Couche-Tard's Complaint Against Casey's

Case 4:10-cv-00265-JAJ-TJS Document 13 Filed 06/18/10 Page 1 of 54
IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF IOWA
CENTRAL DIVISION
________________________________________
CASEY’S GENERAL STORES, INC., )
)
Plaintiff, )
v. ) C.A. No. 4:10-cv-265
)
ALIMENTATION COUCHE-TARD INC. and )
ACT ACQUISITION SUB, INC., )
)
Defendants. )
_______________________________________ )
ALIMENTATION COUCHE-TARD INC. and )
ACT ACQUISITION SUB, INC., )
)
Counterclaim Plaintiffs, )
v. )
)
CASEY’S GENERAL STORES, INC., )
)
Counterclaim Defendant, )
)
and )
)
ROBERT J. MYERS, KENNETH HAYNIE, )
WILLIAM C. KIMBALL, JOHNNY DANOS, )
DIANE C. BRIDGEWATER, JEFFREY M. )
LAMBERTI, RICHARD A. WILKEY and H. )
LYNN HORAK, )
)
Additional Counterclaim )
Defendants. )
_______________________________________ )
DEFENDANTS’ ANSWER, AFFIRMATIVE DEFENSES AND

COUNTERCLAIMS FOR DECLARATORY AND INJUNCTIVE RELIEF
ANSWER
Defendants Alimentation Couche-Tard Inc. and ACT Acquisition Sub, Inc.
(collectively, “Couche-Tard” unless otherwise noted), by and through their undersigned
attorneys, hereby answer the Complaint (the “Complaint”) filed by Casey’s General
Stores, Inc. (“Casey’s”) in this action as follows:
Deny knowledge or information sufficient to form a belief as to the truth of the
allegations contained in the first unenumerated paragraph of the Complaint, except deny
that discovery will provide evidentiary support for Casey’s claims.
1. Deny the allegations in paragraph 1 of the Complaint.
2. Admit the allegations in paragraph 2 of the Complaint.
3. Admit that Couche-Tard has expanded through acquisitions, including
acquisitions in the United States, during the past ten years. Except as so admitted, deny
the allegations in paragraph 3 of the Complaint.
5. Admit that Couche-Tard completed the acquisition of Circle K in 2003.
Except as so admitted, deny the allegations in paragraph 5 of the Complaint, except deny
knowledge or information sufficient to form a belief as to the truth of the allegations
contained in the second sentence thereof.
6. Admit upon information and belief the allegations in the first three
sentences of paragraph 6 of the Complaint. Except as so admitted, deny the allegations in
paragraph 6 of the Complaint.
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8. Admit that in September 2009, Couche-Tard began purchasing shares of
Casey’s common stock on the open market and that, as of October 5, 2009, Couche-Tard
held approximately 140,000 shares of Casey’s common stock. Further admit that, as of
October 5, 2009, Couche-Tard had not yet approached Casey’s regarding a potential
business combination transaction. Except as so admitted, deny the allegations in
10. Admit that on March 9, 2010, Couche-Tard sent a letter to Mr. Myers, and
refer to that letter for a complete statement of its contents. Further admit that on March
29, 2010, Couche-Tard received a letter from Mr. Myers, and refer to that letter for a
complete statement of its contents. Further admit that on March 30, 2010, Couche-Tard
sent a letter to Mr. Myers and that on April 7, 2010, Couche-Tard received a letter from
Mr. Myers, and refer to those letters for a complete statement of their contents. Except as
so admitted, deny the allegations in paragraph 10 of the Complaint.
11. Admit that from September 2009 to April 10, 2010, Couche-Tard acquired
additional shares of Casey’s common stock on the open market. Except as so admitted,
deny the allegations in paragraph 11 of the Complaint.
12. Admit the allegations in paragraph 12 of the Complaint, except for the last
clause of the second sentence of paragraph 12, which contains a legal conclusion as to
which no responsive pleading is required.
13. Admit upon information and belief the allegations in paragraph 13 of the
Complaint.
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14. Admit that on April 9, 2010, Couche-Tard issued a press release, a copy of
which was filed with the SEC under Schedule TO-C, and refer to the press release for a
complete statement of its contents. Except as so admitted, deny the allegations in
15. Admit that Couche-Tard’s press release did not discuss Couche-Tard’s
purchase of shares of Casey’s stock. Except as so admitted, deny the allegations in
16. Admit upon information and belief that Casey’s stock price opened at
$38.13 per share on April 9, 2010. Except as so admitted, deny the allegations in
17. Admit that on April 9, 2010, Couche-Tard sold 1,975,000 shares of
Casey’s common stock at $38.43 per share, and that such sale was subsequently disclosed
by Couche-Tard in its Schedule TO filed with the SEC, and refer to that Schedule for a
Casey’s common stock at $38.43 per share, and that such sale was subsequently disclosed
by Couche-Tard in its Schedule TO filed with the SEC, and refer to that Schedule for a
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25. Admit upon information and belief the allegations in paragraph 25 of the
Complaint.
28. State that paragraph 28 of the Complaint states a legal conclusion as to
32. Admit that Couche-Tard has expressed a desire to increase shareholder
value through acquisitions. Admit that the cited article was published, and refer to the
cited article for a complete statement of its contents. Except as so admitted, deny the
allegations in paragraph 32 of the Complaint.
33. Admit that the cited articles were published, and refer to the cited articles
for a complete statement of their contents. Except as so admitted, deny the allegations in
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34. Admit that the cited article was published, and refer to the cited article for
a complete statement of its contents. Except as so admitted, deny the allegations in
38. Admit that from September 2009 to April 10, 2010, Couche-Tard acquired
additional shares of Casey’s common stock on the open market. Except as so admitted,
deny the allegations in paragraph 38 of the Complaint.
41. Admit that on October 6, 2009, Mr. Myers had a telephone conversation
with Mr. Bouchard. Further admit the last two sentences of paragraph 41 of the
Complaint. Except as so admitted, deny the allegations in paragraph 41 of the
Complaint.
44. Deny knowledge or information sufficient to form a belief as to the truth
of the allegations contained in paragraph 44 of the Complaint.
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45. Admit that on March 10, 2010, Mr. Myers sent an email to Mr. Bouchard
acknowledging receipt of Couche-Tard’s proposal. Except as so admitted, deny
knowledge or information sufficient to form a belief as to the truth of the remaining
of the allegations in paragraph 46 of the Complaint.
of the allegations in paragraph 49 of the Complaint.
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57. Admit that Couche-Tard filed the Schedule TO, and refer to the Schedule
TO for a complete statement of its contents. Except as so admitted, deny the allegations
in paragraph 57 of the Complaint.
Casey’s common stock at $38.43 per share, and refer to the Schedule TO for a complete
statement of its contents. Except as so admitted, deny the allegations in paragraph 62 of
the Complaint.
63. Admit upon information and belief that Couche-Tard’s sale of 1,975,000
shares of Casey’s common stock on April 9, 2010 occurred during the first hour of
trading. Except as so admitted, deny the allegations in paragraph 63 of the Complaint.
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74. Couche-Tard repeats and realleges its responses to paragraphs 1 through
73 hereof as if fully set forth herein.
75. Admit that prior to April 9, 2010, Couche-Tard purchased 1,975,362
shares of Casey’s common stock, which upon information and belief represented
approximately 3.9% of the outstanding common shares. Except as so admitted, deny the
77. Admit that the tender offer announcement was made and that Couche-Tard
filed the announcement under Schedule TO-C. Except as so admitted, deny the
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84. Refer to the statute and regulation cited in paragraph 84 of the Complaint
for a complete statement of their contents.
85. Admit that on April 9, 2010, before the market opened, Couche-Tard
publicly announced in a press release filed under Schedule TO-C that it planned to make
a tender offer for all outstanding shares of Casey’s common stock. Except as so
admitted, deny the allegations in paragraph 85 of the Complaint.
99. Deny that plaintiff is entitled to the relief requested in paragraph 99 of the
Complaint.
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100. Deny that plaintiff is entitled to the relief requested in paragraph 100 of
the Complaint.
the Complaint.
the Complaint.
the Complaint.
the Complaint.
the Complaint.
AFFIRMATIVE DEFENSES
Couche-Tard asserts the following affirmative defenses and reserves the right to
assert other defenses when and if they become appropriate and/or available in this action.
The assertion of any defense herein does not assume the burden of proof on any issue as
to which applicable law places the burden on Casey’s.
FIRST AFFIRMATIVE DEFENSE
The Complaint fails to state a claim upon which relief may be granted.
SECOND AFFIRMATIVE DEFENSE
Plaintiff lacks standing to assert some or all of the claims set forth in the
Complaint.
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THIRD AFFIRMATIVE DEFENSE
Plaintiff has failed to plead fraud with particularity as required by Fed. R. Civ. P.
9(b).
FOURTH AFFIRMATIVE DEFENSE
Plaintiff comes into Court with unclean hands.
FIFTH AFFIRMATIVE DEFENSE
Couche-Tard had no duty to disclose its purchases and sales of Casey’s common
stock prior to the filing of its Schedule TO on June 2, 2010.
COUNTERCLAIMS
Defendants and Counterclaim Plaintiffs Alimentation Couche-Tard Inc. and ACT
Acquisition Sub, Inc. (collectively, “Couche-Tard” unless otherwise noted), by and
through their undersigned attorneys, bring the following counterclaims against Casey’s
General Stores, Inc. (“Casey’s”) and additional Counterclaim Defendants Robert J.
Myers, Kenneth Haynie, William C. Kimball, Johnny Danos, Diane C. Bridgewater,
Jeffrey M. Lamberti, Richard A. Wilkey and H. Lynn Horak (collectively, the “Director
Defendants”) upon knowledge as to matters relating to themselves and upon information
and belief as to all other matters, as follows:
NATURE AND SUMMARY OF THE ACTION
1. Couche-Tard brings this action to secure declaratory and injunctive relief
against the Director Defendants, who have violated, and who continue to violate, their
fiduciary duties to Casey’s and its shareholders. Couche-Tard is, and at all relevant times
was, a shareholder of Casey’s.
2. Each of the Director Defendants has violated the duties of care, loyalty
and good faith owed to Casey’s and its shareholders by implementing and/or leaving in
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place defensive devices designed to thwart Couche-Tard’s non-coercive, non-
discriminatory, premium tender offer to purchase all of the outstanding shares of Casey’s
common stock for $36 per share in cash. These tactics serve no purpose other than to
entrench the Director Defendants and Casey’s management.
3. The Director Defendants’ conduct is unreasonable, fundamentally unfair
and lacks a rational business purpose.
4. After the Director Defendants repeatedly rejected, and refused even to
engage in discussions regarding, Couche-Tard’s proposal to enter into a business
combination with Casey’s -- including a publicly-announced offer on April 9, 2010 to
acquire Casey’s for $36 per share in cash -- Couche-Tard had no choice but to bring its
offer directly to Casey’s shareholders. Accordingly, on June 2, 2010, Couche-Tard
commenced an all-cash tender offer to purchase all outstanding shares of Casey’s
common stock for $36 per share (the “Tender Offer”), representing a 14% premium to
the closing price of Casey’s common stock on the last trading day prior to the public
announcement of Couche-Tard’s proposal and a 24% premium to Casey’s one-year
average closing price. Moreover, the offer price represented an 8.9% premium to the all-
time and 52-week high of Casey’s trading price prior to the public announcement. By
contrast, the mean initial offer price for all unsolicited cash offers greater than $1 billion
since 1997 is a 31% discount to the target companies’ respective all-time highs and a 6%
discount to their respective 52-week highs.
5. The Tender Offer is the initial step in a proposed two-stage merger
transaction, and is to be followed by a second-step merger of a wholly-owned subsidiary
of Couche-Tard with Casey’s, pursuant to which it is currently anticipated that (a)
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Couche-Tard would be the surviving company in the merger and (b) each share of
Casey’s common stock would be converted into the right to receive an amount in cash
equal to the per share price paid by Couche-Tard in the Tender Offer (the “Proposed
Merger” and, together with the Tender Offer, the “Proposed Acquisition”).
6. On June 8, 2010, the Director Defendants, again without undertaking any
discussion with Couche-Tard concerning the merits of its proposal, recommended
through Casey’s Solicitation/Recommendation Statement on Schedule 14D-9 (the “14D-
9”) that Casey’s shareholders not tender their shares.
7. The Director Defendants’ sustained refusal to negotiate with Couche-Tard
has made this action necessary because the Tender Offer is conditioned upon the removal
of certain improper and unlawful impediments to the consummation of the Proposed
Acquisition, namely, defensive measures that are fundamentally unfair to Casey’s
shareholders and that serve no rational business purpose.
8. In contravention of their fiduciary duties, the Director Defendants have (i)
adopted and failed to redeem or make inapplicable to the Proposed Acquisition Casey’s
recently-implemented “poison pill” -- the preferred share purchase rights (“Rights”)
issued pursuant to Casey’s Rights Agreement, dated as of April 16, 2010 (the “Rights
Agreement”); (ii) executed lucrative employment agreements with several top officers
