MEMORANDUM OF UNDERSTANDING
EXHIBIT (e)(12)
MEMORANDUM OF UNDERSTANDING
The plaintiffs and defendants in the actions styled Del Vecchio v. Laserscope, et al.,
Case No. 1:06-CV-065047 and Xxxxxxxxx v. Laserscope, et al., Case No. 1:06-CV-065035, both pending
in the Santa Xxxxx County Superior Court (the “Court”), have reached an agreement in principle
providing for the settlement of the actions (collectively, the “Actions”) on the terms and subject
to the conditions set forth in this Memorandum of Understanding (the “MOU”), subject to Court
approval (the “Settlement”):
WHEREAS, on June 5, 2006, Laserscope (“Laserscope”) announced that its board of directors had
unanimously approved an agreement and plan of merger (the “Merger Agreement”), pursuant to which,
among other things, American Medical Systems Holdings, Inc. (“AMS”) would acquire the outstanding
shares of common stock of Laserscope via a tender offer and subsequent short-form merger for $31.00
per share (the “Acquisition”);
WHEREAS, on June 7, 2006, plaintiff Xxx Xxxxxxx commenced an action against Laserscope and its
directors (“Defendants”) in the Court, challenging the Merger Agreement on behalf of Laserscope’s
common stockholders;
WHEREAS, on June 7, 2006, plaintiff Xxxxxxxxx commenced an action against Laserscope and its
directors (“Defendants”) in the Court, challenging the Merger Agreement on behalf of Laserscope’s
common stockholders;
WHEREAS, the Actions allege, inter alia, that Defendants breached their fiduciary duties,
and/or aided and abetted other Defendants’ breaches of their fiduciary duties by, among other
things, failing to disclose all material information to Laserscope’s shareholders in connection
with the Acquisition;
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WHEREAS, on June 14, 2006, AMS filed with the Securities and Exchange Commission (the “SEC”) a
Schedule TO with respect to the Acquisition and subsequently mailed to Laserscope shareholders an
Offer to Purchase in connection with the Acquisition and on the same date Laserscope filed with the
SEC and mailed to shareholders a Schedule 14D-9 (the “14D-9”) with respect to the Acquisition
(collectively, the “Tender Offer Documents”);
WHEREAS, after reviewing the Tender Offer Documents, on June 27, 2006, Plaintiffs’ counsel
communicated with counsel for Defendants setting forth, inter alia, the terms upon which Plaintiffs
would consider a settlement of the Actions (the “Settlement Communication”);
WHEREAS, following the receipt of the Settlement Communication by counsel for Defendants, the
Plaintiffs and Defendants (collectively the “Parties”) engaged in negotiations pursuant to which
Defendants agreed to file with the SEC an amended 14D-9 to make supplemental disclosures to
Laserscope shareholders, as set forth in ¶1 below;
WHEREAS, the Parties recognize the substantial time and expense that would be incurred by
further litigation in this matter and the uncertainties inherent in any such litigation;
WHEREAS, the Parties have concluded that their interests would be best served by a settlement
of the Actions herein; and
WHEREAS, Defendants deny all allegations of wrongdoing, fault, liability or damage to
Plaintiffs and the putative class, deny that they engaged in any wrongdoing, deny that they
committed any violation of law, deny that they acted improperly in any way, believe that they acted
properly at all times, and believe the Actions have no merit, but wish to settle the Actions on the
terms and conditions stated in this MOU in order to eliminate the burden and expense of further
litigation, and to put the Released Claims (defined below) to rest, without in any way
acknowledging any wrongdoing, fault, liability or damage to Plaintiffs and the putative class.
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NOW THEREFORE THE PARTIES AGREE TO SETTLE THESE ACTIONS (SUBJECT TO APPROVAL OF THE COURT) ON
THE FOLLOWING TERMS:
1. The Parties agree that as a result of the Actions and negotiations Defendants made
supplemental disclosures contained in an Amendment No. 1 to the 14D-9, attached hereto as Exhibit
A, which was filed with the SEC on or about July 5, 2006 (the “Amended 14D-9”);
2. Without admitting any wrongdoing, Defendants acknowledge that the pendency and prosecution
of the Actions, and the efforts of the Plaintiffs and Plaintiffs’ counsel, were factors underlying
their decision to make the additional disclosures;
3. Defendants will provide Plaintiffs’ counsel in the Actions with limited confirmatory
discovery, including such documents and interviews as may be reasonably requested by Plaintiffs’
counsel at times mutually agreed upon by the Parties to confirm the fairness and adequacy of the
Settlement and the disclosures relating to the Acquisition (the “Settlement-Related Proceedings”).
