irene dixon, et al. v. cost plus, inc., et al. 12-cv-02721...

Case5:12-cv-02721-LHK Document89-1 Filed02/15/13 Page1 of 59

EXHIBIT 1


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UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

3 IRENE DIXON, On Behalf of Herself and All CASE NO. 5:12-C V-02721-LHK

4 Others Similarly Situated CLASS ACTION

5 Plaintiff, STIPULATION OF SETTLEMENT

V.

6

Hon: Lucy H. Koh COST PLUS, INC., JOSEPH H. COULOMBE, Date action filed: May 25, 2012

7 CLIFFORD J. EINSTEIN, BARRY J. FELD, MARK R. GENENDER, DANNY W. GURR,

8 JOHN C. POUND, KIM D. ROBBINS, FREDRIC M. ROBERTS, KENNETH T.

9 STEVENS, BED BATH & BEYOND INC., and BLUE CORAL ACQUISITION CORP.,

10 Defendants.

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STIPULATION OF SETTLEMENT

CASE No. 5:12-CV-02721-LHK

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1

STIPULATION AND AGREEMENT OF

2 COMPROMISE, SETTLEMENT AND RELEASE

3

This Stipulation and Agreement of Compromise, Settlement and Release ("Stipulation") is

4 made and entered into as of the th day of February 2013, by and between: (a) plaintiff-

5 intervenor and plaintiff Dr. Gary Ogurkiewicz ("Dr. Ogurkiewicz"), on behalf of the putative class

6 in both the action captioned Irene Dixon v. Cost Plus, Inc., et al., Case No. 12-cv-02721, pending

7 before the United States District Court for the Northern District of California (the "Federal Action")

8 and the action captioned Gary Ogurkiewicz v. Cost Plus, Inc., et al., Case No. RG 12-629912 (the

9 "Ogurkiewicz Action"), pending before the Alameda Superior Court (the "State Court"); (b)

10 plaintiff Willie M. Richardson ("Mr. Richardson," and with Dr. Ogurkiewicz, "Plaintiffs"), on

11 behalf of the putative class in the action captioned Willie M. Richardson v. Cost Plus, Inc., et al.,

12 Case No. RG 12-631301, pending before the State Court (the "Richardson Action" and, together

13 with the Ogurkiewicz Action, the "State Court Actions"); and (c) defendants in the Ogurkiewicz

14 Action, the Richardson Action and the Federal Action ("Defendants" and, with Plaintiffs, the

15 "Parties"), by their respective undersigned counsel.

16

WhEREAS, on May 9, 2012, Cost Plus, Inc. ("Cost Plus" or the "Company"), a California

17 Corporation with its principal place of business in Oakland, California, announced that it had

18 entered into an Agreement and Plan of Merger (the "Merger Agreement") with Bed Bath &

19 Beyond Inc. ("BBBY") and Blue Coral Acquisition Corp. ("Merger Sub") providing for a business

20 combination whereby Cost Plus will merge with and into Merger Sub, and Cost Plus will become a

21 wholly-owned subsidiary of BBBY (the "Merger");

22

WIIERIEAS, the Merger Agreement provided that BBBY would acquire all of the

23 outstanding shares of Cost Plus for $22.00 per share in cash and that the Merger would be effected

24 through what is called a "two-step" merger, whereby Merger Sub commenced a tender offer to

25 acquire all outstanding shares of Cost Plus at a purchase price of $22.00 per share. Shares not

26 acquired in the tender offer received the same $22.00 cash consideration by means of a short-form

27 merger;

28

WHEREAS, on May 11, 2012, plaintiff Dr. Ogurkiewicz filed the Ogurkiewicz Action

1 STIPULATION OF SETTLEMENT CASE No. 5:12-CV-02721-LHK


1 alleging a California state law cause of action for breach of fiduciary duty and aiding and abetting

2 on behalf of a putative class of Cost Plus stockholders against defendants Cost Plus, Inc., Joseph

3 Coulombe, Clifford Einstein, Barry Feld, Danny Gurr, Kim Robbins, Frederic Roberts, Kenneth

4 Stevens, Merger Sub, and BBBY challenging the Merger;

5

WHEREAS, on May 22, 2012, plaintiff Mr. Richardson filed the Richardson Action

6 alleging a California state law cause of action for breach of fiduciary duty and aiding and abetting

7 on behalf of a putative class of Cost Plus stockholders against defendants Cost Plus, Barry J. Feld,

8 Kenneth T. Stevens, Clifford J. Einstein, Danny W. Gurr, Kim D. Robbins, Fredric M. Roberts,

9 BBBY, and Merger Sub;

10

WHEREAS, on May 23, 2012, plaintiff Dr. Ogurkiewicz in the Ogurkiewicz Action and

11 Defendants entered into a stipulation and [proposed] confidentiality order governing the exchange

12 of confidential information;

13

WHEREAS, on May 25, 2012, Cost Plus filed with the Securities Exchange Commission

14 (the "SEC") the Company's Recommendation Statement on Schedule 14D-9 in support of the

15 Merger (the "Recommendation Statement");

16

WHEREAS, on May 25, 2012, Irene Dixon ("Dixon") filed the Federal Action, a putative

17 class action on behalf of Cost Plus stockholders, in the United States District Court for the

18 Northern District of California (the "Court" or the "United States District Court") against

19 defendants Cost Plus, Joseph H. Coulombe, Clifford J. Einstein, Barry J. Feld, Mark R. Genender,

20 Danny W. Gun, John C. Pound, Kim D. Robbins, Fredric M. Roberts, Kenneth T. Stevens, BBBY,

21 and Merger Sub challenging the Merger and alleging claims substantially similar to those alleged

22 in the State Court Actions as well as a claim for violation of Section 14(e) of the Williams Act (15

23 U.S.C.A. §§ 78n, 78aa) challenging the accuracy of Cost Plus' Recommendation Statement;

24

WHEREAS, on May 30, 2012, certain defendants in the Ogurkiewicz Action moved to

25 dismiss and stay the Ogurkiewicz Action and subsequently filed identical motions in the

26 Richardson Action;

27

WHEREAS, on June 4, 2012, plaintiff Dr. Ogurkiewicz in the Ogurkiewicz Action filed

28 and served on defendants in that action Plaintiff's Ex Parte Application for Discovery on Shortened



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1 Time and Memorandum of Points and Authorities in Support (the "Ex Parte Application");

2

WHEREAS, on June 4, 2012, plaintiff Dixon in the Federal Action filed a motion for a

3 preliminary injunction (the "Preliminary Injunction Motion"), which the Court originally set for

4 hearing on June 14, 2012;

5

WHEREAS, on June 6, 2012, the State Court denied the Ex Parte Application in the

6 Ogurkiewicz Action and granted Defendants' motion to stay conditioned on Defendants not

7 opposing intervention by Dr. Ogurkiewicz in the Federal Action;

8

WHEREAS, on June 6, 2012, Cost Plus filed an amendment to its Recommendation

9 Statement (the "First Amendment") to reflect certain information raised by Dr. Ogurkiewicz in his

10 Ex Parte Application and in his earlier demand letter sent to Defendants;.

11

WHEREAS, on June 7, 2012, Dr. Ogurkiewicz filed a motion to intervene in the Federal

12 Action (the "Intervention Motion");

13

WHEREAS, pursuant to a confidentiality stipulation, Defendants produced in the Federal

14 Action certain core documents including: (a) draft minutes of the Cost Plus board of directors (the

15 "Board"); (b) draft minutes of a committee comprised of certain of the Company's outside

16 directors (the "Special Committee"); (c) presentations to the Cost Plus Board and Special

17 Committee by the Special Committee's financial advisor; and (d) management presentations made

18 by Cost Plus to BBBY;

19

WHEREAS, the following individuals were deposed: (a) on June 5, 2012, John Pound, an

20 outside director of Cost Plus who was a member of the Special Committee; (b) on June 7, 2012,

21 Jeffrey Hornstein, a managing director of Peter J. Solomon Company, the Special Committee's

22 financial advisor who had separately produced documents in the Federal Action; and (c) on June 8,

23 1 2012, Barry Feld, Cost Plus' Chief Executive Officer;

24

WHEREAS, on June 11, 2012, the Federal Court reset the hearing on the Preliminary

25 I Injunction Motion from June 14, 2012, to June 19, 2012;

26

WHEREAS, on June 14, the Federal Court issued a further order: (a) resetting the hearing

27 on the Preliminary Injunction Motion for June 25, 2012; (b) setting a briefing schedule for Dr.

28 Ogurkiewicz to file papers in connection with the Preliminary Injunction Motion as well as for


CASE No. 5:12-CV-02721-.LHK

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1 Defendants' response; and (c) setting a briefing schedule on the Intervention Motion which was

2 also set for hearing on June 25, 2012;

3

WHEREAS, on June 21, 2012, Cost Plus filed an amendment to its Recommendation

4 Statement (the "Second Amendment," and with the First Amendment, the "Supplements") to

5 reflect certain information raised by Dr. Ogurkiewicz in his brief filed in support of the Preliminary

6 Injunction Motion and in an earlier demand letter sent to Defendants;

7

WHEREAS, on June 25, 2012, the Court heard argument on both the Preliminary

8 Injunction Motion and the Intervention Motion in the Federal Action. The Court denied the

9 Preliminary Injunction Motion based on a failure to demonstrate both irreparable injury and a

10 likelihood of success on the merits and issued an order to that effect on June 27, 2012. The Court

11 granted the Intervention Motion and indicated if it were to appoint lead plaintiff, that lead plaintiff

12 would likely be Dr. Ogurkiewicz because he had the largest economic interest in the case;

13

WHEREAS, after ruling from the bench, the Court advised the Parties to consider settling

14 the matter based on the supplemental disclosures made by Cost Plus;

15

WHEREAS, on June 27, 2012, Dixon filed a voluntary dismissal without prejudice;

16

WHEREAS, on June 28, 2012, the tender offer closed with 20,824,689 shares validly

17 tendered or approximately 92.5% of Cost Plus outstanding shares of common stock. Cost Plus,

18 BBBY and Merger Sub consummated the Merger the following day;

19

WHEREAS, on July 5, 2012, following arms' length discussions and negotiations

20 regarding a potential resolution of the claims asserted in the State Court Actions and the Federal

21 Action (together, the "Actions"), Plaintiffs' counsel Pomerantz Grossman Hufford Dahlstrom &

22 Gross LLP, Berman DeValerio, Brower Piven, A Professional Corporation, and Brodsky & Smith,

23 LLC ("Plaintiffs' Counsel") and counsel for Defendants agreed to a settlement based upon the

24 Court's recommendation;

25

WHEREAS, Plaintiffs believe the claims have merit and are agreeing to the settlement on

26 behalf of the putative class only because Defendants filed the Supplements after reviewing the

27 briefs Dr. Ogurkiewicz filed with the United States District Court in the Federal Action and the

28 State Court in the Ogurkiewicz Action and having previously received a demand letter from Dr.



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1 Ogurkiewicz;

2

WHEREAS, Defendants have denied, and continue to deny all allegations of wrongdoing,

3 fault, liability or damage to any of the respective plaintiffs in any of the Actions or the Class

4 (defined below), deny that they engaged in any wrongdoing, deny that they committed any

5 violation of law, deny that the Recommendation Statement was in any way deficient or that the

6 Supplements were material, deny that they acted improperly in any way, believe that they acted

7 properly at all times, believe the Actions have no merit, and maintain that they have committed no

8 disclosure violations or any other breach of duty whatsoever in connection with the Merger or any

9 public disclosures, but wish to settle for the reasons set forth herein;

10

WHEREAS, while Defendants acknowledge that Dr. Ogurkiewicz was the primary cause

11 of the Supplements, Defendants have denied and continue to deny that the information contained in

12 the Supplements was required to be disclosed or material to Cost Plus stockholders;

13

WHEREAS, the Parties recognize the time and expense that would be incurred by further

14 litigation and the uncertainties inherent in such litigation;

15

WHEREAS, the Parties wish to settle and resolve the claims asserted by Plaintiffs in the

16 Actions, and all claims relating to or arising out of the Merger and the Merger Agreement, and the

17 Parties have, following arm's length negotiations, reached an agreement as set forth in this

18 Stipulation providing for the settlement of the Actions on the terms and conditions set forth below

19 (the "Settlement"), which includes, but is not limited to, a release of all claims which were or could

20 have been asserted in the Actions;

21

WHEREAS, the Parties believe the Settlement is in the best interests of the Parties and

22 Cost Plus stockholders. The Parties further believe that a settlement based on the terms reflected in

23 this Stipulation is fair, reasonable, and adequate and in the best interests of Cost Plus stockholders;

24

WHEREAS, the Parties completed negotiations over the consideration for a potential

25 settlement and, on July 5, 2012, executed a Memorandum of Understanding ("MOU") containing

26 the terms for the Parties' agreement in principle to resolve the Actions before they engaged in

27 negotiations over Plaintiffs' Counsel's anticipated application for an award of attorneys' fees and

28 expenses; and


CASE No. 5:12-C V-02721-LHK


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WHEREAS, the Parties acknowledge that the Settlement of the Actions and the entry of a

2 final order of judgment in connection therewith will bar, by the doctrine of resfudicata or

3 otherwise, claims belonging to all Cost Plus stockholders arising out of or related to the Merger.

