Exhibit (a)(5)(I)
1 | BRODSKY & SMITH | |||||||||
Evan J. Smith, Esquire (SBN 242352) | ||||||||||
2 | esmith@brodskysmith.com | |||||||||
Ryan P. Cardona, Esquire (SBN 302113) | ||||||||||
3 | rcardona@brodskysmith.com | |||||||||
9595 Wilshire Boulevard, Suite 900 | ||||||||||
4 | Beverly Hills, CA 90212 | |||||||||
Phone: (877) 534-2590 | ||||||||||
5 | Facsimile: (310) 247-0160 | |||||||||
6 | Attorneys for Plaintiff | |||||||||
7 | ||||||||||
UNITED STATES DISTRICT COURT | ||||||||||
8 | ||||||||||
9 | NORTHERN DISTRICT OF CALIFORNIA
| |||||||||
10 | GABRIEL ESPINOZA, | Case No.: | ||||||||
11 | Plaintiff, | Complaint For: | ||||||||
12 | vs. | (1) Breach of Fiduciary Duties | ||||||||
(2) Aiding and Abetting Breach of | ||||||||||
13 | VOCERA COMMUNICATIONS, INC., | Fiduciary Duties | ||||||||
JOHN N. MCMULLEN, SHARON L. | (3) Violation of § 14 (e) of the Securities | |||||||||
14 | O’KEEFE, MIKE BURKLAND, | Exchange Act of 1934 | ||||||||
RONALD A. PAULUS, BHARAT | (4) Violation of § 14 (d) of the Securities | |||||||||
15 | SUNDARAM, JULIE ISKOW, BRENT D. | Exchange Act of 1934 | ||||||||
LANG, ALEXA KING, and HOWARD E. | (5) Violation of § 20(a) of Exchange Act | |||||||||
16 | JANZEN, | of 1934 | ||||||||
17 | Defendants. | |||||||||
JURY TRIAL DEMANDED
| ||||||||||
18 | ||||||||||
19 | ||||||||||
Plaintiff, Gabriel Espinoza (“Plaintiff”), by and through his attorneys, alleges upon | ||||||||||
20 | information and belief, except for those allegations that pertain to him, which are alleged upon | |||||||||
21 | personal knowledge, as follows: | |||||||||
22 | ||||||||||
SUMMARY OF THE ACTION | ||||||||||
23 | ||||||||||
24 | 1. Plaintiff brings this stockholder action against Vocera Communications, Inc. | |||||||||
25 | (“Vocera” or the “Company”) and the Company’s Board of Directors (the “Board” or the | |||||||||
26 | “Individual Defendants,” collectively with the Company, the “Defendants”), for breaches of | |||||||||
27 | fiduciary duty and for violations of Sections 14(e), 14(d) and 20(a) of the Securities and Exchange | |||||||||
28 |
- 1 -
1 | Act of 1934 (the “Exchange Act”) as a result of Defendants’ efforts to sell the Company to Stryker | |||||
2 | Corporation, Inc. (“Parent”) through merger vehicle Voice Merger Sub Corp. (“Merger Sub”) | |||||
3 | (collectively with “Parent,” “Stryker”) as a result of an unfair process, as to enjoin an upcoming | |||||
4 | tender off on a proposed all cash transaction (the “Proposed Transaction”). | |||||
5 | 2. The terms of the Proposed Transaction were memorialized in a January 6, 2022, | |||||
6 | filing with the Securities and Exchange Commission (“SEC”) on Form 8-K attaching the definitive | |||||
7 | Agreement and Plan of Merger (the “Merger Agreement”). Under the terms of the Merger | |||||
8 | Agreement, Stryker will acquire all of the remaining outstanding shares of Vocera’ common stock | |||||
9 | at a price of $79.25 per share in cash. As a result, Vocera will become an indirect wholly-owned | |||||
10 | subsidiary of Stryker. | |||||
11 | 3. Thereafter, on January 25, 2022, Vocera filed a Solicitation/Recommendation | |||||
12 | Statement on Schedule 14D-9 (the “Recommendation Statement”) with the SEC in support of the | |||||
13 | Proposed Transaction. | |||||
14 | 4. In approving the Proposed Transaction, the Individual Defendants have breached | |||||
15 | their fiduciary duties of loyalty, good faith, due care and disclosure by, inter alia, (i) agreeing to | |||||
16 | sell Vocera without first taking steps to ensure that Plaintiff in his capacity as a public Company | |||||
17 | stockholder would obtain adequate, fair and maximum consideration under the circumstances; and | |||||
18 | (ii) engineering the Proposed Transaction to benefit themselves and/or Vocera without regard for | |||||
19 | Plaintiff in his capacity as a public Company stockholder. Accordingly, this action seeks to enjoin | |||||
20 | the Proposed Transaction and compel the Individual Defendants to properly exercise their | |||||
21 | fiduciary duties to Plaintiff in his capacity as a public Company stockholder. | |||||
22 | 5. Next, it appears as though the Board has entered into the Proposed Transaction to | |||||
23 | procure for itself and senior management of the Company significant and immediate benefits with | |||||
24 | no thought to Plaintiff as a public stockholder. For instance, pursuant to the terms of the Merger | |||||
25 | Agreement, upon the consummation of the Proposed Transaction, Company Board Members and | |||||
26 | executive officers will be able to exchange all Company equity awards for the merger | |||||
27 | consideration. | |||||
28 |
- 2 -
1 | 6. In violation of the Exchange Act, Defendants caused to be filed the materially | |||||
2 | deficient Recommendation Statement on January 25, 2022, with the SEC in an effort to solicit | |||||
3 | stockholders, including Plaintiff, to tender their Vocera shares in favor of the Proposed | |||||
4 | Transaction. The Recommendation Statement is materially deficient, deprives Plaintiff of the | |||||
5 | information necessary to make an intelligent, informed and rational decision of whether to tender | |||||
6 | in favor of the Proposed Transaction, and is thus in violation of the Exchange Act. As detailed | |||||
7 | below, the Recommendation Statement omits and/or misrepresents material information | |||||
8 | concerning, among other things: (a) the sales process and in particular certain conflicts of interest | |||||
9 | for management; (b) the financial projections for Vocera, provided by Vocera to the Company’s | |||||
10 | financial advisors Evercore Group, L.L.C. (“Evercore”); and (c) the data and inputs underlying the | |||||
11 | financial valuation analyses, if any, that purport to support the fairness opinions created by | |||||
12 | Evercore and provided to the Company and the Board. | |||||
13 | 7. Accordingly, this action seeks to enjoin the Proposed Transaction. | |||||
14 | 8. Absent judicial intervention, the Proposed Transaction will be consummated, | |||||
15 | resulting in irreparable injury to Plaintiff. This action seeks to enjoin the Proposed Transaction. | |||||
16 | PARTIES | |||||
17 | 9. Plaintiff is a citizen of California and, at all times relevant hereto, has been a Vocera | |||||
18 | stockholder. | |||||
19 | 10. Defendant Vocera provides secure, integrated, and intelligent communication and | |||||
20 | workflow solutions that empowers mobile workers in healthcare, hospitality, retail, energy, | |||||
21 | education, and other mission-critical mobile work environments in the United States and | |||||
22 | internationally. Vocera is incorporated under the laws of the State of Delaware and has its principal | |||||
23 | place of business at 525 Race Street, San Jose, CA. Shares of Vocera common stock are traded on | |||||
24 | the New York Stock Exchange under the symbol “VCRA.” | |||||
25 | 11. Defendant John N. McMullen (“McMullen”) has been a Director of the Company | |||||
26 | at all relevant times. | |||||
27 | 12. Defendant Sharon L. O’Keefe (“O’Keefe”) has been a director of the Company at | |||||
28 |
- 3 -
1 | all relevant times. | |||||
2 | 13. Defendant Mike Burkland (“Burkland”) has been a director of the Company at all | |||||
3 | relevant times. | |||||
4 | 14. Defendant Ronald A. Paulus (“Paulus”) has been a director of the Company at all | |||||
