couche-tard's complaint against casey's

8/9/2019 Couche-Tard's Complaint Against Casey's

1/54

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF IOWA

CENTRAL DIVISION________________________________________CASEYS GENERAL STORES, INC.,

Plaintiff,v.

ALIMENTATION COUCHE-TARD INC. andACT ACQUISITION SUB, INC.,

Defendants._______________________________________ALIMENTATION COUCHE-TARD INC. andACT ACQUISITION SUB, INC.,

Counterclaim Plaintiffs,v.

CASEYS 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 CounterclaimDefendants.

_______________________________________

)

)))))))))))

)))))))))))))))))))

C.A. No. 4:10-cv-265

DEFENDANTS ANSWER, AFFIRMATIVE DEFENSES AND

COUNTERCLAIMS FOR DECLARATORY AND INJUNCTIVE RELIEF

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


2/54

1

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 Caseys General

Stores, Inc. (Caseys) 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 Caseys 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.




3/54

2

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

Caseys common stock on the open market and that, as of October 5, 2009, Couche-Tard

held approximately 140,000 shares of Caseys common stock. Further admit that, as of

October 5, 2009, Couche-Tard had not yet approached Caseys 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 Caseys 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.



4/54

3

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-Tards press release did not discuss Couche-Tards

purchase of shares of Caseys stock. Except as so admitted, deny the allegations in


16. Admit upon information and belief that Caseys 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

Caseys 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




Caseys 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








5/54

4




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




6/54

5

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 Caseys 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.



7/54

6

45. Admit that on March 10, 2010, Mr. Myers sent an email to Mr. Bouchard

acknowledging receipt of Couche-Tards 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.
















8/54

7

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.






Caseys 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-Tards sale of 1,975,000

shares of Caseys 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.












9/54

8






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 Caseys 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











10/54

9

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 Caseys 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.



11/54

10

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 Caseys.

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.



12/54

11

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 Caseys 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 Caseys

General Stores, Inc. (Caseys) 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 Caseys and its shareholders. Couche-Tard is, and at all relevant times

was, a shareholder of Caseys.

2. Each of the Director Defendants has violated the duties of care, loyalty

and good faith owed to Caseys and its shareholders by implementing and/or leaving in



13/54

12

place defensive devices designed to thwart Couche-Tards non-coercive, non-

discriminatory, premium tender offer to purchase all of the outstanding shares of Caseys

common stock for $36 per share in cash. These tactics serve no purpose other than to

entrench the Director Defendants and Caseys 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-Tards proposal to enter into a business

combination with Caseys -- including a publicly-announced offer on April 9, 2010 to

acquire Caseys for $36 per share in cash -- Couche-Tard had no choice but to bring its

offer directly to Caseys shareholders. Accordingly, on June 2, 2010, Couche-Tard

commenced an all-cash tender offer to purchase all outstanding shares of Caseys

common stock for $36 per share (the Tender Offer), representing a 14% premium to

the closing price of Caseys common stock on the last trading day prior to the public

announcement of Couche-Tards proposal and a 24% premium to Caseys one-year

average closing price. Moreover, the offer price represented an 8.9% premium to the all-

time and 52-week high of Caseys 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% discountto the target companies respective all-time highs and a 6%

discountto 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 Caseys, pursuant to which it is currently anticipated that (a)



14/54

13

Couche-Tard would be the surviving company in the merger and (b) each share of

Caseys 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 Caseys Solicitation/Recommendation Statement on Schedule 14D-9 (the 14D-

9) that Caseys 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 Caseys

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 Caseys

recently-implemented poison pill -- the preferred share purchase rights (Rights)

issued pursuant to Caseys 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-Tards 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



15/54

14

and interested shareholders that are not approved in advance by the corporations 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 Caseys 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 corporations 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



16/54

15

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.



17/54

16

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



18/54


19/54

18

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 Caseys 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

Caseys and its shareholders by (a) unreasonably adopting a poison pill and approving

new employment agreements for Caseys 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 Caseys shareholders to tender their shares, and eliminate all other

impediments to the Proposed Acquisition; and (iv) declaring that the Director Defendants



20/54


21/54

20

basis. According to its public filings, as of April 30, 2009, Caseys operated a total of

1,478 stores throughout nine Midwestern states, including Iowa, Missouri and Illinois.

According to the 14D-9, Caseys 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 Caseys 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. Caseys 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 Caseys and a director. He has served on the board since

2006.

24. Additional Counterclaim Defendant Kenneth Haynie is a director of

Caseys and has served on the board since 1987.

25. Additional Counterclaim Defendant Johnny Danos is a director of Caseys

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 Caseys and has served on the board since 2008.



22/54

21

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 Caseys 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 Courts 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 Courts 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.



23/54


24/54

23

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-Tards interest in pursuing a transaction with

Caseys. To this overture, Mr. Myers responded that Couche-Tard should submit any

proposal in writing.

