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1
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LETTER OPINION
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EXTRACTED KEY WORDS
STOCK EXCHANGE RATIO MERGER AGREEMENT LAWSUIT COURT COUNSEL ATTORNEYS MEDCO SHAREHOLDERS SWIB REQUEST STOCK PRICE PLAINTIFF MARKET KING STOCK LITIGATION STOCKHOLDERS WISCONSIN INVESTMENT TRANSACTION PURPORTED CLASS ACTION WISCONSIN INVESTMENT BOARD AVERAGE TRADING PERIOD HOURLY CHARGES KING SHARES DEFENDANTS DISCLOSURES ACCORDING WILMINGTON EISENHOFER |
COURT OF CHANCERY
OF THE
STATE OF DELAWARE
Wtw B. C-R III Submitted: January 2 1,200 1 PO.
CMNCEUOR Decided: April 9,2002 GEORGETW
~~HONE
FASCIMIU
VIA FAX & U.S. MAIL
Stuart M. Grant A. Gilchrist Sparks, III
Cynthia A. Calder Alan J. Stone
Megan D. McIntyre Morris, Nichols, Arsht & Tunnel1
John C. Kairis P.O. Box 1347
Denise T. DiPersio Wilmington, DE 19899
Grant & Eisenhofer, P.A.
1220 N. Market Street, Suite 500
Wilmington, DE 19801
Edward M. McNally
Morris James Hitchens & Williams LLP
222 Delaware Ave., P.O. Box 2306
Wilmington, Delaware 19899
Re: State of Wisconsin Investment Board v. Bartlett, et al.
Civil Action No. 17727
Dear Counsel:
This is the Court's decision on an application for attorneys' fees in this
purported class action lawsuit. The lawsuit effectively ended on February 24,
2000, when this Court denied a request to enjoin a proposed merger. After the
Court's decision, stockholders approved the merger and the transaction was
consummated on February 25,200O. Stock of the acquirer company was thereafter
distributed in exchange for all of the stock of the target company. Attorneys for
the plaintiff, who failed to achieve their goal of stopping the merger from taking
merger agreement provided a formula for the exchange ratio that included a two-
sided collar, with a floor of $22.50 and a ceiling of $34. The pricing formula was
SNIPPETS:
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2
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PLAINTIFFS SUPPLEMENTAL BRIEF IN SUPPORT OF MOTION FOR AWARD OF ATTORNEYS FEES
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EXTRACTED KEY WORDS
SWIB DEFENDANTS MEDCO KING SEINFELD ATTORNEYS COURT LITIGATION AWARD PLAINTIFFS SHARES MEDCO STOCKHOLDERS COUNSEL MOTION MERGER JOHNSON AFF CORRECTIVE DISCLOSURES KING STOCK FEE AGREEMENT STATE OFWISCONSIN INVESTMENT MARKET PRICE EXCHANGE RATIO NEGOTIATE CHANCELLOR INJUNCTION LEGAL FEE GRANT AFF AVERAGE PRICE SUPPLEMENTAL MEMORANDUM |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
STATE OF WISCONSIN INVESTMENT
BOARD, on behalf of itself and all others
similarly situated,
1
Plaintiff,
i
V. Civil Action No. 17727-NC
;
WILLIAM BARTLETT, JAY N. COHN,
MARK B. HIRSCH, EUGENE L. STEP, i
RICHARD C. WILLIAMS, and MEDCO c
RESEARCH, INC., : .:
1 -,._
y;, Il.1
:.-.*I I. -
* `)
i<..)
Defendants. i :- .. _
: .~ r.,
-.. ZL,
PLAINTIFF'S SUPPLEMENTAL BRIEF IN SUPPORT OF ITS~&jTION<~;
FOR AN AWARD OF ATTORNEYS' FEES AND LITIGATION -CXX3TS
-.-. ~
..i
- .I c.z
Dated: January 29,200l Stuart M. Grant
Megan D. McIntyre
Cynthia A. Calder
John C. Kairis
Denise T. DiPersio
GRANT & EISENHOFER, P.A.
