EFiled: Jan 17 2018 12:31PM EST Filing ID 61576501 Case Number 443,2017 IN THE SUPREME COURT OF THE STATE OF DELAWARE WILLIAM E. PETTIT and SUSAN VAN HOUTEN, On Behalf of Themselves and All Others Similarly No. 443, 2017 Situated On Appeal from the Court of Appellants, Plaintiffs-Below, Chancery v. C.A. No. 2017-0125-JTL HD SUPPLY HOLDINGS, INC., Appellee, Defendant-Below. APPELLEE’S CORRECTED ANSWERING BRIEF Srinivas M. Raju (#3313) OF COUNSEL: Matthew W. Murphy (#5938) Lee Ann Russo Richards, Layton & Finger, P.A. JONES DAY One Rodney Square 77 West Wacker Drive 920 North King Street Chicago, IL 60601 Wilmington, DE 19801 (312) 782-3939 (302) 651-7700 Walter W. Davis Attorneys for Appellee, Defendant- Ashley F. Heintz Below Robert A. Watts JONES DAY 1420 Peachtree Street, N.E. Suite 800 Atlanta, GA 30309 (404) 521-3939 Dated: January 17, 2018 RLF1 18762148v.1 TABLE OF CONTENTS Page TABLE OF CITATIONS ....................................................................................... iii NATURE OF THE PROCEEDINGS ....................................................................... 1 SUMMARY OF ARGUMENT ................................................................................ 5 STATEMENT OF FACTS ....................................................................................... 8 A. HD Supply Holdings, Inc.—The “Company” ........................... 8 B. Equity Grants Under the 2013 Omnibus Incentive Plan ........... 8 C. The Power Solutions Sale ........................................................ 10 D. Plaintiffs’ Demand And The Administrator’s Decision .......... 11 E. Plaintiffs’ Illinois Action ......................................................... 12 F. Proceedings Below ................................................................... 14 ARGUMENT .......................................................................................................... 17 I. THE COURT OF CHANCERY PROPERLY GRANTED JUDGMENT ON THE PLEADINGS IN THE COMPANY’S FAVOR BECAUSE THE PLAIN AND UNAMBIGUOUS LANGUAGE OF THE PLAN FORECLOSES PLAINTIFFS’ CLAIMS ............................................................................................. 19 A. Question Presented ................................................................... 19 B. Scope of Review ...................................................................... 19 C. Merits of Argument .................................................................. 19 II. PLAINTIFFS’ MOTION FOR LEAVE TO FILE AN AMENDED COMPLAINT IS MOOT; REGARDLESS, THE COURT OF CHANCERY DID NOT ABUSE ITS DISCRETION IN DENYING IT ....................................................... 39 A. Question Presented ................................................................... 39 B. Scope of Review ...................................................................... 39 C. Merits of Argument .................................................................. 39 III. PLAINTIFFS’ MOTION TO STAY THE ACTION IS MOOT; REGARDLESS, THE COURT OF CHANCERY PROPERLY EXERCISED ITS DISCRETION TO DENY IT ............................... 43 -i- RLF1 18762148v.1 TABLE OF CONTENTS (continued) Page A. Question Presented ................................................................... 43 B. Scope of Review ...................................................................... 43 C. Merits of Argument .................................................................. 43 CONCLUSION ....................................................................................................... 46 Exhibit Pettit v. HD Supply Holdings, Inc., No. 1-16-3213 (Ill. App. 1 Dist. Sept. 27, 2017) (ORDER) ............................................... Exhibit A -ii- RLF1 18762148v.1 TABLE OF CITATIONS Page(s) CASES Abt v. Harmony Mill Ltd. P’ship, 1992 WL 380615 (Del. Ch. Dec. 21, 1992) ....................................................... 22 Activision Blizzard, Inc. v. Hayes, 106 A.3d 1029 (Del. 2013) ................................................................................. 26 Amer v. NVF Co., 1994 WL 279981 (Del. Ch. June 15, 1994) ........................................................ 41 AT&T Corp. v. Lillis, 953 A.2d 241 (Del. 2008) ................................................................................... 31 BAE Sys. Info. & Elec. Sys. Integration, Inc. v. Lockheed Martin Corp., 2009 WL 264088 (Del. Ch. Feb. 3, 2009) .......................................................... 37 Bokat v. Getty Oil Co., 262 A.2d 246 (Del. 1970) ................................................................................... 39 In re Boyd, 99 A.3d 226 (Del. 2014) (TABLE) .............................................................. 40, 43 Carlyle Inv. Mgmt. L.L.C. v. Moonmouth Co. S.A., 2015 WL 5278913 (Del. Ch. Sept. 10, 2015) ..................................................... 