Full opinion text
OPINION FARNAN, District Judge. INTRODUCTION This action was brought by Plaintiff, Tracinda Corporation, (“Tracinda”) against Defendants, DaimlerChrysler AG, Daimler-Benz AG (“Daimler-Benz” or “Daimler”), Jurgen Schrempp and Manfred Gentz (collectively, “Defendants”) alleging violations of securities laws, common law fraud and conspiracy in connection with the November 1998 merger between Chrysler Corporation (“Chrysler”) and Daimler-Benz AG (“Daimler-Benz”). A thirteen day bench trial was held on the claims and defenses raised by the parties. This Memorandum Opinion constitutes the Court’s Findings of Fact and Conclusions of Law on the issues tried before the Court. JURISDICTION AND VENUE The Court has subject matter jurisdiction over this action pursuant to Section 27 of the Securities Exchange Act of 1934, 15 U.S.C. § 78aa, and the doctrine of supplemental jurisdiction. Additionally, the Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1332(a)(2), because the amount in controversy exceeds $75,000, exclusive of interest and costs, and the matter arises between citizens of a State and citizens of a foreign state. Venue in this judicial district is .uncontested and is appropriate pursuant to Section 27 of the Exchange Act, 15 U.S.C. § 78aa, and 28 U.S.C. § 1391(b), because the transactions giving rise to this action occurred in substantial part in the District of Delaware, and Defendants conduct or transact business in the District of Delaware. ' In addition, venue is appropriate in this district under the terms of the Stockholder Agreement dated May 7, 1998, between and among, Daimler-Benz, Chrysler and Tracinda, which provides that the parties consent “to the personal jurisdiction of any federal court located in the State of Delaware or any Delaware state court in the event any dispute arises out of or relates to this Agreement or any of the transactions contemplated by this Agreement.”' DX 108 at 5-6. The Stockholder Agreement also provides that the Agreement “shall be governed by and construed in accordance with the laws of the State of Delaware without regard to the principles of conflicts of law thereof.” Id. at 6. PROCEDURAL BACKGROUND Tracinda filed its Complaint in this action on November 27, 2000, alleging claims for violations of Sections 10(b), 14(a) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rules 10b-5 and 14a-9 of the rules promulgated thereunder, Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 (the “Securities Act”) and claims for common law fraud and conspiracy. In addition to naming Defendants, Tracinda also sued Hilmar Kopper. Separate motions to dismiss were filed by Defendants and Hilmar Kopper. The Court granted Defendants’ motions on Tracihda’s claim for civil conspiracy, but denied the motions, as they applied to Tracinda, in all other respects., Tracinda Corporation v. DaimlerChrysler AG, 197 F.Supp.2d 42 (D.Del.2002) (“Tracinda”). By separate Memorandum Opinion and Order, the Court denied Defendant Kop-per’s motion to dismiss for lack of personal jurisdiction with leave to renew. In re DaimlerChrysler AG Securities Litigation, 197 F.Supp.2d 86 (D.Del.2002) (“In re DaimlerChrysler I”). After the parties engaged in discovery, Defendant Kopper renewed his motion to dismiss for lack of personal jurisdiction. Defendants and Hil-mar Kopper also separately moved for summary judgment. The Court granted Defendant Kopper’s motion to dismiss for lack of personal jurisdiction, In re DaimlerChrysler AG Securities Litigation, 247 F.Supp.2d 579 (D.Del.2003) (“In re DaimlerChrysler II”), and denied Defendants’ Motions for Summary Judgment issuing two opinions, one on the question of whether the claims against Defendants were time-barred under the applicable statute of limitations and one on the remaining issues raised by Defendants. In re DaimlerChrysler AG Sec. Litig., 269 F.Supp.2d 508 (D.Del.2003) (discussing statute of limitations issue) (“In re DaimlerChrysler III ”); In re DaimlerChrysler AG Sec. Litig., 294 F.Supp.2d 616 (D.Del.2003) (“In re DaimlerChrysler IV”). Shortly before