PETCO Animal Supplies, Inc. ("PETCO" or the Company) is a specialty retailer of premium pet food, supplies and services with hundreds of stores in dozens of states and the District of Columbia.

Several purported class action Complaints have been filed charging PETCO and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Specifically, the Complaint alleges that during the Class Period, Defendants caused PETCO's shares to trade at artificially inflated levels through the issuance of false and misleading financial statements. On November 18, 2004, PETCO announced Q3 2004 results and raised its guidance for FY 2004. The Company subsequently issued very favorable results for FY 2004. As a result, by April 2005, the Company's stock was trading above $37 per share. Then, on April 15, 2005, before the market opened, the Company issued a press release entitled "PETCO to Delay Filing of Form 10-K." The release stated that PETCO would delay the filing of its Form 10-K with the Securities and Exchange Commission and that it had requested a 15-day extension after it discovered accounting errors related to certain under-accrued expenses in its distribution operations. The Company anticipated its Q4 2004 earnings would be reduced by $3.0-$4.5 million and expected that FY 2005 earnings would be reduced by a similar amount, as it took into consideration the nature of the under-accrual of expenses. The stock dropped 15% to close at $30.36 per share on these revelations of accounting improprieties.

On August 17, 2005, Judge Marilyn L. Huff consolidated the actions and further approved the Plumbers and Pipefitters Local 51 Pension Fund as lead Plaintiff and Lerach Coughlin Stoia Geller Rudman & Robbins LLP as lead Counsel. In October 2005, a consolidated Complaint was filed extending the class period from August 18, 2004 to August 25, 2005, adding additional but similar causes of action, and naming additional Defendants, including other senior Company officers, several former and current members of the Company’s Board of Directors, and two former stockholders. On August 1, 2006 the Court issued its order granting in part and denying in part Defendants’ motion to dismiss. The Court dismissed (a) the claims against the former stockholders and certain officers and directors and (b) certain of Plaintiffs’ alleged operational misrepresentation claims, but denied the motion to dismiss with respect to the alleged accounting misrepresentation claims made against the Company and certain directors and senior officers. Discovery soon commenced and the parties engaged in numerous settlement conferences. On February 25, 2008, certain Defendants filed a motion for summary judgment which was later granted in part and denied in part according to an Order issued on April 29, 2008.

On June 30, 2008, a motion for preliminary approval of the settlement was filed. The proposed settlement was in the amount of $20,250,000 cash. On July 7, 2008, U.S. District Court Judge Marilyn L. Huff preliminarily approved the settlement and set the approval hearing for September 2, 2008. At the hearing, Judge Huff approved the class action settlement and plan of allocation of settlement proceeds and further granted lead Plaintiff's Counsel's motion for an award of attorney fees and expenses. Judgment was entered and the action has been dismissed with prejudice.