5 | relevant times. | |||||
6 | 15. Defendant Bharat Sundaram (“Sundaram”) has been a director of the Company at | |||||
7 | all relevant times. | |||||
8 | 16. Defendant Julie Iskow (“Iskow”) has been a director of the Company at all relevant | |||||
9 | times. | |||||
10 | 17. Defendant Brent D. Lang (“Lang”) has been a director of the Company at all | |||||
11 | relevant times. In addition, Lang serves as the Company’s Chief Executive Officer (“CEO”). | |||||
12 | 18. Defendant Alexa King (“King”) has been a director of the Company at all relevant | |||||
13 | times. | |||||
14 | 19. Defendant Howard E. Janzen (“Janzen”) has been a director of the Company at all | |||||
15 | relevant times. | |||||
16 | 20. Defendants identified in ¶¶ 10 - 19 are collectively referred to as the “Individual | |||||
17 | Defendants.” | |||||
18 | 21. Non-Party Parent is a Stryker Corporation operates as a medical technology | |||||
19 | company. Parent was founded in 1941 and is headquartered in Kalamazoo, Michigan. Shares of | |||||
20 | Parent common stock are traded on the New York Stock Exchange under the symbol “SYK”. | |||||
21 | 22. Non-Party Merger Sub is a wholly owned subsidiary of Parent created to effectuate | |||||
22 | the Proposed Transaction. | |||||
23 | JURISDICTION AND VENUE | |||||
24 | 23. This Court has subject matter jurisdiction pursuant to Section 27 of the Exchange | |||||
25 | Act (15 U.S.C. § 78aa) and 28 U.S.C. § 1331 (federal question jurisdiction) as Plaintiff alleges | |||||
26 | violations of Sections 14(a) and 20(a) of the Exchange Act. This action is not a collusive one to | |||||
27 | confer jurisdiction on a court of the United States, which it would not otherwise have. The Court | |||||
28 |
- 4 -
1 | has supplemental jurisdiction over any claims arising under state law pursuant to 28 U.S.C. § 1367. | |||||
2 | 24. Personal jurisdiction exists over each defendant either because the defendant | |||||
3 | conducts business in or maintains operations in this District or is an individual who is either present | |||||
4 | in this District for jurisdictional purposes or has sufficient minimum contacts with this District as | |||||
5 | to render the exercise of jurisdiction over defendant by this Court permissible under traditional | |||||
6 | notions of fair play and substantial justice. | |||||
7 | 25. Venue is proper in this District pursuant to 28 U.S.C. § 1391, because Vocera | |||||
8 | maintains its principal offices in this district, and each of the Individual Defendants, as Company | |||||
9 | officers or directors, has extensive contacts within this District. | |||||
10 | THE INDIVIDUAL DEFENDANTS’ FIDUCIARY DUTIES | |||||
11 | 26. By reason of the Individual Defendants’ positions with the Company as officers | |||||
12 | and/or directors, said individuals are in a fiduciary relationship with Vocera and owe the public | |||||
13 | stockholders of the Company, including Plaintiff, the duties of due care, loyalty, and good faith. | |||||
14 | 27. By virtue of their positions as directors and/or officers of Vocera, the Individual | |||||
15 | Defendants, at all relevant times, had the power to control and influence, and did control and | |||||
16 | influence and cause Vocera to engage in the practices complained of herein. | |||||
17 | 28. Each of the Individual Defendants are required to act with due care, loyalty, good | |||||
18 | faith and in the best interests of the Company public stockholders including Plaintiff. To diligently | |||||
19 | comply with these duties, directors of a corporation must: | |||||
20 | a. act with the requisite diligence and due care that is reasonable under the | |||||
21 | circumstances; | |||||
22 | b. act in the best interest of the Company and its public stockholders, | |||||
23 | including Plaintiff; | |||||
24 | c. use reasonable means to obtain material information relating to a given | |||||
25 | action or decision; | |||||
26 | d. refrain from acts involving conflicts of interest between the fulfillment | |||||
27 | of their roles in the Company and the fulfillment of any other roles or | |||||
28 |
- 5 -
1 | their personal affairs; | |||||
2 | e. avoid competing against the company or exploiting any business | |||||
3 | opportunities of the company for their own benefit, or the benefit of | |||||
4 | others; and | |||||
5 | f. disclose to the Company all information and documents relating to the | |||||
6 | company’s affairs that they received by virtue of their positions in the | |||||
7 | Company. | |||||
8 | 29. In accordance with their duties of loyalty and good faith, the Individual | |||||
9 | Defendants, as directors and/or officers of Vocera, are obligated to refrain from: | |||||
10 | a. participating in any transaction where the directors’ or officers’ loyalties are | |||||
11 | divided; | |||||
12 | b. participating in any transaction where the directors or officers are entitled | |||||
13 | to receive personal financial benefit not equally shared by the Company or its public | |||||
14 | stockholders including Plaintiff; and/or | |||||
15 | c. unjustly enriching themselves at the expense or to the detriment of the | |||||
16 | Company or its stockholders including Plaintiff. | |||||
17 | 30. Plaintiff alleges herein that the Individual Defendants, separately and together, in | |||||
18 | connection with the Proposed Transaction, violated, and are violating, the fiduciary duties they | |||||
19 | owe to Plaintiff as a public stockholder of Vocera, including their duties of loyalty, good faith, and | |||||
20 | due care. | |||||
21 | 31. As a result of the Individual Defendants’ divided loyalties, Plaintiff will not receive | |||||
22 | adequate, fair or maximum value for his Vocera common stock in the Proposed Transaction. | |||||
23 | SUBSTANTIVE ALLEGATIONS | |||||
24 | ||||||
Company Background | ||||||
25 | 32. Vocera provides secure, integrated, and intelligent communication and workflow | |||||
26 | solutions that empowers mobile workers in healthcare, hospitality, retail, energy, education, and | |||||
27 | ||||||
28 |
- 6 -
1 | their mission-critical mobile work environments in the United States and internationally. The | |||||
2 | company’s communication solution integrates with other clinical systems, including electronic | |||||
3 | health records, nurse call systems, and patient monitoring, as well as to provide critical data, alerts, | |||||
4 | alarms, and clinical context that enable workflow. | |||||
5 | 33. The Company also offers Vocera Communication and Workflow System, a | |||||
6 | software platform, which connects communication devices, such as hands-free, wearable, and | |||||
7 | voice-controlled Smartbadge and badges, as well as third-party mobile devices; and Vocera Care | |||||
8 | Experience, a hosted software suite that coordinates and streamlines provider-to-patient and | |||||
9 | provider-to-provider communication and clinical rounding to enhance quality of care, patient and | |||||
10 | staff experience, reduce care provider’s risk, and improve reimbursements, as well as Vocera Ease, | |||||
11 | a cloud-based communication platform and mobile application to enhance the patient experience | |||||
12 | by enabling friends and family members to receive timely updates about the progress of their loved | |||||
13 | one in the hospital. In addition, the company provides professional, software maintenance, and | |||||