that trigger upon a change in control to defeat Couche-Tard’s Proposed Acquisition by
entrenching management and making any acquisition considerably more expensive; and
(iii) failed to exempt the Proposed Acquisition from Section 490.1110 (the “Business
Combination Statute”) of the Iowa Business Corporation Act (the “IBCA”), which
imposes a three-year moratorium on business combinations between Iowa corporations
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and “interested shareholders” that are not approved in advance by the corporation’s board
of directors (with certain limited, largely illusory “exceptions”). Thus, the Business
Combination Statute effectively prohibits the successful consummation of any hostile
takeover bid for at least three years. It does so regardless of -- and, potentially, contrary
to -- shareholders’ wishes or best interests.
9. This irreparable injury to Casey’s shareholders is compounded by certain
other provisions of the IBCA, the purpose and effect of which are (i) to permit a board of
directors to reject a takeover attempt it does not want no matter how beneficial to
shareholders, (ii) to permit a board of directors thereby to destroy shareholder value
without compensation and (iii) to exempt such misconduct by directors from any judicial
review. In addition to the Business Combination Statute, these provisions include:
(a) IBCA § 490.624A (the “Poison Pill Statute”), which expressly
permits directors to adopt so-called “rights plans” with almost
unfettered discretion as to their terms, the effect of which is to
render the Tender Offer here ineffective by making it prohibitively
expensive; and
(b) IBCA § 490.1108A (the “Other Constituencies Statute”), which, in
the context of a takeover proposal, permits a board of directors to
consider, and even favor, other “community interest factors” --
including the corporation’s employees, suppliers, customers and
creditors and the communities in which the corporation operates --
over the interests of the shareholders. The statute also provides
that directors who reject a takeover offer based on any of these
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non-shareholder interests (i) “ha[ve] no obligation to facilitate, to
remove any barriers to, or to refrain from impeding, the proposal
or offer” and (ii) are purportedly immune from any claim for
breach of fiduciary duty because “[c]onsideration of any or all of
the community interest factors is not a violation of the business
judgment rule or of any duty of the director to the shareholders, or
a group of shareholders . . . .” (Emphasis added.) Thus, the
provision gives license to corporate directors to reject any takeover
proposal regardless of how favorable it might be to shareholders,
thereby entrenching themselves while shareholder interests are
disregarded, and simultaneously to relieve themselves of any and
all fiduciary obligations and liability to shareholders simply by
attributing their decision to a “community interest factor.” Such a
result is contrary to every fundamental tenet of corporate
governance and shareholder primacy.
10. In combination with the defensive devices adopted by the Director
Defendants, these statutory provisions (collectively, the “Iowa Anti-Takeover Scheme”)
deprive the Proposed Acquisition of any meaningful opportunity for success. Moreover,
these statutory provisions operate to effectively prohibit, regardless of the interests of
shareholders, any tender offer for shares of an Iowa corporation that is not approved by
an incumbent board.
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11. The Iowa Anti-Takeover Scheme thus conflicts directly with and
effectively nullifies and repeals the full purposes and objectives of the Williams Act,
§ 14(d) et seq., 15 U.S.C. §§ 78m(d)-(e) and 78n(d)-(f).
12. The Iowa Anti-Takeover Scheme prohibits any tender offer for shares of
an Iowa corporation without the prior approval of an incumbent board of directors,
regardless of the interests of shareholders, which effectively nullifies and repeals the
Williams Act.
13. As such, the Iowa Anti-Takeover Scheme is preempted under the
Supremacy Clause of the United States Constitution, art. VI, cl. 2.
14. The Iowa Anti-Takeover Scheme also violates the Commerce Clause of
the United States Constitution, art. I, sect. 8, cl. 3, both facially and as applied to this
case. When applied to a tender offer by a bidder for the shares of a corporation traded on
a national securities exchange, it fails to serve any legitimate local interest in regulating
internal corporate governance or protecting shareholders, but instead purports to regulate,
and imposes a substantial undue burden on, interstate commerce. By effectively
prohibiting non-resident shareholders from selling their shares to a bidder because the
board of directors concludes that doing so will serve the interests of non-shareholder
constituencies who need not ever be residents of Iowa -- such as suppliers or customers --
the Iowa Anti-Takeover Scheme constitutes extraterritorial regulation outside of the State
of Iowa and violates the so-called “dormant” Commerce Clause of the United States
Constitution, art. I, sect. 8, cl. 3.
15. For the same reason, by effectively prohibiting shareholders from
accepting the substantial premium in the Tender Offer and by restricting shareholders’
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property interests in their right to vote, to dispose of shares, and to seek review of
business decisions made by boards of directors, the Iowa Anti-Takeover Scheme
constitutes an improper taking without just compensation of shareholders’ property rights
under the Takings Clauses of the United States Constitution, Amendments V and XIV,
and Article I, Section 18 of the Iowa Constitution, both facially and as applied to this
case. By expressly authorizing boards of directors to act contrary to shareholders’
interests, the Iowa Anti-Takeover Scheme works a substantial diminution in the value of
shareholders’ property interests in their shares of Iowa corporations like Casey’s and
serves no legitimate public purpose.
16. The Iowa Anti-Takeover Scheme also constitutes an illegal and
unconstitutional interference with shareholders’ inalienable rights of “acquiring,
possessing and protecting property” guaranteed by Article I, Section 1 of the Iowa
Constitution. The Iowa Anti-Takeover Scheme diminishes the value of shareholders’
ownership interests in Iowa corporations and constitutes an impermissible legislative
interference with shareholders’ voting rights by improperly delegating to boards of
directors discretion to favor the interests of “other constituencies” over the interests of the
shareholders who own the company and to otherwise interfere with shareholders’ rights
to tender their shares at a premium.
17. The provisions in the Iowa Anti-Takeover Scheme that allow directors to
effectively impede a tender offer that offers a large premium to shareholders constitute an
unreasonable use of legislative power. The Iowa Anti-Takeover Scheme provides no
public benefit sufficient to warrant the stark deprivation of rights it imposes on
shareholders, nor is it substantially related to any legitimate legislative objective. On the
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contrary, it permits corporate directors to reject tender offers in order to entrench
themselves and management at the expense of the shareholders who own the company.
The party whose inalienable rights are stripped -- corporate shareholders -- receive no
benefit from the Iowa Anti-Takeover Act.
18. Finally, the 14D-9, filed with the SEC in response to the Tender Offer,
urged Casey’s shareholders not to tender their shares, and in so doing both made
misstatements of material facts and withheld from shareholders critical material
information in violation of Section 14(e) of the Securities Exchange Act of 1934.
19. Accordingly, Couche-Tard seeks a judgment: (i) declaring that the
Director Defendants have breached their common law and statutory fiduciary duties to
Casey’s and its shareholders by (a) unreasonably adopting a poison pill and approving
new employment agreements for Casey’s executives that are triggered upon a change of
control in order to entrench management and prevent consummation of the Proposed
Acquisition and (b) refusing to neutralize the poison pill and failing to render the
Business Combination Statute inapplicable to the Proposed Acquisition; (ii) declaring
that the Iowa Anti-Takeover Scheme is void and unconstitutional both facially and as
applied to this case and that it does not govern the Director Defendants’ actions in
response to the Proposed Acquisition; (iii) ordering the Director Defendants to neutralize
the poison pill by redeeming the Rights or otherwise rendering it inapplicable to the
Tender Offer, approve the Proposed Acquisition pursuant to the Business Combination
Statute or otherwise render it inapplicable to the Proposed Acquisition, take all other
action to permit the Casey’s shareholders to tender their shares, and eliminate all other
impediments to the Proposed Acquisition; and (iv) declaring that the Director Defendants
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have violated Section 14(e) of the Securities Exchange Act of 1934 and ordering them to
make corrective disclosure in the 14D-9.
PARTIES
20. Defendant and Counterclaim Plaintiff Couche-Tard, a Canadian
corporation with principal administrative offices in Québec, Canada, is a leading
convenience store operator offering a range of food products, beverages, other
merchandise and services and motor fuel throughout both Canada and the United States.
It has operations in 43 states and the District of Columbia and in all ten Canadian
provinces, and its shares trade principally on the Toronto Stock Exchange. Couche-Tard
is a Canadian foreign private issuer subject to the informational requirements of the
Securities Exchange Act of 1934.
21. Defendant and Counterclaim Plaintiff ACT Acquisition Sub, Inc. (“ACT
Acquisition Sub”) is an indirect wholly owned subsidiary of Couche-Tard with its
principal place of business in Québec, Canada. ACT Acquisition Sub was recently
formed under the laws of the State of Iowa for the purpose of making the Tender Offer
and taking other action as necessary in connection therewith. ACT Acquisition Sub has
not engaged, and is not expected to engage, in any business other than in connection with
its organization, the Proposed Acquisition and undertaking a proxy solicitation for the
purpose of replacing the Director Defendants with a new board of directors.
22. Plaintiff and Counterclaim Defendant Casey’s is an Iowa corporation with
its principal executive offices in Ankeny, Iowa. Casey’s operates convenience stores that
carry a broad selection of food, beverages, tobacco products, health and beauty aids,
automotive products and other nonfood items, and offer gasoline for sale on a self-service
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basis. According to its public filings, as of April 30, 2009, Casey’s operated a total of
1,478 stores throughout nine Midwestern states, including Iowa, Missouri and Illinois.
According to the 14D-9, Casey’s had 50,929,162 shares of common stock issued and
outstanding as of June 4, 2010, with an additional 5,956,550 shares of common stock
reserved for issuance under Casey’s equity compensation plans, of which up to a
maximum of 956,550 shares of common stock were issuable or otherwise deliverable in
connection with the vesting of outstanding equity awards. Casey’s common stock is
listed and traded on the NASDAQ Global Select Market under the symbol “CASY.”
23. Additional Counterclaim Defendant Robert J. Myers is the President and
Chief Executive Officer of Casey’s and a director. He has served on the board since
2006.
24. Additional Counterclaim Defendant Kenneth Haynie is a director of
Casey’s and has served on the board since 1987.
25. Additional Counterclaim Defendant Johnny Danos is a director of Casey’s
and has served on the board since 2004.
26. Additional Counterclaim Defendant William C. Kimball is a director of
27. Additional Counterclaim Defendant Diane C. Bridgewater is a director of
28. Additional Counterclaim Defendant Jeffrey M. Lamberti is a director of
29. Additional Counterclaim Defendant William Richard A. Wilkey is a
director of Casey’s and has served on the board since 2008.
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30. Additional Counterclaim Defendant H. Lynn Horak is a director of
31. Because of their positions as described above, the Director Defendants
owe fiduciary duties of care, loyalty, and good faith to Casey’s and its shareholders.
JURISDICTION AND VENUE
32. This Court has jurisdiction over this action pursuant to: (i) 28 U.S.C.
§ 1331, because the action arises under federal Constitutional and statutory provisions;
(ii) 15 U.S.C. § 78aa, because the action arises under Section 14(e) of the Securities
Exchange Act of 1934, 15 U.S.C. § 78n(e); and (iii) 28 U.S.C. § 1367, because the state
law claims asserted herein are related to the claims within this Court’s original federal
question jurisdiction so as to form part of the same case or controversy under Article III
of the United States Constitution.
33. Couche-Tard seeks, inter alia, declaratory relief pursuant to 28 U.S.C.
§§ 2201 and 2202 and Rule 57 of the Federal Rules of Civil Procedure and injunctive
relief pursuant to Rule 65 of the Federal Rules of Civil Procedure. There exists an actual,
substantial and immediate controversy within this Court’s jurisdiction, which is the result
of the Director Defendants’ conduct and will be redressed by a judicial decision granting
the relief sought herein.
34. This Court also has jurisdiction over the Director Defendants pursuant to
Rules 13(h), 19, and 20 of the Federal Rules of Civil Procedure.
35. Venue is proper in this district pursuant to 28 U.S.C. § 1391(b)(2) and (c)
and 15 U.S.C. § 78aa.
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FACTUAL BACKGROUND
A. Couche-Tard Identifies Untapped Value For Both Companies’ Shareholders

