Amgen 2011 Annual Report Download - page 171

AMGEN INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
An amended consolidated complaint was filed on March 13, 2008, adding Anthony Gringeri as a State
Defendant and removing the causes of action for insider selling and misappropriation of information, violation of
California Corporations Code Section 25402 and violation of California Corporations Code Section 25403. On
July 14, 2008, the Superior Court dismissed without prejudice the consolidated state derivative class action. The
judge also ordered a stay of any re-filing of an amended complaint until the federal court has determined whether
any securities fraud occurred.
Birch v. Sharer, et al.
On January 23, 2009, a stockholder derivative lawsuit titled Birch v. Sharer, et al. was filed in the Superior
Court of the State of California, Los Angeles County (the Los Angeles Superior Court) naming Amgen Inc.,
Kevin W. Sharer, David Baltimore, Frank J. Biondi, Jr., Jerry D. Choate, Vance D. Coffman, Frederick W.
Gluck, Frank C. Herringer, Gilbert S. Omenn, Judith C. Pelham, J. Paul Reason, Leonard D. Schaeffer and Tom
Zindrick as defendants. The complaint alleges derivative claims for breach of fiduciary duty based on a purported
failure to implement adequate internal controls and to oversee the Company’s operations, which plaintiff claims
resulted in numerous lawsuits and investigations over a number of years. Plaintiff seeks damages on behalf of
Amgen, including costs and expenses, allegedly incurred, among other things, in connection with wrongful
termination lawsuits and potential violations of the Health Insurance Portability and Accountability Act. On
February 25, 2009, the case was reassigned to a judge in the Complex Department of the Los Angeles Superior
Court. Amgen and the individual defendants filed motions to dismiss on June 23, 2009.
Oral argument on Amgen and the individual defendants’ motions to dismiss were heard on September 25,
2009 before the Los Angeles Superior Court and the court granted the motions to dismiss but allowed the
plaintiff an opportunity to amend her complaint by October 21, 2009. Plaintiff filed a request for dismissal
without prejudice with the court on October 23, 2009. On October 29, 2009, Amgen received from plaintiff a
stockholder demand on the Board of Directors to take action to remedy breaches of fiduciary duties by the
directors and certain executive officers of the Company. Ms. Birch alleged that the directors and certain
executive officers violated their core fiduciary principles, causing Amgen to suffer damages. She demanded that
the Board of Directors take action against each of the officers and directors to recover damages and to correct
deficiencies in the Company’s internal controls that allowed the misconduct to occur. The Board of Directors
completed its investigation and determined in its business judgment that it was not in the best interests of the
Company to pursue the claims made in the demand against any of the individuals mentioned in the demand.
Therefore, the Board voted to reject the demand and communicated this to Ms. Birch on May 19, 2010.
On February 8, 2010, plaintiff filed another stockholder demand lawsuit in the Los Angeles Superior Court
against the same defendants in the original lawsuit but also added Board of Director members François de
Carbonnel and Rebecca Henderson. The allegations in the new complaint are nearly identical to those in the
previously filed complaint. The case filed on February 8, 2010 by plaintiff Birch was assigned to the Complex
Division of the Los Angeles Superior Court. On June 30, 2010, Amgen filed its demurrer to plaintiff’s complaint
with the Complex Division of the Los Angeles Superior Court. On September 29, 2010, the Complex Division of
the Los Angeles Superior Court denied Amgen’s and the individual defendants’ demurrers finding that the plaintiff
had adequately pled wrongful refusal. Amgen and the individual defendants filed answers on October 29, 2010. On
December 9, 2010, the Complex Division of the Los Angeles Superior Court stayed the underlying action and
Amgen and the individual defendants filed a motion for judgment on the pleadings/motion for summary judgment.
The motion for the judgment on the pleadings was heard on January 31, 2011 and the Complex Division of the Los
Angeles Superior Court dismissed the entire lawsuit with prejudice against both Amgen and the individual
defendants without leave to amend. On February 24, 2011, plaintiff filed a notice of appeal with the California State
Appellate Court. The briefing schedule for the appeal was issued by the California State Appellate Court and
plaintiff’s opening brief was filed September 7, 2011. The opposition brief from Amgen and the individual
defendants was filed on November 21, 2011. No date has been set for oral argument.
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