14 | technical support services; and classroom training, distance learning, or customized courseware | |||||
15 | for systems administrators, IT and industry-specific professionals, and end-user educators. | |||||
16 | 34. As of December 31, 2020, the company provided its solutions to approximately | |||||
17 | 1,900 healthcare facilities, including large hospital systems, small and medium-sized local | |||||
18 | hospitals, clinics, surgery centers, and aged-care facilities. It sells its products through direct sales | |||||
19 | force, resellers, and distributors. The company was incorporated in 2000 and is headquartered in | |||||
20 | San Jose, California. | |||||
21 | 35. The Company’s most recent financial performance press release, revealing | |||||
22 | financial results from the quarter preceding the announcement of the Proposed Transaction, | |||||
23 | indicated sustained and solid financial performance. For example, in the October 28, 2021 press | |||||
24 | release announcing its 2021 Q3 financial results, the Company highlighted such milestones as total | |||||
25 | revenue of $63.6 million, up 18% compared to $53.8 million last year, GAAP net income of $2.1 | |||||
26 | million compared to $4.2 million last year Adjusted EBITDA of $15.3 million compared to $13.5 | |||||
27 | million last year. | |||||
28 |
- 7 -
1 | 36. Speaking on these positive results, CEO Defendant Lang commented on the | |||||
2 | Company’s positive financial results as follows, “The third quarter was another fantastic quarter | |||||
3 | for our business with strong growth and customer success,” ”Our market leadership in both the | |||||
4 | commercial and federal healthcare markets continued with impressive bookings and revenue | |||||
5 | growth, demonstrating the value of our unique solutions and the strong execution by our team.” | |||||
6 | 37. The results from earlier in 2021 told the same story. When the Company announced | |||||
7 | its Q2 2021 earnings on July 29. 2021, it highlighted similar success, posting results such as total | |||||
8 | revenue of $56.2 million, up 19% compared to $47.3 million last year. | |||||
9 | 38. These positive results are not an anomaly, but rather, are indicative of a trend of | |||||
10 | continued financial success and future potential success by Vocera. Clearly, based upon these | |||||
11 | positive financial results and outlook, the Company is likely to have tremendous future success. | |||||
12 | 39. Despite this upward trajectory and continually increasing financial results, the | |||||
13 | Individual Defendants have caused Vocera to enter into the Proposed Transaction without | |||||
14 | providing requisite information to Vocera stockholders such as Plaintiff. | |||||
15 | The Flawed Sales Process | |||||
16 | 40. As detailed in the Recommendation Statement, the process deployed by the | |||||
17 | Individual Defendants was flawed and inadequate, was conducted out of the self-interest of the | |||||
18 | Individual Defendants and was designed with only one concern in mind — to effectuate a sale of | |||||
19 | the Company by any means possible. | |||||
20 | 41. Notably, the Recommendation Statement indicates that an “informal advisory | |||||
21 | team” of the Board members and members of the management team was created to “help advise” | |||||
22 | Vocera management regarding the sales process. However, the Recommendation Statement | |||||
23 | indicates is silent as to whether this informal advisory team was not delegated any actual authority. | |||||
24 | Moreover, the Recommendation Statement clearly indicates that Company insiders sat on this | |||||
25 | informal advisory team. The Recommendation Statement fails to indicate why a proper, formal, | |||||
26 | committee of disinterested and independent directors was not created to run the sales process | |||||
27 | 42. In addition, the Recommendation Statement is silent as to the nature of the | |||||
28 |
- 8 -
1 | confidentiality agreements entered into between the Company and potentially interested third | |||||
2 | parties, including Stryker, throughout the sales process, if any, and whether these agreements differ | |||||
3 | from each other, and if so in what way. The Recommendation Statement also fails to disclose all | |||||
4 | specific conditions under which any standstill provision contained in any entered confidentiality | |||||
5 | agreement entered into between the Company and any potentially interested third parties, including | |||||
6 | Stryker, throughout the sales process, if any, would fall away | |||||
7 | 43. It is not surprising, given this background to the overall sales process, that it was | |||||
8 | conducted in an inappropriate and misleading manner. | |||||
9 | The Proposed Transaction | |||||
10 | 44. On January 6, 2022, Stryker issued a press release announcing the Proposed | |||||
11 | Transaction. The press release stated, in relevant part: | |||||
12 | Kalamazoo, Michigan — January 6, 2022 — Stryker (NYSE: SYK) announced | |||||
today a definitive merger agreement to acquire all of the issued and outstanding | ||||||
13 | shares of common stock of Vocera Communications, Inc. (NYSE: VCRA) for | |||||
14 | $79.25 per share, or a total equity value of approximately $2.97 billion and a total | |||||
enterprise value of approximately $3.09 billion (including convertible notes). | ||||||
15 | Vocera, which was founded in 2000, has emerged as a leading platform in the | |||||
digital care coordination and communication category. The importance of this | ||||||
16 | growing segment has continued to expand throughout the pandemic as it aims to | |||||
reduce cognitive overload for caregivers and enables them to deliver the best patient | ||||||
17 | care possible. | |||||
18 | Vocera brings a highly complementary and innovative portfolio to Stryker’s | |||||
19 | Medical division that will address the increasing need for hospitals to connect | |||||
caregivers and disparate data-generating medical devices, which will help drive | ||||||
20 | efficiencies and improve safety and outcomes. Vocera’s highly developed software | |||||
competency, unique and innovative hardware solutions, and the ability to securely | ||||||
21 | enable remote communication between patients and their families, complements | |||||
22 | Stryker’s Advanced Digital Healthcare offerings. The combined business will | |||||
further advance Stryker’s focus on preventing adverse events throughout the | ||||||
23 | continuum of care. | |||||
24 | “This acquisition underscores our commitment and focus on our customer,” stated | |||||
Kevin Lobo, Chair and Chief Executive Officer, Stryker. “Vocera will help Stryker | ||||||
25 | significantly accelerate our digital aspirations to improve the lives of caregivers and | |||||
26 | patients.” | |||||
27 | ||||||
28 |
- 9 -
1 | “Today’s milestone represents an exciting opportunity for Vocera given the clear | |||||
alignment of mission, goals and culture between our two organizations and our | ||||||
2 | ability to drive even greater economic and clinical value for our customers,” said | |||||
3 | Brent Lang, Chairman and Chief Executive Officer, Vocera. | |||||
4 | Under the terms of the merger agreement, Stryker will commence a tender offer for | |||||
all outstanding shares of common stock of Vocera for $79.25 per share in cash. The | ||||||