Through A Prospective Business Combination With Casey’s
36. In the Fall of 2009, Couche-Tard decided to approach Casey’s about a
potential business combination after Couche-Tard’s management and board of directors
determined that such a combination would foster growth and shareholder returns superior
to those of the respective companies on their own. A key driver of that assessment, in
addition to the combination of world-class competencies, was the highly complementary
nature of the two businesses.
37. Casey’s success has been centered in Iowa and surrounding states in the
Midwest, while Couche-Tard is the leader in the Canadian convenience store industry
and the largest independent convenience store operator in North America. Couche-Tard
has a strong track record of successful integration of acquired businesses, with its
acquisition of Circle K Corp. from ConocoPhillips Co. and deals with Exxon Mobil
Corp., Shell Oil Products US, BP West Coast Products LLC and Spirit Energy LLC.
Combining the two businesses would marry the geographic and operational strengths of
each and result in a more diverse company, able to offer its products and services more
efficiently through an expanded distribution network.
B. Couche-Tard Informally Approaches Casey’s And Is Rejected
38. On October 6, 2009, Alain Bouchard, the President and Chief Executive
Officer of Couche-Tard, contacted Robert Myers, the President and Chief Executive
Officer of Casey’s, and expressed preliminary interest in exploring a possible business
combination transaction with Casey’s. Mr. Bouchard told Mr. Myers that careful study
had convinced Couche-Tard’s managers and directors that joining forces with Casey’s
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would, through geographic and business diversification and highly complementary
business capabilities, create significant additional returns to shareholders, and substantial
benefits to stakeholders, of both companies.
39. Having received no response, Mr. Bouchard again contacted Mr. Myers on
November 13, 2009 to reaffirm Couche-Tard’s interest in pursuing a transaction with
Casey’s. To this overture, Mr. Myers responded that Couche-Tard should submit any
proposal in writing.
C. The Director Defendants Repeatedly Reject Couche-Tard’s Written