trial, Traeinda voluntarily dismissed its claims under Sections 11, 12 and 15 of the Securities Act, leaving for trial the common law fraud claim and the claims under the Exchange Act. Trial commenced on December 1, 2003, .but was recessed due to a discovery production issue that arose near the end of the trial. Trial was completed in February 2004, and post-trial briefing was completed in May 2004. FINDINGS OF FACT The Court makes the following findings with regard to the factual background related to this action. The Court makes additional findings where necessary in the context of its legal analysis under the heading “Conclusions of Law.” 1. The Parties A. Traeinda Corporation Traeinda is a holding company incorporated in Nevada with its principal place of business located in Beverly Hills, California. Traeinda is primarily engaged in the business of investing in other companies, particularly companies listed on the New York Stock Exchange. Kerkorian Tr. Vol. B. at 270:12-271:1; Mandekic Tr. Vol. A. 114:17-19. Kirk Kerkorian is the Chairman, Chief Executive Office and sole shareholder of Traeinda. Joint Pretrial Order, Ex. 1 at ¶ 1; DX 1 at ¶ 11. As of May 6, 1998, Traeinda was Chrysler’s largest stockholder. Joint Pretrial Order, Ex. 1 at ¶ 1. Based on its line of business and its experience, Traeinda is properly considered a sophisticated investor! In re DaimlerChrysler AG IV, 294 F.Supp.2d at 625. B. DaimlerChrysler AG DaimlerChrysler AG (“DaimlerChrys-ler”) was formed in 1998, as a result of the merger between Daimler-Benz and Chrysler (the “Merger”). DaimlerChrysler is a stock corporation organized under the laws of the Federal Republic of Germany. Joint Pretrial Order, Ex. 1 at ¶ 2. Currently, DaimlerChrysler ordinary shares trade on the New York Stock Exchange under the trading symbol “DCX.” Id. Daimler-Chrysler shares are also traded on other domestic and foreign stock exchanges. Id. Since its formation and continuing to date, DaimlerChrysler has had two headquarters, one in Auburn Hills, Michigan and one in Stuttgart, Germany. C. Daimler-Benz AG Prior to the Merger, Daimler-Benz was a stock corporation organized and existing under the laws of the Federal Republic of Germany, with its principal place of business in Stuttgart, Germany. Id. at ¶3. Until November 17, 1998, Daimler-Benz was the issuer of American Depository Shares trading on the New York Stock exchange under the trading symbol “DAI.” Daimler-Benz also traded ordinary shares on the Frankfurt Stock Exchange. Id. D. Chrysler Corporation Prior to the Merger, Chrysler'was a corporation organized and existing under the laws of the State of Delaware with its principal place of business located in Auburn Hills, Michigan. Until November 12, 1998, Chrysler common stock traded on the New York Stock Exchange under the trading symbol “C.” Id. at ¶ 4. E. Jurgen Schrempp Jürgen Schrempp is a citizen of the Federal Republic of Germany. Since November 1998, Schrempp has been a Chairman of the DaimlerChrysler Board of Management. Prior, to that time, Schrempp served as Chairman of the Daimler-Benz Board of Management. Id. at ¶ 5. Schrempp does not serve and has never served on the Supervisory Board of either DaimlerChrysler or Daimler-Benz. F.Manfred Gentz Manfred Gentz is "a citizen of the Federal Republic of Germany. Since November 1998, Gentz has been a member of Daim-lerChrysler’s Management Board. In this capacity, Gentz is responsible for Finance and Controlling. Prior to the Merger, Gentz served in a similar position and capacity on Daimler-Benz’s Board of Management. Id. at ¶ 6. Gentz does not serve and has never served on the Supervisory Boards of either Daimler-Benz or Daim-lerChrysler. II. Tracinda’s Historical Relationship With Chrysler Tracinda’s interest in Chrysler began when Kerkorian met Lee Iacocca, who was then Chairman of Chrysler, in 1990. Ker-korian Tr. Vol. B. 280:6-12, 314:13-21; DX 24 at 13. Shortly thereafter, Tracinda started investing in Chrysler, acquiring approximately 9.9% of Chrysler’s outstanding stock in 1990. Kerkorian Tr. Vol. B. 281:15-17, DX 