4

NOW, THEREFORE, IT IS HEREBY STIPULATED, CONSENTED TO AND AGREED,

5 by Plaintiffs, for themselves and on behalf of the Class, and Defendants that, subject to the

6 approval of the Court and pursuant to Rule 23 of the Federal Rules 'of Civil Procedure and the other

7 conditions set forth herein, for good and valuable consideration set forth herein and conferred on

8 Plaintiffs and the Class, the Actions shall be finally and fully settled, compromised and dismissed,

9 on the merits and with prejudice, and that the Released Claims (defined below) shall be finally and

10 fully compromised, settled, released and dismissed with prejudice as to the Released Parties

11 (defined below) and Defendants' Released Claims (defined below) shall be finally and fully

12 compromised, settled, released and dismissed with prejudice as to Plaintiffs, Plaintiffs' Counsel,

13 Dixon, Dixon's counsel, and any member of the Class, in the manner and upon the terms and

14 conditions hereafter set forth.

15

1. Without admitting any wrongdoing and without conceding that the

16 I Recommendation Statement was inaccurate or incomplete in any respect or that the Supplements

17 contained material information, Defendants acknowledge that Dr. Ogurkiewicz's demand letter and

18 intervention in the Federal Action were the primary cause of the Supplements.

19

2. Plaintiffs acknowledge that they reviewed the Supplements prior to the Merger and

20 deemed them an adequate basis for settling the Actions.

21

3. No Released Party shall have any obligation to pay or bear any amounts, expenses,

22 costs, damages, or fees to or for the benefit of Plaintiffs or any or all members of the Class or any

23 attorney for any member of the Class, or any of them, in connection with this Settlement, including

24 but not limited to attorneys' fees and expenses for any counsel to any Class member, or any costs

25 of notice or settlement administration or otherwise; provided, however, that Cost Plus or its

26 successor-in-interest shall (a) be responsible for providing notice of the Settlement to the members

27 of the Class and shall pay all reasonable, documented costs and expenses incurred in providing

28 notice of the Settlement to the members of the Class and (b) be obligated to pay attorneys' fees and


CASE No. 5:12-CV-02721-LIIK


1 expenses to Plaintiffs' Counsel upon an award, if any, of attorneys' fees and expenses and/or an

2 incentive award for Dr. Ogurkiewicz by the Court solely as provided in Paragraph 15 hereof.

3

4. The Parties agree to seek certification, pursuant to Rules 23(a), 23(b)(1), and

4 23(b)(2) of the Federal Rules of Civil Procedure, of a non-opt out class for settlement purposes

5 only that includes any and all record and beneficial holders of Cost Plus stock, including any and

6 all of their respective successors in interest, predecessors, representatives, trustees, executors,

7 administrators, heirs, assigns or transferees, immediate and remote, and any person or entity acting

8 for or on behalf of, or claiming under, any of them, and each of them, who held any such Cost Plus

9 stock at any time between and including May 9, 2012, and June 29, 2012, but excluding the

10 specifically named Defendants (the "Class"). Dr. Ogurkiewicz shall apply to be designated as class

11 representative and Pomerantz Grossman Hufford Dahlstrom & Gross LLP shall apply to be

12 appointed lead counsel for the settlement of all claims brought on behalf of the Class in the Actions

13 ("Lead Counsel"), including those claims brought under Section 14(e) of the Williams Act (15

14 U.S.C.A. §§ 78n, 78aa).

15

5. The Parties agree to seek an entry of a judgment (the "Judgment") in the Form

16 attached as Exhibit A: (a) unconditionally certifying the Class as defined in Paragraph 4, above; (b)

17 dismissing with prejudice the Federal Action on the merits; (c) barring further prosecution of the

18 State Court Actions on the grounds of resfudicata and requiring the Parties to obtain the dismissal

19 of the State Court Actions with prejudice on the merits; (d) settling, releasing, and permanently

20 barring Defendants' Released Claims (defined below) in favor of Plaintiffs, Plaintiffs' Counsel,

21 Dixon, Dixon's counsel, and any member of the Class on behalf of Defendants; and (e) settling,

22 releasing, and permanently barring the Released Claims (defined below) in favor of the Released

23 Parties (defined below) on behalf of Plaintiffs and any and all members of the Class, for

24 themselves and for their spouses and former spouses, partners, successors, predecessors-in-interest,

25 and assigns.

26

6. "Released Claims" means any and all manner of claims, demands, rights, liabilities,

27 losses, obligations, duties, damages, costs, debts, expenses, interest, penalties, sanctions, fees,

28 attorneys' fees, actions, potential actions, causes of action, suits, agreements, judgments, decrees,



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matters, issues and controversies of any kind, nature or description whatsoever, whether known or

2 unknown, disclosed or undisclosed, accrued or unaccrued, apparent or not apparent, foreseen or

3 unforeseen, matured or not matured, suspected or unsuspected, liquidated or not liquidated, fixed

4 or contingent, including Unknown Claims (defined below), that any Plaintiff or any or all members

5 of the Class or any attorney for any member of the Class, or any of them, ever had, now have, or

6 otherwise could, can or might assert, whether direct, derivative, individual, class, representative,

7 legal, equitable (including, without limitation, for any breach of fiduciary duties) or of any other

8 type, or in any other capacity, against any of the Released Parties, whether based on state, local,

9 foreign, federal, statutory, regulatory, common or other law or rule (including but not limited to

10 any claims under federal securities laws or state disclosure law or any claims that could be asserted

11 derivatively on behalf of Cost Plus), which now or hereafter are based upon, arise out of, relate in

12 any way to, or involve, directly or indirectly, any of the actions, transactions, occurrences,

13 statements, representations, misrepresentations, omissions, allegations, facts, practices, events,

14 claims or any other matters, things or causes whatsoever, or any series thereof, that were, could

15 have been, or in the future can or might be alleged, asserted, set forth, claimed, embraced, involved,

16 or referred to in, or related to, directly or indirectly, any of the Actions or the subject matter of any

17 of the Actions in any court, tribunal, forum or proceeding, including, without limitation: (a) the

18 Merger; (b) any deliberations or negotiations in connection with the Merger, including the process

19 of deliberation or negotiation by each of Cost Plus, BBBY, and/or Merger Sub and any of their

20 respective officers, directors or advisors; (c) the consideration received by Class members in

21 connection with the Merger; (d) the Recommendation Statement and Supplements or any other

22 disclosures, SEC filings, public filings, periodic reports, press releases, proxy statements or other

23 statements issued, made available or filed relating, directly or indirectly, to the Merger, including

24 without limitation claims under any and all federal securities laws (including those within the

25 exclusive jurisdiction of the federal courts); (e) the fiduciary obligations of the Released Parties in

26 connection with the Merger; (f) the fees, expenses or costs incurred in prosecuting, defending, or

27 settling the Actions; or (g) any of the allegations in any complaint filed in any of the Actions;

28 provided, however, that the Released Claims shall not include the right to enforce this Stipulation,



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the MOU, the Judgment or claims for statutory appraisal in connection with the Merger by Cost

2 Plus stockholders who properly perfect such appraisal claims and do not otherwise waive their

3 appraisal rights.

4

7. "Defendants' Released Claims" means any and all manner of claims, demands,

5 rights, liabilities, losses, obligations, duties, damages, costs, debts, expenses, interest, penalties,

6 sanctions, fees, attorneys' fees, actions, potential actions, causes of action, suits, agreements,

7 judgments, decrees, matters, issues and controversies of any kind, nature or description whatsoever,

8 whether known or unknown, disclosed or undisclosed, accrued or unaccrued, apparent or not

apparent, foreseen or unforeseen, matured or not matured, suspected or unsuspected, liquidated or

10 not liquidated, fixed or contingent, including Unknown Claims (defined below), which any of the

11 Defendants may have or could have asserted against Plaintiffs, Plaintiffs' Counsel, Dixon, Dixon's

12 counsel, or any member of the Class, arising out of the institution, prosecution, settlement or

13 resolution of the Actions, provided, however, that "Defendants' Released Claims" shall not include

14 the right to enforce this Stipulation, the MOU, or the Judgment.

15

"Released Parties" means, whether or not each or all of the following persons or

16 entities were named, served with process or appeared in the Actions: (a) Joseph H. Coulombe,

17 Clifford J. Einstein, Barry J. Feld, Mark R. Genender, Danny W. Gurr, John C. Pound, Kim D.

18 Robbins, Fredric M. Roberts, and Kenneth T. Stevens (collectively, the "Individual Defendants"),

19 Cost Plus, BBBY, Merger Sub; and (b) the respective past, present or future directors, officers,

20 employees, partners, attorneys, financial advisors, accountants, insurers, reinsurers, principals,

21 agents, controlling shareholders, any entity in which any Defendant has, had or will have a

22 controlling interest, assigns, spouses, heirs, associates, related or affiliated entities, any member(s)

23 of their immediate families, or any trust of which any Defendant is the settlor or which is for the

24 benefit of any Defendant and/or member(s) of his or her family, of each and all of the foregoing.

25

9. The Released Claims and Defendants' Released Claims include any claim that a

26 I party does not know or suspect exists in his, her, or its favor at the time of the release of the

27 Released Claims or Defendants' Released Claims, including without limitation those which, if

28 known, might have affected the decision to enter into the Settlement ("Unknown Claims"). With


CASE No. 5:12-CV-02721-Lffl(


respect to any of the Released Claims, the Parties stipulate and agree that upon Final Court

Approval of the Settlement, Plaintiffs shall expressly have, and each member of the Class shall be

deemed to have, and by operation of the final order and judgment by the Court shall have,

expressly waived, relinquished and released any and all provisions, rights and benefits conferred by

or under Cal. Civ. Code § 1542 or any law of the United States or any state of the United States or

territory of the United States, or principle of common law, which is similar, comparable or

equivalent to Cal. Civ. Code § 1542, which provides:

"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR."

Plaintiffs acknowledge, and the members of the Class by operation of law shall be deemed to have

acknowledged, that they may discover facts in addition to or different from those now known or

believed to be true with respect to the Released Claims, but that it is the intention of Plaintiffs, and

by operation of law the members of the Class, to completely, fully, finally and forever extinguish

any and all Released Claims, known or unknown, suspected or unsuspected, which now exist, or

heretofore existed, or may hereafter exist, and without regard to the subsequent discovery of

additional or different facts. Plaintiffs acknowledge, and the members of the Class by operation of

law shall be deemed to have acknowledged, that the inclusion of "Unknown Claims" in the

definition of "Released Claims" was separately bargained for and was a material element of the

Settlement and was relied upon by each and all of the Defendants in entering into this Stipulation.

10. "Final Court Approval" means that the Court has entered a final order and judgment:

(a) unconditionally certifying the Class; (b) approving the Settlement; (c) dismissing the Federal

Action with prejudice on the merits and with each Party to bear their own costs (except those costs

set forth in Paragraphs 15 and 32 hereto); (d) enjoining further prosecution of the State Court

Actions and requiring the Parties to obtain the dismissal of the State Court Actions with prejudice

on the merits; (e) discharging the Released Parties from the Released Claims; and (f) that is final

and no longer subject to further appeal or review, whether by affirmance on or exhaustion of any

possible appeal or review, writ of certiorari, lapse of time or otherwise. Notwithstanding any

10 STIPULATION OF SETTLEMENT CASE No. 5:12-CV-02721-LBK


1 provision to the contrary in this Stipulation, Final Court Approval shall not include (and the

2 Settlement is expressly not conditioned on) the approval of attorneys' fees and the reimbursement

3 of expenses to Plaintiffs' Counsel as provided in Paragraph 15 hereto, and any appeal related

4 thereto.

5

11. All the Defendants have vigorously denied, and continue to vigorously deny, any

6 wrongdoing or liability with respect to all claims asserted in the Actions, including that they have

7 committed any violations of law, that they have acted improperly in any way, that they have any

8 liability or owe any damages of any kind to any Plaintiff or member of the Class, and that any

9 additional information disclosed in the Supplements was material to Cost Plus stockholders or was

10 otherwise required under any applicable rule, regulation, statute, or law, but are executing this

11 Stipulation solely because they consider it desirable that the Actions be settled and dismissed with

12 prejudice in order to, among other things, (a) eliminate the burden, inconvenience, expense, risk

13 and distraction of further litigation, (b) finally put to rest and terminate all the claims which were or

14 could have been asserted against Defendants in the Actions, and (c) permit the Merger as already

15 consummated to proceed without further risk of injunctive or other relief.

16

12. Plaintiffs and Plaintiffs' Counsel in the Actions believe that (a) the claims Plaintiffs

17 have asserted have legal merit, although they recognize that there are legal and factual defenses to

18 the claims asserted in the Actions that Defendants have raised and might have raised throughout

19 the pendency of the Actions, and (b) the Settlement is fair, reasonable, adequate, and in the best

20 interests of Plaintiffs and the Class.

21

13. All Defendants shall have the right to withdraw from the Settlement in the event that

22 (a) any court rescinds or otherwise challenges the validity of the Merger or (b) any claim related to

23 the subject matter of any of the Actions, the Merger, or the Released Claims is commenced or

24 prosecuted against any of the Released Parties in any court prior to Final Court Approval of the

25 Settlement, including an application by any person for a fee related in any way to the Actions other

26 than in connection with the proceedings set forth in Paragraph 15 below, and (following a motion

27 by any Defendant) any such claim is not dismissed with prejudice or stayed in contemplation of

28 dismissal with prejudice following Final Court Approval. In the event that any such claim is


CASE No. 5:12-CV-02721-LIIK

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commenced or prosecuted against any of the Released Parties, the Parties shall cooperate and use

2 their best efforts to secure the dismissal with prejudice or withdrawal of such claim (or a stay

3 thereof in contemplation of dismissal with prejudice, following Final Court Approval of the

4 Settlement), including where appropriate joining in any motion to dismiss or demurrer to such

5 litigation.