Proposals Without Discussion Or Negotiation
40. On March 9, 2010, Mr. Bouchard sent a letter to Mr. Myers setting forth
Couche-Tard’s proposal to acquire 100% of the outstanding shares of Casey’s at a price
of $36 per share. That price represented a 14% premium over Casey’s closing price on
the day before, a 17% premium over Casey’s 90-calendar day average closing price and a
24% premium over Casey’s one-year average closing price. Moreover, the offer price
represented an 8.9% premium to the all-time and 52-week high of Casey’s trading price
prior to the April 9, 2010 announcement. By contrast, the mean initial offer price for all
unsolicited cash offers greater than $1 billion since 1997 is a 31% discount to the target
companies’ respective all-time highs and a 6% discount to their respective 52-week
highs. Similarly, based on Casey’s reported financial results before any adjustments, the
$36 per share price implied a 7.4x last twelve month EBITDA (Earnings Before Interest,
Taxes, Depreciation and Amortization) multiple -- a substantial premium to Casey’s
estimated EBITDA trading multiples for year-end 2011 as of the date Couche-Tard’s
proposal was publicly announced (5.6x).
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41. Mr. Bouchard’s letter stated that Couche-Tard had strong financing
support and was prepared to engage with Casey’s to proceed to an agreement in a matter
of weeks. The letter made clear that Couche-Tard’s management team, financial advisors
and legal counsel were available at Casey’s convenience to discuss any aspect of the
terms and structure of the offer.
42. Mr. Bouchard’s letter also stated that Couche-Tard had an extremely high
regard for Casey’s operations, management and employees, and that Couche-Tard, with
highly decentralized operations, had a track record of keeping most of its acquired
companies’ existing management and employees in place.
43. Upon information and belief, the Director Defendants rejected Couche-
Tard’s March 9, 2010 proposal.
44. The Director Defendants did not make any counter-offer to the proposal,
nor did they even discuss the proposal with Couche-Tard or its advisors.
45. Instead, on March 29, 2010, Mr. Myers sent a brief, four-sentence letter to
Mr. Bouchard notifying Mr. Bouchard of the rejection.
46. The letter provided no explanation for the Director Defendants’ rejection
of the proposal.
47. On March 30, 2010, Mr. Bouchard sent another letter to Mr. Myers,
requesting that the Casey’s board reconsider the proposal and enter into negotiations with
Couche-Tard. In the letter, Mr. Bouchard reported Couche-Tard’s continued willingness
to work together with Mr. Myers and Casey’s board of directors to negotiate a transaction
for joint presentation to Casey’s shareholders.
48. The Director Defendants once again rejected Couche-Tard’s proposal.
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49. On April 7, 2010, Mr. Myers sent a brief, five-sentence letter to Mr.
Bouchard which provided no explanation for refusing the proposal, other than that it was
“not in the best interests of the Company.”
50. Again, the Director Defendants made no counter-offer and refused to
engage in discussions or negotiations with Couche-Tard.
51. On April 9, 2010, Couche-Tard once more approached Casey’s. That
morning, Mr. Bouchard informed Mr. Myers of a letter forthcoming that day renewing
Couche-Tard’s offer to join with Casey’s to create significant value for their respective
shareholders, employees, business partners and other constituencies. Couche-Tard
publicly disclosed the letter and filed it with the SEC.
52. Later that same morning, Mr. Myers sent a publicly-filed response letter to
Mr. Bouchard, which once again rejected Couche-Tard’s proposal.
53. In this letter, for the first time, Mr. Myers expressed the belief that
Couche-Tard’s proposal undervalued Casey’s shares. Yet, the letter did not say how far
undervalued the Director Defendants believed the proposal to be, or provide any
counteroffer reflecting what they viewed as an accurate valuation.
D. The Director Defendants Enact Defensive Measures
54. In response to Couche-Tard’s overtures, the Director Defendants adopted
a poison pill on April 16, 2010 that ensured that any attempted takeover would be
prohibitively expensive. The Director Defendants’ action, unless enjoined, precludes any
attempted tender offer, regardless of how favorable it is to Casey’s shareholders, unless
approved by Casey’s board. The consequence of this is to entrench the Director
Defendants and management, and to preclude Casey’s shareholders from obtaining the
value for their shares offered by Couche-Tard.
25
55. Also on April 16, the Director Defendants approved a new employment
agreement with Mr. Myers, which extended his employment as President and CEO
through April 30, 2013 at a base salary of $660,000 per year (without accounting for any
bonus payment). Notably, the Director Defendants agreed to this extension
notwithstanding that Mr. Myers’ previous employment contract -- which contained
identical salary terms -- did not expire until June 21, 2011.
56. The Director Defendants then added another layer of entrenchment on
May 27, 2010, by approving amended employment agreements with ten of Casey’s top
officers which, among other benefits, extended their employment for two years upon a
change of control. The recipients of this corporate largesse included, among others,
Director Defendant Myers and executive officers Terry W. Handley (Chief Operating
Officer), William J. Walljasper (Senior Vice President and Chief Financial Officer), and
Sam J. Billmeyer (Senior Vice President – Logistics and Acquisitions).
57. The Director Defendants further cemented management in place by
amending the employment agreements of two more officers in identical fashion on June
1, 2010, bringing the total to twelve Casey’s officers who abruptly received employment
extensions in response to Couche-Tard’s proposals (collectively, and together with the
May 27, 2010 employment agreements, the “Change of Control Agreements”). Under
their prior employment agreements, none of these executives would have received such
an extension upon consummation of a merger of the type proposed by Couche-Tard.
58. The apparent purpose of the Change of Control Agreements is to entrench
incumbent management, burden Casey’s with substantial financial liabilities upon a
change of control, and limit Couche-Tard’s ability to exercise control over Casey’s
26
following consummation of the Proposed Merger, thereby making the Proposed Merger
less attractive.
59. In adopting the poison pill and approving the Change of Control
Agreements, the Director Defendants breached their fiduciary duties to Casey’s and its
shareholders.
E. The Director Defendants’ Refusal To Negotiate Forces Couche-Tard

To Communicate Its Offer Directly To Casey’s Shareholders
60. On June 2, 2010, ACT Acquisition Sub, an indirect wholly owned
subsidiary of Couche-Tard, announced an all-cash, non-discriminatory tender offer for
100% of the outstanding shares of Casey’s common stock for $36 per share.
61. In a press release announcing the Tender Offer, Couche-Tard stated that a
Casey’s/Couche-Tard combination would deliver superior value to the companies’
respective shareholders, employees, business partners and other constituencies. Couche-
Tard further explained that, because the Director Defendants had rejected its proposals
without even discussing the economic terms and conditions of a potential business
combination with Couche-Tard and its advisors, Couche-Tard had decided to present the
offer directly to Casey’s shareholders and to permit them to choose for themselves.
62. On June 2, 2010, Casey’s issued a press release advising shareholders not
to take any action regarding the Tender Offer until the Director Defendants made a
recommendation within ten business days.
F. The Director Defendants Reject The Proposed Acquisition And, In The