5 | boards of directors of both Stryker and Vocera have unanimously approved the | |||||
transaction. The closing of the transaction is subject to expiration or termination of | ||||||
6 | the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements | |||||
7 | Act, completion of the tender offer and other customary closing conditions. | |||||
8 | The acquisition is expected to close in the first quarter of 2022 and is expected to | |||||
have a neutral impact to net earnings per diluted share in 2022. | ||||||
9 | ||||||
The Inadequate Merger Consideration | ||||||
10 | ||||||
45. Significantly, the Company’s financial prospects, opportunities for future | ||||||
11 | growth, and investment in innovation establish the inadequacy of the merger consideration. | |||||
12 | ||||||
46. First, the compensation afforded under the Proposed Transaction to | ||||||
13 | Company stockholders significantly undervalues the Company. The proposed valuation | |||||
14 | does not adequately reflect the intrinsic value of the Company. | |||||
15 | ||||||
47. Moreover, post-closure, Plaintiff will be frozen out of his ownership interest | ||||||
16 | in the Company and will not be able to reap the rewards of the Company’s future prospects. | |||||
17 | ||||||
48. It is clear from these statements and the facts set forth herein that this deal | ||||||
18 | is designed to maximize benefits for Stryker at the expense of Vocera stockholders, | |||||
19 | including specifically Plaintiff, which clearly indicates that Plaintiff in his capacity as a | |||||
20 | Vocera stockholder was not an overriding concern in the formation of the Proposed | |||||
21 | Transaction. | |||||
22 | ||||||
Preclusive Deal Mechanisms | ||||||
23 | ||||||
49. The Merger Agreement contains certain provisions that unduly benefit Stryker by | ||||||
24 | making an alternative transaction either prohibitively expensive or otherwise impossible. | |||||
25 | Significantly, the Merger Agreement contains a termination fee provision that is especially onerous | |||||
26 | and impermissible. Notably, in the event of termination, the merger agreement requires Vocera to | |||||
27 | ||||||
28 |
- 10 -
1 | pay up to $108.7 million to Stryker, if the Merger Agreement is terminated under certain | |||||
2 | circumstances. Moreover, under one circumstance, Vocera must pay this termination fee even if it | |||||
3 | consummates any competing Alternative Acquisition Agreement (as defined in the Merger | |||||
4 | Agreement) within 12 months following the termination of the Merger Agreement. The termination | |||||
5 | fee will make the Company that much more expensive to acquire for potential purchasers. The | |||||
6 | termination fee in combination with other preclusive deal protection devices will all but ensure | |||||
7 | that no competing offer will be forthcoming. | |||||
8 | 50.The Merger Agreement also contains a “No Solicitation” provision that restricts | |||||
9 | Vocera from considering alternative acquisition proposals by, inter alia, constraining Vocera’s | |||||
10 | ability to solicit or communicate with potential acquirers or consider their proposals. Specifically, | |||||
11 | the provision prohibits the Company from directly or indirectly soliciting, initiating, proposing or | |||||
12 | inducing any alternative proposal, but permits the Board to consider an unsolicited bona fide | |||||
13 | acquisition proposal if it constitutes or is reasonably calculated to lead to a “Superior Company | |||||
14 | Proposal” as defined in the Merger Agreement. | |||||
15 | 51.Moreover, the Merger Agreement further reduces the possibility of a topping offer | |||||
16 | from an unsolicited purchaser. Here, the Individual Defendants agreed to provide Stryker | |||||
17 | information in order to match any other offer, thus providing Stryker access to the unsolicited | |||||
18 | bidder’s financial information and giving Stryker the ability to top the superior offer. Thus, a rival | |||||
19 | bidder is not likely to emerge with the cards stacked so much in favor of Stryker. | |||||
20 | 52.These provisions, individually and collectively, materially and improperly impede | |||||
21 | the Board’s ability to fulfill its fiduciary duties with respect to fully and fairly investigating and | |||||
22 | pursuing other reasonable and more valuable proposals and alternatives in the best interests | |||||
23 | Plaintiff in its capacity as a public Company stockholder. | |||||
24 | 53.Accordingly, the Company’s true value is compromised by the | |||||
25 | consideration offered in the Proposed Transaction. | |||||
26 | Potential Conflicts of Interest | |||||
27 | 54.The breakdown of the benefits of the deal indicate that Vocera insiders are the | |||||
28 |
- 11 -
1 | primary beneficiaries of the Proposed Transaction, not the Company’s public stockholders such as |
| ||||||||||||||||||||||||||||||||
2 | Plaintiff. The Board and the Company’s executive officers are conflicted because they will have |
| ||||||||||||||||||||||||||||||||
3 | secured unique benefits for themselves from the Proposed Transaction not available to Plaintiff as |
| ||||||||||||||||||||||||||||||||
4 | a public stockholder of Vocera. |
| ||||||||||||||||||||||||||||||||
5 | 55. Notably, Company insiders, currently own large, illiquid portions of Company |
| ||||||||||||||||||||||||||||||||
6 | stock, which will be exchanged for the merger consideration upon the consummation of the |
| ||||||||||||||||||||||||||||||||
7 | Proposed Transaction as follows: |
| ||||||||||||||||||||||||||||||||
8 | ||||||||||||||||||||||||||||||||||
Table of Share-Related Payments | ||||||||||||||||||||||||||||||||||
9 | Name | Number of Shares Owned (#) | Total Offer Price Payable for Shares (5) | |||||||||||||||||||||||||||||||
10 | | Executive Officers(1) | | |||||||||||||||||||||||||||||||
Brent D. Lang(2) | 252,045 | 19,974,566 | ||||||||||||||||||||||||||||||||
11 | Steven J. Anheier | 3,969 | 314,543 | |||||||||||||||||||||||||||||||
M. Bridget Duffy | 13,343 | 1,057,433 | ||||||||||||||||||||||||||||||||
12 | Paul T. Johnson | 64,558 | 5,116,222 | |||||||||||||||||||||||||||||||
Douglas A. Carlen | 29,485 | 2,336,686 | ||||||||||||||||||||||||||||||||
13 | Justin R. Spencer | 54,452 | 4,315,321 | |||||||||||||||||||||||||||||||
14 | | Non-Employee Directors | | |||||||||||||||||||||||||||||||
Michael Burkland | 40,558 | 3,214,222 | ||||||||||||||||||||||||||||||||
15 | Julie Iskow | 12,041 | 954,249 | |||||||||||||||||||||||||||||||
Howard E. Janzen | 48,687 | 3,858,445 | ||||||||||||||||||||||||||||||||
16 | Alexa King | 37,729 | 2,990,023 | |||||||||||||||||||||||||||||||
John N. McMullen | 20,950 | 1,660,288 | ||||||||||||||||||||||||||||||||
17 | Sharon L. O’Keefe | 39,687 | 3,145,195 | |||||||||||||||||||||||||||||||
Ronald A. Paulus | 11,815 | 936,339 | ||||||||||||||||||||||||||||||||
18 | Bharat Sundaram | 12,041 | 954,249 | |||||||||||||||||||||||||||||||
19 | ||||||||||||||||||||||||||||||||||
56. Additionally, Company insiders, currently own Company options, restricted stock |
| |||||||||||||||||||||||||||||||||
20 | units, and other equity awards, which will be exchanged for the merger consideration upon the |
| ||||||||||||||||||||||||||||||||
21 | consummation of the Proposed Transaction as follows: |
| ||||||||||||||||||||||||||||||||
22 | ||||||||||||||||||||||||||||||||||
Vested Option | Unvested RSUs | Unvested PSUs | ||||||||||||||||||||||||||||||||
