreeing to the increased
consideration to be paid to Western Beef's stockholders.
3. This settlement shall not impair any Class member's statutory rights
to an appraisal under 8 Del. C. Section 262.
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4. The consummation of this settlement is subject to the completion by
plaintiff of additional discovery satisfactory to plaintiff, the drafting and
execution of a definitive Stipulation of Settlement and such other documentation
as may be required to obtain final Court approval of the settlement, and the
dismissal of the Action with prejudice and without costs to any party (except as
provided for in paragraph 8 below).
5. Plaintiff reserves the right to withdraw from the terms of this
Memorandum of Understanding and the proposed settlement in the event the
remaining discovery reveals facts that are inconsistent with the fairness of the
proposed settlement to the Class.
6. The parties to the Action will in good faith agree upon and execute
an appropriate Stipulation of Settlement (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 Action upon the terms set forth in this
Memorandum of Understanding (collectively, the "Settlement Documents"). The
Settlement Documents will be prepared, executed and submitted to the Court for
approval at the earliest practicable time after plaintiff completes discovery,
and will expressly provide, among other things, that: defendants have denied,
and continue to deny, that they have committed any violation of law or engaged
in any of the wrongful acts alleged in the Action; and plaintiff and his
counsel, having made an investigation of the facts, believe that the proposed
Settlement
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is fair, reasonable and adequate and in the best interests of the Class.
7. This settlement, and any award to the plaintiff's counsel of
attorneys' fees and expenses, shall be null and void and any evidence relating
to the settlement negotiations may not be introduced as evidence or referred to
in any proceedings in this Action or in any other action, and each party shall
be restored to his or its respective position as it existed before execution of
the Memorandum of Understanding, if:
(a) the Court declines, in any respect, to enter an Order of Final
Judgment approving the settlement and dismissing the Action with prejudice as to
all claims asserted in the Action; or
(b) The Court approves the settlement, including any amendment thereto
approved by the all the parties, but such approval is reversed or vacated on
appeal and such reversal or order vacating the settlement becomes final by a
lapse of time or otherwise; or
(c) counsel for the plaintiff should determine prior to the settlement
hearing that, based upon discovery or subsequent events, this settlement is not
fair, reasonable and adequate to the Class.
8. Plaintiff's counsel intend to apply to the Court for an award of
attorneys' fees in the amount of $150,000 and for reimbursement of expenses not
to exceed $10,000. Defendants will not oppose such application. Subject to
Paragraph 7 of this Memorandum of Understanding Western will pay or cause to be
paid
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the plaintiff's attorney's fees and expenses award of the Court. Said payment
will be in addition to and not diminish the amount paid to the Class members for
their Western stock. Defendants shall in addition be responsible for the costs
and expenses related to providing Notice of the proposed settlement to the Class
members, regardless of whether the proposed settlement is finally approved by
the Court.
9. This Memorandum of Understanding may be executed in counterparts by
any of the signatories hereto and the transmission of an original signature page
by telecopier shall constitute valid execution of the agreement. Copies of this
Memorandum of Understanding executed in counterpart shall constitute one
agreement.
10. This Memorandum of Understanding and the settlement contemplated by
it shall be governed by, and construed in accordance with, the laws of the State
of Delaware, without regard to Delaware's rules with respect to conflict of
laws.
11. This Memorandum of Understanding may be modified or amended only by
a writing signed by all parties hereto.
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12. Except as otherwise provided herein, this Memorandum of
Understanding shall be binding upon and shall inure to the benefit of the
parties and their respective agents, successors, executors, heirs and assigns.
Dated: July 28, 1999
WOLF POPPER LLP
by: /S/ Lester L. Levy
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Lester L. Levy
845 Third Avenue
New York, NY 10022
212-759-4600
ROSENTHAL, MONHAIT, GROSS & GODDESS, P.A.
Kevin Gross, Esq.
Suite 1401, Mellon Bank Center
Wilmington, DE 19801
302-656-4433
Attorneys for Plaintiff and the Class
WILLKIE FARR & GALLAGHER
by: /S/ Joseph T. Baio
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Joseph T. Baio, Esq.
The Equitable Center
787 Seventh Avenue
New York, New York 10019-6099
212-728-8000
Attorneys for Defendants Western Beef,
Inc. and Stephen R. Bokser
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CAMHY KARLINSKY & STEIN LLP
by: /S/ Kenneth A. Lapatine
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Kenneth A. Lapatine, Esq.
1740 Broadway, 16th Floor
New York, New York 10019-4315
Attorneys for Defendants J.
Castellana and P. Castellana.
ROBINSON SILVERMAN PEARCE ARONSOHN
& BERMAN LLP
by: /S/ Stuart A. Gordon
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1290 Avenue of the Americas
New York, NY 10104
Attorneys for Defendant Arnold Becker
RICHARDS LAYTON & FINGER
Anne C. Foster, Esq.
One Rodney Square
P.O. Box 551
Wilmington, DE 16899
Attorneys for Defendants
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