Exhibit (a)(5)(d)
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
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IN AND FOR NEW CASTLE COUNTY
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STEVEN WOLK, :
:
Plaintiff, :
:
v. :
:
ARTHUR L. CAHOON, PAUL J. SALEM, STEVEN C. : Case No. 18042NC
HALSTEDT, JAMES C. ALLEN, JUSTIN L. JASCHKE, :
TRYGVE E. MYHREN, YUKIMASA ITO and VERIO :
INC., :
:
Defendants. :
_______________________________________________ x
COMPLAINT
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Plaintiff, Steven Wolk, by his attorneys, alleges upon information and
belief, except as to paragraph 1 which is alleged upon personal knowledge, as
follows:
1. Plaintiff Steven Wolk ("plaintiff") is the owner of common stock of
Verio Inc. ("Verio" or the "Company") and has been the owner of such shares
continuously since prior to the wrongs complained of herein.
2. Defendant Verio is a corporation duly existing and organized under the
laws of the State of Delaware with principal executive offices at 8005 South
Chester Street, Suite 200, Englewood, Colorado. The Company is one of the
world's largest operators of Web sites for businesses and a leading provider of
comprehensive Internet services to small and mid-sized businesses.
3. Defendant Steven C. Halstedt ("Halstedt") is and at all times relevant
hereto has been Chairman of the Board of Verio.
4. Defendant Justin L. Jaschke ("Jaschke") is and at all times relevant
hereto has been Chief Executive Officer and a director of Verio.
5. Defendants Arthur L. Cahoon, Paul J. Salem, James C. Alen, Trygve E.
Myhren and Yukimasa Ito are and at all times relevant hereto have been directors
of Verio.
6. The defendants referred to in paragraphs 3 through 5 are collectively
referred to herein as the "Individual Defendants."
7. By reason of the above Individual Defendants' positions with the
Company as officers and/or directors, said individuals are in a fiduciary
relationship with plaintiff and the other public stockholders of Verio, and owe
plaintiff and the other members of the class the highest obligations of good
faith, fair dealing, due care, loyalty and full and candid disclosure.
CLASS ACTION ALLEGATIONS
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8. Plaintiff brings this action on his own behalf and as a class action,
pursuant to Rule 23 of the Rules of the Court of Chancery, on behalf of himself
and holders of Verio common stock (the "Class"). Excluded from the Class are
defendants herein and any person, firm, trust, corporation or other entity
related to or affiliated with any of the defendants.
9. This action is properly maintainable as a class action.
a. The Class is so numerous that joinder of all members is
impracticable. As of May 5, 2000, there were approximately 78.7 million shares
of Verio common stock outstanding.
b. There are questions of law and fact which are common to the
Class, including, inter alia the following:
(i) whether the merger described herein is grossly unfair to
the Class;
(ii) whether plaintiff and the other members of the Class would
be irreparably damaged were the transactions complained of herein consummated;
and
(iii) whether defendants have breached their fiduciary and other
common law duties owed by them to plaintiff and the other members of the Class.
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c. Plaintiff is committed to prosecuting this action and has
retained competent counsel experienced in litigation of this nature. Plaintiff's
claims are typical of the claims of the other members of the Class and plaintiff
has the same interests as the other members of the Class. Accordingly, plaintiff
is an adequate representative of the Class and will fairly and adequately
protect the interests of the Class.
d. Defendants have acted in a manner which affects plaintiff and all
members of the Class alike, thereby making appropriate injunctive relief and/or
corresponding declaratory relief with respect to the Class as a whole.
e. The prosecution of separate actions by individual members of the
Class would create a risk of inconsistent or varying adjudications with respect
to individual members of the Class, which would establish incompatible standards
of conduct for defendants, or adjudications with respect to individual members
of the Class which would, as a practical matter, be dispositive of the interests
of other members or substantially impair or impede their ability to protect
their interests.