23 | Number of | Cash | Number of | Cash | Number of | Cash | Total Cash | |||||||||||||||||||||||||||
Underlying | Consideration | Underlying | Consideration | Underlying | Consideration | Consideration | ||||||||||||||||||||||||||||
Shares | Payable | Shares | Payable | Shares | Payable | Payable | ||||||||||||||||||||||||||||
24 | Name | (#)(1) | ($)(2) | (#)(3) | ($)(4) | (#)(5) | ($)(6) | ($)(7) | ||||||||||||||||||||||||||
Executive Officers: | ||||||||||||||||||||||||||||||||||
25 | Brent D. Lang | 3 | 199 | 193,496 | 15,334,558 | 254,184 | 20,144,082 | 35,478,839 | ||||||||||||||||||||||||||
Steven J. Anheier | 29,273 | 2,319,885 | 40,874 | 3,239,265 | 5,559,150 | |||||||||||||||||||||||||||||
26 | Douglas A. Carlen |
| 50,114 | 3,971,535 | 54,266 | 4,300,581 | 8,272,116 | |||||||||||||||||||||||||||
M. Bridget Duffy | 50,114 | 3,971,535 | 54,266 | 4,300,581 | 8,272,116 | |||||||||||||||||||||||||||||
Paul T. Johnson | 48,552 | 3,088,754 | 66,568 | 5,275,514 | 87,649 | 6,946,183 | 15,310,451 | |||||||||||||||||||||||||||
27 | Justin R. Spencer | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
28 |
- 12 -
1 | Non-Employee Directors | — | — | — | ||||||||||||||||||||||||||||||||||
Michael Burkland | — | — | 4,379 | 347,036 | — | — | 347,036 | |||||||||||||||||||||||||||||||
2 | Julie Iskow | — | — | 4,379 | 347,036 | — | — | 347,036 | ||||||||||||||||||||||||||||||
Howard E. Janzen | — | — | 4,379 | 347,036 | — | — | 347,036 | |||||||||||||||||||||||||||||||
Alexa King | — | — | 4,379 | 347,036 | — | — | 347,036 | |||||||||||||||||||||||||||||||
3 | John N. McMullen | — | — | 4,379 | 347,036 | — | — | 347,036 | ||||||||||||||||||||||||||||||
Sharon L. O’Keefe | — | — | 4,379 | 347,036 | — | — | 347,036 | |||||||||||||||||||||||||||||||
4 | Ronald A. Paulus | — | — | 4,379 | 347,036 | — | — | 347,036 | ||||||||||||||||||||||||||||||
5 | Bharat Sundaram | — | — | 4,379 | 347,036 | — | — | 347,036 | ||||||||||||||||||||||||||||||
6 | 57. In addition, certain employment agreements with certain Vocera executives, entitle |
| ||||||||||||||||||||||||||||||||||||
7 | such executives to severance packages should their employment be terminated under certain |
| ||||||||||||||||||||||||||||||||||||
8 | circumstances. These ‘golden parachute’ packages are significant, and will grant each director or |
| ||||||||||||||||||||||||||||||||||||
9 | officer entitled to them millions of dollars, compensation not shared by Plaintiff and will be paid |
| ||||||||||||||||||||||||||||||||||||
10 | out as follows: | |||||||||||||||||||||||||||||||||||||
11 | Golden Parachute Compensation | |||||||||||||||||||||||||||||||||||||
Perquisites/Benefits | ||||||||||||||||||||||||||||||||||||||
12 | Name(I) | Cash (S)(I) | Equity (S)(2) | (S)(3) | Total (S)(4) | |||||||||||||||||||||||||||||||||
Brent D. Lang | 1,711,884 | 35,478,640 | 51,561 | 37,242,085 | ||||||||||||||||||||||||||||||||||
13 | Steven J. Anheier | 512,328 | 5,559,150 | 43,158 | 6,114,636 | |||||||||||||||||||||||||||||||||
Douglas A. Carlen | 337,397 | 8,272,115 | 32,369 | 8,641,881 | ||||||||||||||||||||||||||||||||||
14 | M. Bridget Duffy | 359,598 | 8,272,115 | 22,805 | 8,654,518 | |||||||||||||||||||||||||||||||||
15 | Paul T. Johnson | 565,830 | 12,221,697 | 43,158 | 12,830,685 | |||||||||||||||||||||||||||||||||
16 | 58. The Recommendation Statement also fails to adequately disclose communications |
| ||||||||||||||||||||||||||||||||||||
17 | regarding post-transaction employment during the negotiation of the underlying transaction must |
| ||||||||||||||||||||||||||||||||||||
18 | be disclosed to stockholders. Communications regarding post-transaction employment during the |
| ||||||||||||||||||||||||||||||||||||
19 | negotiation of the underlying transaction must be disclosed to stockholders. This information is |
| ||||||||||||||||||||||||||||||||||||
20 | necessary for Plaintiff to understand potential conflicts of interest of management and the Board, |
| ||||||||||||||||||||||||||||||||||||
21 | as that information provides illumination concerning motivations that would prevent fiduciaries |
| ||||||||||||||||||||||||||||||||||||
22 | from acting solely in the best interests of the Company’s stockholders. |
| ||||||||||||||||||||||||||||||||||||
23 | 59. Thus, while the Proposed Transaction is not in the best interests of Voccra, Plaintiff |
| ||||||||||||||||||||||||||||||||||||
24 | or Company stockholders, it will produce lucrative benefits for the Company’s officers and |
| ||||||||||||||||||||||||||||||||||||
25 | directors. | |||||||||||||||||||||||||||||||||||||
26 | ||||||||||||||||||||||||||||||||||||||
The Materially Misleading and/or Incomplete Recommendation Statement |
| |||||||||||||||||||||||||||||||||||||
27 | 60. On January 25, 2022, the Vocera Board caused to be filed with the SEC a materially |
| ||||||||||||||||||||||||||||||||||||
28 |
- 13 -
1 | misleading and incomplete Recommendation Statement, that in violation the Exchange Act and | |||||
2 | breach of their fiduciary duties, failed to provide Plaintiff in his capacity as a Company stockholder | |||||
3 | with material information and/or provides materially misleading information critical to the total | |||||
4 | mix of information available to Plaintiff concerning the financial and procedural fairness of the | |||||
5 | Proposed Transaction. | |||||
6 | Omissions and/or Material Misrepresentations Concerning the Sales Process leading up | |||||
7 | to the Proposed Transaction | |||||
8 | 61. Specifically, the Recommendation Statement fails to disclose material information | |||||
9 | concerning the process conducted by the Company and the events leading up to the Proposed | |||||
10 | Transaction. In particular, the Recommendation Statement fails to disclose: | |||||
11 | a. The specific reasoning as to why the informal advisory team that was created | |||||
12 | by the Board to aid in running the sales process contained Board members who | |||||
13 | were not disinterested or independent and/or company insiders such as | |||||
14 | members of management; | |||||
15 | b. The specific reasoning as to why the informal advisory team created by the | |||||
16 | Board to aid in running the sales process was not delegated any actual authority | |||||
17 | to run the sales process; | |||||
18 | c. Whether the terms of any confidentiality agreements entered during the sales | |||||
19 | process between Vocera on the one hand, and any other third party (including | |||||
20 | Stryker), if any, on the other hand, differed from one another, and if so, in what | |||||
21 | way; | |||||
22 | d. All specific conditions under which any standstill provision contained in any | |||||
23 | entered confidentiality agreement entered into between the Company and | |||||
24 | potentially interested third parties (including Stryker) throughout the sales | |||||
25 | process, if any, would fall away; and | |||||
26 | e. The Recommendation Statement also fails to adequately disclose | |||||
27 | communications regarding post-transaction employment during the negotiation | |||||
28 |
- 14 -
1 | of the underlying transaction must be disclosed to stockholders. | |||||
2 | Communications regarding post-transaction employment during the | |||||
3 | negotiation of the underlying transaction must be disclosed to stockholders. | |||||
4 | This information is necessary for stockholders to understand potential conflicts | |||||