6

14. Pending execution and Final Court Approval of the Settlement by the United States

7 District Court, Plaintiffs agree to stay the proceedings in the Federal Action and to continue in

8 place the current stay of the State Court Actions and to stay and not to initiate any other

9 proceedings other than those incident to the Settlement itself. The Parties' respective deadlines to

10 respond to any filed or served pleadings or discovery requests are extended indefinitely.

11

15. Subject to Paragraph 17 below, Cost Plus or its successor-in-interest shall pay to

12 Plaintiffs' Counsel such attorneys' fees and expenses and/or an incentive award for Dr.

13 Ogurkiewicz, if any, as are awarded by the Court (the "Fee Award"). Any award of attorneys' fees

14 and expenses and/or an incentive award for Dr. Ogurkiewicz shall be paid solely by Cost Plus or its

15 successor-in-interest to Pomerantz Grossman Hufford Dahlstrom & Gross LLP within seven (7)

16 business days following the Court's Final Court Approval of the Settlement and satisfaction of the

17 conditions of Paragraph 16 below. Defendants shall not oppose an application by Plaintiffs'

18 Counsel for an award of attorneys' fees and expenses and an incentive award for Dr. Ogurkeiwicz

19 to the extent that such application shall not seek an award exceeding $375,000 in the aggregate (the

20 "Fee Application"). Plaintiffs' Counsel, and any other counsel, agree not to seek an award of

21 attorneys' fees and expenses and an incentive award for Dr. Ogurkiewicz that exceed $375,000 in

22 the aggregate. Plaintiffs' Counsel intend to seek an incentive award of $2,800.00 for Dr.

23 Ogurkeiwicz as part of the aggregate sum being sought. No other application for attorneys' fees

24 and expenses or an incentive award shall be filed by any Plaintiff or any other member of the Class

25 or any attorney for any member of the Class, or any of them, in the Actions or any other action or

26 proceeding regarding the subject matter of the Actions, and Plaintiffs' Counsel expressly waives

27 any right to seek any award of such fees and expenses except as provided in this paragraph.

28 Notwithstanding any other provision of this Settlement, no fees or expenses shall be sought by or

12 STIPULATION OF SETTLEMENT CASE No. 5:12-CV-02721-LHK


1 paid to Plaintiffs' Counsel absent Final Court Approval of the Settlement which contains a release

2 of the Released Claims as against the Released Parties. Final resolution by the Court of the Fee

3 Application or of any agreed upon Fee Award shall not be a precondition to Final Court Approval

4 of the Settlement or the dismissal of the State Court Actions or Federal Action in accordance with

5 this Stipulation.

6

16. This Stipulation and the Settlement described herein shall not be legally binding

7 upon any party unless and until this Stipulation is executed by all of the Parties. This Stipulation

8 and the Settlement described herein is subject to and expressly conditioned upon: (a) the entry by

9 the Court of the Judgment substantially in the form attached hereto as Exhibit A; (b) dismissal with

10 prejudice of the Federal Action and the State Court Actions as to all members of the Class

11 (including Plaintiffs); (c) the certification by the Court for settlement purposes of the Class

12 described in Paragraph 4 above; and (d) Final Court Approval of the Settlement by the Court;

13 provided, however, that the Court's Final Court Approval of the Settlement is not contingent on

14 approval of the Fee Application or awarding the Fee Award.

15

17. If the Court fails to approve the Settlement in accordance with the terms described

16 herein, this Stipulation, the MOU and any orders that may have been entered by any court in

17 connection therewith shall be null and void and of no force and effect, unless counsel for each of

18 the Parties, within ten (10) business days from any such terminating event, agrees in writing with

19 counsel for the other Parties hereto to proceed with this Stipulation and Settlement, including only

20 with such modifications, if any, as to which all other Parties in their sole judgment and discretion

21 may agree. In the event this Stipulation is terminated pursuant to its terms or by any party hereto,

22 it shall not be deemed to prejudice in any way the position of any party with respect to this

23 litigation or any other litigation or proceeding. In such event, the Parties shall be deemed to have

24 reverted to their respective litigation status immediately prior to the execution of the MOU, and

25 they shall proceed in all respects as if the MOU and this Stipulation had not been executed and any

26 related orders had not been entered, and neither the existence of this Stipulation or the MOU nor

27 their respective contents shall be deemed: (a) to prejudice in any way the positions of the Parties

28 with respect to any of the Actions; (b) to constitute an admission of fact of wrongdoing by any

13 STIPULATION OF SETTLEMENT

CASE No. 5:12-CV-02721-Lffl(


1 Party; (c) to waive the right of Defendants to oppose the certification of any class in the Actions; or

2 (d) to entitle any Party to recover any fees, costs or expenses incurred in connection with any of the

3 Actions.

4

18. Neither the provisions contained in this Stipulation, the MOU and/or the Judgment,

5 nor any of the negotiations or proceedings in connection therewith, shall be deemed a presumption,

6 concession, or admission by any Party to the Actions of any fault, liability, or wrongdoing, or lack

7 of any fault, liability, or wrongdoing, as to any facts or claims alleged or asserted in the Actions, or

8 any other actions or proceedings, and shall not be interpreted, construed, deemed, invoked, offered,

9 received in evidence, or otherwise used by any Party in the Actions or in any other action or

10 proceeding, whether civil, criminal, or administrative, except (a) in connection with any proceeding

11 to enforce the terms of the Settlement, the MOU and/or the Judgment or (b) as may be necessary to

12 argue that this Stipulation, the MOU and/or Judgment has res judicata, collateral estoppel or other

13 issue or claim preclusion effect.

14

19. Upon the Court's Final Court Approval of the Settlement and the satisfaction of the

15 conditions of Paragraph 16 above, Defendants shall be deemed to have, and by operation of the

16 Judgment shall have, fully, finally, and forever released, relinquished, and discharged Plaintiffs,

17 Plaintiffs' Counsel and each and all of the Class members, for themselves and for their spouses and

18 former spouses, partners, successors, predecessors-in-interest, and assigns, from all claims based

19 upon or arising out of the institution, prosecution, settlement or resolution of the Actions.

20 Notwithstanding the foregoing, the Defendants and all other Released Persons shall retain the right

21 to enforce the terms of this Stipulation, the MOU and/or the Judgment.

22

20. Plaintiffs and Plaintiffs' Counsel represent and warrant that Plaintiffs were Cost

23 Plus stockholders through the consummation of the Merger and had been Cost Plus stockholders at

24 all relevant times, and that none of Plaintiffs' claims or causes of action that are referred to in this

25 Stipulation or that could have been asserted in the Actions have been assigned, encumbered, or in

26 any manner transferred in whole or in part.

27

21. The Parties represent and agree that the terms of the Settlement were negotiated at

28 arm's length and in good faith by the Parties, and reflect a settlement that was reached voluntarily



14


1 based upon adequate information and sufficient discovery and after consultation with experienced

2 legal counsel.

3

22. To the extent permitted by law, all agreements made and orders entered during the

4 course of the Actions relating to the confidentiality of documents or information shall survive this

5 Stipulation.

6

23. Except for attorney notes, pleadings, other Court submissions and transcripts of

7 depositions, Plaintiffs agree to destroy or to return to Defendants all discovery obtained from

8 Defendants within ten (10) days after Final Court Approval.

9

24. The waiver by any Party of any breach of this Stipulation by any other Party shall

10 not be deemed a waiver of that or any other prior or subsequent breach of any provision of this

11 Stipulation by any other Party.

12

25. This Stipulation may be executed in counterparts by facsimile, imaging or original

13 signature by any of the signatories hereto and as so executed shall constitute one agreement.

14

26. This Stipulation and the Settlement contemplated by it, and any dispute arising out

15 of or relating in any way to this Stipulation, the MOU, or the Settlement whether in contract, tort or

16 otherwise, shall be governed by and construed in accordance with the laws of the state of

17 California, without regard to conflict of laws principles. Each of the Parties (a) irrevocably

18 submits to the personal jurisdiction of this Court as well as to the jurisdiction of all courts to which

19 an appeal may be taken from such courts, in any suit, action or proceeding arising out of or relating

20 to this Stipulation, the MOU and/or the Judgment and (b) agrees that all claims in respect of such

21 suit, action or proceeding shall be brought, heard and determined exclusively by the United States

22 District Court (provided that, in the event that subject matter jurisdiction is unavailable in the Court,

23 then all such claims shall be brought, heard and determined exclusively in any other state or federal

24 court sitting in Oakland, California).

25

27. Each of the attorneys executing this Stipulation has been duly empowered and

26 authorized by his/her respective client(s) to do so.

27

28. This Stipulation constitutes and contains the entire agreement and understanding

28 between the Parties concerning the settlement of the Actions, and supersedes and replaces all prior


CASE No. 5:12-C V-02721-LHIK

15


1 negotiations and representations, and all agreements proposed or otherwise, whether written or oral,

2 concerning the settlement of the Actions. This Stipulation may not be amended, modified,

superseded, changed, or canceled, and the terms and conditions hereof may not be waived, except

41 by a written instrument signed by each of the Parties expressly stating that it is intended to modify

5 this Stipulation. Each party agrees that, in interpreting and applying the terms and provisions of

6 this Stipulation, no party shall be deemed the drafter of any provision, and that no presumption

7 shall exist or be implied for or against any party as a result of who drafted any provision.

8

29. This Stipulation shall be binding upon and shall inure to the benefit of the Parties

9 and the Released Parties and the respective legal representatives, insurers, reinsurers, heirs,

10 executors, administrators, transferees, successors and assigns of all such foregoing persons and

11 upon any corporation, partnership, or other entity into or with which any Party may merge,

12 consolidate or reorganize.

13

30. As soon as practicable after this Stipulation has been executed, the Parties will apply

14 to the Court for the entry of the scheduling order (the "Scheduling Order") in substantially the form

15 attached hereto as Exhibit B, providing, among other things, that the Federal Action shall proceed

16 as a class action on behalf of the Class, approving the form of notice to the Class and scheduling a

17 final settlement hearing.

18

31. The Scheduling Order shall provide for an injunction against any Plaintiff or any

19 member of the Class from bringing any claims covered by the Settlement in the Actions or in any

20 other action, suit or proceeding, including any claim by any member of the Class or any attorney

21 for any member of the Class seeking a fee based on any supplemental disclosures made by Cost

22 Plus other than in connection with the proceedings set forth in Paragraph 15 above; provided,

23 however, that nothing in this paragraph shall preclude any proceedings to implement the Settlement,

24 pending Final Court Approval of the Settlement.

25

32. Cost Plus or its successor-in-interest shall cause to be mailed, as set forth in the

26 Scheduling Order, by first-class mail a Notice of Pendency of Class Action, Proposed Settlement of

27 Class Action, Settlement Hearing and Right to Appear (the "Notice"), which, subject to approval

28 by the Court, shall be substantially in the form attached hereto as Exhibit C. Cost Plus or its

Wi STIPULATION OF SETTLEMENT



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successor will assume administrative responsibility for and will pay all reasonable costs and

expenses related to preparing and disseminating the Notice.

IN WITNESS WHEREOF, the Parties intending to be legally bound, have caused this

Stipulation to be executed and delivered as of the date first written above.

DATED: February/f, 2013

GUSTAVO F. BRUCKNER POMERANTZ GROSSMAN H[JFFORD DAHLSTROM

& GROSS LLP

Attorneys for Plaintiff-Intervenor and Plaintiff GARY OGURKIEWICZ

BROD SKY & SMITH, LLC

EVAN J. SMITH

BRIAN C. KERR BROWER PIVEN,

A Professional Corporation

Attorneys for Plaintiff WILLIE M. RICHARDSON

FARUQI & FARUQI, LLP

By: / JUAN MONTEVERDE /

Attorneys for Plaintiff IRENE DIXON


CASE No. 5:12-CV-02721-LEI(

17

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successor will assume administrative responsibility for and will pay all reasonable costs and

expenses related to preparing and disseminating the Notice.

IN WITNESS WHEREOF, the Parties intending to be legally bound, have caused this

Stipulation to be executed and delivered as of the date first written above.

DATED: February 2013

BERMAN DEVALERIO

By: NICOLE LAVALLEE

GUSTAVO F. BRUCKNER POMERANTZ GROSSMAN HUFFORD DAI-WSTROM

& GROSS LLP

Attorneys for Plaintiff-Intervenor and Plaintiff GARY OGURKIEW!CZ

BRODSKY

By:. EVAN J. SMITH

BRIAN C. KERR BROWER PIVEN,

A Professional Corporation

Attorneys for Plaintiff WILLIE M. RICHARDSON

FARUQI & FARUQI, LLP

JUAN MONTE VERDE Attorneys for Plaintiff

IRENE DIXON

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STIPULATION OF SETTLEMENT CASE No. 5:12-C V-0272J-LJ-JK

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SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP

By: — L (ERIC S. WAXMAN

Attorneys for Defendants COST PLUS, INC., JOSEPH H. COULOMBE,

CLIFFORD J. EINSTEIN, BARRY J. FELD, MARK R. GENENDER, DANNY W. GURR, JOHN C. POUND,

KIM D. ROBBINS, FREDRIC M. ROBERTS, and KENNETH T. STEVENS

PROSKAUER ROSE LLP

By: MICHAEL A. FIRESTEIN Attorneys for Defendants

BED BATH & BEYOND INC. and BLUE CORAL ACQUISITION CORP.