24 at 12. .Two years later, Kerkorian sought representation for Tra-cinda on the Chrysler Board, and threatened a proxy fight to obtain such representation. DX 24 at 13-14; Kerkorian Tr. Vol. B. 315:8-318:1. In response, Iacocca, his designated successor Robert Eaton and the Chairman of the Nominating Committee of Chrysler’s Board of Directors met with Kerkorian. As a result of these discussions, Kerkorian withdrew his request for board representation. DX 24 at 14. During the next year and a half, Tracin-da sought a possible stock split and dividend increase for Chrysler shareholders. To .achieve these goals, Tracinda had several discussions with Chrysler, and Kerko-rian met with Eaton personally to press for a stock repurchase program. DX 24 at 14; Kerkorian Tr. Vol. B. 319:5-320:5; DX 24 at 14. When Chrysler resisted Tracin-da’s proposals, Kerkorian issued an ultima-turn stating: “If, by December 15, the Board has not taken action to redeem the poison pill and to initiate a stock buyback, a stock split and a dividend increase as proposed in this letter, I .intend to take all appropriate legal steps to pursue these proposals, including legal action to invalidate the poison pill.” DX 24 at 15-16; Kerkorian Tr. Vol. B. 322:2-19, 323:21-324:18. On December 1, 1994, Chrysler took the action requested by Kerkorian and announced a $1 billion share repurchase program and a common stock dividend increase of 60%. Less than five months later, Kerkorian, assisted by former Chrysler Chairman Ia-eocca, launched a campaign to acquire all of the outstanding common stock of Chrysler for $55 per share in cash. DXs 96,123, Kerkorian Tr. Vol. B. 330:3-13. Prior to making a public announcement of its buyout proposal, Tracinda had numerous meetings with Chrysler executives, including Eaton. DX 640, Kerkorian Tr. Vol. B. 345:4-6. The night before Tracinda publicly announced its tender offer, Kerkorian spoke with Eaton by phone. As a result of their conversation, Kerkorian believed that the Chrysler management would not oppose his buyout proposal. Mandekic Tr. Vol. A. 141:3-7; Kerkorian Tr. Vol. B 283:3-9, 345:4-22; 141:6-7. To Kerkori-an’s surprise, Chrysler publicly rejected the buyout proposal the same day it was announced. DX 22, Mandekic Tr. Vol. A 141:1-7, 19-23. Although Kerkorian relied on what he understood to be Eaton’s oral assurance that he would not oppose the buyout, Kerkorian came to wish that he had obtained Eaton’s assurance in writing. Kerkorian Tr. Vol. B. 345:25-346:13; Man-dekic Tr. Vol. A. 143:15-20. After Chrysler rejected the buyout proposal, Tracinda sought to hire Chrysler’s former Chief Financial Officer, Jerome York. DX 25, Ker-korian Tr. Vol. B. 348:23-25. On May 31, 1995, Tracinda abandoned its proposed buyout, because it failed to secure sufficient financing for its offer. Kerkorian Tr. Vol. B. 285:12-21, 362:11-15; DX 24 at 26. After abandoning its buyout proposal, Tracinda continued to acquire Chrysler shares. Approximately one month later, on June 27, 1995, Tracinda commenced a tender offer to purchase 14,000,000 common shares'of Chrysler stock for $50 per share in cash. DX 24. As part of its tender Offer, Tracinda disclosed the possibility that it would replace the existing Board of Directors and name a new chairman. DX 24 at 27. On September 1, 1995, York agreed to become Vice-Chairman of Tracinda. DX 25, 638, 639. During the negotiations leading to York’s hiring, Kerkorian discussed with York the possibility that he might replace Eaton as Chairman of Chrysler. Kerkorian Dep. 126:10-12, 19-20; DX 24 at 27. York was hired by Tracinda because of his knowledge of Chrysler and for the experience he brought as former CFO of Chrysler and IBM. Kerkorian Tr. Vol. B. 369:16-370:13, 370:19-24, 373:12-18; Mandekic Tr. Vol. A. 153:9-154:4. As compensation for the services he was to provide to Tracinda, York received an approximately $26 million signing bonus, a salary of $1 million per year and a 6% share of any increases in the value of the Chrysler stock held by Tracinda. According to Tracinda, the estimated value of