5 | of interest of management and the Board, as that information provides | |||||
6 | illumination concerning motivations that would prevent fiduciaries from acting | |||||
7 | solely in the best interests of the Company’s stockholders | |||||
8 | Omissions and/or Material Misrepresentations Concerning Vocera’s Financial | |||||
9 | Projections | |||||
10 | 62. The Recommendation Statement fails to provide material information concerning | |||||
11 | financial projections for Vocera provided by Vocera management and relied upon by Evercore in | |||||
12 | its analyses. The Recommendation Statement discloses management-prepared financial | |||||
13 | projections for the Company which are materially misleading. | |||||
14 | 63. Notably, in connection with its fairness opinion rendered to the Company Board | |||||
15 | regarding the Proposed Transaction, Evercore notes that it reviewed, “certain internal projected | |||||
16 | financial data relating to Vocera prepared and furnished to us by management of Vocera, as | |||||
17 | approved for Evercore’s use by Vocera, which we refer to as the Management Projections.” | |||||
18 | 64. The Recommendation Statement, therefore, should have, but fails to provide, | |||||
19 | certain information in the projections that Vocera management provided to the Board and | |||||
20 | Evercore. Courts have uniformly stated that “projections ... are probably among the most highly- | |||||
21 | prized disclosures by investors. Investors can come up with their own estimates of discount rates | |||||
22 | or [ ] market multiples. What they cannot hope to do is replicate management’s inside view of the | |||||
23 | company’s prospects.” In re Netsmart Techs., Inc. S’holders Litig., 924 A.2d 171, 201-203 (Del. | |||||
24 | Ch. 2007). | |||||
25 | 65. With regard to the Management Projections for each of the Base Case, Upside | |||||
26 | Case, and Downside Case the Recommendation Statement fails to disclose material line items for | |||||
27 | the following metrics: | |||||
28 |
- 15 -
1 | a. Non-GAAP Gross Profit, including all underlying necessary inputs and | |||||
2 | assumptions, including specifically: total cost of revenue, amortization of | |||||
3 | acquired intangibles, restructuring costs, acquisition-related expenses, and | |||||
4 | other non-recurring charges; | |||||
5 | b. Non-GAAP Total Operating Expenses, including all underlying necessary | |||||
6 | inputs and assumptions, including specifically: total operating expenses, | |||||
7 | amortization of acquired intangibles, restructuring costs, acquisition-related | |||||
8 | expenses, and other non-recurring charges; | |||||
9 | c. Non-GAAP Operating Income, including all underlying necessary inputs and | |||||
10 | assumptions, including specifically: GAAP net earnings (loss) before tax, net | |||||
11 | interest expense, amortization of acquired intangibles, restructuring costs, | |||||
12 | acquisition-related expenses, and other non-recurring charges; and | |||||
13 | d. Adjusted EBITDA, including all underlying necessary inputs and assumptions, | |||||
14 | including specifically: GAAP net earnings (loss) before tax, net interest | |||||
15 | expense, amortization, restructuring costs, acquisition-related expenses, and | |||||
16 | other non-recurring charges. | |||||
17 | 66. The Recommendation Statement also fails to disclose a reconciliation of all non- | |||||
18 | GAAP to GAAP metrics utilized in the projections. | |||||
19 | 67. This information is necessary to provide Plaintiff in his capacity as a Company | |||||
20 | stockholder a complete and accurate picture of the sales process and its fairness. Without this | |||||
21 | information, Plaintiff is not fully informed as to Defendants’ actions, including those that may | |||||
22 | have been taken in bad faith, and cannot fairly assess the process. | |||||
23 | 68. Without accurate projection data presented in the Recommendation Statement, | |||||
24 | Plaintiff is unable to properly evaluate the Company’s true worth, the accuracy of Evercore’s | |||||
25 | financial analyses, or make an informed decision whether to tender his shares in favor of the | |||||
26 | Proposed Transaction. As such, the Board is in violation of the Exchange Act and in breach of | |||||
27 | their fiduciary duties by failing to include such information in the Recommendation Statement. | |||||
28 |
- 16 -
1 | Omissions and/or Material Misrepresentations Concerning the Financial Analyses by | |||||
2 | Evercore | |||||
3 | 69. In the Recommendation Statement, Evercore describes its fairness opinion and the | |||||
4 | various valuation analyses performed to render such opinion. However, the descriptions fail to | |||||
5 | include necessary underlying data, support for conclusions, or the existence of, or basis for, | |||||
6 | underlying assumptions. Without this information, one cannot replicate the analyses, confirm the | |||||
7 | valuations or evaluate Evercore’s fairness opinion. | |||||
8 | 70. With respect to the Discounted Cash Flow Analysis, the Recommendation | |||||
9 | Statement fails to disclose the following: | |||||
10 | a. The calculated terminal values for Vocera; | |||||
11 | b. The specific inputs and assumptions used to determine the utilized perpetuity | |||||
12 | growth rate range of 5.0% to 6.0%; | |||||
13 | c. The specific inputs and assumptions used to determine the utilized terminal | |||||
14 | multiple ranges of, 15.0x—20.0x, 20.0x—25.0x, and 10.0x—15.0x, as applied | |||||
15 | to Vocera’s estimated Adjusted EBITDA in the Terminal Year; | |||||
16 | d. The specific inputs and assumptions used to determine the utilized discount rate | |||||
17 | range of 8.0% to 9.0%; | |||||
18 | e. Vocera’s estimated weighted average cost of capital; and | |||||
19 | f. The number of fully diluted Company Shares as of December 31, 2021. | |||||
20 | 71. With respect to the Selected Public Company Trading Analysis, the | |||||
21 | Recommendation Statement fails to disclose the following: | |||||
22 | a. The specific inputs and assumptions used to determine the utilized reference | |||||
23 | range of enterprise value / revenue multiples of 8.0x—11.0x; | |||||
24 | b. The specific inputs and assumptions used to determine the utilized reference | |||||
25 | range of enterprise value / revenue multiples of 7.0x—9.0x; and | |||||
26 | c. The number of fully diluted Company Shares as of December 31, 2021. | |||||
27 | 72. With respect to the Selected Transactions Analysis, the Recommendation Statement | |||||
28 |
- 17 -
1 | fails to disclose the following: | |||||
2 | a. The specific inputs and assumptions used to determine the utilized reference | |||||
3 | range of 9.0x - 10.0x LTM 2021 Revenue; | |||||
4 | b. The specific inputs and assumptions used to determine the utilized reference | |||||
5 | range of 8.0x - 9.0x NTM 2022 Revenue; | |||||
6 | c. The specific transactions analyzed; | |||||
7 | d. The specific metrics for the transactions analyzed; | |||||
8 | e. The dates on which each selected transaction was announced; | |||||
9 | f. The dates on which each selected transaction closed; and | |||||
10 | g. The value of each selected transaction. | |||||
11 | 73. With respect to the Equity Research Analyst Price Targets, the Recommendation | |||||
12 | Statement fails to disclose the following: | |||||
13 | a. The specific price targets analyzed; and | |||||