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18 STIPULATION OF SELT CASE No. 5:12-CV-02721-LHK


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SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP

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By: ERIC S. WAXMAN

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Attorneys for Defendants COST PLUS, INC., JOSEPH H. COULOIVIBE,

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CLIFFORD J. EINSTEIN, BARRY J. FELD, MARK R. GENENDER, DANNY W. GURR, JOHN C. POUND,

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KIM D. ROBBINS, FREDRIC M. ROBERTS, and KENNETH T. STEVENS

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MICH)L,-A. FIRESTE1N'---_. Attjthne for Defendants

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18 STIPULATION OF SETTLEMENT

CASE No. 5:12-CV02721-LHK


EXHIBIT A


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SAN JOSE DIVISION

IRENE DIXON, On Behalf of Herself and All ) CASE NO. 5:12-C V-02721-LHK )

) CLASS ACTION Others Similarly Situated

) Plaintiff, ) [PROPOSED] ORDER AND FINAL v. ) JUDGMENT

COST PLUS, INC., JOSEPH H. COULOMBE, CLIFFORD J. EINSTEIN, BARRY J. FELD, Hon: Lucy H. Koh MARK R. GENENDER, DANNY W. GURR, Date action filed: May 25, 2012 JOHN C. POUND, KIM D. ROBBINS, FREDRIC M. ROBERTS, KENNETH T. STEVENS, BED BATH & BEYOND INC., and BLUE CORAL ACQUISITION CORP.,

Defendants.

[PROPOSED] ORDER AND FINAL JUDGMENT

CASE NO. 5:12-CV-02721-LHK 414533.02-Palo Alto Server 1A

MSW - Draft September 6, 2012 - 4:04 PM

27

28



2

A hearing having been held before this Court on ____________, 2013, pursuant to this

3

Court’s Order dated _______________, 2013 (the “Scheduling Order”), upon a Stipulation and

4

Agreement of Compromise, Settlement and Release (the “Stipulation”) filed in the above-captioned

5

action (the “Federal Action”), which (along with the defined terms therein) is incorporated herein

6

by reference; it appearing that due notice of said hearing has been given in accordance with the

7

aforesaid Scheduling Order; the respective Parties having appeared by their attorneys of record; the

8

Court having heard and considered evidence in support of the proposed settlement (the

9

“Settlement”) set forth in the Stipulation; the attorneys for the respective Parties having been heard;

10 an opportunity to be heard having been given to all other persons requesting to be heard in

11 accordance with the Scheduling Order; the Court having determined that notice to the Class (as

12

defined below) was adequate and sufficient; and the entire matter of the Settlement having been

13

heard and considered by the Court:

14

IT IS ORDERED, ADJUDGED AND DECREED THIS

DAY OF

15 _______________, 2013, AS FOLLOWS :

16

In full compliance with Rule 23 of the Federal Rules of Civil Procedure and the

17 requirements of due process, on __, 2013, Cost Plus, Inc. (“Cost Plus”), or its

18 successor-in-interest, mailed the Notice of Pendency of Class Action, Proposed Settlement of Class

19

Action, Settlement Hearing and Right to Appear (the “Notice”) by first-class mail pursuant to and

20

in the manner directed by the Scheduling Order, proof of the mailing of the Notice has been filed

21 with the Court and full opportunity to be heard has been offered to all Parties, the Class and

22 persons in interest.

23

2. Each of the provisions of Rule 23(a) of the Federal Rules of Civil Procedure has

24

been satisfied and the Federal Action has been properly maintained according to the provisions of

25

Rule 23(b) of the Federal Rules of Civil Procedure with respect to the claims asserted on behalf of

26

the Class. Specifically, the Court finds that the Class satisfies the numerosity requirement of Rule

27

23(a)(1). As of June 29, 2012, the consummation date of the Merger, there were approximately

28

22,522,252 public shares of Cost Plus common stock issued and outstanding and held by the public





holders of record that comprise the Class. There are questions of law and fact common to the Class,

2

including whether the disclosures made by Cost Plus in connection with the Merger were adequate,

3 whether the Individual Defendants breached their fiduciary duties to the members of the Class and

4 whether the Plaintiffs in the Actions and the Class members were injured as a consequence of the

5

Defendants’ actions, satisfying Rule 23(a)(2). The claims and defenses of the representative Party,

6

Gary Ogurkiewicz (“Dr. Ogurkiewicz”), are typical of the claims or defenses of the Class in that

7

they all arise from the same allegedly wrongful course of conduct and are based on the same legal

8

theories, satisfying Rule 23(a)(3). The representative Plaintiff, Dr. Ogurkiewicz, and his counsel,

9

Pomerantz Grossman Hufford Dahlstrom & Gross LLP, are adequate representatives of the Class

10 and are fairly and adequately protecting and representing the interests of the Class, satisfying Rule

11

23(a)(4). The prosecution of separate actions by individual Class members would create a risk of

12

inconsistent adjudications which would establish incompatible standards of conduct for the

13

Defendants, and, as a practical matter, the disposition of the Federal Action will influence the

14

disposition of any pending or future identical cases brought by other members of the Class,

15 satisfying Rule 23(b)(1); and there were allegations that Defendants acted or refused to act on

16 grounds generally applicable to the Class, satisfying Rule 23(b)(2). In light of the foregoing, the

17

Court expressly finds that certification of a non-opt out class for settlement purposes only is

18 necessary and appropriate.

19

3. The Federal Action is certified as a class action, pursuant to Rules 23(a), 23(b)(1)

20 and 23(b)(2) of the Federal Rules of Civil Procedure, without opt-out rights and for settlement

21 purposes only, by Dr. Ogurkiewicz on behalf of a class consisting of any and all record and

22

beneficial holders of Cost Plus stock, including any and all of their respective successors in interest,

23 predecessors, representatives, trustees, executors, administrators, heirs, assigns or transferees,

24

immediate and remote, and any person or entity acting for or on behalf of, or claiming under, any

25 of them, and each of them, who held any such Cost Plus stock at any time between and including

26

May 9, 2012, and June 29, 2012, but excluding the specifically named Defendants (the “Class”).

27

Pomerantz Grossman Hufford Dahlstrom & Gross LLP is hereby appointed as Lead Counsel for

28

2 [PROPOSED] ORDER AND FINAL JUDGMENT CASE NO. 5:12-CV-02721-LHK

414533.02-Palo Alto Server 1A MSW - Draft September 6, 2012 - 4:04 PM


the prosecution and settlement of all claims brought on behalf of the Class in the Actions, including

2

those claims brought under Section 14(e) of the Williams Act (15 U.S.C.A. §§ 78n, 78aa).

3

4. Due and adequate notice of the proceedings having been provided to the members

4 of the Class, and a full opportunity having been offered to them to participate in the Hearing, it is

5

I hereby determined that they are bound by the Order and Final Judgment (the “Judgment”) entered

6

I herein.

7

5. The Stipulation and the terms of the Settlement as described in the Stipulation and

8

the Notice are hereby approved and confirmed as being fair, reasonable, adequate, and in the best

9

interests of the Class and the Company; the Parties to the Stipulation are directed hereby to

10 consummate the Settlement in accordance with the terms and conditions set forth in the Stipulation;

11 and the Clerk of Court is directed to enter and docket this Judgment in the Federal Action.

12

6. This Federal Action and the Released Claims (defined below) are hereby dismissed

13 on the merits and with prejudice, and without costs, except as provided in the Stipulation and in

14 paragraph 13 herein, in full and final discharge of any and all claims or obligations that were or

15 could have been asserted in the Federal Action against the Released Parties (defined below).

16

Defendants hereby release Plaintiffs, Plaintiffs’ Counsel, Dixon, Dixon’s counsel, and all members

17 of the Class from the Defendants’ Released Claims (defined below).

18

7. Plaintiffs and any and all Class members, for themselves and for their spouses and

19

former spouses, partners, successors, predecessors-in-interest, and assigns, hereby shall be deemed

20

to have, and by operation of this Judgment shall have, released and forever discharged the Released

21

Parties from any and all Released Claims.

22

8. “Released Claims” means any and all manner of claims, demands, rights, liabilities,

23

losses, obligations, duties, damages, costs, debts, expenses, interest, penalties, sanctions, fees,

24 attorneys’ fees, actions, potential actions, causes of action, suits, agreements, judgments, decrees,

25 matters, issues and controversies of any kind, nature or description whatsoever, whether known or

26 unknown, disclosed or undisclosed, accrued or unaccrued, apparent or not apparent, foreseen or

27 unforeseen, matured or not matured, suspected or unsuspected, liquidated or not liquidated, fixed

28 or contingent, including Unknown Claims (defined below), that any Plaintiff or any or all members





of the Class or any attorney for any member of the Class, or any of them, ever had, now have, or

2 otherwise could, can or might assert, whether direct, derivative, individual, class, representative,

3

legal, equitable (including, without limitation, for any breach of fiduciary duties) or of any other

4

type, or in any other capacity, against any of the Released Parties (defined below), whether based

5 on state, local, foreign, federal, statutory, regulatory, common or other law or rule (including but

6 not limited to any claims under federal securities laws or state disclosure law or any claims that

7 could be asserted derivatively on behalf of Cost Plus), which now or hereafter are based upon, arise

8 out of, relate in any way to, or involve, directly or indirectly, any of the actions, transactions,

9 occurrences, statements, representations, misrepresentations, omissions, allegations, facts, practices,

10 events, claims or any other matters, things or causes whatsoever, or any series thereof, that were,

11 could have been, or in the future can or might be alleged, asserted, set forth, claimed, embraced,

12

involved, or referred to in, or related to, directly or indirectly, any of the Actions or the subject

13 matter of any of the Actions in any court, tribunal, forum or proceeding, including, without

14

limitation: (a) the Merger; (b) any deliberations or negotiations in connection with the Merger,

15

including the process of deliberation or negotiation by each of Cost Plus, BBBY, and/or Merger

16

Sub and any of their respective officers, directors or advisors; (c) the consideration received by

17

Class members in connection with the Merger; (d) the Recommendation Statement and

18

Supplements or any other disclosures, SEC filings, public filings, periodic reports, press releases,

19 proxy statements or other statements issued, made available or filed relating, directly or indirectly,

20

to the Merger, including without limitation claims under any and all federal securities laws

21

(including those within the exclusive jurisdiction of the federal courts); (e) the fiduciary obligations

22 of the Released Parties (defined below) in connection with the Merger; (f) the fees, expenses or

23 costs incurred in prosecuting, defending, or settling the Actions; or (g) any of the allegations in any

24 complaint filed in any of the Actions; provided, however, that the Released Claims shall not

25

include the right to enforce the Stipulation, the MOU, the Judgment or claims for statutory

26 appraisal in connection with the Merger by Cost Plus stockholders who properly perfect such

27 appraisal claims and do not otherwise waive their appraisal rights.

28




9. “Defendants’ Released Claims” means any and all manner of claims, demands,

2 rights, liabilities, losses, obligations, duties, damages, costs, debts, expenses, interest, penalties,

3 sanctions, fees, attorneys’ fees, actions, potential actions, causes of action, suits, agreements,

4

judgments, decrees, matters, issues and controversies of any kind, nature or description whatsoever,

5 whether known or unknown, disclosed or undisclosed, accrued or unaccrued, apparent or not

6 apparent, foreseen or unforeseen, matured or not matured, suspected or unsuspected, liquidated or

7 not liquidated, fixed or contingent, including Unknown Claims (defined below), which any of the

8

Defendants may have or could have asserted against Plaintiffs, Plaintiffs’ Counsel, Dixon, Dixon’s

9 counsel, or any member of the Class, arising out of the institution, prosecution, settlement or

10 resolution of the Actions, provided, however, that “Defendants’ Released Claims” shall not include

11

the right to enforce this Stipulation, the MOU, or the Judgment.

12

10. “Released Parties” means, whether or not each or all of the following persons or

13 entities were named, served with process or appeared in the Actions: (a) Cost Plus, Joseph H.

14

Coulombe, Clifford J. Einstein, Barry J. Feld, Mark R. Genender, Danny W. Gurr, John C. Pound,

15

Kim D. Robbins, Fredric M. Roberts, and Kenneth T. Stevens, BBBY, Merger Sub; and (b) the

16 respective past, present or future directors, officers, employees, partners, attorneys, financial

17 advisors, accountants, insurers, reinsurers, principals, agents, controlling shareholders, any entity in

18 which any Defendant has, had or will have a controlling interest, assigns, spouses, heirs, associates,

19 related or affiliated entities, any member(s) of their immediate families, or any trust of which any

20

Defendant is the settlor or which is for the benefit of any Defendant and/or member(s) of his or her

21

family, of each and all of the foregoing.

