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OCT 1 6 2014 DOROTHY BROWN VERIFIED COMPLAINT CLERK of CIRCUIT Court' Plaintiff Wade D

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OCT 1 6 2014 DOROTHY BROWN VERIFIED COMPLAINT CLERK of CIRCUIT Court' Plaintiff Wade D IN THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS COUNTY DEPARTMENT, CHANCERY DIVISION -------------------------------------------------------------- )( WADE D. MIQUELON, ·· Plaintiff, v. JURY TRIAL DEMANDED WALGREEN CO., Defendant. F1LED -------------------------------------------------------------- )( OCT 1 6 2014 DOROTHY BROWN VERIFIED COMPLAINT CLERK OF CIRCUIT COURt' Plaintiff Wade D. Miquelon ("Miquelon"), through his undersigned counsel, complains against defendant Walgreen Co. ("Walgreens" or the "Company") and alleges as follows: INTRODUCTION 1. This past August 4, Miquelon stepped down as the Chief Financial Officer ("CFO") and President, International of Walgreens, the largest drugstore chain in the United States. The decision was personal, based on his desire to pursue opportunities outside of Walgreens after an outstanding six-year tenure. In announcing Miquelon's decision, the Company issued a press release that hailed Miquelon's "remarkable leadership, strategic vision and expertise." These words faithfully captured the Company's internal assessment ofMiquelon: Only last April, Miquelon was offered a promotion by Walgreens' Chief Executive Officer ("CEO") Gregory Wasson ("Wasson") and was told both verbally and in writing that, ifhe accepted the offer, he would be in line to succeed Wasson as CEO. 2. Over the new few days, from August 5 through August 8, Wasson and Walgreens' Director and largest shareholder Stefano Pessina ("Pessina") met with certain investors, 15401055 including "activist" investors, to discuss the past and future performance ofWalgreens and Walgreens' pending combination with Alliance Boots. The transaction would create the largest pharmacy company in the world. 3. Within a week, Miquelon received a call from a Wall Street Journal reporter. The reporter purported to be exceedingly well-informed about the investor meetings and posed a series of questions that were both directed at Miquelon and very disturbing, such as "please address the contention by some senior Walgreens executives that there were lax financial controls in your group." After informing the Company and receiving clearance from Walgreens' Head of Corporate Communications, Charles Greener (who reported to the Company's General Counsel, Thomas Sabatino), Miquelon responded in writing to the reporter's questions. 4. On August 19, the Wall Street Journal published an article with a headline that no CFO would ever want to see: "Walgreen Shakeup Followed Bad Projection- CFO, Pharmacy Chief Leave After Bungled Forecast Related to Prescription Drug Business." 5. The article contained entirely false, defamatory, disparaging and devastating statements that attacked Miquelon professionally and personally. The sources cited also were stunning: The Wall Street Journal described information received from "investors," who in tum cited "Walgreen directors" and "people familiar" with the situation, people whom Miquelon likely would have counted among his colleagues only days before. 6. Several Company officers then reached out to Miquelon to express sympathy over the article. They also told Miquelon that an internal memo, prepared by a Walgreens' Investor Relations Director who had attended certain of the meetings that Wasson and Pessina had with investors between August 5 and 8, reported that Wasson and Pessina had made many disparaging 2 and defamatory comments about Miquelon, other Walgreens executives, and the Board of Directors, and also had improperly disclosed Company confidential and/or proprietary information. 7. Miquelon immediately pressed Sabatino to have Walgreens publicly report the truth and set the record straight: that Miquelon had not been forced or pressured to leave and, indeed, had performed his job exceedingly well and had never "bungled" a forecast. But the Company refused, suggesting that any response would prompt further coverage and therefore would not be in the Company's best interest. 8. Coverage continued anyhow. A second and even more defamatory article was published in the Wall Street Journal on September 30. Again, Miquelon demanded a corrective public statement (this time specifically from Wasson and Pessina). And again, on October 3, the demand was flatly refused. 