1220 N. Market St., Suite 500
Wilmington, DE 1980 1
(302) 622-7000
ATTORNEYS FOR THE STATE
OF WISCONSIN INVESTMENT BOARD
PRELIMINARY STATEMENT
SNIPPETS:
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3
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DEFENDANTS SUPPLEMENTAL MEMORANDUM
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EXTRACTED KEY WORDS
FEE AWARD MEDCO SEINFELD COURT LAWSUIT CHANCELLOR PLAINTIFFS FEE REQUEST COUNSEL LITIGATION MERGER SHAREHOLDERS INCENTIVES RISK DEFENDANT FUTURE PLAINTIFFS SWIB KING SHARES MEMORANDUM SUPPLEMENTAL DISCLOSURES MERGER AGREEMENT EXCHANGE RATIO ATTORNEYS VOLUNTARY CORPORATE ACTION MERGER CONSIDERATION PETITIONER SETTLEMENT STOCK PRICE HOURLY RATE |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
STATE OF WISCONSIN >
INVESTMENT BOARD,
:
Plaintiff, >) Civil Action No. 17727
V.
i
MEDCO RESEARCH, INC. et al.
,--
; -?;
Defendants. ) ,
DEFENDANT'S SUPPLEMENTAL MEMORANDUti :
Defendant Medco Research, Inc. submits this memorandum
addressing the Chancellor's opinion in Seinfeld v. Coker, a case in which the
petitioner - much like Grant & Eisenhofer ("G&E") in this case - sought a
grossly excessive fee award. Applying the Supreme Court's Sugarland factors,
the Seinfeld court drastically reduced a fee request where the petitioner sought a
fee of $263 1 per hour, an amount the Court found "much more than necessary to
maximize future plaintiffs' incentives to bring meritorious cases and to litigate
them efficiently." Seinfeld v. Coker, 2000 WL 1800214 at "6.
Recognizing that "such a high fee overcompensates plaintiffs'
counsel for the risk they faced in bringing this lawsuit," I/ the Chancellor cut the
Seinfeld petitioner's fee request in half - to $250,000 - to avoid "increas[ing] the
threat of inefficient litigation by conferring a too generous hourly rate." Id. The
Court reached this result even though, unlike this case, there was no question
If Unlike Seinfeld, G&E bore little risk in this case. Its retainer agreement
with SWIB guaranteed payment of at least, half of G&E's hourly charges, plus &l
expenses See Defendant's Memorandum In Opposition To Plaintiffs Motion For An
Award of Attorneys' Fees and Costs and For Voluntary Dismissal, filed June 1, 2000
("Opp."), at 34; Retainer Letter from G&E (Ex. 8 to Opp.).
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4
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PLAINTIFFS REPLY BRIEF IN SUPPORT OF MOTION FOR AN AWARD OF ATTORNEYS FEES AND COSTS AND FOR VOLUNTARY DISMISSAL WITHOUT PREJUDICE
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EXTRACTED KEY WORDS
DEFENDANTS FEE EXCHANGE RATIO MEDCO COURT SHAREHOLDERS DEL MERGER SUPPLEMENTAL DISCLOSURES MOTION AWARD ATTORNEYS PREJUDICE LITIGATION KING STOCK PRICE FEE AGREEMENT WILLIAMS DEP DELAWARE WISCONSIN INVESTMENT HARTNETT STOCKHOLDERS PRELIMINARY INJUNCTION JOHNSON DEP CHANCERY SHAREHOLDER VOTE LITIGATION COSTS PRICING PERIOD COMMON FUND |
IN THE COURT OF CHANCERY OF TH[E STATE OF DELAWARE
IN AND FOR NEW CASTlLE COUNTY
STATE OF WISCONSIN INVESTMENT
BOARD, on behalf of itself and all others ;
similarly situated,
;
Plaintiff, >
V. i Civil Action No. 17727-NC
52 ,_/
WILLIAM BARTLETT, JAY N. COHN, ; -:
C' / : -'
.-
MARK B. HIRSCH, EUGENE L. STEP, .-- 7
-_.:-. 2
RICHARD C. WILLIAMS, and MEDCO _
i _.-
RESEARCH, INC., ., c.7
.