22

11. The Released Claims and Defendants’ Released Claims include any claim that a

23 party does not know or suspect exists in his, her, or its favor at the time of the release of the

24

Released Claims or Defendants’ Released Claims, including without limitation those which, if

25

known, might have affected the decision to enter into the Settlement (“Unknown Claims”). With

26 respect to any of the Released Claims, the Parties stipulate and agree that upon Final Court

27

Approval of the Settlement, Plaintiffs shall expressly have, and each member of the Class shall be

28

deemed to have, and by operation of the final order and judgment by the Court shall have,




expressly waived, relinquished and released any and all provisions, rights and benefits conferred by

2 or under Cal. Civ. Code § 1542 or any law of the United States or any state of the United States or

3

territory of the United States, or principle of common law, which is similar, comparable or

4 equivalent to Cal. Civ. Code § 1542, which provides:

5

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT EXIST IN HIS OR HER FAVOR AT THE TIME OF

6

EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”

7

8

Plaintiffs acknowledge, and the members of the Class by operation of law shall be deemed to have

9 acknowledged, that they may discover facts in addition to or different from those now known or

10

believed to be true with respect to the Released Claims, but that it is the intention of Plaintiffs, and

11

by operation of law the members of the Class, to completely, fully, finally and forever extinguish

12 any and all Released Claims, known or unknown, suspected or unsuspected, which now exist, or

13

heretofore existed, or may hereafter exist, and without regard to the subsequent discovery of

14 additional or different facts. Plaintiffs acknowledge, and the members of the Class by operation of

15

law shall be deemed to have acknowledged, that the inclusion of “Unknown Claims” in the

16

definition of “Released Claims” was separately bargained for and was a material element of the

17

Settlement and was relied upon by each and all of the Defendants in entering into the Stipulation.

18

12. Plaintiffs and any and all members of the Class, for themselves and for their spouses

19 and former spouses, partners, successors, predecessors-in-interest, and assigns, are hereby

20

individually and severally permanently barred and enjoined from instituting, commencing,

21 prosecuting, participating in or continuing any action or other proceeding in any court or tribunal of

22

this or any other jurisdiction, either directly, representatively, derivatively or in any other capacity,

23 against any of the Released Persons, based upon, arising out of, or in any way related to or for the

24 purpose of enforcing any Released Claim, all of which Released Claims are hereby declared to be

25 compromised, settled, released, dismissed with prejudice and extinguished by virtue of the

26 proceedings in the Federal Action and this Judgment. Consistent with this paragraph, the Parties

27 are directed to obtain the dismissal of the State Court Actions with prejudice on the merits.

28




13. Plaintiffs’ Counsel are awarded attorneys’ fees in the amount of $__________ and

2 expenses in the amount of $____________, which sums the Court finds to be fair and reasonable.

3

The Court also approves Plaintiffs' application for an incentive fee for Dr. Ogurkiewicz in an

4 amount of $____________. Cost Plus or its successor-in-interest shall cause such amounts to be

5 paid in accordance with the terms of the Stipulation. Any Plaintiff or any other member of the

6

Class or any attorney for any member of the Class, or any of them, is hereby barred from a further

7 application for attorneys’ fees or expenses in the Actions or in any other action or proceeding

8 regarding the subject matter of the Actions.

9

14. Upon the Court’s Final Court Approval of the Settlement and the satisfaction of the

10 conditions of Paragraph 16 of the Stipulation, Defendants shall be deemed to have, and by

11 operation of this Judgment shall have, fully, finally, and forever released, relinquished, and

12

discharged Plaintiffs, Plaintiffs’ Counsel and each and all of the Class members, for themselves

13 and for their spouses and former spouses, partners, successors, predecessors-in-interest, and assigns,

14

from all claims based upon or arising out of the institution, prosecution, settlement or resolution of

15

the Actions. Notwithstanding the foregoing, the Defendants and all other Released Persons shall

16 retain the right to enforce the terms of the Stipulation, the MOU and/or this Judgment.

17

15. Neither the provisions contained in the Stipulation, the MOU and/or the Judgment,

18 nor any of the negotiations or proceedings in connection therewith, shall be deemed a presumption,

19 concession, or admission by any party to the Actions of any fault, liability, or wrongdoing, or lack

20 of any fault, liability, or wrongdoing, as to any facts or claims alleged or asserted in the Actions, or

21 any other actions or proceedings, and shall not be interpreted, construed, deemed, invoked, offered,

22 received in evidence, or otherwise used by any person in the Actions or in any other action or

23 proceeding, whether civil, criminal, or administrative, except (a) in connection with any proceeding

24

to enforce the terms of the Settlement, the MOU and/or the Judgment or (b) as may be necessary to

25 argue that the Stipulation, the MOU and/or Judgment has res judicata, collateral estoppel or other

26

issue or claim preclusion effect.

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16. The effectiveness of the provisions of this Judgment and the obligations of Plaintiffs

28 and Defendants under the Settlement shall not be conditioned upon or subject to the resolution of

7 [PROPOSED] ORDER AND FINAL JUDGMENT

CASE NO. 5:12-CV-02721-LHK

414533.02-Palo Alto Server 1A



1 any appeal from this Judgment that relates solely to the issue of Plaintiffs’ Counsel’s application

2

for an award of attorneys’ fees and expenses and/or an incentive award for Dr. Ogurkiewicz.

3

17. If Final Court Approval does not occur, this Judgment shall be rendered null and

4 void and shall be vacated and, in such event, all orders entered and releases delivered in connection

5

herewith, except Paragraphs 15 and 17 hereof and Paragraphs 10, 17, and 25 of the Stipulation,

6 shall be null and void, and the Parties shall be returned, without prejudice in any way, to their

7 respective litigation positions immediately prior to the execution of the MOU.

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18. Without affecting the finality of this Judgment, jurisdiction is hereby retained by

this Court for the purpose of protecting and implementing the Stipulation and the terms of this

Judgment, including the resolution of any disputes that may arise with respect to the effectuation of

any of the provisions of the Stipulation, and for the entry of such further orders as may be

necessary or appropriate in administering and implementing the terms and provisions of the

Settlement and this Judgment.

IT IS SO ORDERED.

Dated: The Honorable Lucy H. Koh United States District Court

Submitted by:

POMERANTZ GROSSMAN HUFFORD DAHLSTROM & GROSS LLP

By: GUSTAVO F. BRUCKNER (admitted pro hac vice)






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EXHIBIT B


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SAN JOSE DIVISION

) CASE NO 5 : 12-CV-02721-LHK . IRENE DIXON, On Behalf of Herself and All )

Others Similarly Situated ) CLASS ACTION ) Plaintiff, ) [PROPOSED] SCHEDULING ORDER

v.

COST PLUS, INC., JOSEPH H. COULOMBE, Hon: Lucy H. Koh CLIFFORD J. EINSTEIN, BARRY J. FELD, Date action filed: May 25, 2012 MARK R. GENENDER, DANNY W. GURR, JOHN C. POUND, KIM D. ROBBINS, FREDRIC M. ROBERTS, KENNETH T. STEVENS, BED BATH & BEYOND INC., and BLUE CORAL ACQUISITION CORP.,

Defendants.

[PROPOSED] SCHEDULING ORDER



27

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1


2 The Parties having made application, pursuant to Rule 23 of the Federal Rules of Civil

3 Procedure, for an Order approving the proposed settlement (the “Settlement”) of the above-

4 captioned action (the “Federal Action”) in accordance with a Stipulation of Settlement dated

5 February __, 2013 (the “Stipulation”), which (along with the defined terms therein) is incorporated

6 herein by reference and which, together with the accompanying documents and the Memorandum

7 of Understanding (the “MOU”) executed by the Parties on July 5, 2012, sets forth the terms and

8 conditions for the Settlement of the Actions and for a judgment dismissing Plaintiffs’ claims with

9 prejudice upon the terms and conditions set forth therein; and the Court having read and considered

10 the Stipulation and the accompanying documents; and all Parties having consented to the entry of

11 this Order;

12 IT IS HEREBY ORDERED this ___day of

2013, that:

13 1. The Federal Action shall be maintained and proceed as a class action pursuant to

14 Rules 23(a), 23(b)(1) and 23(b)(2) of the Federal Rules of Civil Procedure, without opt-out rights

15 and for settlement purposes only, by plaintiff Gary Ogurkiewicz (“Dr. Ogurkiewicz”) on behalf of

16 a class consisting of any and all record and beneficial holders of Cost Plus stock, including any and

17 all of their respective successors in interest, predecessors, representatives, trustees, executors,

18 administrators, heirs, assigns or transferees, immediate and remote, and any person or entity acting

19 for or on behalf of, or claiming under, any of them, and each of them, who held any such Cost Plus

20 stock at any time between and including May 9, 2012, and June 29, 2012, but excluding the

21 specifically named Defendants (the “Class”).

22 2. A hearing (the “Hearing”) shall be held before the Honorable Lucy H. Koh, United

23 States District Court for the Northern District of California, San Jose Courthouse, Courtroom 8, 4th

24 Floor, 280 South 1st Street, San Jose, California 95113, no sooner than June 3, 2013, and

25 specifically on

2013, at ______ __.m., for the purposes of determining: (a) whether

26 the Court should unconditionally certify the case as a class action, without opt-out rights and for

27 settlement purposes only, pursuant to Rules 23(a), 23(b)(1) and 23(b)(2) of the Federal Rules of

28 Civil Procedure, on behalf of any and all record and beneficial holders of Cost Plus stock,

1 [PROPOSED] SCHEDULING ORDER CASE NO. 5:12-CV-02721-LHK



including any and all of their respective successors in interest, predecessors, representatives,

2

trustees, executors, administrators, heirs, assigns or transferees, immediate and remote, and any

3 person or entity acting for or on behalf of, or claiming under, any of them, and each of them, who

4

held any such Cost Plus stock at any time between and including May 9, 2012, and June 29, 2012,

5

but excluding the specifically named Defendants; (b) whether Dr. Ogurkiewicz may be designated

6 as class representative with the law firm of Pomerantz Grossman Hufford Dahlstrom & Gross LLP

7 as Lead Counsel for the Class for the settlement of all claims in the Actions, including those claims

8

brought under Section 14(e) of the Williams Act (15 U.S.C.A. §§ 78n, 78aa), and whether Dr.

9

Ogurkiewicz and Pomerantz Grossman Hufford Dahlstrom & Gross LLP have adequately

10 represented the interests of the Class; (c) whether the Court should approve the Settlement pursuant

11

to the Stipulation; (d) whether the Court should enter the Judgment providing for the dismissal of

12

the claims asserted in the Actions and the Released Claims on the merits and with prejudice as

13 against the named Plaintiffs and all members of the Class and releasing the Released Parties from

14

the Released Claims and also providing for the dismissal of the Defendants’ Released Claims on

15

the merits and with prejudice as against Defendants and releasing Plaintiffs, Plaintiffs’ Counsel,

16

Dixon, Dixon’s counsel, and every member of the Class from the Defendants’ Released Claims; (e)

17

if the Court approves the Settlement and enters such Judgment, whether the Court should grant the

18 application of Plaintiffs’ Counsel for an award of attorneys’ fees and expenses to be paid by Cost

19

Plus or its successor-in-interest; (f) if the Court approves the Settlement and enters such Judgment,

20 whether the Court should grant the application of an incentive award for Dr. Ogurkiewicz; and (g)

21 such other matters as may properly come before the Court. The Court may adjourn the Hearing

22

(including consideration of the application of Plaintiffs’ Counsel for an award of attorneys’ fees

23 and expenses and/or an incentive award for Dr. Ogurkiewicz) without further notice to the Class

24 other than by announcement at the Hearing or any adjournment thereof.

25

3. The Court approves, in form and content, the Notice of Pendency of Class Action,

26

I Proposed Settlement of Class Action, Settlement Hearing and Right to Appear (the “Notice”)

27 substantially in the form attached as Exhibit C to the Stipulation, and finds that the mailing and

28

distribution of the Notice meets the requirements of Rule 23 of the Federal Rules of Civil




Procedure and due process, is the best notice practicable under the circumstances, and shall

2 constitute due and sufficient notice to all persons entitled thereto.

3

4. Within ten (10) business days after the date of this Order, Cost Plus or its successor-

4

in-interest shall cause a copy of the Notice to be mailed by first-class mail to each person who was

5 shown on the stock records maintained by or on behalf of Cost Plus to be or to have been a record

6 owner of any shares of Cost Plus common stock at any time between and including May 9, 2012,

7 and June 29, 2012, at his, her or its last known address appearing on the stock records maintained

8

by or on behalf of Cost Plus. All record holders who were not also the beneficial owners of the

9 shares of Cost Plus’ common stock held by them of record shall be requested to forward the Notice

10

to the beneficial owners of those shares. Cost Plus or its successor-in-interest shall use reasonable

11 efforts to give notice to beneficial owners of Cost Plus’ stock by making additional copies of the

12

Notice available to any record holder requesting the same for the purpose of distribution to

13

beneficial owners.

14

5. At least fifteen (15) business days prior to the date of the Hearing, the Parties shall

15

file any opening briefs in support of the Settlement, and Plaintiffs’ Counsel shall file their

16 application for an award of attorneys’ fees and expenses and an incentive award for Dr.

17

Ogurkiewicz, including any supporting affidavits.

18

6. At or before the Hearing provided for in Paragraph 2 of this Order, Cost Plus or its

19

I successor-in-interest shall file proof, by affidavit, of such mailings provided for in Paragraph 4 of

20

this Order.

