In re Medco/Express Scripts Merger Litigation

Settled: April 16, 2012

After hard-fought negotiations, the settlement terms increased the rights of Medco/Express Scripts shareholders.

On July 21, 2011, Medco and Express Scripts, Inc. ("Express Scripts") announced the execution of a merger agreement (the "Merger Agreement") between Medco, Express Scripts, Aristotle Holding, Inc., Aristotle Merger Sub, Inc. and Plato Merger Sub, Inc., pursuant to which Express Scripts would acquire Medco for $28.80 in cash and 0.81 shares of Express Scripts Holding stock for each share of Medco common stock (the "Proposed Transaction").

Between July 22, 2011 and July 29, 2011, ten actions were filed by purported Medco Shareholders in the Delaware Court of Chancery all alleging, among other things, that Medco and its board of directors had breached their fiduciary duties in connection with their consideration and approval of the Proposed Transaction, and that Express Scripts had aided and abetted those breaches of fiduciary duty. One of those actions was filed by Labaton Sucharow on behalf of Labourers' Pension Fund of Central & Eastern Canada.

Between July 22, 2011 and August 8, 2011, seven similar actions were filed in the United States District Court for the District of New Jersey (collectively, the "Federal Action"), and five more were filed in the New Jersey Superior Court.

On August 23, 2011, the Delaware Court of Chancery certified the class and appointed Labourers' Pension Fund of Central & Eastern Canada co-lead plaintiff and Labaton Sucharow co-lead counsel of the Delaware cases (the "Delaware Action").

On August 26, 2011, the New Jersey state court actions were stayed in favor of the Delaware Action.

On September 19, 2011, the New Jersey District Court denied defendants' motion stay the Federal Action.

Thereafter, lead counsel in the Delaware and Federal Actions litigated the global action together.  Lead counsel conducted further investigation of the facts and circumstances underlying the claims asserted in the Actions, which included, among other things, reviewing and analyzing documents produced by defendants, and conducting the depositions of Ravi Sachdev, Managing Director of Investment Banking at JP Morgan, who served as financial advisor to Medco on the Proposed Transaction, on Friday, November 11, 2011, and Richard J. Rubino, Senior Vice President, Finance and Chief Financial Officer of Medco, on November 14, 2011.

After hard-fought negotiations, the parties arrived at a settlement in principle based on the following terms: (1) a reduction of the Termination Fee (as defined in the Merger Agreement) from $950 million to $650 million; (2) a reduction of the number of applications of "matching rights" from an unlimited number to one for each of Express Scripts and Medco; (3) the rescheduling of the special meetings of Express Scripts and Medco's shareholder vote; and (4) supplemental disclosures concerning the Merger Agreement and the Proposed Transaction in the Definitive Joint Proxy/filed with the SEC.

A Fairness Hearing was held on April 16, 2012, and the settlement was approved.