York’s contract was almost $43 million, not including the $26 million signing bonus. DX 723, Mandekic Tr. Vol. A. 152:18-23. Although York is represented by Tracin-da’s attorneys, Tracinda did not produce York as a witness at trial. In connection with its efforts to obtain additional share buy-backs and dividends, Tracinda Also engaged in a media campaign which included criticism of Chrysler’s management. Kerkorian Dep. 143:5-144:6; Kerkorian Tr. Vol. B. 382:2-12. To assist in its media efforts, Tracinda retained the public relations firm of Sard Verbinnen & Co. and allowed York to “lead the charge” against Chrysler. Ker-korian Tr. Vol. B. 390:24-391:9; DX 234; Aljian Dep. 59:10-19. Reporting on Tra-cinda’s media campaign, an article in the October 16, 1995 edition of Business Week stated: As Kerkorian presses his campaign for control of Chrysler, he and his aides are making Eaton and his track record, management style, and strategic vision the central issue. In conversations with reporters and with the powerful institutional investors who will ultimately decide the battle’s outcome, they are tarring Eaton as a man more-lucky than smart. DX 235; see also Kerkorian Tr. Vol. B. 395:15-397:7. Kerkorian characterized Tracinda’s media comments with regard to Eaton and Chrysler’s management as “trash talk,” which did not reflect his personal feelings. Kerkorian Dep. 144:18 — 25; Kerkorian Tr. 287:2-12. By October 1995, Tracinda had acquired approximately 13% of Chrysler’s common stock and pressed Chrysler to appoint York to its Board of Directors. DX 26. Two months later, on December 28, 1995, Tracinda filed a Proxy Statement with the SEC in connection with a possible insurgent proxy solicitation at Chrysler’s annual meeting in 1996. DX 698. On February 8, 1996, Kerkorian, Tracin-da and Chrysler executed a series of agreements to settle the issues that had arisen among them. One of these agreements included the Standstill Agreement by which Chrysler agreed to nominate a Tracinda representative to its Board in exchange for Tracinda agreeing to maintain its level of ownership of Chrysler stock below 13.5%. DX 30; DX 28 at Ex. 1. In addition, Chrysler agreed to initiate stock buy-backs totaling over $2 billion in 1996 and $1 billion in 1997. DX 29, Kerko-rian Tr. Vol. B. 385:2-14, 398:20-25. The Standstill Agreement also bound Tracinda to vote its Chrysler shares on all matters, including proposed mergers, in the same proportion as all other Chrysler shareholders. DX 30 at 5. Consistent with the terms of the Standstill Agreement, Tracinda’s designee, James Aljian, was elected to the Chrysler Board of Directors. Using confidential information obtained from his Board position that was not available to other shareholders, Aljian reported to Kerkorian and York about the goings on at Chrysler. Kerkori-an Tr. Vol. B. 399:1-400:3; Kerkorian Dep. 173:2-8, 334:23-335:2; York Dep. 86:16-87:2, 103:12-18,166:10-22, 240:4-8, 259:25-260:11; Aljian Dep. 31:9-17, 149:12-151:3, 212:8-214:2, 225:5-15, 293:10-300:13. As Kerkorian put it, “with Aljian on the board, it’s like Tracinda being on the board, as far as .getting information.” Kerkorian Dep. 173:6-8; Kerkorian Tr. Vol. B. 399:23-400:3. Indeed, Kerkorian expected Aljian to inform him of anything that was important at Chrysler, and according to Kerkorian, Aljian knew what Kerkorian considered to be important. Kerkorian Tr. Vol. B. 400:4-18; Kerkorian Dep. 335:3-5. Using confidential information obtained from Aljian, York wrote a memorandum to Kerkorian in May 1997 which criticized Chrysler’s spending and its management. Commenting on Chrysler’s expenditures, York wrote that Chrysler’s spending levels were “truly astronomical,” and that its spending plans were a “dangerous way to run things.” DX 31 at 2-3. As for Chrysler’s management, York wrote that the data from Chrysler’s board presentations was “flawed,” and that “[i]t is a dumb way to prepare a Business Plan.” Id. (emphasis in original) About a month, after receiving York’s memo, Tracinda began discussing the potential reduction of its investment