; .
Defendants. >
PLAINTIFF'S REPLY BRIEF IN SUP'PORT OF ITS MOTION
FOR AN AWARD OF ATTORNEYS' FEES AND LITIGATION COSTS
AND FOR VOLUNTARY DISMISSAL WITHOUT PREJUDICE
Dated: June 15, 2000 Stuart M. Grant
Cynthia A. Calder
Megan D. McIntyre
John C. K.airis
Denise T. DiPersio
GRANT & EISENHOFER, P.A.
12Z!O N. Market St Suite 500
Wilmington, DE 16801
(302) 622-7000
ATTORNEYS FOR THE STATE
OF WISCONSIN INVESTMENT BOARD
TABLE OF CONTIm
TABLEOFAUTHORITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SNIPPETS:
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5
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PLAINTIFFS BRIEF IN SUPPORT OF ITS MOTION FOR AN AWARD OF ATTORNEYS FEES AND COSTS AND FOR DISMISSAL WITHOUT PREJUDICE
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EXTRACTED KEY WORDS
DEFENDANTS DISCLOSURES MEDCO PROXY COURT ATTORNEYS GRANT LITIGATION MOTION AWARD SWIB SHAREHOLDERS CORRECTIVE DISCLOSURES MERGER WILLIAMS EXCHANGE RATIO PRELIMINARYSTATEMENT LITIGATION COSTS PREJUDICE PROPOSED CLASS KING STOCK PRICING PERIOD SHAREHOLDER VOTE PRELIMINARY INJUNCTION MOTION AVERAGE PRICE GRANT AFF MERGER AGREEMENT INCREASED EXCHANGE RATIO SUPPLEMENT |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AN-D FOR NEW CASTLE COUNTY
STATE OF WISCONSIN INVESTMENT 1
BOARD, on behalf of itself and all others
similarly situated, ;
Plaintiff, ;
V. i Civil Action No. 17727-NC
WILLIAM BARTLETT, JAY N. COHN, i
MARK B. HIRSCH, EUGENE L. STEP, >
RICHARD C. WILLIAMS, and MEDCO
RESEARCH, INC., 1
Defendants.
PLAINTIFF'S BRIEF IN SUPPORT OF ITS MOTION
FOR AN AWARD OF ATTORNEYS' FEES AND LITIGATION COSTS
AND FOR VOLUNTARY DISMISSAL WITHOUT PREJUDICE
Dated: April 19,200O Stuart M. Grant
Cynthia A. Calder
Megan D. McIntyre
John C. Kairis
Denise T. DiPersio
GRANT & EISENHOFER, P.A.
1220 N. Market St., Suite 500
Wilmington, DE 19801
(302) 622-7000
ATTORNEYS FOR THE STATE
OF WISCONSIN INVESTMENT BOARD
TABLE OF CONTENTS
TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . .
PRELIMINARYSTATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SNIPPETS:
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6
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MEMORANDUM OPINION
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EXTRACTED KEY WORDS
MEDCO MERGER PLAINTIFF VOTE KING DISCLOSURE COURT MEDCO BOARD DEFENDANTS LOYALTY ENJOIN ALLEGATIONS WILLIAMS PROPOSED MERGER INJUNCTIVE RELIEF CARE REASONABLENESS PHARMACEUTICALS CONSUMMATION PLAINTIFFS REQUEST FIDUCIARY DUTIES INFORMED DECISION SUPPLEMENT BUSINESS JUDGMENT MERGER AGREEMENT SELF-INTEREST POTENTIAL SUITORS PRELIMINARY INJUNCTION ORIGINAL PROXY |
IN THE COURT OF CHANCERY OF THE STATIE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY `$%.a3
STATE OF WISCONSIN INVESTMENT ) 1' i i ~ -\
r/__
-"> 1 -:> q ) `
BOARD, on behalf of itself and all others ) i i : 0 `i .2+~..- i`r \
similarly situated, > D.`!$ I` 7r ; ..,! c f r
>
Plaintiff, >
>
V. ) CA. No. 17727
>
WILLIAM BARTLETT, JAY N. COHN, )
MARK Bl. HIRSCH, EUGENE L. STEP, )
RICHARD C. WILLIAMS, and MEDCO )
RESEARCH, INC., >>
Defendants. >
Submitted: February 9,200O
Decided: February 24,200O
MEMORANDUM OPINION
Stuart M. Grant, Cynthia A. Calder, Megan D. McIntyre, John C. Kairis and
Denise T. DiPersio of Grant & Eisenhofer, Wilmington, Delaware.
Attorneys for Plaintiff.
A. Gilchrist Sparks, III, Alan J. Stone, S. Mark Hurd and Jessica Zeldin of
Morris, Nichols, Arsht & Tunnell, Wilmington, Delaware. OF COUNSEL:
James R. Daly, Lee Ann Russo and Robert C. Micheletto of Jones, Day,
Reavis & Pogue, Chicago, Illinois. Attorneys for Defendants.
STEELE:, V.C.
Plaintiff brings this action, on behalf of itself and all others who own
Medco common stock, to enjoin a shareholder vote on the proposed merger
between Medco Research Inc. ("Medco") and King Pharmaceuticals, Inc.
("King") and to enjoin the merger's consummation.
Plaintiffs request for injunctive relief is based on allegations of
SNIPPETS:
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7
.
ANSWER
|
EXTRACTED KEY WORDS
PARAGRAPH ALLEGATIONS DEFENDANTS ADMIT MEDCO KING WILLIAMS STOCK COMPLAINT AGREEMENT COMMON STOCK PROXY STATEMENT RESPONSE MERGER COURT RESPECTFULLY REFER WISCONSIN INVESTMENT DEFENDANTS WILLIAM BARTLETT PLAINTIFF DIRECTORS FIRST SENTENCE STOCK PRICE CLASS ACTION MEDCO RESEARCH NEGOTIATIONS SECOND SENTENCE ACCURATE TERMS SWIB PURPORTS THIRD SENTENCES DELAWARE |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
STATE OF WISCONSIN INVESTMENT
BOARD, on behalf of itself and all others
similarly situated, ; i-
Plaintiff, > .
V. i Civil Action No. 17727
-I
WILLIAM BARTLETT, JAY N. COHN, 1
MARK B. HIRSCH, EUGENE L. STEP,
RICHARD C. WILLIAMS, and MEDCO i
RESEARCH, INC., >
Defendants. 1
ANSWER
Defendants William Bartlett ("Bartlett"), Jay N. Cohn ("Cohn"), Mark B. Hirsch
("Hirsch"), Eugene L. Step ("Step"), Richard C. Williams ("Williams"), and Medco Research,
Inc. ("Medco") (collectively, the "Defendants"), by their undersigned attorneys, for their answer
to the verified complaint ("Complaint") filed by plaintiff, State of Wisconsin Investment Board
("SWIB"), state as follows:
1. Defendants deny the allegations contained in paragraph 1, except admit
that on or about December 1, 1999, Medco issued a press release announcing its agreement to
merge with King Pharmaceuticals, Inc. ("King") and for a further answer, respectfully refer the
Court to that press release for its full and correct contents.
2. Defendants admit only that the December 29, 1999 Proxy Statement
("Proxy Statement") states that Medco's common stock closed at $27.25 per share on
November 30, 1999. Defendants deny all remaining allegations in paragraph 2.