4. The parties to the Actions will use their best efforts to agree upon, execute and present
to the Court within thirty (30) days of the date hereof a formal stipulation of settlement
(“Stipulation”) and such other documents as may be necessary and appropriate to obtain the prompt
approval by the Court of the Settlement and the dismissal with prejudice of the Actions in the
manner contemplated herein and by the Stipulation.
5. Pending the negotiation and execution of the Stipulation, all proceedings in the Actions,
except for Settlement-Related Proceedings, shall be stayed, and the Parties shall take such actions
as are necessary to accomplish the same. The Stipulation shall provide that all proceedings in the
Actions, except for Settlement-Related Proceedings, shall be stayed until the Settlement-Related
Proceedings are concluded.
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6. The Stipulation shall include, among other things, the following provisions:
(a) for the certification as a non-opt out class for settlement purposes of
all holders of Laserscope common stock as of June 5, 2006 through and including the
date of the closing of the Acquisition, including any and all of their respective
successors in interest, predecessors, representatives, trustees, executors,
administrators, heirs, assigns or transferees, immediate and remote, and any person
or entity acting for or on behalf of, or claiming under, any of them, and each of
them (the “Class”). Excluded from the Class are Defendants, members of the
immediate family of any individual Defendant, any entity which a Defendant has or
had a controlling interest, officers of Laserscope and the legal representatives,
agents, executors, heirs, successors or assigns of any such excluded person;
(b) for the complete discharge, dismissal with prejudice, settlement and
release of all claims, demands, rights, actions or causes of action, liabilities,
damages, losses, obligations, judgments, suits, injunctions, fees, expenses, costs,
matters and issues of any kind or nature whatsoever, whether known or unknown,
contingent or absolute, suspected or unsuspected, disclosed or undisclosed, hidden
or concealed, matured or unmatured, that have been, could have been, or in the
future can or might be asserted in the Actions or in any court, tribunal or
proceeding (including, but not limited to, any claims arising under federal or
state statutory or common law relating to alleged fraud, breach of any duty,
negligence, violations of the federal securities laws or otherwise) 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,
AMS, and/or their respective families, parent entities, associates, affiliates or
subsidiaries, and each and all of their respective past, present or future officers,
directors, stockholders, agents, representatives, employees, attorneys, financial or
investment advisors, advisors, consultants, accountants, investment bankers,
commercial bankers, trustees, engineers, agents, insurers, co-insurers and
reinsurers, heirs, executors, trustees, general or limited partners or partnerships,
limited liability companies, members, investors, heirs, executors, personal or legal
representatives, estates, administrators, predecessors,
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successors and assigns(collectively, the “Released Persons”), whether or not any such Released Persons
were named, served with process or appeared in the Actions which have arisen, could
have arisen, arise now or hereafter arise out of, or relate in any manner to the
allegations, facts, events, Acquisition, matters, acts, occurrences, statements,
representations, misrepresentations, omissions, or any other matter, thing or cause
whatsoever, or any series thereof, embraced, involved or set forth in, or referred
to or otherwise related to: (i) the Acquisition, the Merger Agreement or any
amendment thereto; (ii) the fiduciary obligations of any of the Released Persons in
connection with the Acquisition, or any amendment thereto; (iii) the negotiations in
connection with the Acquisition, or any amendment or supplement thereto; and (iv)
the disclosure obligations of any of the Released Persons in connection with the
Acquisition, or any amendment thereto including any allegations of
misrepresentations and/or omissions in the Tender Offer Documents and exhibits
thereto or any amendment thereto, including the Amended 14D-9 (collectively, the
“Settled Claims”); provided however, that the
Settled Claims shall not include the right of the Plaintiffs or any members of the
Class to enforce in the Court the terms of the Stipulation;
(c) that the Released Persons release Plaintiffs, members of the Class and
their counsel, from all claims arising out of the instituting, prosecution,
settlement or resolution of the Actions, provided however, that the Released
Persons shall retain the right to enforce in the Court the terms of the Stipulation
or this MOU;
(d) that the Court’s order approving the Settlement and dismissing with