C. The Director Defendants Repeatedly Reject Couche-Tards Written

Proposals Without Discussion Or Negotiation

40. On March 9, 2010, Mr. Bouchard sent a letter to Mr. Myers setting forth

Couche-Tards proposal to acquire 100% of the outstanding shares of Caseys at a price

of $36 per share. That price represented a 14% premium over Caseys closing price on

the day before, a 17% premium over Caseys 90-calendar day average closing price and a

24% premium over Caseys one-year average closing price. Moreover, the offer price

represented an 8.9% premium to the all-time and 52-week high of Caseys 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% discountto the target

companies respective all-time highs and a 6% discount to their respective 52-week

highs. Similarly, based on Caseys 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 Caseys

estimated EBITDA trading multiples for year-end 2011 as of the date Couche-Tards

proposal was publicly announced (5.6x).



25/54

24

41. Mr. Bouchards letter stated that Couche-Tard had strong financing

support and was prepared to engage with Caseys to proceed to an agreement in a matter

of weeks. The letter made clear that Couche-Tards management team, financial advisors

and legal counsel were available at Caseys convenience to discuss any aspect of the

terms and structure of the offer.

42. Mr. Bouchards letter also stated that Couche-Tard had an extremely high

regard for Caseys 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-

Tards 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 Caseys board reconsider the proposal and enter into negotiations with

Couche-Tard. In the letter, Mr. Bouchard reported Couche-Tards continued willingness

to work together with Mr. Myers and Caseys board of directors to negotiate a transaction

for joint presentation to Caseys shareholders.

48. The Director Defendants once again rejected Couche-Tards proposal.



26/54


27/54

26

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 Caseys 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 Caseys officers who abruptly received employment

extensions in response to Couche-Tards 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 Caseys with substantial financial liabilities upon a

change of control, and limit Couche-Tards ability to exercise control over Caseys



28/54

27

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 Caseys and its

shareholders.

E. The Director Defendants Refusal To Negotiate Forces Couche-Tard

To Communicate Its Offer Directly To Caseys 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 Caseys common stock for $36 per share.

61. In a press release announcing the Tender Offer, Couche-Tard stated that a

Caseys/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 Caseys shareholders and to permit them to choose for themselves.

62. On June 2, 2010, Caseys 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 Caseys Shareholders

63. On June 8, 2010, Caseys 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 Caseys and its shareholders and other constituencies. 14D-9



29/54

28

at 8. Accordingly, the Director Defendants recommended that Caseys shareholders

reject the Tender Offer and decline to tender their shares to Couche-Tard. Id.

64. In their zeal to persuade Caseys 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-

Tards 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., Caseys) requestedthat Couche-Tard submit its proposal in

writing, which Mr. Bouchard did on March 9, 2010. Caseys repeatedly rejected Couche-

Tards overtures without elaboration or explanation. Couche-Tard has offered to meet

directly with Caseys -- or to coordinate a meeting of the companies respective advisors

-- to discuss its proposal, and has both called and emailed Caseys 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 Caseys closing stock

price the day before Couche-Tards 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



30/54

29

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 Caseys 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% discountto the all time

high and a 6% discountto the 52-week high of the respective target companies trading

prices. Second, the one-day premium of 14% signifies not Couche-Tards

opportunism, as the 14D-9 asserts, but rather that Caseys pre-announcement trading

price already reflected the markets recognition of Caseys full value; indeed, the median

research price target for Caseys 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



31/54

30

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, Caseys 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

Caseys computation). This is true even though Caseys LTM EBITDA as of January 1,

2010 was higher ($258 million) than in any fiscal year during the five-year measuring

period that Caseys employed.

d. The 14D-9 also contends that Couche-Tards 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

Holdings 2005 acquisition of 7-Eleven and Couche-Tards 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 Caseys), 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.



32/54

31

e. The 14D-9 asserts that the Tender Offer does not fully recognize

the value of Caseys real estate holdings and the operational synergies that would result

from a Couche-Tard/Caseys 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-Tards

and Caseys respective service areas have little overlap -- fewer than 30 Caseys stores

have a Couche-Tard store within a 1-mile radius. Further, Caseys 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 Caseys does own the vast majority of its real estate -- freeing

Caseys 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-9s suggestion that Couche-Tard will be unable

to obtain financing (id. at 19) is both misleading and unsupportable. Couche-Tards

credit worthiness is among the strongest of any company in the convenience store

industry. For example, Couche-Tards 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



33/54

32

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 Caseys common stock without publicly

disclosing its position prior to commencing the Tender Offer and (ii) selling a portion of

its holdings in Caseys stock representing approximately 3.9% of Caseys outstanding

shares at a profit on the morning of April 9, 2010, the day of Couche-Tards 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

Caseys, 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 Caseys 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 Caseys 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-Tards 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 Caseys other

constituencies -- a belief purportedly based on the differences in the manner in which

Caseys and Couche-Tard are operated and managed. Id. at 20. The Director



34/54

33

Defendants made no inquiry of Couche-Tard about its operations and management, and

make no mention of either Couche-Tards track record of retaining employees of

acquired companies, or Couche-Tards representation that its highly decentralized

business model would keep most, if not all, Caseys employees in place. Similarly, the

14D-9 ignores the benefits a combined company -- with greater scale -- can provide to

constituents, including broader opportunities for Caseys employees and expanded sales

opportunities for Caseys suppliers. In fact, the Director Defendants never even inquired

about Couche-Tards plans for Caseys, 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-Tards Tender Offer undervalued Caseys -

- 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-Tards premium proposal to

Caseys shareholders).

G. The Director Defendants Refuse To Dismantle The Anti-Takeover Devices

65. Couche-Tards Tender Offer is, by necessity, subject to several important

conditions, including that the Director Defendants (i) redeem Caseys 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 Caseys 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



35/54

34

(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-

Tards purely voluntary, non-coercive, non-discriminatory all cash Tender Offer to

Caseys shareholders. This conduct lacks any rational business purpose, is fundamentally

unfair to Caseys 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 Caseys 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 Caseys and/or Couche-

Tards common stock, depending on when a shareholder exercises the Right, at a deep

discount to the market price.



36/54

35

71. If the pill is triggered, all Caseys shareholders except Couche-Tard can --

and likely will -- exercise their Rights, which will severely dilute Couche-Tards stake in

Caseys and make the Tender Offer prohibitively expensive.

72. Caseys poison pill operates as follows:

a. First, the Rights become exercisable upon the earlier of: (i) such

date that Caseys 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 Caseys

common stock to purchase one one-thousandth of a share of Caseys Series A Preferred

Stock for a purchase price of $95 divided by half of the then-current market value of

Caseys 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, Caseys 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



37/54

36

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 Caseys Series A

Preferred Stock at a purchase price of $95 divided by half of the then-current market

value of Caseys common stock.

f. If and when Caseys engages in a merger, the Rights flip-over

and become exercisable for shares of the acquirors common stock at the bargain price of

two shares for the market value of one.

g. Thus, Caseys 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 Caseys 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 Caseys common shareholders. In light of the clear economic value posed to

Caseys shareholders by Couche-Tards voluntary, non-discriminatory Tender Offer, and

the lack of corresponding economic benefit imparted to Caseys shareholders by the

poison pill, the Director Defendants refusal to either redeem the Rights or render the



38/54

37

Rights Agreement inapplicable to the Proposed Acquisition constitutes a breach of the

fiduciary obligations to Caseys 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 Caseys, 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 companys 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 corporations 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 companys 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 Delawares Antitakeover



39/54

38

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 Iowas save for a slightly highertrigger 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-Tards

purchase of shares of common stock of Caseys 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



40/54

39

would prevent the Proposed Acquisition altogether, such as significant changes to either

Caseys or Couche-Tards 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 Caseys 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-Tards stake in Caseys and by barring the Proposed

Merger for three years.

85. The Director Defendants execution of the Change of Control Agreements

burdens Caseys with substantial new financial liabilities upon a change of control and

would restrict Couche-Tards ability to control Caseys in the event that it was able to

consummate the Proposed Acquisition.



41/54

40

86. Collectively, these measures pose irreparable harm to Couche-Tard and all

other Caseys shareholders by denying Couche-Tard the unique opportunity to acquire

Caseys and by depriving Caseys 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 Caseys other shareholders is not compensable by monetary damages.

87. All Caseys 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 Caseys in determining whether to tender their shares pursuant to the

Tender Offer. In addition, Caseys 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 Caseys

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



42/54


43/54

42

98. The Director Defendants conduct threatens to deprive Couche-Tard of the

unique opportunity to acquire Caseys.

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

Courts 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. Caseys 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 Caseys shareholders reside in Iowa.

103. The purpose of the Williams Act is to protect the shareholders of publicly-

traded companies such as Caseys 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 Caseys that are incorporated in Iowa and whose shares

are traded on a national securities exchange.



44/54

43

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 targets 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 targets board of directors, subject to certain

illusory exceptions, namely, where the bidder (i) acquires 85% or more of the targets

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 boards

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



45/54

44

purports to preemptively insulate from judicial scrutiny a boards 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.



46/54

45

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 corporations shareholders, the

vast majority of whom are located outside of Iowa, and prevent a tender offer solely

because of a boards 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-Tards 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 Caseys shareholders.



47/54

46

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 Caseys shareholders.

122. Moreover, the protections afforded by the Other Constituencies Statute

make it unlikely that the Caseys 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.



48/54

47

128. A shareholders 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 Caseys 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 Caseys without just

compensation and serves no legitimate public purpose.

131. Operation of the Iowa Anti-Takeover Scheme in this context has deprived

the Caseys 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 Caseys 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.




49/54

48

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 legislatures 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 states police power that has a real and substantial relation

to the objects sought to be obtained. The states police power, in turn, refers to the

legislatures 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



50/54

49

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 Caseys 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 Caseys 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.




51/54

50

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.



52/54

51

148. These material misstatements and omissions were made knowingly,

intentionally and/or recklessly in order to induce Caseys 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 Caseys shareholders to tender

their shares in the Tender Offer.

3. The Director Defendants have further breached their fiduciary

duties by approving the Chang

couche-tard's complaint against casey's

Documents