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EXHIBIT 2.3
MEMORANDUM OF UNDERSTANDING
The parties to the action entitled Xxxxxxxx x. Xxxxxxx et al., Case No.
BC191390, pending in the Superior Court of the State of California, County of
Los Angeles (the "Action") have reached an agreement in principle for the
settlement of the Action on the terms and subject to the conditions set forth
below:
1. As a result of the negotiations between the undersigned attorneys
for the parties, the following measures shall be taken in connection with the
proposed merger provided for in the Agreement and Plan of Merger, dated as of
May 18, 1998, among VK Acquisition Corp., a wholly owned subsidiary of Office
Depot, Inc. ("Office Depot"), and Viking Office Products, Inc. ("Viking"), (the
"Merger Agreement"):
a. Viking will cause its investment bankers, Xxxxxxx Xxxxx, Xxxxxx
Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx") and SBC Warburg Xxxxxx Xxxx Inc.
("Xxxxxxx Xxxxxx Xxxx") (collectively, the "financial advisors") to update
each's written opinion to the Viking board of directors, dated May 17, 1998
(collectively, the "fairness opinion"), in which Xxxxxxx Xxxxx and Xxxxxxx
Xxxxxx Xxxx each opined that as of that date the
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exchange ratio provided for in the Merger Agreement of one share of Office
Depot common stock for each share of Viking common stock was fair from a
financial point of view to the holders of shares of Viking common stock. The
updated fairness opinion will reflect the financial advisors' opinion of the
fairness of the exchange ratio from a financial point of view to the holders of
shares of Viking common stock as of the date the Joint Proxy
Statement/Prospectus on Form S-4 (the "Proxy Statement") was filed with the
United States Securities Exchange Commission in final form (July 22, 1998), or
such other date as the parties may agree. Xxxxxx will promptly publicly
disclose through a press release the conclusion reached by its financial
advisors in the updated fairness opinion;
b. The Merger Agreement will be modified to provide that the
termination fee ("Termination Fee") payable, under certain circumstances, by
Viking to Office Deport pursuant to Section 8.03 of the Merger Agreement shall
be reduced by five percent. Xxxxxx will promptly disclose through a press
release the reduction in the Termination Fee.
2. The parties to the Action will attempt in good faith to agree upon
and execute a Stipulation of Settlement and such other documentation as may be
required in order to obtain
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the approval of the California State Court of the settlement and the dismissal
of the Action upon the terms set forth in this Memorandum of Understanding. The
Stipulation of Settlement will expressly provide, inter alia, that Defendants
in the Action have denied, and continue to deny, that they have committed or
have threatened to commit any violations of law and that they are entering into
the Stipulation because the proposed settlement would eliminate the burden and
expense of further litigation.
3. The parties to the Action will present the settlement to the
California State Court for approval following appropriate notice to the class
members on whose behalf the Action was instituted, and will use their best
efforts to obtain final court approval of the settlement, and the dismissal with
prejudice of the Action, as against the named plaintiff and the class members on
whose behalf the Action was brought.
4. The consummation of the settlement is subject to the completion by
Plaintiff of such discovery as is deemed necessary by Plaintiff's Counsel
(subject to appropriate objections), the drafting and execution of an
appropriate 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 as to all claims asserted
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therein as against the named Plaintiff and the class of Viking shareholders on
whose behalf the Action was brought and without costs to any party (except as
provided for in paragraph 6 below).
5. The Settlement contemplated by this Memorandum of Understanding will
not be binding upon any party until the transaction referred to in paragraph 1
is consummated, discovery referred to in paragraph 4 is completed, an
appropriate Stipulation of Settlement has been signed, final court approval of
the settlement and the dismissal of the Action with prejudice and without costs
(except as provided in paragraph 6 below) has been obtained. This Memorandum of
Understanding shall be null and void and of no force and effect should any of
these conditions not be met or should Plaintiff's Counsel determine based upon
discovery or otherwise, that the settlement is not fair and reasonable and, in
that event, this Memorandum of Understanding shall not be admissible in any
proceeding or be deemed to prejudice in any way the positions of the parties
with respect to any action.
6. Plaintiff's Counsel in the Action intend to apply to the California
State Court for an award of attorneys fees and reasonable out-of-pocket
disbursements in an aggregate amount not to exceed $300,000 (together, the
"Fees"). Subject to the terms
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and conditions of this Memorandum of Understanding and the Stipulation of
Settlement contemplated hereby, Office Depot or Viking and/or their successors
in interest will pay Plaintiff's Counsel the Fees, up to such amount of $300,000
as may be awarded by the California State Court. Office Depot and Viking and/or
their successors in interest shall pay the costs and expenses related to
providing notice of the settlement to members of the plaintiff class in the
Action. Office Depot and Viking and/or their successors in interest agree not to
oppose Plaintiff's Counsel's application for fees.
7. The parties shall agree to extensions of time with respect to
pleadings and other court filings as are appropriate in the context of this
agreement in principle.
8. This Memorandum of Understanding may be executed in any number of
counterparts with the same effect as if all parties hereto had executed the same
document. All such counterparts shall be construed together and shall constitute
one instrument.
Dated: August __, 1998
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XXXXXXX XXXXX XXXXXXX XXXXX
& LERACH LLP
By: [SIG]
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Counsel for Plaintiff Xxxxxxxx
Xxxxxxxx and the Class
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Telephone: (000) 000-0000
and
One Pennsylvania Plaza
New York, NY 00000-0000
Telephone: (000) 000-0000
XXXXXXXXX XXXXXXXX & XXXXXXXX
By: [SIG]
----------------------------------
Counsel for Plaintiff Xxxxxxxx
Xxxxxxxx and the Class
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
XXXXXXX XXXXXXX & XXXXXXXX
By: [SIG]
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Counsel for Defendant,
Office Depot, Inc.
000 Xxxxxxxxx Xxxx Xxxxx
Xxxxx 000
Xxxxxxxxx Xxxx, XX 00000
Telephone: (000) 000-0000
and
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
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XXXXXX & XXXXXXX
By: /s/ XXXXXX XXXXXX
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Counsel for Defendants
Viking Office Products, Inc.,
Xxxxx Xxxxxxx, X. Xxxxx Xxxxxx,
Xxx X. Xxxx, III, Xxxx X. Xxxxxxxx,
Xxxxxxx X. Xxxxxx, Xx. and
Xxxx X. Xxxxxx
000 Xxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000-2007
Telephone: (000) 000-0000
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