40 Chi. Bridge & Iron Co. N.V. v. Westinghouse Elec. Co. LLC, 166 A.3d 912 (Del. 2017) ................................................................................... 19 Clark v. State Farm Mut. Auto. Ins. Co., 131 A.3d 806 (Del. 2016) ................................................................................... 41 Cypress Assocs., LLC v. Sunnyside Cogeneration Assocs. Project, 2007 WL 148754 (Del. Ch. Jan. 17, 2007) ......................................................... 35 Data Centers, LLC v. 1743 Holdings LLC,, 2015 WL 9464503 (Del. Super. Ct. Nov. 20, 2015) ........................................... 36 -iii- RLF1 18762148v.1 In re Ebix, Inc. S’holder Litig., 2016 WL 208402 (Del. Ch. Jan. 15, 2016) ......................................................... 13 Fidanque v. Am. Maracaibo Co., 92 A.2d 311 (Del. Ch. 1952) .............................................................................. 26 Fortis Advisors LLC v. Dialog Semiconductor PLC, 2015 WL 401371 (Del. Ch. Jan. 30, 2015) ............................................. 34, 35, 36 Friedman v. Khosrowshahi, 2014 WL 3519188 (Del. Ch. July 16, 2014), aff’d, 2015 WL 1001009 (Del. Mar. 6, 2015) (ORDER) ............................................................. 32 Fujisawa Pharm. Co. v. Kapoor, 655 A.2d 307 (Del. 1995) ................................................................................... 43 Gerber v. Enter. Prods. Hldgs., LLC, 67 A.3d 400 (Del. 2013), overruled on other grounds by Winshall v. Viacom Int’l, Inc., 76 A.3d 808 (Del. 2013) ................................................... 36 Great Hill Equity P’rs IV, LP v. SIG Growth Equity Fund I, LLLP, 2014 WL 6703980 (Del. Ch. Nov. 26, 2014) ..................................................... 38 Ingres Corp. v. CA, Inc., 8 A.3d 1143 (Del. 2010) ..................................................................................... 44 Kuhn Constr., Inc. v. Diamond State Port Corp., 990 A.2d 393 (Del. 2010) ................................................................................... 24 Kuroda v. SPJS Holdings, L.L.C., 971 A.2d 872 (Del. Ch. 2009) ................................................................ 32, 34, 36 Markow v. Synageva Biopharma Corp., 2016 WL 1613419 (Del. Super. Ct. Mar. 3, 2016) ............................................. 36 McWane Cast Iron Pipe Corp. v. McDowell-Wellman Eng’g Co., 263 A.2d 281 (Del. 1970) ................................................................................... 44 Nemec v. Shrader, 991 A.2d 1120 (Del. 2010) ........................................................................... 24, 30 Norton v. K-Sea Transp. P’rs, L.P., 67 A.3d 354 (Del. 2013) ..................................................................................... 25 -iv- RLF1 18762148v.1 O’Brien v. Progressive N. Ins. Co., 785 A.2d 281 (Del. 2001) ................................................................................... 30 ONTI, Inc. v. Integra Bank, 751 A.2d 904 (Del. Ch. 1999) ............................................................................ 26 OSI Sys., Inc. v. Instrumentarium Corp., 892 A.2d 1086 (Del. Ch. 2006) .......................................................................... 22 Rhone-Poulenc Basic Chems. Co. v. Am. Motorists Ins. Co., 616 A.2d 1192 (Del. 1992) ................................................................................. 29 Rosen v. Wind River Sys., Inc., 2009 WL 1856460 (Del. Ch. June 26, 2009) ...................................................... 44 Rothschild Int’l Corp. v. Liggett Grp., Inc., 463 A.2d 642 (Del. Ch. 1983), aff’d, 474 A.2d 133 (Del. 1984) ....................... 26 Ryan v. Gifford, 918 A.2d 341 (Del. Ch. 2007) ............................................................................ 45 Salamone v. Gorman, 106 A.3d 354 (Del. 2014) ................................................................................... 23 Sanders v. Wang, 1999 WL 1044880 (Del. Ch. Nov. 8, 1999) ....................................................... 21 Schick Inc. v. Amalgamated Clothing & Textile Workers Union, 533 A.2d 1235 (Del. Ch. 1987) .......................................................................... 42 Seidensticker v. Gasparilla Inn, Inc., 2007 WL 4054473 (Del. Ch. Nov. 8, 2007) ................................................. 28, 29 Those Certain Underwriters At Lloyd’s, London v. Nat’l Installment Ins. Servs., Inc., 2007 WL 4554453 (Del. Ch. Dec. 21, 2007), aff’d, 962 A.2d 916 (Del. 2008) (TABLE) ......................................................................................... 42 Veloric v. J.G. Wentworth, Inc., 2014 WL 4639217 (Del. Ch. Sept. 18, 2014) ....................................................