prejudice the Actions will permanently bar and enjoin the institution and
prosecution by Plaintiffs and any member of the Class of any other action against
any Released Party in any court asserting any Settled Claims;
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(e) that Defendants have denied, and continue to deny, that any of them
have committed or have threatened to commit any violations of law or breaches of
duty to the Plaintiffs, the Class or anyone else;
(f) that Defendants are entering into the Settlement solely because it will
eliminate the uncertainty, distraction, burden and expense of further litigation;
(g) that the Settlement is subject to the successful completion of the
Acquisition, including any amendment thereto;
(h) that in the event the Settlement does not become final for any reason,
Defendants reserve the right to oppose certification of any class in future
proceedings; and
(i) that subject to the order of the Court, pending final determination of
whether the Settlement should be approved, Plaintiffs and all members of the Class,
and any of them, are barred and enjoined from commencing, prosecuting, instigating
or in any way participating in the commencement or prosecution of any action
asserting any Settled Claims, either directly, representatively, derivatively or in
any other capacity, against any Released Person.
7. This MOU shall be null and void and of no force and effect, unless otherwise agreed to by
the Parties pursuant to the terms hereof, if: (a) the Settlement does not obtain final Court
approval for any reason, provided, however, that failure of the Court to approve the amount of
attorneys’ fees provided for in ¶14 shall not void this MOU or the Stipulation; (b) Plaintiffs in
the Actions conclude, after obtaining any confirmatory discovery requested and agreed upon, that
the Settlement memorialized herein is not fair, adequate, and in the best interests of the Class;
or (c) the Acquisition, including any amendment thereto, is not concluded for any other reason. In
the event any Party withdraws from the Settlement, this MOU shall not be deemed to prejudice in any
way the respective positions of the Parties with respect to the Actions, and neither the existence
of this MOU, nor its contents, nor the negotiations leading to it, shall be admissible in evidence
or shall be referred to for any purpose in the Actions or in any other litigation or proceeding.
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8. The Stipulation shall provide a statement that: (a) the release contemplated by the
Stipulation shall extend to claims that the parties granting the release (the “Releasing Parties”)
do not know or suspect to exist at the time of the release, which if known, might have affected the
Releasing Parties’ decision to enter into the release; (b) the Releasing Parties shall be deemed to
relinquish, to the extent applicable, and to the full extent permitted by law, the provisions,
rights and benefits of §1542 of the California Civil Code; and (c) the Releasing Parties shall be
deemed to waive 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, which is similar, comparable or
equivalent to California Civil Code §1542.
9. This MOU will be executed by counsel for the Parties to the Actions, each of whom
represents and warrants that they have the authority from their client(s) to enter into this MOU
and bind their clients thereto, that Plaintiffs are the only holders and owners of their claims and
causes of action asserted in the Actions, and that none of Plaintiffs’ claims or causes of action
referred to in any complaint in the Actions or this MOU has been assigned, encumbered or in any
manner transferred in whole or in part.
10. This MOU, the Stipulation and the Settlement shall be governed by and construed in
accordance with the laws of the State of California, without regard to California’s principles
governing choice of law. The Parties agree that any dispute arising out of or relating in any way
to this MOU, the Stipulation or the Settlement shall not be litigated or otherwise pursued in any
forum or venue other than the Court, and the Parties expressly waive any right to demand a jury
trial as to any such dispute.
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11. This MOU may be modified or amended only by a writing, signed by all of the Parties
hereto, that refers specifically to this MOU.
12. The provisions contained in this MOU shall not be deemed a presumption, concession or
admission by any Defendant of any fault, liability or wrongdoing as to any facts or claims that
have been or might be alleged or asserted in the Actions, or any other action or proceeding that
has been, will be, or could be brought, and shall not be interpreted, construed, deemed, invoked,
offered, or received in evidence or otherwise used by any person in the Actions, or in any other
action or proceeding, whether civil, criminal or administrative, for any purpose other than as
provided expressly herein.