Process, Mislead Casey’s Shareholders
63. On June 8, 2010, Casey’s filed its 14D-9, wherein the Director Defendants
stated that they had determined at a meeting on June 6, 2010 “that the [Tender] Offer is
not in the best interests of Casey’s and its shareholders and other constituencies.” 14D-9
27
at 8. Accordingly, the Director Defendants recommended that Casey’s shareholders
reject the Tender Offer and decline to tender their shares to Couche-Tard. Id.
64. In their zeal to persuade Casey’s shareholders to forego the premium
Tender Offer, the Director Defendants (i) made untrue statements of material fact in the
14D-9 and (ii) omitted material facts necessary to make the Director Defendants’ 14D-9
statements not misleading, in violation of Section 14(e) of the Williams Act, 15 U.S.C. §
78n(e).
a. The Director Defendants (i) assert that Couche-Tard exaggerated
the level of dialogue between the companies (id. at 19) and (ii) characterize Couche-
Tard’s proposal as “unsolicited.” Id. at 1. Both statements are false. Mr. Bouchard
reached out several times to Mr. Myers in the Fall of 2009 to discuss the proposed
transaction. Mr. Myers (i.e., Casey’s) requested that Couche-Tard submit its proposal in
writing, which Mr. Bouchard did on March 9, 2010. Casey’s repeatedly rejected Couche-
Tard’s overtures without elaboration or explanation. Couche-Tard has offered to meet
directly with Casey’s -- or to coordinate a meeting of the companies’ respective advisors
-- to discuss its proposal, and has both called and emailed Casey’s concurrently with each
proposal submission, hoping to establish a dialogue. Each time, Couche-Tard has made
clear its desire to negotiate a business combination on mutually acceptable terms and
conditions; each time it has been rebuffed.
b. The 14D-9 states that the 14% premium to Casey’s closing stock
price the day before Couche-Tard’s proposal was announced “is significantly lower than
the 32% median premium for all cash acquisitions of U.S. companies in transactions
valued between $1 billion and $3 billion in 2009 and 2010 to date (of which the median
28
premium in completed hostile bids was 66%).” Id. at 18. This statement is false and
misleading. In fact, the median premium for such transactions is 27%. Moreover, the
14D-9 leaves out critical contextual information. First, the offer price of $36.00 per share
represents an 8.9% premium to the all-time and 52-week high of Casey’s trading price
prior to the April 9, 2010 announcement. By contrast, the mean initial offer price for all
unsolicited cash offers greater than $1 billion since 1997 is a 31% discount to the all time
high and a 6% discount to the 52-week high of the respective target companies’ trading
prices. Second, the one-day premium of 14% signifies not Couche-Tard’s
“opportunism,” as the 14D-9 asserts, but rather that Casey’s pre-announcement trading
price already reflected the market’s recognition of Casey’s full value; indeed, the median
research price target for Casey’s common stock prior to the announcement was $33.00
per share.
c. Similarly misleading is the Director Defendants’ assertion that the
Tender Offer represents a low EBITDA multiple compared to historical industry trading.
The 14D-9 states that the Tender Offer implies a multiple of 7.0x LTM (Last Twelve
Months) EBITDA for the twelve months ending January 31, 2010, as compared “to a five
year average LTM EBITDA trading multiple of 7.7x for the convenience store sector.”
Id. at 18. This statement is misleading on several fronts. First, public trading tends to be
driven by projected EBITDA expectations, not trailing data. Thus, LTM multiples are
most commonly utilized in comparing acquisition multiples rather than public trading
multiples. Second, the “five year average” LTM EBITDA for convenience store peers --
which the 14D-9 lists as a 7.7x multiple -- was strategically selected by the Director
Defendants and bears little value as a comparative tool, because it includes outlier years
29
in which convenience stores traded at uncommonly high multiples driven by (i) the
historically accessible leverage available to finance real estate and (ii) periods of
abnormal oil price volatility and hurricane activity. These market aberrations thus skew
the figures over a five year span. By contrast, at the time Couche-Tard publicly
announced its proposal, Casey’s traded at 5.6x CY2011E EBITDA based on the
Institutional Brokers’ Estimate System (IBES), the same average trading multiple of The
Pantry, Inc., Couche-Tard and Susser Holdings Corporation (the “peers” included in
Casey’s computation). This is true even though Casey’s LTM EBITDA as of January 1,
2010 was higher ($258 million) than in any fiscal year during the five-year measuring
period that Casey’s employed.
d. The 14D-9 also contends that Couche-Tard’s precedent
transactions analysis improperly excluded prior transactions with higher multiples to
make the Tender Offer appear more valuable. Id. This criticism is both unwarranted and
inaccurate. While the 14D-9 contends that Couche-Tard should have included IYG
Holding’s 2005 acquisition of 7-Eleven and Couche-Tard’s previous acquisition of
Silcorp Limited in 1999, neither transaction is an appropriate guidepost for comparison
with the Tender Offer. The 7-Eleven transaction was different in kind because 7-Eleven
owned the name “7-Eleven” and received lucrative franchise royalties from a worldwide
network of approximately 27,500 stores. Indeed, 7-Eleven only had 9% company
operated stores (compared to 100% for Casey’s), and franchisees accounted for
approximately 60% of all 7-Eleven merchandise sales. The Silcorp transaction is
likewise irrelevant to assessing the Tender Offer, as it involved the acquisition of a
Canadian company.
30
e. The 14D-9 asserts that the Tender Offer does not fully recognize
the value of Casey’s real estate holdings and the operational synergies that would result
from a Couche-Tard/Casey’s merger. Id. These statements are misleading in that neither
measure is significant. The opportunities for synergies in connection with the Proposed
Acquisition are very limited for a transaction of this size, largely because Couche-Tard’s
and Casey’s respective service areas have little overlap -- fewer than 30 Casey’s stores
have a Couche-Tard store within a 1-mile radius. Further, Casey’s serves vastly different
types of markets than Couche-Tard, with the former focused predominantly in rural
markets and the latter operating predominantly in cities or dense suburban areas.
Similarly, although Casey’s does own the vast majority of its real estate -- freeing
Casey’s earnings from the rental expense many retailers endure -- the real estate
generally consists of small parcels in rural markets that (i) lack valuable alternative uses
and (ii) are not typically eligible for sale-leaseback financing because of location.
f. Similarly, the 14D-9’s suggestion that Couche-Tard will be unable
to obtain financing (id. at 19) is both misleading and unsupportable. Couche-Tard’s
credit worthiness is among the strongest of any company in the convenience store
industry. For example, Couche-Tard’s bonds consistently trade in the market at among
the lowest yields of all comparably-rated retailer debt securities. Moreover, at the close
of the Proposed Acquisition, Couche-Tard expects to have a pro forma leverage ratio of
3.3x debt/EBITDA, and, coupled with the significant free cash flow generated by the
Proposed Acquisition, expects to substantially deleverage within two years after closing.
For these reasons, several prominent banks have already expressed a willingness to
provide financing to Couche-Tard for the Proposed Acquisition. Couche-Tard simply
31
made a business decision not to execute commitments prior to commencing its Tender
Offer because of the substantial expenses it would incur by doing so.
g. The 14D-9 also improperly insinuates that Couche-Tard engaged
in wrongful conduct by (i) acquiring shares of Casey’s common stock without publicly
disclosing its position prior to commencing the Tender Offer and (ii) selling a portion of
its holdings in Casey’s stock representing approximately 3.9% of Casey’s outstanding
shares at a profit on the morning of April 9, 2010, the day of Couche-Tard’s public
announcement of its intent to commence the Tender Offer. See id. These allegations are
materially false and misleading. Couche-Tard had no obligation to disclose its position in
Casey’s, since it never accumulated 5% of the outstanding shares of common stock, nor
was it precluded from trading out of its position where the stock price unexpectedly
surpassed the price Couche-Tard was willing to pay in connection with the Tender Offer.
Couche-Tard did not determine to sell its Casey’s shares any time before April 9, and did
so only because the stock price rose to a level at which Couche-Tard was unwilling to
effect the Tender Offer. Moreover, Couche-Tard was advised by its broker prior to
selling its Casey’s shares that such sale would not affect the market because of the large
trading volume on that day. There is simply no indication of any intent to deceive or
manipulate the market on Couche-Tard’s part -- the Director Defendants are using
inflammatory accusations in an effort to rally support against a premium bidder.
h. The 14D-9 also expresses the Director Defendants’ “belief” that
the consummation of the Tender Offer would adversely impact Casey’s other
constituencies -- a belief purportedly based on “the differences in the manner in which
Casey’s and Couche-Tard are operated and managed.” Id. at 20. The Director
32
Defendants made no inquiry of Couche-Tard about its operations and management, and
make no mention of either Couche-Tard’s track record of retaining employees of
acquired companies, or Couche-Tard’s representation that its highly decentralized
business model would keep most, if not all, Casey’s employees in place. Similarly, the
14D-9 ignores the benefits a combined company -- with greater scale -- can provide to
constituents, including broader opportunities for Casey’s employees and expanded sales
opportunities for Casey’s suppliers. In fact, the Director Defendants never even inquired
about Couche-Tard’s plans for Casey’s, much less how those plans would affect various
constituency interests.
i. Finally, the 14D-9 fails to provide any analysis supporting the
Director Defendants’ conclusion that Couche-Tard’s Tender Offer undervalued Casey’s -
- a particularly striking omission since the Director Defendants only offered that reason
once Couche-Tard made its proposal public (i.e., once the Director Defendants were
forced to justify their successive rejections of Couche-Tard’s premium proposal to
Casey’s shareholders).
G. The Director Defendants Refuse To Dismantle The Anti-Takeover Devices
65. Couche-Tard’s Tender Offer is, by necessity, subject to several important
conditions, including that the Director Defendants (i) redeem Casey’s poison pill or
otherwise render it inapplicable to the Proposed Acquisition and (ii) approve the
Proposed Merger under the Business Combination Statute or otherwise render it
inapplicable to the Proposed Merger. The Director Defendants have refused to do either,
in violation of their fiduciary duties to Casey’s and its shareholders.
66. IBCA § 490.831 provides that, subject to certain exceptions, a corporate
director is liable for a breach of fiduciary duties if, among other things, he or she fails to
33
(i) act in good faith, (ii) act in a manner he or she reasonably believes to be in the best
interests of the corporation, or (iii) adequately inform him or herself of surrounding facts
and circumstances when exercising corporate decision-making functions.
67. The Director Defendants have wrongfully refused to dismantle either the
poison pill or the barriers imposed by the Business Combination Statute despite Couche-
Tard’s purely voluntary, non-coercive, non-discriminatory all cash Tender Offer to
Casey’s shareholders. This conduct lacks any rational business purpose, is fundamentally
unfair to Casey’s shareholders -- who thereby are being deprived of any benefit presented
by the Tender Offer -- and constitutes a breach of the Director Defendants’ fiduciary
duties.
1. The Poison Pill
68. As a practical matter, the existence of what is commonly referred to as a
“poison pill” effectively precludes Couche-Tard from consummating the Tender Offer,
regardless of the extent to which Casey’s shareholders might wish to tender their shares.
69. On April 16, 2010, the Director Defendants implemented the Tender Offer
roadblock -- the Rights Agreement -- which they previously adopted. The Director
Defendants adopted a resolution declaring a dividend distribution of one Right for each
outstanding share of common stock, payable when a “distribution” of such preferred
stock purchase rights occurs.
70. The Rights granted to shareholders are essentially warrants to buy
additional shares of a special preferred class of stock issued by Casey’s and/or Couche-
Tard’s common stock, depending on when a shareholder exercises the Right, at a deep
discount to the market price.
34
71. If the pill is triggered, all Casey’s shareholders except Couche-Tard can --
and likely will -- exercise their Rights, which will severely dilute Couche-Tard’s stake in
Casey’s and make the Tender Offer prohibitively expensive.
72. Casey’s poison pill operates as follows:
a. First, the Rights become exercisable upon the earlier of: (i) such
date that Casey’s learns that a person (with certain exceptions not applicable here) has
acquired or obtained the right to acquire beneficial ownership of 15% or more of the
outstanding common stock (thus becoming an “Acquiring Person”), or (ii) such date, if
any, as may be designated by the Director Defendants after the commencement of, or first
public disclosure of an intention to commence, a tender or exchange offer, the
consummation of which would result in any person acquiring beneficial ownership of
15% or more of the outstanding common stock (the “Distribution Date”).
b. Next, each Right initially entitles registered holders of Casey’s
common stock to purchase one one-thousandth of a share of Casey’s Series A Preferred
Stock for a purchase price of $95 divided by half of the then-current market value of
Casey’s common stock. Until the Distribution Date, the Rights are transferred only with
the common stock.
c. After the Distribution Date, Rights certificates are to be mailed to
holders of record of common stock as of the close of business on the Distribution Date
and those certificates alone will evidence the Rights.
d. Prior to the existence of an Acquiring Person, Casey’s may redeem
the Rights in whole, but not in part, for $0.01 per Right, in which case the Rights
Agreement would not be an impediment to consummating either the Tender Offer or the
35
Proposed Merger. The Rights expire on April 15, 2011, unless extended or earlier
redeemed or exchanged.
e. When a party becomes an Acquiring Person, all Rights other than
those held by the Acquiring Person “flip-in.” This means that each Right becomes
exercisable and entitles its holder to purchase 1/1000 of a share of Casey’s Series A
Preferred Stock at a purchase price of $95 divided by half of the then-current market
value of Casey’s common stock.
f. If and when Casey’s engages in a merger, the Rights “flip-over”
and become exercisable for shares of the acquiror’s common stock at the bargain price of
two shares for the market value of one.
g. Thus, Casey’s shareholders have no incentive to exercise the
Rights unless and until a person triggers the “flip-in” or “flip-over” provisions by
becoming an Acquiring Person.
73. The effect of Casey’s poison pill, which the Director Defendants adopted
and implemented, is to impose substantial, ruinous dilution upon Couche-Tard -- both by
requiring Couche-Tard to acquire thousands of Preferred Shares (when the flip-in
provision is triggered) and then to suffer direct dilution of its stock when the flip-over
provision is triggered -- should it become an Acquiring Person. This would make the
Tender Offer economically impracticable, but would offer little to no direct economic
benefit to Casey’s common shareholders. In light of the clear economic value posed to
Casey’s shareholders by Couche-Tard’s voluntary, non-discriminatory Tender Offer, and
the lack of corresponding economic benefit imparted to Casey’s shareholders by the
poison pill, the Director Defendants’ refusal to either redeem the Rights or render the
36
Rights Agreement inapplicable to the Proposed Acquisition constitutes a breach of the
fiduciary obligations to Casey’s and its shareholders.
2. The Business Combination Statute
74. Pursuant to the provisions of the Business Combination Statute, a third-
party, such as Couche-Tard, that acquires 10% or more of the outstanding voting stock of
a publicly-traded Iowa corporation, such as Casey’s, cannot merge with the publicly-
traded Iowa corporation until three years following the acquisition of the 10% block.
75. The three-year moratorium does not apply if (i) a company’s board
approves the transaction before the share acquisition date (i.e., the transaction was not
hostile), (ii) the third party owns at least 85% of the corporation’s outstanding voting
stock -- excluding, for purposes of calculating the number of shares outstanding, those
shares owned by directors and officers of the Iowa corporation -- or (iii) after the share
acquisition date, the transaction is approved by the Iowa company’s board and authorized
by at least 66 2/3% of the outstanding voting stock not owned by the third party.
76. Because the first and third exceptions are effectively irrelevant to a hostile
bid (one requires approval by the incumbent board, the other approval by the very
shareholders who decided not to tender in the first place), the only potentially viable
escape hatch in the hostile takeover context is the second exception: a hostile bidder can
override the Business Combination Statute by increasing its holdings in the target stock
from less than 10% to 85% or greater in the same tender offer.
77. However, a recent landmark study has presented empirical data
concluding that the 85% threshold is simply unattainable for a hostile tender offeror.
Guhan Subramanian, Steven Herscovici & Brian Barbetta, Is Delaware’s Antitakeover
37
Statute Unconstitutional? Evidence from 1988-2008, 65 Bus. Law. 685 (2010). The
study collects comprehensive data on hostile takeover attempts against companies
incorporated in Delaware -- which has a business combination statute substantially
identical to Iowa’s save for a slightly higher trigger of 15% instead of 10% -- from 1988
through 2008. The study found that “no bidder in the last nineteen years (1990-2008)
has achieved the 85% out required by Section 203, or has even come close.” Id. at 35
(emphasis added). Accordingly, since the “exceptions” to the Business Combination
Statute are illusory, that provision, alone, constitutes an absolute bar on successful hostile
takeovers.
78. Coupled with the effect of the poison pill -- and, more specifically, the
Director Defendants’ wrongful refusal to dismantle the poison pill -- the restriction in the
Business Combination Statute is even more powerful, granting the Director Defendants
virtually unbridled authority to reject the Proposed Acquisition without regard to the
desires of shareholders who wish to tender their shares for purchase in the Tender Offer.
79. The Director Defendants have thus far failed to allow shareholders the
opportunity to realize the value they seek to obtain through the Tender Offer. The
Director Defendants have refused to adopt a resolution approving Couche-Tard’s
purchase of shares of common stock of Casey’s or the Proposed Acquisition for purposes
of the Business Combination Statute.
80. Application of the Business Combination Statute to the Proposed
Acquisition will potentially delay the transaction for at least three years. Accordingly, at
least three years of the substantial benefit of the Proposed Acquisition will be lost
forever. In addition, any number of events could occur within those three years that
38
would prevent the Proposed Acquisition altogether, such as significant changes to either
Casey’s or Couche-Tard’s financial health or the pursuit of divergent business strategies
that would not create the benefits presently presented by the Proposed Acquisition.
81. Moreover, a three-year delay between the consummation of the Tender
Offer and the Proposed Merger would render the Proposed Acquisition economically
unfeasible for Couche-Tard.
82. The effect of the Director Defendants’ refusal to adopt a resolution
approving the Proposed Acquisition for purposes of the Business Combination Statute is
to prohibit the Casey’s shareholders from obtaining the benefits of the Tender Offer.
H. Irreparable Harm
83. The Director Defendants’ refusal to negotiate or engage in discussions
with Couche-Tard regarding its various proposals has made it significantly more difficult
for Couche-Tard to consummate the Proposed Acquisition and will require replacement
of the Director Defendants if it is to be achieved.
84. The Director Defendants’ imposition of the poison pill and their continued
refusal to (i) dismantle the poison pill and (ii) render the Business Combination Statute
inapplicable threaten to make the Proposed Acquisition financially unfeasible by causing
a massive dilution of Couche-Tard’s stake in Casey’s and by barring the Proposed
Merger for three years.
85. The Director Defendants’ execution of the Change of Control Agreements
burdens Casey’s with substantial new financial liabilities upon a change of control and
would restrict Couche-Tard’s ability to control Casey’s in the event that it was able to
consummate the Proposed Acquisition.
39
86. Collectively, these measures pose irreparable harm to Couche-Tard and all
other Casey’s shareholders by denying Couche-Tard the unique opportunity to acquire
Casey’s and by depriving Casey’s shareholders of the opportunity to receive maximum
value for their shares. Unless the Court orders the relief requested, the substantial
benefits of the Proposed Acquisition likely will be lost forever. The injury to Couche-
Tard and Casey’s other shareholders is not compensable by monetary damages.
87. All Casey’s shareholders have been and are being irreparably harmed by
the Director Defendants’ untrue statements of material fact and failure to disclose
material facts necessary to make the statements made in the 14D-9 not misleading. Each
of the omitted facts is material in that each would be considered important to
shareholders of Casey’s in determining whether to tender their shares pursuant to the
Tender Offer. In addition, Casey’s shareholders thereby have been and will continue to
be denied material information to which they are lawfully entitled and which is essential
to their making an informed decision to tender, hold or sell their shares of Casey’s
common stock.
COUNT I
(BREACH OF FIDUCIARY DUTIES BY FAILING TO REMOVE