21

7. Any member of the Class who objects to the certification of the Class, the

22

Settlement of Plaintiffs’ claims in the Actions as set forth in the Stipulation, the Judgment to be

23 entered in the Federal Action, and/or Plaintiffs’ Counsel’s application for fees and expenses and/or

24 an incentive award for Dr. Ogurkiewicz, or otherwise wishes to be heard, may appear personally or

25

by counsel at the Hearing and present evidence or argument that may be proper and relevant;

26 provided, however , that no member of the Class may be heard and no papers or briefs submitted by

27 or on behalf of any member of the Class shall be received and considered, except by Order of the

28

Court for good cause shown, unless, no later than ten (10) business days prior to the Hearing,





copies of (a) a written notice of intention to appear, identifying the name, address, and telephone

number of the objector and, if represented, their counsel; (b) proof of membership in the Class; (c)

a written detailed statement of such person’s specific objections to any matter before the Court; (d)

a written statement certifying that the objector is a member of the Class; (e) the grounds for such

objections and any reasons for such person’s desiring to appear and be heard; and (f) all documents

and writings such person desires this Court to consider, shall be served electronically or by hand or

overnight mail upon the following counsel:

Gustavo F. Bruckner Pomerantz Grossman Hufford Dahlstrom & Gross LLP Attn: Cost Plus Settlement 600 Third Avenue, 20th Floor New York, NY 10016

Evan Smith Brodsky & Smith, LLC Attn: Cost Plus Settlement 9595 Wilshire Boulevard Suite 900 Beverly Hills, CA 90212

Eric S. Waxman Skadden, Arps, Slate, Meagher & Flom LLP Attn: Cost Plus Settlement 300 South Grand Avenue Suite 3400 Los Angeles, CA 90071

Michael Firestein Proskauer Rose LLP Attn: Cost Plus Settlement 2049 Century Park East Los Angeles, CA 90067-3206

Mr. Bruckner or Mr. Smith shall immediately furnish all objections as they are received to

Defendants’ counsel and will file all objections with the Court no later than five (5) days prior to

the Hearing. Unless the Court otherwise directs, no member of the Class shall be entitled to object

to the Settlement, or to the judgment to be entered herein, or to the award of attorneys’ fees and

expenses to Plaintiffs’ Counsel and/or an incentive award for Dr. Ogurkiewicz, or otherwise to be

heard, except by serving and filing written objections as described above. Any person who fails to

object in the manner provided above shall be deemed to have waived such objection and shall

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forever be barred from making any such objection in the Federal Action or in any other action or

I proceeding.

8. Any member of the Class or any attorney for any member of the Class that intends

to seek on any basis an award of attorneys’ fees or costs relating to the Actions must also file

notice with the Court no later than ten (10) business days prior to the Hearing. Such notice must

include a memorandum of points and authorities in support of the request for an award of fees or

costs and any supporting declarations, documents or other evidence. Such notice shall also be

served electronically and by overnight mail upon the following counsel:



Eric S. Waxman Skadden, Arps, Slate, Meagher & Flom LLP Attn: Cost Plus Settlement 300 South Grand Avenue Suite 3400 Los Angeles, CA 90071


The final judgment approving the Settlement shall bar the application for attorneys’ fees or

expenses by any party that fails to comply with the provisions of this paragraph, and no other

application for attorneys’ fees and expenses and/or an incentive award shall be filed by any

Plaintiff or any other member of the Class or any attorney for any member of the Class in the

Actions or any other action or proceeding regarding the subject matter of the Actions.

9. If the Court approves the Settlement provided for in the Stipulation following the

I Hearing, judgment shall be entered substantially in the form attached as Exhibit A to the

5

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Stipulation.

2

10. The Stipulation and the Settlement are subject to and expressly conditioned upon:

3

(a) the entry by the Court of the Judgment substantially in the form attached to the Stipulation as

4

Exhibit A, (b) consummation of the Merger, and (c) Final Court Approval of the Settlement;

5 provided, however, that neither the Court’s approval of the Settlement nor Final Court Approval of

6

the Settlement is contingent on approval of the Fee Application or awarding the Fee Award. If the

7

Court fails to approve the Settlement in accordance with the terms described in the Stipulation or

8

the MOU, then any orders that may have been entered by any court in connection therewith shall

9

be null and void and of no force and effect, unless counsel for each of the Parties to the Stipulation,

10 within ten (10) business days from any such terminating event, agrees in writing with counsel for

11

the other Parties to the Stipulation to proceed with the Stipulation and Settlement, including only

12 with such modifications, if any, as to which all other Parties in their sole judgment and discretion

13 may agree. In the event the Stipulation is terminated pursuant to its terms or by any Party, it shall

14 not be deemed to prejudice in any way the position of any Party with respect to this litigation or

15 any other litigation or proceeding. In such event, the Parties to the Stipulation shall be deemed to

16

have reverted to their respective litigation status immediately prior to the execution of the MOU,

17 and they shall proceed in all respects as if the MOU and the Stipulation had not been executed and

18 any related orders had not been entered, and neither the existence of the Stipulation or the MOU

19 nor their respective contents shall be admissible in evidence or shall be referred to for any purpose

20

in this litigation or in any other litigation or proceeding.

21

11. The Court reserves the right to approve the Stipulation and the Settlement with

22 modifications and without further notice to members of the Class, and retains jurisdiction over the

23

Actions to consider all further applications arising out of or connected with the proposed

24

Settlement.

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12. Pending final determination of whether the Settlement should be approved,

26

Plaintiffs and any member of the Class shall not institute, commence or prosecute any claims

27 covered by the Settlement, including Released Claims or any claim by any member of the Class or

28 any attorney for any member of the Class seeking a fee based on any supplemental disclosures




1 made by Cost Plus other than in connection with the proceedings set forth in Paragraph 14 of the

2

Stipulation. In addition, all discovery and other proceedings in the Actions, other than such

3 proceedings as may be necessary to carry out the terms and conditions of the Settlement embodied

4

in the Stipulation, are hereby stayed and suspended until further order of this Court.

5

IT IS SO ORDERED.

6

7

Dated: The Honorable Lucy H. Koh

8

United States District Court

9 Submitted by:

10

POMERANTZ GROSSMAN HUFFORD DAHLSTROM & GROSS LLP

11

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By: GUSTAVO F. BRUCKNER (admitted pro hac vice)

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7 [PROPOSED] SCHEDULING ORDER





EXHIBIT C


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SAN JOSE DIVISION

IRENE DIXON, On Behalf of Herself and All

CASE NO. 5:12-CV-02721-LHK Others Similarly Situated

CLASS ACTION Plaintiff,

NOTICE OF PENDENCY OF CLASS v. ACTION, PROPOSED SETTLEMENT

COST PLUS, INC., JOSEPH H. COULOMBE, CLIFFORD J. EINSTEIN, BARRY J. FELD,

OF CLASS ACTION, SETTLEMENT HEARING AND RIGHT TO APPEAR

MARK R. GENENDER, DANNY W. GURR, JOHN C. POUND, KIM D. ROBBINS, FREDRIC M. ROBERTS, KENNETH T. STEVENS, BED BATH & BEYOND INC., and BLUE CORAL ACQUISITION CORP.,

Defendants.

NOTICE OF PENDENCY OF CLASS ACTION, PROPOSED SETTLEMENT OF CLASS ACTION, SETTLEMENT HEARING AND RIGHT TO APPEAR

[Cover Page, as required by the Private Securities Litigation Reform Act of 1995 (“PSLRA”)]

TO: ALL RECORD AND BENEFICIAL HOLDERS OF COST PLUS, INC. STOCK, INCLUDING THEIR RESPECTIVE PREDECESSORS, SUCCESSORS-IN-INTEREST, HEIRS, OR ASSIGNS, WHO HELD ANY SUCH COST PLUS, INC. STOCK AT ANY TIME BETWEEN AND INCLUDING MAY 9, 2012, AND JUNE 29, 2012

PLEASE READ THIS NOTICE CAREFULLY. THIS NOTICE RELATES TO A PROPOSED SETTLEMENT OF THE LITIGATION REFERRED TO IN THE CAPTION AND CONTAINS IMPORTANT INFORMATION REGARDING YOUR RIGHTS. IF YOU HELD SHARES OF COST PLUS, INC. COMMON STOCK FOR THE BENEFIT OF OTHERS, PLEASE PROMPTLY TRANSMIT THIS DOCUMENT TO SUCH BENEFICIAL OWNERS.

I A federal court authorized this notice. This is not a solicitation from a lawyer.

The proposed settlement (the “Settlement”) is set forth in a Stipulation of Settlement dated February __, 2013 (the “Stipulation” or “Settlement Agreement”). Plaintiffs (defined below) agreed to the Settlement based on disclosures Cost Plus, Inc. (“Cost Plus”) made on June 6 and June 21, 2012, before the closing of the merger between Cost Plus and Bed Bath & Beyond Inc. (“BBBY”) and its subsidiary Blue Coral Acquisition Corp. (“Merger Sub”), which disclosures Plaintiffs deemed an adequate basis for settling the Actions (defined below). The proposed Settlement does not provide for the distribution of any amounts to the members of the Class (defined below). If the United States District Court for the Northern District of California (the “Court” or the “Federal Court”) approves the proposed Settlement, you will be forever barred from contesting the fairness, reasonableness or adequacy of the proposed Settlement, and from pursuing the Released Claims (defined below).

• Plaintiffs and Defendants (defined below) (together, the “Parties”) disagree on both liability and damages and the average amount of damages that would be recoverable if Plaintiffs

i NOTICE OF SETTLEMENT





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prevailed on the claims in the Actions. Defendants deny that they are liable to Plaintiffs or the Class and deny that Plaintiffs or the Class have suffered any damages. The issues on which the parties disagree include: (a) whether the complaint’s allegations support a federal securities claim; (b) whether Defendants acted with the requisite state of mind, or scienter; (c) whether Defendants’ alleged misstatements or omissions harmed the members of the Class; and (d) whether Defendants’ alleged misstatements or omissions were material to investors. Plaintiffs sought to enjoin the consummation of the merger between Cost Plus and BBBY or to rescind the merger in the event that it was consummated.

Plaintiff’s Counsel (defined below) intend to apply for an award of fees and expenses incurred by Plaintiffs’ Counsel, and other counsel for plaintiffs, and an incentive award for Plaintiff Gary Ogurkiewicz ("Dr. Ogurkiewicz") in connection with the Actions in an amount not to exceed $375,000 in the aggregate. Plaintiffs’ Counsel intend to seek an incentive award of $2,800.00 for Dr. Ogurkeiwicz as part of the aggregate sum being sought. In no event will Defendants be required to pay any fees or expenses beyond the above amounts to any member of the Class or any attorney for a member of the Class who may seek an award of fees or costs relating to or arising out of the Actions. If the Court awards Plaintiff’s Counsel attorneys’ fees and expenses and/or an incentive award for Dr. Ogurkiewicz, Cost Plus or its successor-in-interest will pay those fees. If the Court does not approve the request for attorneys’ fees and expenses and/or an incentive award for Dr. Ogurkiewicz, it will not affect the Settlement.

• Questions regarding the Settlement may be directed to Plaintiffs’ Counsel: Rebecca Jarmon, Pomerantz Grossman Hufford Dahlstrom & Gross LLP, 600 Third Avenue, 20th Floor, New York, NY 10016.

• In settling the Actions, the Parties believe the Settlement is in the best interests of the Class and of the Parties. Also in settling the Actions, the Parties recognized the time and expense that would be incurred by further litigation and the uncertainties inherent in such litigation.

Defendants have vigorously denied, and continue to vigorously deny, any wrongdoing or liability with respect to all claims asserted in the Actions, including that they have committed any violations of law, that they have acted improperly in any way, that they have any liability or owe any damages of any kind to any Plaintiff or member of the Class, and that any additional information in the June 6 and June 21, 2012, disclosures was material to Cost Plus stockholders or was required under any applicable rule, regulation, statute, or law, but executed the Stipulation solely because they consider it desirable that the Actions be settled and dismissed with prejudice in order to, among other things, (a) eliminate the burden, inconvenience, expense, risk and distraction of further litigation, (b) finally put to rest and terminate all the claims which were or could have been asserted against Defendants in the Actions, and (c) thereby permit the merger as already-consummated to proceed without further risk of injunctive or other relief.

Object to the Settlement by ___________, 2013.

Write to the Parties’ counsel explaining why you do not think the Settlement should be approved and, if you wish to attend and speak at the Settlement Hearing (defined below), indicating your intention to do so.

Attend the Settlement Hearing on

Submit a valid written objection indicating your , 2013. intention to attend the Settlement Hearing and

speak in Court about the fairness of the Settlement.

ii NOTICE OF SETTLEMENT




28


1

2 WHY DID I GET THIS NOTICE? ................................................................................................. 1

3 WHO IS A CLASS MEMBER? ..................................................................................................... 1

4 WHATIS THE CASE ABOUT? .................................................................................................... 1

5 WHAT ARE THE TERMS OF THE SETTLEMENT? ................................................................. 4

6 WHAT LEGAL RIGHTS ARE BEING RELEASED? .................................................................. 6

7 HOW ARE CLASS COUNSEL PAID? ....................................................................................... 10

8 WILL THERE BE A HEARING? ................................................................................................ 10

9 WHAT ARE MY RIGHTS? ......................................................................................................... 11

10 WHAT IF I AM HOLDING SHARES ON BEHALF OF SOMEONE ELSE? ........................... 12

11 HOW CAN I GET MORE INFORMATION? ............................................................................. 13

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iii

NOTICE OF SETTLEMENT





1 I WHY DID I GET THIS NOTICE?

2

The purpose of this notice (the “Notice”) is to inform you of a proposed Settlement of the

3

following class action lawsuits:

4 • Gary Ogurkiewicz v. Cost Plus, Inc., et al., Case No. RG 12-629912 (the “Ogurkiewicz Action”), pending before the California Superior Court, County of Alameda (the “State

5

Court”);

6 • Willie M. Richardson v. Cost Plus, Inc., et al., Case No. RG 12-631301, pending before the State Court (the “Richardson Action,” and with the Ogurkiewicz Action, the “State Court

7

Actions”); and

8 • Irene Dixon v. Cost Plus, Inc., et al., Case No. 12-cv-02721, pending before the Court (the “Federal Action,” and with the State Court Actions, the “Actions”).