9. Together, the two Wall Street Journal Articles spelled out in plain but highly inflammatory English a story of utter professional failure: That Miquelon "bungled" the Company's earnings before interest and taxes ("EBIT") forecast for Fiscal Year ("FY") 2016, that he was personally responsible for a "shock[ing]" "calculate[ion]" error that necessitated a $1.1 billion reduction in the FY 2016 EBIT goal, and that he was forced or pressured out of the Company. This story is flatly contradicted by the facts. Indeed, as Walgreens knew in detail, Miquelon made no error at all - calculation or otherwise. Wasson and Pessina had worked hand in hand with Miquelon on the FY 2016 EBIT forecast for many months and were fully aware of the magnitude of the market-related challenges to achieving the goal. Roughly six weeks before announcing the revised FY 2016 EBIT forecast number, the Company, at Miquelon's insistence 3 and despite pressure from Wasson to delay, announced that it had to withdraw its previously announced FY 2016 EBIT goal because it was no longer reasonable. Any notion that Wasson or Pessina could possibly have been "shock[ed]" by a "sudden[]" decrease in the forecast is entirely false. 10. Further, apparently in order to obtain context for the basic (defamatory) storyline of the estimation error, the Wall Street Journal reporter also told Miquelon that "senior Walgreen executives" stated that Miquelon's finance unit was "weak" and had "lax controls." These additional defamatory and disparaging statements too were entirely false. In each financial reporting period during Miquelon's tenure as CFO, the Company had filed statements with the United States Securities and Exchange Commission ("SEC") certifying, pursuant to the Sarbanes Oxley Act of 2002, that it had in place effective financial reporting controls. These certifications were prepared under the direction of the Audit Committee of the Board of Directors and signed by the CEO, Wasson. If the finance unit had lax controls, federal law requires the Company to investigate and, as necessary, report these issues to the Company's outside auditor and disclose them in SEC filings. There has never been any such investigation or disclosure. No such action was taken because there were no "lax controls," the finance unit was not "weak" and Miquelon was an outstanding CFO throughout his tenure. 11. The true context for defamatory statements made to the Wall Street lies not in a lack of financial controls but in an unchecked desire to push the combination of Walgreens and Alliance Boots forward to completion. Several weeks before the first Wall Street Journal article defaming Miquelon was published, an activist investor had threatened Miquelon on a conference call in which Wasson and other executives participated, stating that Miquelon was "giving []bad 4 advice," was "too conservative," and that the Company should be increasing- not decreasing­ the FY 2016 earnings forecast and completing a tax inversion (re-domiciling offshore to potentially save on taxes -a move that Miquelon opposed). This investor then told Miquelon that, if Miquelon did not recommend these things, two other activist investors that he mentioned by name would "stop at nothing to get you out of the way, including getting personal dirt on you and embarrassing you publicly ... I wouldn't be surprised if that wheel is in motion." 12. Instead of defending Miquelon and resisting such abusive tactics, Wasson and Pessina ultimately decided to disparage and defame Miquelon, as a way to deflect investor disappointment with the entirely proper decisions Miquelon advocated, i.e., to lower the FY 2016 EBIT forecast and not to re-domicile the Company offshore. Upon information and belief, the Company also wished and worked to deflect the Wall Street Journal reporter's attention away from the other improper and inaccurate statements Wasson and Pessina had made in investor meetings about other Company executive and the Board of Directors, which had been described to the Wall Street Journal reporter, and which the Company feared would become a focus of the article. 13. The unanswered articles have had the inevitable negative impact on Miquelon: Miquelon has gone from being a 49-year-old former CFO of a Fortune 30 company CEO, who had Chief Operating Officer ("COO"), and CFO opportunities in the marketplace, to being a man with no such options and no recourse other than this lawsuit. JURISDICTION AND VENUE 14. This Court has personal jurisdiction over the defendant Walgreens pursuant to 735 ILCS 5/2-209 because: Walgreens is a corporation organized under the laws of Illinois; Walgreens 5 conducts business and owns, uses, or possesses real estate in Illinois; the contract at issue in this Complaint between Miquelon and Walgreens was executed in, and is subject to the laws of, Illinois; and Walgreens has committed tortious acts against Miquelon that have damaged Miquelon within the State of Illinois. 15. This Court has subject matter jurisdiction over the matter pursuant to 735 ILCS 5/2-701, because there exists a justiciable controversy capable of resolution by this Court. 16. Venue is proper in Cook County pursuant to 725 ILCS 5/2-101, because Walgreens resides and conducts business in Cook County, Illinois. THE PARTIES 17. Wade D. Miquelon is a
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