UNREASONABLE TAKEOVER DEFENSES THAT SERVE
NO RATIONAL BUSINESS PURPOSE)
88. Couche-Tard repeats the allegations in paragraphs 1 through 87 above as
if fully set forth herein.
89. The failure and refusal of the Director Defendants to (i) neutralize the
poison pill by redeeming the Rights or otherwise rendering it inapplicable to the
Proposed Acquisition, (ii) approve the Proposed Acquisition under the Business
Combination Statute or otherwise render it inapplicable to the Proposed Acquisition, and
40
(iii) take all other action to permit Casey’s shareholders to tender their shares in the
Tender Offer, is fundamentally unfair to Casey’s and its shareholders and cannot be
attributed to any rational business purpose.
90. Given the history of this matter, the Director Defendants cannot be
expected, absent an order from this Court, to approve the Proposed Acquisition.
91. The Director Defendants’ actions are in breach of the fiduciary duties they
owe to Casey’s and its shareholders.
92. The Director Defendants’ actions are causing Couche-Tard irreparable
harm, and Couche-Tard has no adequate remedy at law.
COUNT II
(BREACH OF FIDUCIARY DUTIES BY IMPLEMENTING

UNREASONABLE DEFENSIVE MEASURES THAT SERVE
NO RATIONAL BUSINESS PURPOSE)
94. The Director Defendants’ approval of the Change of Control Agreements
for twelve of Casey’s leading executives was done for the purpose of entrenching
incumbent management and serving as a further obstacle to the Proposed Acquisition.
95. The Change of Control Agreements burden Casey’s with additional and
unnecessary financial liabilities.
96. The Director Defendants’ approval of the Change of Control Agreements
is a violation of the Director Defendants’ duty of loyalty.
97. The Director Defendants’ actions are in breach of the fiduciary duties they
owe to Casey’s and its shareholders.
41
98. The Director Defendants’ conduct threatens to deprive Couche-Tard of the
unique opportunity to acquire Casey’s.
99. The Director Defendants’ actions are causing Couche-Tard irreparable
harm, and Couche-Tard has no adequate remedy at law.
COUNT III
(DECLARATORY JUDGMENT THAT THE IOWA ANTI-TAKEOVER