9 You received this Notice because you are listed as a stockholder of Cost Plus. You should read

10 this Notice carefully to understand your legal rights.

11 WHO IS A CLASS MEMBER?

12 The class (the “Class”) includes any and all record and beneficial holders of Cost Plus

13 stock, including any and all of their respective successors in interest, predecessors, representatives,

14 trustees, executors, administrators, heirs, assigns or transferees, immediate and remote, and any

15 person or entity acting for or on behalf of, or claiming under, any of them, and each of them, who

16 held any such Cost Plus stock at any time between and including May 9, 2012, and June 29, 2012,

17 but excluding the specifically named Defendants (defined below).

18 WHAT IS THE CASE ABOUT?

19 THE DESCRIPTION OF THE ACTION AND SETTLEMENT WHICH FOLLOWS HAS

20

BEEN PREPARED BY COUNSEL FOR THE PARTIES. THE COURT HAS MADE NO FINDINGS WITH RESPECT TO SUCH MATTERS, AND THIS NOTICE IS NOT AN

21

EXPRESSION OR STATEMENT BY THE COURT OF FINDINGS OF FACT.

22 On May 9, 2012, Cost Plus announced it had entered into an Agreement and Plan of Merger

23 (the “Merger Agreement”) with BBBY and Merger Sub providing for a business combination

24 whereby Cost Plus would merge with and into Merger Sub, and Cost Plus would become a wholly-

25 owned subsidiary of BBBY (the “Merger”).

26 The Merger Agreement provided that BBBY would acquire all of the outstanding shares of

27 Cost Plus for $22.00 per share in cash and that the Merger would be effected through what is called

28 a “two-step” merger, whereby BBBY’s subsidiary would commence a tender offer to acquire all

1






outstanding shares of Cost Plus at a purchase price of $22.00 per share. Shares not acquired in the

2

tender offer would receive the same $22.00 cash consideration by means of a short-form merger.

3

On May 11, 2012, Dr. Ogurkiewicz filed the Ogurkiewicz Action alleging a California state

4

law cause of action for breach of fiduciary duty and aiding and abetting on behalf of a putative

5 class of Cost Plus stockholders against defendants Cost Plus, Inc., Joseph Coulombe, Clifford

6

Einstein, Barry Feld, Danny Gurr, Kim Robbins, Frederic Roberts, Kenneth Stevens, Merger Sub,

7 and BBBY challenging the Merger.

8

On May 22, 2012, plaintiff Willie M. Richardson (“Mr. Richardson,” and with Dr.

9

Ogurkiewicz, “Plaintiffs”) filed the Richardson Action alleging a California state law cause of

10 action for breach of fiduciary duty and aiding and abetting on behalf of a putative class of Cost

11

Plus stockholders against defendants Cost Plus, Barry J. Feld, Kenneth T. Stevens, Clifford J.

12

Einstein, Danny W. Gurr, Kim D. Robbins, Fredric M. Roberts, BBBY, and Merger Sub.

13

On May 25, 2012, Cost Plus filed with the Securities Exchange Commission (the “SEC”)

14

the Company’s Recommendation Statement on Schedule 14D-9 in support of the Merger (the

15

“Recommendation Statement”).

16

On May 25, 2012, Irene Dixon (“Dixon”) filed the Federal Action, a putative class action

17 on behalf of Cost Plus stockholders, in the Federal Court against defendants Cost Plus, Joseph H.

18

Coulombe, Clifford J. Einstein, Barry J. Feld, Mark R. Genender, Danny W. Gurr, John C. Pound,

19

Kim D. Robbins, Fredric M. Roberts, Kenneth T. Stevens, BBBY, and Merger Sub (collectively,

20

“Defendants”) challenging the Merger and alleging claims substantially similar to those alleged in

21

the State Court Actions as well as a claim for violation of Section 14(e) of the Williams Act (15

22

U.S.C.A. §§ 78n, 78aa) challenging the accuracy of Cost Plus’ Recommendation Statement. Dixon

23 subsequently filed a motion for a preliminary injunction seeking to enjoin the Merger (the

24

“Preliminary Injunction Motion”).

25

On May 30, 2012, certain defendants in the Ogurkiewicz Action moved to dismiss and stay

26

the Ogurkiewicz Action and subsequently filed identical motions in the Richardson Action.

27

On June 4, 2012, Dr. Ogurkiewicz in the Ogurkiewicz Action filed and served on

28

defendants in that action Dr. Ogurkiewicz’s Ex Parte Application for Discovery on Shortened Time

2






and Memorandum of Points and Authorities in Support (the “Ex Parte Application”). On June 6,

2

2012, the State Court denied that Ex Parte Application and granted Defendants’ motion to stay

3 conditioned on Defendants not opposing intervention by Dr. Ogurkiewicz in the Federal Action.

4

On June 6, 2012, Cost Plus filed an amendment to its Recommendation Statement (the

5

“First Amendment”) to reflect certain information raised by Dr. Ogurkiewicz in his Ex Parte

6

I Application and in an earlier demand letter sent to Defendants.

7

On June 7, 2012, Dr. Ogurkiewicz filed a motion to intervene in the Federal Action (the

8

“Intervention Motion”).

9

Pursuant to a confidentiality stipulation, Defendants produced in the Federal Action certain

10 core documents including: (a) draft minutes of the Cost Plus board of directors (the “Board”); (b)

11

draft minutes of a committee comprised of certain of the Company’s outside directors (the “Special

12

Committee”); (c) presentations to the Cost Plus Board and Special Committee by the Special

13

Committee’s financial advisor; and (d) management presentations made by Cost Plus to BBBY. In

14 addition, the following individuals were deposed in the Federal Action: (a) on June 5, 2012, John

15

Pound, an outside director of Cost Plus who was a member of the Special Committee; (b) on June 7,

16

2012, Jeffrey Hornstein, a managing director of Peter J. Solomon Company, the Special

17

Committee’s financial advisor who had separately produced documents in the Federal Action; and

18

(c) on June 8, 2012, Barry Feld, Cost Plus’ Chief Executive Officer.

19

On June 14, the Federal Court issued an order setting, among other things, (a) the hearing

20 on the Preliminary Injunction Motion for June 25, 2012, and (b) a briefing schedule for Dr.

21

Ogurkiewicz to file papers in connection with the Preliminary Injunction Motion as well as for

22

Defendants’ response.

23

On June 21, 2012, Cost Plus filed an amendment to its Recommendation Statement (the

24

“Second Amendment,” and with the First Amendment, the “Supplements”) to reflect certain

25

information raised by Dr. Ogurkiewicz in his brief filed in support of the Preliminary Injunction

26

Motion and in an earlier demand letter sent to Defendants.

27

On June 25, 2012, the Court heard argument on both the Preliminary Injunction Motion and

28

the Intervention Motion in the Federal Action. The Court denied the Preliminary Injunction

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1

Motion based on a failure to demonstrate both irreparable injury and a likelihood of success on the

2 merits and issued an order to that effect on June 27, 2012. The Court also granted the

3

Intervention Motion. After ruling from the bench, the Court advised the Parties to consider settling

4

the matter based on the supplemental disclosures made by Cost Plus.

5

On June 27, 2012, Dixon filed a voluntary dismissal without prejudice of her claims.

6

On June 28, 2012, the tender offer closed with 20,824,689 shares validly tendered or

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I approximately 92.5% of Cost Plus outstanding shares of common stock. Cost Plus, BBBY and

8

Merger Sub consummated the Merger the following day.

9

Pursuant to the Court’s recommendation, Plaintiffs’ counsel Pomerantz Grossman Hufford

10

Dahlstrom & Gross LLP, Berman DeValerio, Brower Piven, A Professional Corporation, and

11

Brodsky & Smith, LLC (“Plaintiffs’ Counsel”) and counsel for Defendants engaged in arm’s length

12

discussions and negotiations regarding a potential resolution of the claims asserted in the Actions.

13

On July 5, 2012, following arm’s length discussions and negotiations regarding a potential

14 resolution of the claims asserted in the Actions, Plaintiffs’ Counsel and counsel for Defendants

15 agreed to a settlement and executed a Memorandum of Understanding (the “MOU”) containing the

16

terms for the Parties’ agreement in principle to resolve the Actions.

17

On February __, 2013, the Parties executed and submitted to the Court the Stipulation,

18 which resulted in the Court entering a scheduling order (the “Scheduling Order”) in the Federal

19

Action on ____, 2013.

20

I WHAT ARE THE TERMS OF THE SETTLEMENT?

21

Cost Plus provided the Supplements to Cost Plus stockholders that were made in filings

22 with the SEC on June 6, 2012, and June 21, 2012. Without admitting any wrongdoing and without

23 conceding that the Recommendation Statement or any other disclosures were inaccurate or

24

incomplete in any respect or that the Supplements were material, Defendants acknowledge that Dr.

25

Ogurkiewicz’s demand letter and intervention in the Federal Action were the primary cause of the

26

Supplements. Plaintiffs acknowledge that they reviewed the Supplements prior to the Merger and

27

deemed them an adequate basis for settling the Actions.

28

If the Court approves the Settlement, then, among other things:

4

NOTICE OF SETTLEMENT CASE NO. 5:12-CV-02721-LHK



1

(i) the Federal Action will be dismissed;

2

(ii) the Court will dismiss the Released Claims (defined below) and the

3

Defendants’ Released Claims (defined below) with prejudice and on

4

the merits and without costs;

5

(iii) further prosecution of the State Court Actions will be enjoined and

6

the Parties will be required to dismiss the State Court Actions with

7 prejudice;

8

(iv) the Defendants’ Released Claims (defined below) will be released as

9 against Plaintiffs, Plaintiffs’ Counsel, Dixon, Dixon’s counsel, and

10 any member of the Class (see “What legal rights are being released”

11

below for more information); and

12

(v) the Released Claims (defined below) will be released as against

13

Defendants and the Released Parties (defined below) (see “What

14

legal rights are being released” below for more information).

15

Defendants have vigorously denied, and continue to vigorously deny, any wrongdoing or

16

liability with respect to all claims asserted in the Actions, including that they have committed any

17 violations of law, that they have acted improperly in any way, that they have any liability or owe

18 any damages of any kind to any Plaintiff or member of the Class, and that any additional

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information in the Supplements was material to Cost Plus stockholders or was required under any

20 applicable rule, regulation, statute, or law, but executed the Stipulation solely because they

21 consider it desirable that the Actions be settled and dismissed with prejudice in order to, among

22 other things, (a) eliminate the burden, inconvenience, expense, risk and distraction of further

23

litigation, (b) finally put to rest and terminate all the claims which were or could have been asserted

24 against Defendants in the Actions, and (c) thereby permit the Merger as already consummated to

25 proceed without further risk of injunctive or other relief.

26

In settling the Actions, the Parties believe the Settlement is in the best interests of the Class

27 and of the Parties. Also in settling the Actions, the Parties recognized the time and expense that

28 would be incurred by further litigation and the uncertainties inherent in such litigation.

5

NOTICE OF SETTLEMENT CASE NO. 5:12-CV-02721-LIIK



1

The full terms of the Settlement are set forth in the Stipulation that is on file with the Court.

2

I WHAT LEGAL RIGHTS ARE BEING RELEASED?