13. Notwithstanding the intention of the Parties to enter into a Stipulation, this MOU shall
be binding upon and inure to the benefit of the Parties and their respective legal representatives,
agents, executors, heirs, successors and assigns.
14. Subject to the terms and conditions of this MOU, the terms and conditions of the
Stipulation contemplated hereby and subject to final approval of the Settlement and such fees by
the Court, Laserscope, on behalf of itself and for the benefit of the other defendants in the
Actions and Released Persons, shall pay $275,000 to Plaintiffs’ counsel for their fees and expenses
incurred in connection with the Actions. In the event that the Court shall award a lesser amount
of fees and expenses to Plaintiffs’ counsel, the remaining terms of the Stipulation shall remain in
full force and effect. Laserscope or its successor shall pay the fees and expenses award to
Plaintiffs’ counsel in the Actions within five (5) business days of the entry of the Court’s final
order approving the Settlement and dismissing the Actions with prejudice. In the event that such
order is reversed or modified on appeal, Plaintiffs’ counsel shall refund to Defendants the
advanced amount and all interest accrued or accumulated thereon. Except as provided herein, the
Released Persons shall bear no other expenses, costs, damages, or fees alleged or incurred by any
of the named Plaintiffs, by any member of the Class, or by any of their attorneys, experts,
advisors, agents or representatives.
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15. Defendants shall pay all reasonable costs and expenses incurred in providing notice of the
Settlement to the members of the Class, with the understanding that notice shall be effected by
mail.
16. This MOU may be executed in any number of actual or telecopied counterparts and by each of
the different Parties on several counterparts, each of which when so executed and
delivered will be an original. The executed signature page(s) from each actual or telecopied
counterpart may be joined together and attached and will constitute one and the same instrument.
17. IN WITNESS WHEREOF, the Parties have executed this MOU effective as of the date set forth
below.
DATED: July 10, 2006
|
LERACH XXXXXXXX XXXXX XXXXXX | |||
| XXXXXX & XXXXXXX LLP | ||||
| XXXXXX X. XXXXXXX | ||||
| XXXXXXX X. XXXXX | ||||
| XXXXXXX X. XXXX | ||||
| /s/ Xxxxxxx Xxxx | ||||
| XXXXXXX X. XXXX | ||||
| 000 Xxxx Xxxxxxxx, Xxxxx 0000 | ||||
| San Diego, CA 92101 | ||||
| Telephone: 619/000-0000 | ||||
| 619/000-0000 (fax) | ||||
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| ADEMI & X’XXXXXX, LLP | ||||
| XXXX XXXXX | ||||
| XXXXXXX XXXXX | ||||
| 0000 Xxxx Xxxxxx Xxxxxx | ||||
| Cudahy, WI 53110 | ||||
| Telephone: 414/000-0000 | ||||
| 414/000-0000 (fax) | ||||
| XXXXXXX LAW FIRM, A.P.C. | ||||
| XXXXX X. XXXXXXX | ||||
| XXXXX X. XXXXXX | ||||
| 000 Xxxx Xxxxxxxx, 00xx Xxxxx | ||||
| San Diego, CA 92101 | ||||
| Telephone: 619/000-0000 | ||||
| 619:000-0000 (fax) | ||||
| XXXXXXX XXXXXXX & XXXXXX, LLP | ||||
| XXXXXXX X. XXXXXX | ||||
| 0000 XxXxxxxx Xxxxxx, Xxxxx 0000 | ||||
| Houston, TX 00000-0000 | ||||
| Telephone: 713/000-0000 | ||||
| 713/000-0000 (fax) | ||||
| Attorneys for Plaintiff | ||||
DATED: July 10, 2006
|
XXXXXX XXXXXXXXXX & XXXXXXXXX LLP | |||
| XXXXX XXXXXX | ||||
| /s/ Xxxxx Xxxxxx | ||||
| XXXXX XXXXXX | ||||
| The Xxxxxx Building | ||||
| 000 Xxxxxx Xxxxxx | ||||
| San Francisco, CA 94105 | ||||
| Telephone: 415/000-0000 | ||||
| 415/000-0000 (fax) | ||||
| Attorneys for Defendants | ||||
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