SCHEME IS PREEMPTED BY THE WILLIAMS ACT)
101. There exists an actual, substantial and immediate controversy within this
Court’s jurisdiction which is the result of the Director Defendants’ conduct and which
will be redressed by a judicial decision granting the relief sought herein.
102. Casey’s is a public company whose shares are traded on a national
securities exchange and which is subject to the federal securities laws, including the
Williams Act. Only a small percentage of Casey’s shareholders reside in Iowa.
103. The purpose of the Williams Act is to protect the shareholders of publicly-
traded companies such as Casey’s by preserving shareholder autonomy and ensuring that
management, the bidder and shareholders are placed on an equal footing so that
shareholders may make informed choices regarding whether to accept the offered
premium or retain current management.
104. The Iowa Anti-Takeover Scheme purports to regulate tender offers for the
shares of public companies like Casey’s that are incorporated in Iowa and whose shares
are traded on a national securities exchange.
42
105. The statutory barriers set up by the Iowa Anti-Takeover Scheme include
the Poison Pill Statute, the Business Combination Statute, and the Other Constituencies
Statute.
106. The Poison Pill Statute expressly permits directors to adopt so-called
rights plans with virtually unlimited discretion as to their terms and conditions, thereby
allowing the directors to deprive the target’s shareholders of obtaining the benefit of a
premium for their stock, and allowing directors to impose severe economic burdens on a
tender offeror who wishes to acquire the target company.
107. The Business Combination Statute imposes a three-year moratorium on
acquisitions absent pre-approval by the target’s board of directors, subject to certain
illusory exceptions, namely, where the bidder (i) acquires 85% or more of the target’s
voting stock in one tender offer or (ii) receives approval after the tender offer from both
the target board and two-thirds of the non-tendering shareholders. Thus, the Business
Combination Statute effectively prohibits the successful consummation of any hostile
takeover for at least three years.
108. The Other Constituencies Statute permits a board of directors to not only
consider non-shareholder “community interest factors” in assessing a takeover proposal,
but also permits those interests to trump the interests of shareholders in the board’s
calculus. The Other Constituencies Statute leaves no doubt about its purpose, providing
that, if a board rejects a tender offer proposal on the basis of one or more of these
“community interest factors,” it “has no obligation to facilitate, to remove any barriers to,
or to refrain from impeding, the proposal or offer” -- apparently with no regard to how its
rejection affects shareholders. Going even further, the Other Constituencies Statute
43
purports to preemptively insulate from judicial scrutiny a board’s decision to subvert the
interests of shareholders -- no matter how flagrantly -- in favor of any other “community
interest factors.”
109. The Iowa Anti-Takeover Scheme not only deprives tender offers of any
meaningful opportunity for success, but operates to prohibit them where, as here, prior
board (as opposed to shareholder) approval is not forthcoming.
110. The Iowa Anti-Takeover Scheme thus stands as an obstacle to the
accomplishment and execution of the full purposes, policies and objectives of the
Williams Act.
111. As such, the Iowa Anti-Takeover Scheme is preempted by the Williams
Act under the Supremacy Clause of the United States Constitution, art. VI, cl. 2.
112. Couche-Tard has no adequate remedy at law.
COUNT IV
(DECLARATORY JUDGMENT THAT THE IOWA ANTI-

TAKEOVER SCHEME IS UNCONSTITUTIONAL UNDER THE COMMERCE
CLAUSE, BOTH FACIALLY AND AS APPLIED TO THIS CASE)
115. The Iowa Anti-Takeover Scheme erects impenetrable -- and
unconstitutional -- barriers to shareholders’ ability to sell their shares in a change of
control transaction without board approval.
44
116. By operation of the Poison Pill Statute, the Business Combination Statute,
and the Other Constituencies Statute, the Iowa Anti-Takeover Scheme permits a board of
directors to act contrary to the interests and wishes of the corporation’s shareholders, the
vast majority of whom are located outside of Iowa, and prevent a tender offer solely
because of a board’s purported interest in protecting other constituencies, none of which
need be located in Iowa.
117. By allowing incumbent management of an Iowa corporation to decide
whether or not to allow a tender offer, the Iowa Anti-Takeover Scheme also prevents
individual investors from selling their stock at a premium in the interstate market for
securities.
118. The effects of the Iowa Anti-Takeover Scheme thus extend far beyond any
legitimate local interest in regulating matters of internal corporate governance and,
instead, regulate interstate commerce.
119. The Iowa Anti-Takeover Scheme violates the Commerce Clause of the
United States Constitution, art. I, sect. 8, cl. 3, because it (i) discriminates against
interstate commerce and directly regulates commerce outside the state of Iowa, and (ii)
imposes severe and onerous burdens on interstate commerce that clearly exceed any local
benefits.
120. The Director Defendants have exploited these unconstitutional provisions
of Iowa law by enacting a poison pill and by refusing to exempt Couche-Tard’s Proposed
Acquisition from the restrictions imposed by the Business Combination Statute, thereby
intending to defeat the Proposed Acquisition with no rational business justification and to
the detriment of Couche-Tard and the Casey’s shareholders.
45
121. In the 14D-9, the Director Defendants justified their opposition to the
Proposed Acquisition with reference to the alleged effect that the Proposed Acquisition
would have on constituencies other than the Casey’s shareholders.
122. Moreover, the protections afforded by the Other Constituencies Statute
make it unlikely that the Casey’s shareholders will be able to effectively challenge the
Director Defendants’ self-interested refusal to appropriately consider the Proposed
Acquisition.
COUNT V
(DECLARATORY JUDGMENT THAT IOWA ANTI-TAKEOVER

SCHEME IS UNCONSTITUTIONAL UNDER THE TAKINGS CLAUSES
OF THE UNITED STATES AND IOWA CONSTITUTIONS, BOTH
FACIALLY AND AS APPLIED TO THIS CASE)
126. The Takings Clauses of the United States Constitution, Amendments V
and XIV, and the Iowa Constitution, Article I, Section 18, require that a state compensate
a property owner when it confiscates private property for public use and that there be a
legitimate public purpose for the taking.
127. Legislation that results in a de facto taking of property constitutes an
impermissible “regulatory taking.”
46
128. A shareholder’s ownership interest in a public corporation constitutes a
protected property interest. This property interest includes the right to vote, to dispose of
shares, and to seek review of business decisions made by boards of directors.
129. The Iowa Anti-Takeover Scheme unreasonably restricts such rights and
authorizes boards of directors of Iowa corporations like Casey’s to “just say no” to a
takeover offer supported by an overwhelming percentage of shareholders and to destroy
shareholder value without compensation. Furthermore, it insulates directors who permit
the interests of third-party constituencies to trump the interests of the shareholders from
liability.
130. The Iowa Anti-Takeover Scheme thus works a diminution in the value of
shareholders’ property interests in Iowa corporations like Casey’s without just
compensation and serves no legitimate public purpose.
131. Operation of the Iowa Anti-Takeover Scheme in this context has deprived
the Casey’s shareholders of their above-listed property rights. Those rights have instead
been transferred either to the Director Defendants or to unnamed constituencies whose
interests have trumped those of the Casey’s shareholders.
132. As such, the Iowa Anti-Takeover Scheme and the actions of the Director
Defendants that it purportedly authorized are void as violative of the Takings Clauses of
the United States Constitution, Amendments V and XIV, and the Iowa Constitution,
Article I, Section 18.
47
COUNT VI
(DECLARATORY JUDGMENT THAT THE IOWA ANTI-

TAKEOVER SCHEME IS VOID UNDER THE INALIENABLE
RIGHTS CLAUSE OF THE IOWA CONSTITUTION)
136. Article I, Section 1, of the Iowa Constitution protects the inalienable right
of citizens of this State to acquire and protect property. Legislative actions that interfere
with property rights, therefore, are subject to a substantive due process analysis pursuant
to which courts must weigh the rights infringed upon by the statute at issue against the
public interest purportedly served by the legislature’s enactment of the statute.
137. In order to pass muster, the statutory scheme must, at a minimum, not be
unreasonable, unduly oppressive or patently beyond the necessities of the case, and must
insure that the means employed by the legislature to accomplish the stated goal constitute
a reasonable exercise of the a state’s police power that has a real and substantial relation
to the objects sought to be obtained. The state’s police power, in turn, refers to the
legislature’s authority to enact laws that promote public health, safety and welfare.
138. The Iowa Anti-Takeover Scheme serves no such purpose. It is
unreasonable, arbitrary and an improper exercise of legislative power. The statutes at
issue, taken together, interfere with shareholders’ property interests in their shares by
delegating to a board of directors unfettered discretion to prioritize other constituencies
over the owners of the company -- the shareholders. These statutes also interfere with
48
fundamental principles of corporate democracy by allowing a board of directors to
entrench itself, and deprive shareholders of their right to control their company and to sell
their shares in a tender offer, even if the shareholder believes the price offers fair value
for his or her shares.
139. The Iowa Anti-Takeover Scheme gives directors broad discretion to block
a premium tender offer by considering “community interest factors” that have no
substantial relationship to the long-term or short-term benefit to shareholders, including
the interests of suppliers, customers and creditors of the corporation. The shareholders
whose fundamental rights are infringed thus receive no benefit under the Iowa Anti-
Takeover Scheme.
140. The means of implementation chosen by the legislature, therefore, do not
bear a real and substantial relationship to any legitimate legislative objective, but instead
deprive shareholders of their property interests in their shares, as well as their
fundamental right to vote, without any reasonable basis.
141. Operation of the Iowa Anti-Takeover Scheme in this context has deprived
the Casey’s shareholders of their above-listed property rights. Those rights have instead
been transferred either to the Director Defendants or to unnamed constituencies whose
interests have trumped those of the Casey’s shareholders.
142. Therefore, the Iowa Anti-Takeover Scheme violates the principles of
substantive due process embodied in Article I, Section 1, of the Iowa Constitution and is
void.
49
COUNT VII
(VIOLATION OF SECTION 14(e) OF THE