3

If the Court approves of the Settlement, any Plaintiff or any or all members of the Class or

4 any attorney for any member of the Class, or any of them, shall be deemed to have, and shall have,

5 released and forever discharged the Released Parties (defined below) of and from any and all

6

Released Claims (defined below). In addition, Defendants shall be deemed to have, and shall have,

7 released and forever discharged Plaintiffs, Plaintiffs’ Counsel, Dixon, Dixon’s counsel, and any

8 member of the Class of and from any and all Defendants’ Released Claims (defined below). For

9 purposes of the Settlement:

10

“Released Claims” means any and all manner of claims, demands, rights, liabilities,

11

losses, obligations, duties, damages, costs, debts, expenses, interest, penalties, sanctions,

12

fees, attorneys’ fees, actions, potential actions, causes of action, suits, agreements,

13

judgments, decrees, matters, issues and controversies of any kind, nature or description

14 whatsoever, whether known or unknown, disclosed or undisclosed, accrued or unaccrued,

15 apparent or not apparent, foreseen or unforeseen, matured or not matured, suspected or

16 unsuspected, liquidated or not liquidated, fixed or contingent, including Unknown Claims

17

(defined below), that any Plaintiff or any or all members of the Class or any attorney for

18 any member of the Class, or any of them, ever had, now have, or otherwise could, can or

19 might assert, whether direct, derivative, individual, class, representative, legal, equitable

20

(including, without limitation, for any breach of fiduciary duties) or of any other type, or in

21 any other capacity, against any of the Released Parties (defined below), whether based on

22 state, local, foreign, federal, statutory, regulatory, common or other law or rule (including

23

but not limited to any claims under federal securities laws or state disclosure law or any

24 claims that could be asserted derivatively on behalf of Cost Plus), which now or hereafter

25 are based upon, arise out of, relate in any way to, or involve, directly or indirectly, any of

26

the actions, transactions, occurrences, statements, representations, misrepresentations,

27 omissions, allegations, facts, practices, events, claims or any other matters, things or causes

28 whatsoever, or any series thereof, that were, could have been, or in the future can or might

6






1

be alleged, asserted, set forth, claimed, embraced, involved, or referred to in, or related to,

2

directly or indirectly, any of the Actions or the subject matter of any of the Actions in any

3 court, tribunal, forum or proceeding, including, without limitation: (a) the Merger; (b) any

4

deliberations or negotiations in connection with the Merger, including the process of

5

deliberation or negotiation by each of Cost Plus, BBBY, and/or Merger Sub and any of

6

their respective officers, directors or advisors; (c) the consideration received by Class

7 members in connection with the Merger; (d) the Recommendation Statement and

8

Supplements or any other disclosures, SEC filings, public filings, periodic reports, press

9 releases, proxy statements or other statements issued, made available or filed relating,

10

directly or indirectly, to the Merger, including without limitation claims under any and all

11

federal securities laws (including those within the exclusive jurisdiction of the federal

12 courts); (e) the fiduciary obligations of the Released Parties (defined below) in connection

13 with the Merger; (f) the fees, expenses or costs incurred in prosecuting, defending, or

14 settling the Actions; or (g) any of the allegations in any complaint filed in any of the

15

Actions; provided, however, that the Released Claims shall not include the right to enforce

16

this Stipulation, the MOU, the Judgment (defined below) or claims for statutory appraisal in

17 connection with the Merger by Cost Plus stockholders who properly perfect such appraisal

18 claims and do not otherwise waive their appraisal rights;

19

“Defendants’ Released Claims” means any and all manner of claims, demands,

20 rights, liabilities, losses, obligations, duties, damages, costs, debts, expenses, interest,

21 penalties, sanctions, fees, attorneys’ fees, actions, potential actions, causes of action, suits,

22 agreements, judgments, decrees, matters, issues and controversies of any kind, nature or

23

description whatsoever, whether known or unknown, disclosed or undisclosed, accrued or

24 unaccrued, apparent or not apparent, foreseen or unforeseen, matured or not matured,

25 suspected or unsuspected, liquidated or not liquidated, fixed or contingent, including

26

Unknown Claims (defined below), which any of the Defendants may have or could have

27 asserted against Plaintiffs, Plaintiffs’ Counsel, Dixon, Dixon’s counsel, or any member of

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the Class, arising out of the institution, prosecution, settlement or resolution of the Actions,

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1 provided, however, that “Defendants’ Released Claims” shall not include the right to

2 enforce this Stipulation, the MOU, or the Judgment;

3

“Released Parties” means, whether or not each or all of the following persons or

4 entities were named, served with process or appeared in the Actions: (a) Cost Plus, Joseph

5

H. Coulombe, Clifford J. Einstein, Barry J. Feld, Mark R. Genender, Danny W. Gurr, John

6

C. Pound, Kim D. Robbins, Fredric M. Roberts, and Kenneth T. Stevens, BBBY, Merger

7

Sub; and (b) the respective past, present or future directors, officers, employees, partners,

8 attorneys, financial advisors, accountants, insurers, reinsurers, principals, agents,

9 controlling shareholders, any entity in which any Defendant has, had or will have a

10 controlling interest, assigns, spouses, heirs, associates, related or affiliated entities, any

11 member(s) of their immediate families, or any trust of which any Defendant is the settlor or

12 which is for the benefit of any Defendant and/or member(s) of his or her family, of each

13 and all of the foregoing;

14

The Released Claims and Defendants’ Released Claims include any claim

15

that a party does not know or suspect exists in his, her, or its favor at the time of the release

16 of the Released Claims or Defendants’ Released Claims, including without limitation those

17 which, if known, might have affected the decision to enter into the Settlement (“Unknown

18

Claims”). With respect to any of the Released Claims, the Parties stipulate and agree that

19 upon Final Court Approval of the Settlement (defined below), Plaintiffs shall expressly

20

have, and each member of the Class shall be deemed to have, and by operation of the final

21 order and judgment by the Court shall have, expressly waived, relinquished and released

22 any and all provisions, rights and benefits conferred by or under Cal. Civ. Code § 1542 or

23 any law of the United States or any state of the United States or territory of the United

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States, or principle of common law, which is similar, comparable or equivalent to Cal. Civ.

25

Code § 1542, which provides:

26

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT EXIST IN HIS OR HER FAVOR AT THE TIME OF

27

EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”

28

8






1

Plaintiffs acknowledge, and the members of the Class by operation of law shall be deemed

2

to have acknowledged, that they may discover facts in addition to or different from those

3 now known or believed to be true with respect to the Released Claims, but that it is the

4

intention of Plaintiffs, and by operation of law the members of the Class, to completely,

5

fully, finally and forever extinguish any and all Released Claims, known or unknown,

6 suspected or unsuspected, which now exist, or heretofore existed, or may hereafter exist,

7 and without regard to the subsequent discovery of additional or different facts. Plaintiffs

8 acknowledge, and the members of the Class by operation of law shall be deemed to have

9 acknowledged, that the inclusion of “Unknown Claims” in the definition of “Released

10

Claims” was separately bargained for and was a material element of the Settlement and was

11 relied upon by each and all of the Defendants in entering into this Stipulation;

12

“Final Court Approval” means that the Court has entered a final order and

13

judgment: (a) unconditionally certifying the Class; (b) approving the Settlement; (c)

14

dismissing the Federal Action with prejudice on the merits and with each Party to bear their

15 own costs (except those costs set forth in Paragraphs 15 and 32 of the Stipulation); (d)

16

barring further prosecution of the State Court Actions on the grounds of res judicata and

17 requiring the Parties to obtain the dismissal of the State Court Actions with prejudice on the

18 merits; (e) discharging the Released Parties from the Released Claims; and (f) that is final

19 and no longer subject to further appeal or review, whether by affirmance on or exhaustion

20 of any possible appeal or review, writ of certiorari, lapse of time or otherwise.

21

Notwithstanding any provision to the contrary in this Stipulation, Final Court Approval is

22 not conditioned on the approval of attorneys’ fees and the reimbursement of expenses to

23

Plaintiffs’ Counsel and an incentive award to Dr. Ogurkiewicz; and

24

“Judgment” means the Order and Final Judgment attached to the Stipulation as

25

Exhibit C.

26

The Settlement also bars and enjoins Plaintiffs and all members of the Class from

27

I instituting, commencing or prosecuting any claims covered by the Settlement, including Released

28

Claims or any claim by any member of the Class or any attorney for any member of the Class

9






1 seeking a fee based on any supplemental disclosures made by Cost Plus other than in connection

2 with the proceedings set forth in Paragraph 15 of the Stipulation. In addition, all discovery and

3 other proceedings in the Actions, other than such proceedings as may be necessary to carry out the

4

terms and conditions of the Settlement embodied in the Stipulation, are hereby stayed and

5 suspended until further order of this Court.

6

HOW ARE CLASS COUNSEL PAID?

7

You do not have to pay for Plaintiffs’ Counsel to represent your interests. If the Court

8 approves the terms of the Settlement, Cost Plus or its successor-in-interest will pay Plaintiffs’

9

Counsel’s attorneys’ fees and expenses, if any, as are awarded by the Court (the “Fee Award”).

10

Any award of attorneys’ fees and expenses and/or an incentive award for Dr. Ogurkiewicz will be

11 paid within seven (7) business days following Final Court Approval of the Settlement and

12 satisfaction of the conditions enumerated in Paragraph 16 of the Stipulation. Defendants will not

13 oppose an application by Plaintiffs' Counsel for an award of attorneys’ fees and expenses and an

14

incentive award for Dr. Ogurkiewicz to the extent that such application shall not seek an award

15 exceeding $375,000 in the aggregate (the “Fee Application”). Plaintiffs' Counsel, and any other

16 counsel, agree not to seek an award of attorneys' fees and documented out-of-pocket expenses and

17 an incentive award for Dr. Ogurkiewicz that exceed $375,000 in the aggregate. Plaintiffs’ Counsel

18

intend to seek an incentive award of $2,800.00 for Dr. Ogurkeiwicz as part of the aggregate sum

19

being sought. No other application for attorneys’ fees and expenses shall be filed and in no event

20 shall Defendants be required to pay any amount beyond the agreed upon amount in the Fee

21

Application. If the Court does not approve the request for attorneys’ fees and expenses and/or an

22

incentive award for Dr. Ogurkiewicz, it will not affect the Settlement.

23

WILL THERE BE A HEARING?

24

There will be a hearing (the “Settlement Hearing”) in connection with the Settlement. The

25

Settlement Hearing will be held before the Honorable Lucy H. Koh, United States District Court

26

for the Northern District of California, San Jose Courthouse, Courtroom 8, 4th Floor, 280 South 1st

27

Street, San Jose, California 95113, on ____________, 2013, at ________ __.m. The purpose of the

28

Settlement Hearing is to decide: (a) whether the Court should unconditionally certify the case as a

10






1 class action, without opt-out rights and for settlement purposes only, pursuant to Rules 23(a),

2

23(b)(1) and 23(b)(2) of the Federal Rules of Civil Procedure, on behalf of any and all record and

3

beneficial holders of Cost Plus stock, including any and all of their respective successors in

4

interest, predecessors, representatives, trustees, executors, administrators, heirs, assigns or

5

transferees, immediate and remote, and any person or entity acting for or on behalf of, or claiming

6 under, any of them, and each of them, who held any such Cost Plus stock at any time between and

7

including May 9, 2012, and June 29, 2012, but excluding the specifically named Defendants; (b)

8 whether Dr. Ogurkiewicz may be designated as class representative with the law firm of Pomerantz

9

Grossman Hufford Dahlstrom & Gross LLP as lead counsel for the Class, and whether Dr.

10

Ogurkiewicz and Pomerantz Grossman Hufford Dahlstrom & Gross LLP have adequately

11 represented the interests of the Class; (c) whether the Court should approve the Settlement of the

12

Actions pursuant to the Stipulation; (d) whether the Court should enter the Judgment providing for

13

the dismissal of the claims asserted in the Actions and the Released Claims on the merits and with

14 prejudice as against the named Plaintiffs and all members of the Class and releasing the Released

15

Parties from the Released Claims; (e) if the Court approves the Settlement and enters such

16

Judgment, whether the Court should grant the application of Plaintiffs’ Counsel for an award of

17 attorneys’ fees and expenses to be paid by Cost Plus or its successor-in-interest; (f) if the Court

18 approves the Settlement and enters such Judgment, whether the Court should grant the application

19 of an incentive award for Dr. Ogurkiewicz; and (g) such other matters as may properly come

20

before the Court.

21

The Court can change the date of the Settlement Hearing without further notice. The Court

22 also has the right to approve the Settlement or make changes to the Settlement without further

23 notice.

24 I WHAT ARE MY RIGHTS?

25

You have the right to appear in person or through counsel at the Settlement Hearing and to

26 present any evidence or argument regarding the Court’s consideration of the Settlement, the

27

Judgment, the application for attorneys’ fees and expenses by Plaintiffs’ Counsel and an incentive

28 award for Dr. Ogurkiewicz, or any other relevant matter, by filing what is called an objection.

11






Your objection must state: (a) your name, address, phone number and email address; (b) the

number of Cost Plus shares you owned and proof that you are a member of the Class; (c) a detailed

summary of your objection(s) to any matter before the Court; (d) the reasons for your objection;

and (e) all documents, writings or other evidence which you want the Court to consider. Your

objection must be postmarked on or before

2013, and sent to:



Eric S. Waxman Skadden, Arps, Slate, Meagher & Flom LLP Attn: Cost Plus Settlement 300 South Grand Avenue Los Angeles, California 90071


You may also hire your own attorney, at your own cost, to represent you at the Settlement

Hearing. If you do not hire your own attorney, Plaintiffs’ Counsel will represent your rights in the

case. If you choose to hire an attorney to speak at the Settlement Hearing they must file a Notice

of Appearance with the Court. If you or your attorney do not appear at the Settlement Hearing, the

Court will consider your written submission if it is served and filed in accordance with the

foregoing procedures. Any person who fails to object in the manner outlined above shall be

deemed to have waived any objection to the Settlement.

WHAT IF I AM HOLDING SHARES ON BEHALF OF SOMEONE ELSE?

Brokerage firms, banks and/or other persons or entities who held shares of Cost Plus stock,

either of record or beneficially, at any time between May 9, 2012, and June 29, 2012, for the

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12 NOTICE OF SETTLEMENT





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benefit of others are requested to immediately send this Notice to all of their respective beneficial

owners. If additional copies of this Notice are needed for forwarding to such beneficial owners,

any requests for such additional copies may be made to Cost Plus Shareholder Litigation, c/o KCC

Class Action Services, P.O. Box 6177, Novato, CA 94948-6142.

HOW CAN I GET MORE INFORMATION?

This Notice is only a summary of the Settlement. For more information about the case you

can review the documents that have been filed with the Court. You or your attorney may examine

the documents filed in the Federal Action during regular business hours on any business day at the

United States District Court for the Northern District of California, San Jose Courthouse, Clerk’s

Office, 280 South 1st Street, San Jose, California 95113.

If you would like further information, you may also contact Plaintiffs’ Counsel at:

Rebecca Jarmon Pomerantz Grossman Hufford Dahlstrom & Gross LLP

600 Third Avenue, 20th Floor New York, NY 10016

PLEASE DO NOT WRITE OR CALL THE COURT.

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irene dixon, et al. v. cost plus, inc., et al. 12-cv-02721...

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