14 | b. The identity of the equity research analysts and/or firms that published the | |||||
15 | utilized price targets. | |||||
16 | 74. These disclosures are critical for Plaintiff to be able to make an informed decision | |||||
17 | on whether to tender his shares in favor of the Proposed Transaction. | |||||
18 | 75. Without the omitted information identified above, Plaintiff is missing critical | |||||
19 | information necessary to evaluate whether the proposed consideration truly maximizes his value | |||||
20 | and serves his interest as a stockholder. Moreover, without the key financial information and | |||||
21 | related disclosures, Plaintiff cannot gauge the reliability of the fairness opinion and the Board’s | |||||
22 | determination that the Proposed Transaction is in his best interests as a public Vocera stockholder. | |||||
23 | As such, the Board has violated the Exchange Act and breached their fiduciary duties by failing to | |||||
24 | include such information in the Recommendation Statement. | |||||
25 | FIRST COUNT | |||||
26 | Breach of Fiduciary Duties | |||||
27 | (Against the Individual Defendants) | |||||
28 |
- 18 -
1 | 76. Plaintiff repeats all previous allegations as if set forth in full herein. | |||||
2 | 77. The Individual Defendants have violated their fiduciary duties of care, loyalty and | |||||
3 | good faith owed to Plaintiff in his capacity as a Company public stockholder. | |||||
4 | 78. By the acts, transactions and courses of conduct alleged herein, Defendants, | |||||
5 | individually and acting as a part of a common plan, are attempting to unfairly deprive Plaintiff of | |||||
6 | the true value of his investment in Vocera. | |||||
7 | 79. As demonstrated by the allegations above, the Individual Defendants failed to | |||||
8 | exercise the care required, and breached their duties of loyalty and good faith owed to the Plaintiff | |||||
9 | in his capacity as a Company public stockholder by entering into the Proposed Transaction through | |||||
10 | a flawed and unfair process and failing to take steps to maximize the value of the Company to | |||||
11 | Plaintiff in his capacity as a Company public stockholder. | |||||
12 | 80. Indeed, Defendants have accepted an offer to sell Vocera at a price that fails to | |||||
13 | reflect the true value of the Company, thus depriving Plaintiff in his capacity as a Company public | |||||
14 | stockholder of the reasonable, fair and adequate value of his shares. | |||||
15 | 81. Moreover, the Individual Defendants breached their duty of due care and candor by | |||||
16 | failing to disclose to Plaintiff in his capacity as a Company public stockholder all material | |||||
17 | information necessary for it to make an informed decision on whether to tender his shares in favor | |||||
18 | of the Proposed Transaction. | |||||
19 | 82. The Individual Defendants dominate and control the business and corporate affairs | |||||
20 | of Vocera, and are in possession of private corporate information concerning Vocera’s assets, | |||||
21 | business and future prospects. Thus, there exists an imbalance and disparity of knowledge and | |||||
22 | economic power between them and Plaintiff in his capacity as a Company public stockholder | |||||
23 | which makes it inherently unfair for them to benefit their own interests to the exclusion of Plaintiff. | |||||
24 | 83. By reason of the foregoing acts, practices and course of conduct, the Individual | |||||
25 | Defendants have failed to exercise due care and diligence in the exercise of their fiduciary | |||||
26 | obligations toward Plaintiff in his capacity as a Company public stockholder. | |||||
27 | 84. As a result of the actions of the Individual Defendants, Plaintiff in his capacity as a | |||||
28 |
- 19 -
1 | Company public stockholder will suffer irreparable injury in that he has not and will not receive | |||||
2 | its fair portion of the value of Vocera’s assets and has been and will be prevented from obtaining | |||||
3 | a fair price for his holdings of Vocera common stock. | |||||
4 | 85. Unless the Individual Defendants are enjoined by the Court, they will continue to | |||||
5 | breach their fiduciary duties owed to Plaintiff in his capacity as a Company public stockholder, all | |||||
6 | to the irreparable harm of the Plaintiff. | |||||
7 | 86. Plaintiff has no adequate remedy at law. Only through the exercise of this Court’s | |||||
8 | equitable powers can Plaintiff be fully protected from the immediate and irreparable injury which | |||||
9 | Defendants’ actions threaten to inflict. | |||||
10 | SECOND COUNT | |||||
11 | Aiding and Abetting the Board’s Breaches of Fiduciary Duty | |||||
12 | (Against Defendant Vocera) | |||||
13 | 87. Plaintiff incorporates each and every allegation set forth above as if fully set forth | |||||
14 | herein. | |||||
15 | 88. Defendant Vocera knowingly assisted the Individual Defendants’ breaches of | |||||
16 | fiduciary duty in connection with the Proposed Transaction, which, without such aid, would not | |||||
17 | have occurred. | |||||
18 | 89. As a result of this conduct, Plaintiff in his capacity as a Company public stockholder | |||||
19 | will suffer irreparable injury in that he has not and will not receive his fair portion of the value of | |||||
20 | Vocera’s assets and has been and will be prevented from obtaining a fair price for its holdings of | |||||
21 | Vocera common stock. | |||||
22 | 90. Plaintiff has no adequate remedy at law. | |||||
23 | THIRD COUNT | |||||
24 | Violations of Section 14(e) of the Exchange Act | |||||
25 | (Against All Defendants) | |||||
26 | 91. Plaintiff repeats all previous allegations as if set forth in full herein. | |||||
27 | 92. Defendants have disseminated the Recommendation Statement with the intention | |||||
28 |
- 20 -
1 | of soliciting stockholders, including Plaintiff, to tender their shares in favor of the Proposed | |||||
2 | Transaction. | |||||
3 | 93. Section 14(e) of the Exchange Act provides that in the solicitation of shares in a | |||||
4 | tender offer, “[i]t shall be unlawful for any person to make any untrue statement of a material fact | |||||
5 | or omit to state any material fact necessary in order to make the statements made, in the light of | |||||
6 | the circumstances under which they are made, not misleading[.]. | |||||
7 | 94. The Recommendation Statement was prepared in violation of Section 14(e) because | |||||
8 | it is materially misleading in numerous respects and omits material facts, including those set forth | |||||
9 | above. Moreover, in the exercise of reasonable care, Defendants knew or should have known that | |||||
10 | the Recommendation Statement is materially misleading and omits material facts that are | |||||
11 | necessary to render them non-misleading. | |||||
12 | 95. The Individual Defendants had actual knowledge or should have known of the | |||||
13 | misrepresentations and omissions of material facts set forth herein. | |||||
14 | 96. The Individual Defendants were at least negligent in filing a Recommendation | |||||
15 | Statement that was materially misleading and/or omitted material facts necessary to make the | |||||
16 | Recommendation Statement not misleading. | |||||
17 | 97. The misrepresentations and omissions in the Recommendation Statement are | |||||