SECURITIES EXCHANGE ACT OF 1934)
145. Section 14(e) of the Securities Exchange Act of 1934, 15 U.S.C. § 78n(e),
makes it “unlawful for any person to make any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements made, in the light of
the circumstances under which they are made, not misleading, or to engage in any
fraudulent, deceptive, or manipulative acts or practices, in connection with any tender
offer or request or invitation for tenders, or any solicitation of security holders in
opposition to or in favor of any such offer, request, or invitation.”
146. Section 14(e) of the Securities Exchange Act of 1934 and the regulations
promulgated thereunder are intended to ensure that shareholders confronted with a tender
offer are provided with all the information about that offer and the offeror necessary for
them to make an informed investment decision whether to tender their shares to the
offeror, sell their shares in the market or hold their shares.
147. The Director Defendants, by the use and means and instruments of
interstate commerce or of the mails and in connection with the Tender Offer, have made
untrue statements of material fact and have omitted to state material facts necessary in
order to make statements that they have made, in light of the circumstances under which
they were made, not misleading, all as more particularly described in paragraph 64 above.
50
148. These material misstatements and omissions were made knowingly,
intentionally and/or recklessly in order to induce Casey’s shareholders not to tender their
shares to Couche-Tard in the Tender Offer.
149. By virtue of the foregoing, the Director Defendants have violated, and
continue to violate Section 14(e) of the Securities Exchange Act of 1934.
PRAYER FOR RELIEF
WHEREFORE, Couche-Tard requests that the Court render judgment against the
Director Defendants and all other persons in active concert or participation with them as
follows:
A. Declaring that:
1. The Director Defendants have breached their fiduciary duties by
adopting and implementing the poison pill contained in the Rights
Agreement.
2. The Director Defendants have further breached their fiduciary
duties by failing and refusing to (i) redeem the Rights or amend the
Rights Agreement to permit the Tender Offer to proceed, (ii) adopt
a resolution exempting the Proposed Acquisition from the
provisions of the Business Combination Statute and (iii) take all
other action necessary to permit Casey’s shareholders to tender
their shares in the Tender Offer.
3. The Director Defendants have further breached their fiduciary
duties by approving the Change of Control Agreements.
51
4. The Iowa Anti-Takeover Scheme is preempted by the Williams
Act and does not apply to the Proposed Acquisition.
5. The Iowa Anti-Takeover Scheme violates the Commerce Clause of
the U.S. Constitution, is void and does not apply to the Proposed
Acquisition.
6. The Iowa Anti-Takeover Scheme is unconstitutional under the
Takings Clause of the Fifth and Fourteenth Amendments of the
U.S. Constitution, and Article I, Section 18 of the Iowa
Constitution, is void and does not apply to the Proposed
Acquisition.
7. The Iowa Anti-Takeover Scheme violates Article I, Section 1 of
the Iowa Constitution, is void and does not apply to the Proposed
Acquisition.
8. The Director Defendants have made or caused Casey’s to make
materially false and misleading misstatements and omissions in
violation of the Williams Act.
B. Enjoining the Director Defendants and all other persons in active concert
or participation with them directly or indirectly from taking any steps to
impede or frustrate the ability of Casey’s shareholders to consider or
accept the Tender Offer, or taking any other steps to interfere with or
impede the Proposed Acquisition.
C. Ordering the Director Defendants to (i) redeem the Rights or to amend the
Rights Agreement so as to make it inapplicable to the Tender Offer and
52
(ii) grant approval of the Proposed Acquisition for purposes of the
Business Combination Statute.
D. Ordering the Director Defendants to take all other action necessary to
permit Casey’s shareholders to tender their shares into the Tender Offer.
E. Ordering the Director Defendants to make appropriate corrective
disclosures in the 14D-9.
F. Awarding Couche-Tard its costs and disbursements for this action,
including attorneys’ fees.
G. Granting Couche-Tard such further relief as may be just and proper.
Dated: June 18, 2010
NYEMASTER, GOODE, WEST, HANSELL &

O’BRIEN, P.C.
Jay Eaton
Thomas H. Walton (#3808)
700 Walnut Street
Suite 1600
Des Moines, Iowa 50309
(515) 283-3100
Attorneys for Defendants-Counterclaim
Plaintiffs
OF COUNSEL:
DEWEY & LEBOEUF LLP

Richard W. Reinthaler
1301 Avenue of the Americas
New York, New York 10019
(212) 259-8056
53

Couche-Tard&#39;s Complaint Against Casey&#39;s

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Case 4:10-cv-00265-JAJ-TJS Document 13 Filed 06/18/10 Page 1 of 54

IN THE UNITED STATES DISTRICT COURT

DEFENDANTS’ ANSWER, AFFIRMATIVE DEFENSES AND

Defendants Alimentation Couche-Tard Inc. and ACT Acquisition Sub, Inc.

(collectively, “Couche-Tard” unless otherwise noted), by and through their undersigned

Stores, Inc. (“Casey’s”) in this action as follows:

Deny knowledge or information sufficient to form a belief as to the truth of the

that discovery will provide evidentiary support for Casey’s claims.

1. Deny the allegations in paragraph 1 of the Complaint.

2. Admit the allegations in paragraph 2 of the Complaint.

3. Admit that Couche-Tard has expanded through acquisitions, including

the allegations in paragraph 3 of the Complaint.

4. Admit the allegations in paragraph 4 of the Complaint.

5. Admit that Couche-Tard completed the acquisition of Circle K in 2003.

knowledge or information sufficient to form a belief as to the truth of the allegations

contained in the second sentence thereof.

sentences of paragraph 6 of the Complaint. Except as so admitted, deny the allegations in

paragraph 6 of the Complaint.

7. Deny the allegations in paragraph 7 of the Complaint.

8. Admit that in September 2009, Couche-Tard began purchasing shares of

business combination transaction. Except as so admitted, deny the allegations in

paragraph 8 of the Complaint.

9. Admit the allegations in paragraph 9 of the Complaint.

so admitted, deny the allegations in paragraph 10 of the Complaint.

deny the allegations in paragraph 11 of the Complaint.

which no responsive pleading is required.

complete statement of its contents. Except as so admitted, deny the allegations in

paragraph 14 of the Complaint.

purchase of shares of Casey’s stock. Except as so admitted, deny the allegations in

paragraph 15 of the Complaint.

paragraph 16 of the Complaint.

17. Admit that on April 9, 2010, Couche-Tard sold 1,975,000 shares of

complete statement of its contents. Except as so admitted, deny the allegations in

paragraph 17 of the Complaint.

18. Admit that on April 9, 2010, Couche-Tard sold 1,975,000 shares of

complete statement of its contents. Except as so admitted, deny the allegations in

paragraph 18 of the Complaint.

19. Deny the allegations in paragraph 19 of the Complaint.

20. Deny the allegations in paragraph 20 of the Complaint.

21. Deny the allegations in paragraph 21 of the Complaint.

22. Deny the allegations in paragraph 22 of the Complaint.

23. Deny the allegations in paragraph 23 of the Complaint.

24. Deny the allegations in paragraph 24 of the Complaint.

26. Admit the allegations in paragraph 26 of the Complaint.

27. Admit the allegations in paragraph 27 of the Complaint.

28. State that paragraph 28 of the Complaint states a legal conclusion as to

which no responsive pleading is required.

29. State that paragraph 29 of the Complaint states a legal conclusion as to

which no responsive pleading is required.

30. State that paragraph 30 of the Complaint states a legal conclusion as to

which no responsive pleading is required.

31. State that paragraph 31 of the Complaint states a legal conclusion as to

which no responsive pleading is required.

32. Admit that Couche-Tard has expressed a desire to increase shareholder

allegations in paragraph 32 of the Complaint.

paragraph 33 of the Complaint.

a complete statement of its contents. Except as so admitted, deny the allegations in

paragraph 34 of the Complaint.

paragraph 35 of the Complaint.

a complete statement of its contents. Except as so admitted, deny the allegations in

paragraph 36 of the Complaint.

37. Deny the allegations in paragraph 37 of the Complaint.

deny the allegations in paragraph 38 of the Complaint.

39. Admit the allegations in paragraph 39 of the Complaint.

Couche-Tard's Complaint Against Casey's

Couche-Tard's Complaint Against Casey's