in Chrysler. In a memo dated June 20, 1997, York noted that Kerkorian asked him to explore this possibility “three weeks ago.” York advised Kerkorian that “large blocks of stock generally sell at a discount to market,” DX 32 at 2, and Kerkorian understood that the sale of a large block of stock could adversely affect Chrysler’s stock price. Kerkorian Dep. 185:7-10. With respect to the issue of providing a rationale for the sale, York wrote: In the case of Tracinda, I believe the only explanation that would stand a decent chance of not creating uncertainty in the market would be a statement to the effect that Tracinda is planning to expand its investment in the entertainment sector, and is selling Chrysler to generate liquidity in preparation for such an investment. DX 32 at 1. Ultimately, Kerkorian decided not to sell a large block of Chrysler shares on the open market. Kerkorian Dep. 180:11-19. In fact, from the time it entered the Standstill Agreement until the Merger, Tracinda sold its Chrysler shares (1) when it was notified by its General Counsel, William O’Brien that the sale was necessary to keep Tracinda in compliance with the Standstill Agreement, PX 174, PX 237, PX 258, PX 950, Kerkorian Tr. Vol. B. 289:6-17, and (2) to reduce its holdings to below 5% prior to the closing of the Merger in order to avoid significant tax consequences. Mandekic Tr. Vol. A. 125:8-126:6.h III. Merger Discussions A. Tracinda’s Views On A Business Combination For Chrysler In addition to the aforementioned discussions concerning its investment in Chrysler, Tracinda also explored the possibility of finding a merger partner or acqui-ror for Chrysler. To this end, York testified that he had a “long standing” view that there had to be a consolidation in the automotive industry. York Dep. 135:14-25, 139:2-14. York prepared several anal-yses of candidates that might merge with or acquire Chrysler. However, Tracinda only produced one of these analyses in discovery, and York could not account for the other analyses he prepared. York Dep. 135:3-9, 142:2-22. In the one analysis produced, Tracinda concluded that a business combination between Chrysler and Daimler-Benz was “attractive” and that Daimler-Benz was the “best fit” to combine with Chrysler. Kerkorian Tr. Vol. B. 414:23-415:1; York Dep. 146:7-154:18, DX 33. From the outset, Kerkorian was enthused about the possibility of a combination between Daimler-Benz and Chrysler, because Daimler-Benz was a world-wide company and the potential synergies could result in a combination where “two and two make five.” Kerkorian Tr. Vol. B 417:21-418:2, 419:3-10; Kerkorian Dep. 194:18-195:4. Kerkorian approached Eaton to share his thoughts about a potential business combination between Daimler-Benz and Chrysler. At the time, Kerkori-an had no idea whether the transaction should be a merger or an acquisition. Kerkorian Tr. Vol. B. 420:10-15, Kerkorian Dep. 192:10-194:4, 196:7-197:2. Upon raising the issue with Eaton, Kerkorian learned that Eaton had already spoken with Schrempp, Chairman of Daimler-Benz’s Management Board, about a potential transaction between the companies. Kerkorian Dep. 196:13-16, 196:23-197:2. When Kerkorian returned to Tracinda, he instructed York and Aljian to “stay close” to the potential Chrysler Daimler-Benz combination. As a result, York began preparing further studies of a potential transaction. DXs 34-38. As a member of the Chrysler Board of Directors, Aljian was briefed on the discussions between Schrempp and Eaton on February 5, 1998. DX 20 at 50. Like Kerkorian, Aljian was an enthusiastic supporter of the Merger, and Aljian kept.Tra-cinda apprised of developments regarding the Merger. DX 42; Wilson Tr. Vol. H. 1714:20-1715:2; York Dep. 166:10-22. Continuing his analysis of the combined value of Chrysler and Daimler-Benz, York prepared a memo on February 16, 1998. In that memo, York wrote, “[t]he valuation potential [of a Chrysler Daimler-Benz combination] is so great that nothing should stand in the way of a complete board evaluation of this possible combination.” York also wrote that “the key issue” to obtaining this value was the “P/E multiple of [the] combined entity.” DX 34 at Y 58 (emphasis in original); York Dep. 173:2-9, 176:16-177:8. York advised Ker-korian that such a combination could result in immediate gains for Chrysler in the range of $646 million to $2,668 billion, depending on where the merged company’s initial P/E ratio fell in a range between 12 and 18 billion, with an ultimate gain between $1.8 and $4.4 billion. At the time York wrote his memo, he had no informa-^ tion about the nature or structure of the transaction being considered. • In fact, York’s analysis assumed that the transaction would be in the nature of a purchase, which would be the case in an acquisition. DX 34 at Y 58. Before any detailed proposals for the Merger were presented to the Chrysler Board, York prepared a memo on March 4, 1998, to Kerkorian and Aljian describing: (1) “the key points supporting the rationale for a merger,” (2) “the strategic aspects concerning the combination,” and (3) “the relevant numbers.” DX 35 at cover page (T008812). Discussing the current posture of Chrysler, York first observed that there was “[n]othing to propel Chrysler stand-alone to higher level.” York then summarized the problems and risks Chrysler faced: No opportunity for substantial cost reductions. No new minivan to invent. No hew Jeep to purchase. No new pick-up opportunity. Auto industry cycle now mature. Incentive costs spiraling upward. Chrysler earnings under pressure. Chrysler international sales shrinking, not expanding. Institutional disinvesting in Chrysler on a net basis. Any.economic or market decline likely to be worse for Chrysler: Cyclical stock. Risk to share repurchase. Regional producer. Regulatory risks are huge for Chrysler: Higher fuel economy for Jeeps, minivans, and pick-ups. Safety standard for Jeeps, minivans, and pick-ups. DX 35 at 1 (T00813). In conclusion, York stated,, the “[situation is compelling to do the merger,” and “[n]ow is the time to do it, b[e]fore the .Chrysler-specific risks ma-terialise.” Id. (emphasis in original). In this regard, York testified, that the idea was to “sell the home before the termites attack the floor beams.” York Dep. 193:9-14. York also wrote that “no conceivable Chrysler standalone plan can achieve the value of the synergies of a merger.” DX 35 at 1 (T8813). During his deposition testimony, Aljian described this memo as “showing] the basis of the benefit of the merger.” Aljian Dep- 201:11-13. York also stated that, the memo included all the reasons he could think of as to why the Merger could produce “huge value” for the shareholders. York D.ep. 190:6-17. York also testified that he solicited advice from a friend at Deloitte & Touche during this time frame concerning the feasibility of a German company acquiring a United States corporation in a tax-free transaction. DX 104; York Dep. 200:4-18. Two days later, York prepared another memo dated March 6, 1998, in response to Kerkorian’s question about whether Eaton had enough incentives to make sure he accomplished the transaction with Daimler-Benz. York Dep. 197:20-199:7, DX 36. In his memo, York reported to Kerkorian that Eaton would receive “north of 110 million- — or a lot of incentive for him to get the deal done.” DX 36; Kerkorian Tr. Vol. B. 444:21-445:7. As a director of Chrysler, Aljian was aware of Eaton’s stake in the transaction, as well as the stakes of other members in senior management, and these interests were disclosed publicly to the Chrysler shareholders prior to their vote on the Merger. DX 20 at 68. One week before Chrysler’s Board of Directors approved the Merger, York created a three-page document entitled “Cleveland/Denver Key Issues.” This document was dated April 30, 1998, and reflected the views of York, Aljian and Richard Sobelle, Tracinda’s in-house general counsel, regarding the Merger. During his deposition testimony and on cross-examination at trial, Kerkorian stated that he could not recall any other merger-related issues that were important to him, other than the issues laid out in this memo. