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Martin Marietta Materials v. Vulcan Materials (Delaware)

Martin Marietta Materials v. Vulcan Materials (Delaware)

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Published by DealBook

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categoriesBusiness/Law
Published by: DealBook on Dec 13, 2011
Copyright:Attribution Non-commercial

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12/13/2011

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 IN THE COURT OF CHANCERY FOR THE STATE OF DELAWARE
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -xMARTIN MARIETTA MATERIALS, INC.,Plaintiff,v.VULCAN MATERIALS COMPANY,Defendant.::::::::::C.A. No. _____-___- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
VERIFIED COMPLAINTFOR DECLARATORY JUDGMENT AND INJUNCTIVE RELIEF
Plaintiff Martin Marietta Materials, Inc. (“Martin Marietta”), by andthrough its undersigned attorneys, as and for its complaint against Defendant VulcanMaterials Company (“Vulcan”), upon knowledge as to itself and its own acts and uponinformation and belief as to all other matters, alleges as follows:
NATURE OF THE ACTION
1.
 
This is an action for declaratory judgment and injunctive relief enforcing the non-disclosure agreement between Martin Marietta and Vulcan dated May3, 2010 (the “Non-Disclosure Agreement” or “NDA”). Martin Marietta seeks adeclaration that the Non-Disclosure Agreement does not prohibit (i) Martin Marietta’spublic offer to purchase all issued and outstanding shares of Vulcan’s common stock inexchange for Martin Marietta’s stock (the “Exchange Offer”); and (ii) Martin Marietta’sproposal to Vulcan’s stockholders to vote for the election of Martin Marietta’s fiveindependent nominees to Vulcan’s board of directors. Martin Marietta also seeks an
 
2injunction against Vulcan violating the exclusive Delaware forum selection clause in theNon-Disclosure Agreement.2.
 
Martin Marietta is a leading producer of aggregates, crushed stone,sand and gravel used for public, commercial and residential construction. Vulcan is thenation’s largest producer of construction aggregates and a leader in the production of other construction materials. The Exchange Offer being commenced on December 12,2011 is a non-coercive and non-discriminatory offer to purchase Vulcan’s shares, andproposes, promptly after completion of the Exchange Offer, to consummate a second-stepmerger of a wholly-owned subsidiary of Martin Marietta with and into Vulcan, therebyacquiring all of Vulcan’s shares not acquired pursuant to the Exchange Offer. Under theproposed terms of the Exchange Offer, each outstanding share of Vulcan common stock would be exchanged for 0.50 shares of Martin Marietta common stock, representing an18% premium to Vulcan’s stockholders based on the average per share prices for bothcompanies during the 30-day period ended December 9, 2011.3.
 
Concurrent with the commencement of the Exchange Offer and theproposal for the second-step merger, Martin Marietta is notifying Vulcan of its intent topropose five individuals to be nominated for election to Vulcan’s currently 11-memberboard at Vulcan’s 2012 annual stockholders meeting, which Martin Marietta expects,based on Vulcan’s practice and bylaws, to be held on May 15, 2012.4.
 
Martin Marietta and Vulcan have at various times discussed acombination of the companies. The combined business would present meaningfulsynergies and increased value for stockholders of both companies. More than a year and
 
3a half ago, the companies engaged in active discussions to explore the financial andstrategic merits, and potential terms, of a business combination.5.
 
In connection with the discussions in 2010, Martin Marietta andVulcan executed the Non-Disclosure Agreement dated May 3, 2010. Notably, the Non-Disclosure Agreement does not contain a standstill provision prohibiting either partyfrom making a public offer, or any agreement by Martin Marietta to limit its holdings of Vulcan’s shares. Martin Marietta and Vulcan instead excluded ordinary standstillprovisions from their agreement, thereby preserving each party’s right to make publicoffers in the future.6.
 
Consistent with its unwillingness to take the steps necessary toreach a definitive agreement on a business combination that would present immediate andsignificant premium for its stockholders, it is anticipated that Vulcan will oppose andseek equitable relief enjoining Martin Marietta’s Exchange Offer and proposal for theelection of its director nominees, claiming that Martin Marietta’s actions violate the Non-Disclosure Agreement. An injunction barring Martin Marietta’s Exchange Offer andproposal could prevent Vulcan’s stockholders from directly considering their merits andcould permit Vulcan’s board of directors to avoid giving due consideration to MartinMarietta’s Exchange Offer and proposal, which its fiduciary duties require. MartinMarietta brings this action now to ensure that any claim regarding the Non-DisclosureAgreement can be resolved expeditiously so as to allow the Exchange Offer and theproposal for director nominees to be fairly considered by Vulcan’s stockholders.

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