18 | material to Plaintiff, and Plaintiff will be deprived of his entitlement to decide whether to tender | |||||
19 | its shares on the basis of complete information if such misrepresentations and omissions are not | |||||
20 | corrected prior to the expiration of the tender offer period regarding the Proposed Transaction. | |||||
21 | 98. Plaintiff has no adequate remedy at law. | |||||
22 | FOURTH COUNT | |||||
23 | Violations of Section 14(d)(4) of the Exchange Act and SEC Rule 14d-9 | |||||
24 | (Against all Defendants) | |||||
25 | 99. Plaintiff repeats and realleges all previous allegations as if set forth in full herein. | |||||
26 | 100. Defendants have disseminated the Recommendation Statement with the intention | |||||
27 | of soliciting stockholders, including Plaintiff, to tender their shares in favor of the Proposed | |||||
28 |
- 21 -
1 | Transaction. | |||||
2 | 101. Section 14(d)(4) requires Defendants to make full and complete disclosure in | |||||
3 | connection with a tender offer. | |||||
4 | 102. SEC Rule 14d-9 requires a Company’s directors to, furnish such additional | |||||
5 | information, if any, as may be necessary to make the required statements, in light of the | |||||
6 | circumstances under which they are made, not materially misleading. | |||||
7 | 103. Here, the Recommendation Statement violates both Section 14(d)(4) and SEC Rule | |||||
8 | 14d-9 because it because it is materially misleading in numerous respects, omits material facts, | |||||
9 | including those set forth above and Defendants knowingly or recklessly omitted the material facts | |||||
10 | from the Recommendation Statement. | |||||
11 | 104. The misrepresentations and omissions in the Recommendation Statement are | |||||
12 | material to Plaintiff, and Plaintiff will be deprived of his entitlement to decide whether to tender | |||||
13 | his shares on the basis of complete information if such misrepresentations and omissions are not | |||||
14 | corrected prior to the expiration of the tender offer period regarding the Proposed Transaction. | |||||
15 | 105. Plaintiff has no adequate remedy at law. | |||||
16 | FIFTH COUNT | |||||
17 | Violations of Section 20(a) of the Exchange Act | |||||
18 | (Against all Individual Defendants) | |||||
19 | 106. Plaintiff repeats all previous allegations as if set forth in full herein. | |||||
20 | 107. The Individual Defendants were privy to non-public information concerning the | |||||
21 | Company and its business and operations via access to internal corporate documents, conversations | |||||
22 | and connections with other corporate officers and employees, attendance at management and | |||||
23 | Board meetings and committees thereof and via reports and other information provided to them in | |||||
24 | connection therewith. Because of their possession of such information, the Individual Defendants | |||||
25 | knew or should have known that the Recommendation Statement was materially misleading to | |||||
26 | Plaintiff in his capacity as a Company stockholder. | |||||
27 | 108. The Individual Defendants were involved in drafting, producing, reviewing and/or | |||||
28 |
- 22 -
1 | disseminating the materially false and misleading statements complained of herein. The Individual | |||||
2 | Defendants were aware or should have been aware that materially false and misleading statements | |||||
3 | were being issued by the Company in the Recommendation Statement and nevertheless approved, | |||||
4 | ratified and/or failed to correct those statements, in violation of federal securities laws. The | |||||
5 | Individual Defendants were able to, and did, control the contents of the Recommendation | |||||
6 | Statement. The Individual Defendants were provided with copies of, reviewed and approved, | |||||
7 | and/or signed the Recommendation Statement before its issuance and had the ability or opportunity | |||||
8 | to prevent its issuance or to cause it to be corrected. | |||||
9 | 109. The Individual Defendants also were able to, and did, directly or indirectly, control | |||||
10 | the conduct of Vocera’s business, the information contained in its filings with the SEC, and its | |||||
11 | public statements. Because of their positions and access to material non-public information | |||||
12 | available to them but not the public, the Individual Defendants knew or should have known that | |||||
13 | the misrepresentations specified herein had not been properly disclosed to and were being | |||||
14 | concealed from Plaintiff and Company, and that the Recommendation Statement was misleading. | |||||
15 | As a result, the Individual Defendants are responsible for the accuracy of the Recommendation | |||||
16 | Statement and are therefore responsible and liable for the misrepresentations contained herein. | |||||
17 | 110. The Individual Defendants acted as controlling persons of Vocera within the | |||||
18 | meaning of Section 20(a) of the Exchange Act. By reason of their position with the Company, the | |||||
19 | Individual Defendants had the power and authority to cause Vocera to engage in the wrongful | |||||
20 | conduct complained of herein. The Individual Defendants controlled Vocera and all of its | |||||
21 | employees. As alleged above, Vocera is a primary violator of Section 14 of the Exchange Act and | |||||
22 | SEC Rule 14a-9. By reason of their conduct, the Individual Defendants are liable pursuant to | |||||
23 | section 20(a) of the Exchange Act. | |||||
24 | WHEREFORE, Plaintiff demands injunctive relief, in his favor and against the | |||||
25 | Defendants, as follows: | |||||
26 | (A) Enjoining the Proposed Transaction; | |||||
27 | (B) In the event Defendants consummate the Proposed Transaction, rescinding it and | |||||
28 |
- 23 -
1 | setting it aside or awarding rescissory damages to Plaintiff; | |||||||
2 | (C) Declaring and decreeing that the Merger Agreement was agreed to in breach of the | |||||||
3 | fiduciary duties of the Individual Defendants and is therefore unlawful and unenforceable; | |||||||
4 | (D) Directing the Individual Defendants to exercise their fiduciary duties to disseminate a | |||||||
5 | Recommendation Statement that does not contain any untrue statements of material fact | |||||||
6 | and that states all material facts required in it or necessary to make the statements contained | |||||||
7 | therein not misleading; | |||||||
8 | (E) Directing defendants to account to Plaintiff for damages sustained because of the | |||||||
9 | wrongs complained of herein; | |||||||
10 | (F) Awarding Plaintiff the costs of this action, including reasonable allowance for | |||||||
11 | Plaintiff’s attorneys’ and experts’ fees; and | |||||||
12 | (G) Granting such other and further relief as this Court may deem just and proper. | |||||||
13 | DEMAND FOR JURY TRIAL | |||||||
14 | Plaintiff hereby demands a jury on all issues which can be heard by a jury. | |||||||
15 | ||||||||
Dated: January 27, 2022 | BRODSKY & SMITH | |||||||
16 | ||||||||
17 | By: /s/ Evan J. Smith | |||||||
Evan J. inquire (SBN 242352) | ||||||||
18 | esmith@brodskysmith.com | |||||||
Ryan P. Cardona, Esquire (SBN 302113) | ||||||||
19 | rcardona@brodskysmith.com | |||||||
9595 Wilshire Blvd., Ste. 900 | ||||||||
20 | Phone: (877) 534-2590 | |||||||
Facsimile (310) 247-0160 | ||||||||
21 | ||||||||
22 | Attorneys for Plaintiff | |||||||
23 | ||||||||
24 | ||||||||
25 | ||||||||
26 | ||||||||
27 | ||||||||
28 |
- 24 -