3. Defendants admit only that the proposed merger contemplates a stock-for-
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8
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SWIBS SECOND MOTION FOR PRELIM. INJUNCTION
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EXTRACTED KEY WORDS
MEDCO STOCKHOLDERS STOCK PRICE MERGER AVERAGE STOCK STOCKHOLDER MEETING COUNSEL KING DIRECTORS COURT SWIB RESCHEDULE MOTION SHAREHOLDER VOTE SHARES SCHEDULING CHANCERY WISCONSIN INVESTMENT ENJOINING RATIO DUTY TRADING WORTH HERETO SWIB RESPECTFULLY REQUESTS WILLIAMS MEDCO RESEARCH PLAINTIFF PRELIMINARY INJUNCTION CLOSING STOCK PRICE |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
STATE OF WISCONSIN INVESTMENT
BOARD, on behalf of itself and all others
similarly situated, i
Plaintiff, 1
V. Civil Action No. 17727-NC
i
WILLIAM BARTLETT, JAY N. COHN,
MARK B. HIRSCH, EUGENE L. STEP,
RICHARD C. WILLIAMS, and MEDCO
RESEARCH, INC.,
Defendants.
NOTICE OF MOTION
-
TO: Alan J. Stone, Esquire
Morris, Nichols, Arsht & Tunnel1
120 1 Market Street
Wilmington, DE 1980 1
PLEASE TAKE NOTICE that Plaintiff will present the attached Motion For
Preliminary Injunction at the earliest convenience of the Court.
GRANT & EISENHOFER, P.A.
Dated: February 17,200O
Jay W. Eisenhofer
Megan D. McIntrye
Cynthia A. Calder
John C. Kairis
Denise T. DiPersio
1220 N. Market Street, Suite 500
Wilmington, DE 1980 1
(302) 622-7000
Attorneys for Plaintiff State of Wisconsin
Investment Board
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
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9
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ORDER
|
EXTRACTED KEY WORDS
VOTE MERGER SUPPLEMENT MATERIALS PLAINTIFFS PROXY DEFENDANTS REASONS COURT MEDCO DELAWARE KING ADEQUATE ENJOIN REQUEST PLAINTIFF ASSERTS DISCLOSURES PROXY STATEMENT SOLICITATION RECOMMENDATION VOTING CONFIDENT ASSURE BENEFICIAL OWNERS FRANCHISE APPROVE ORIGINAL PROXY INSTRUCTIONS CAST |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
STATE OF WISCONSIN INVESTMENT ) FILED
BOARD, on behalf of itself and all others ) i \
similarly situated, > .I,$ 1 ii- / t.:.., , ,,
> ,I
Plaintiff, f~-+TiA!*r in CllanM&
>
>
V. ) C.A. No. 17727
WILLIAM BARTLETT, JAY N. COHN, )
MARK B. HIRSCH, EUGENE L. STEP, )
RICHARD C. WILLIAMS and MEDCO )
RESEARCH, INC., >>
Defendants. >
Submitted: February 9,200O
Decided: February 9,200O
O R D E R
Stuart M. Grant, Cynthia A. Calder, Megan D. McIntyre, John C. Kairis and
Denise T. DiPersio of Grant & Eisenhofer, Wilmington, Delaware. Attorneys for
Plaintiff.
A. Gilchrist Sparks, III, Alan J. Stone, S. Mark Hurd and Jessica Zeldin of Morris,
Nichols, Arsht & Tunnell, Wilmington, Delaware. OF COUNSEL: James R.
Daly, Lee Ann Russo and Robert C. Micheletto of Jones, Day, Reavis & Pogue,
Chicago, Illinois. Attorneys for Defendants.
STEELE, V.C.
After reviewing the record, plaintiffs written and oral presentation in
support of its application for a preliminary injunction seeking to enjoin a
shareholder vote scheduled for 1000 hours February 10, 2000 on a merger which
the shareholders have been requested to approve in that vote and defendant's
opposition to plaintiffs application, the following findings and conclusions
constitute the Order of the Court.
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10
.