SUBSTANTIVE ALLEGATIONS
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10. On May 8, 2000, it was announced that Nippon Telegraph & Telephone
Corp. ("NTT") has agreed to purchase all of the outstanding shares of Verio for
$5.5 billion (the "Merger"). NTT currently owns approximately 11.4% of the
outstanding shares of Verio. Pursuant to the terms of the Merger, NTT will pay
$60 in cash for each share of Verio that it does not already own. NTT said it
will make no change in Verio's management. NTT expects to make a tender offer on
May 17, 2000.
11. The Merger consideration to be paid to Class members is unfair and
inadequate because, among other things:
(a) the consideration agreed upon did not result from an appropriate
consideration of the value of Verio as the Individual Defendants
were presented with, and asked to evaluate, the proposed Merger
without any attempt to sufficiently ascertain the true value of
Verio through open bidding or a "market check" mechanism; and,
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(b) Verio common stock has traded as high as $80 per share as
recently as March 1, 2000.
12. The Individual Defendants have thus far failed to announce any active
or open bidding procedures best calculated to maximize shareholder value and
have, instead, agreed to the Merger which will only serve to inhibit the
maximization of shareholder value.
13. The Individual Defendants were and are under a duty:
(a) to fully inform themselves of Verio's market value before taking,
or agreeing to refrain from taking, action;
(b) to act in the interests of the equity owners;
(c) to maximize shareholder value;
(d) to obtain the best financial and other terms when the Company's
independent existence will be materially altered by a
transaction; and,
(e) to act in accordance with their fundamental duties of care and
loyalty.
14. Verio shareholders will, if the transaction is consummated, be
deprived of the opportunity for substantial gains which the Company may realize.
15. By reason of the foregoing acts, practices and course of conduct,
defendants have failed to exercise ordinary care and diligence in the exercise
of their fiduciary obligations toward plaintiff and the other Verio public
stockholders.
16. As a result of the actions of defendants, plaintiff and other members
of the Class have been and will be damaged in that they have not and will not
receive their fair proportion of the value of Verio's assets and businesses and
will be prevented from obtaining appropriate consideration for their shares of
Verio common stock.
17. Unless enjoined by this Court, the defendants will continue to breach
their fiduciary duties owed to plaintiff and the other members of the Class, and
will consummate the proposed transaction which will exclude the Class from its
fair proportionate share of Verio's valuable assets and businesses, and/or
benefit them in the unfair manner complained of herein, all to the irreparable
harms of the Class, as aforesaid.
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18. Plaintiff and the Class have no adequate remedy at law.
WHEREFORE, plaintiff demands judgement and preliminary and permanent
relief, including injunctive relief, in favor of the Class and against
defendants as follows:
A. Declaring that this action is properly maintainable as a class action
and certifying plaintiff as the representative of the Class;
B. Preliminarily and permanently enjoining defendants and their counsel
agents, employees and all persons acting under, in concert with, or for them,
from proceeding with, consummating, or closing the proposed transaction or any
business combination with a third party, unless and until the Company adopts and
implements a procedure or process, such as an auction, to obtain the highest
possible price for the Company;
C. Directing the Individual Defendants to exercise their fiduciary duties
to obtain a transaction which is in the best interests of shareholders until the
process for the sale or auction of the Company is completed and the highest
possible price is obtained;
D. In the event that the proposed transaction is consummated, rescinding
it and setting it aside, or awarding rescissory damages to the Class;
E. Awarding compensatory damages against defendants, individually and
severally, in an amount to be determined at trail, together with pre-judgement
and post-judgment interest at the maximum rate allowable by law, arising from
the proposed transaction;
F. Awarding plaintiff his costs and disbursements, including a reasonable
allowance for plaintiff's counsel and expert fees and expenses; and
G. Granting plaintiff and the Class such other and further relief as the
Court may deem just and proper.
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ROSENTHAL, MONHAIT, GROSS
& GODDESS, P.A.
By:__________________________
Mellon Bank Center, Suite 1401
Wilmington, DE 19899-1070
(302) 656-4433
Attorneys for Plaintiff
Of Counsel:
SCHIFERIN & BARROWAY, LLP
Marc A. Topaz
Patricia C. Weiser
Three Bala Plaza East
Suite 400
Bala Cynwyd, PA 19004
(610) 667-7706
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