Opinion ID: 1952721
Heading Depth: 1
Heading Rank: 26

Heading: Genesis' One Day Ultimatum

Text: The record reflects that two of the four NCS board members, Shaw and Outcalt, were also the same two NCS stockholders who combined to control a majority of the stockholder voting power. Genesis gave the four person NCS board less than twenty-four hours to vote in favor of its proposed merger agreement. Genesis insisted the merger agreement include a Section 251(c) clause, mandating its submission for a stockholder vote even if the board's recommendation was withdrawn. Genesis further insisted that the merger agreement omit any effective fiduciary out clause. Genesis also gave the two stockholder members of the NCS board, Shaw and Outcalt, the same accelerated time table to personally sign the proposed voting agreements. These voting agreements committed them irrevocably to vote their majority power in favor of the merger and further provided in Section 6 that the voting agreements be specifically enforceable. Genesis also required that NCS execute the voting agreements. Genesis' twenty-four hour ultimatum was that, unless both the merger agreement and the voting agreements were signed with the terms it requested, its offer was going to be withdrawn. According to Genesis' attorneys, these were unalterable conditions to Genesis' willingness to proceed. Genesis insisted on the execution of the interlocking voting rights and merger agreements because it feared that Omnicare would make a superior merger proposal. The NCS board signed the voting rights and merger agreements, without any effective fiduciary out clause, to expressly guarantee that the Genesis merger would be approved, even if a superior merger transaction was presented from Omnicare or any other entity.