MEMORANDUM OF LAW IN SUPPORT OF PLAINTIFFS MOTION FOR EXPEDITED PROCEEDINGS
|
EXTRACTED KEY WORDS
MERGER SHAREHOLDERS PLAINTIFF DIRECTORS VOTE MEDCO COURT LOCK-UP DELAWARE DEFENDANTS KING FACTS SWIB PROVISIONS MOTION DISCLOSURE TRANSACTION ILLEGAL LOCK-UP HARDSHIPS MEDCO STOCKHOLDERS WISCONSIN INVESTMENT AGREEMENT LUCKV STORE DEL PRELIMINARY INJUNCTION EXPEDITED DISCOVERY DOCUMENT REQUESTS IRREPARABLE HARM SPECIAL MEETING STOCK OPTION |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
STATE OF WISCONSIN INVESTMENT
BOARD, on behalf of itself and all others
similarly situated,
i
Plaintiff, >
V. I Civil Action No.1172 ? hc
WILLIAM BARTLETT, JAY N. COHN, j
MARK B. HIRSCH, EUGENE L. STEP, -3
RICHARD C. WILLIAMS, and MEDCO 1 y:,y..,7, c.
CL2
RESEARCH, INC., 1, c ;;-,
> .L.
~ -1 Z" -
.a f
1. h ,
Defendants. ; I -w".
.,
b
`,_ >a`
, *m
L:.`;
MEMORANDUM OF LAW IN SUPPORT OF :; ; c3 _
9 ";j
OTION FOR -PROCEEDINGS
Dated: January 10, 2000 Stuart M. Grant
Jay W. Eisenhofer
Cynthia A. Calder
John C. Kairis
GRANT & EISENHOFER, P.A.
1220 North Market Street, Suite 500
Wilmington, Delaware 19801
(302) 622-7000
Fax: (302) 622-7100
Attorneys for plaintiff, State of Wisconsin
Investment Board
PRELIMINARY STATEMENT . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . , , . . , . , .
SNIPPETS:
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11
.
VERIFIED COMPLAINT
|
EXTRACTED KEY WORDS
KING WILLIAMS STOCK MERGER PRICE DEFENDANTS TRANSACTION COMMON STOCK SHARES PLAINTIFF SHAREHOLDERS MEDCO STOCKHOLDERS FEE INVESTMENT PHARMACEUTICALS CLOSING WILLIAM BARTLETT MERGER CONSIDERATION DIRECTORS SWIB VALUATION WISCONSIN INVESTMENT COMPLAINT FIDUCIARY DUTY NEGOTIATING MATERIALS PROJECTIONS ALLEGATIONS RELATING PERSONAL KNOWLEDGE |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
STATE OF WISCONSIN INVESTMENT
BOARD, on behalf of itself and all others
similarly situated,
Plaintiff,
V.
WILLIAM BARTLETT, JAY N. COHN,
MARK B. HIRSCH, EUGENE L. STEP,
RICHARD C. WILLIAMS, and MEDCO
RESEARCH, INC.,
Defendants.
Plaintiff, the State of Wisconsin Investment Board ("SWIB"), for its complaint
against the defendants, makes the following allegations upon information and belief, except as to
allegations relating to itself, which it makes upon personal knowledge.
OF THEACTION
1. On December 1,1999, Medco Research, Inc. ("Medco") announced that it had
entered a merger transaction (the "Merger") in which each share of Medco common stock would be
exchanged for .68 18 shares of King Pharmaceuticals, Inc. ("King") common stock based upon a 20
day average of the closing price of King stock.
2. If the closing of the Merger had taken place on the day it was announced
(December 1,1999) Medco shareholders would have received $28.25 worth of King stock for each
share of Medco stock. (See Exhibit A hereto for King's stock price for the 20 days prior to
December 1, 1999). According to the Proxy Statement soliciting shareholder approval, the closing
price of Medco stock that same day was $27.25. Thus, the deal on the day it was approved would
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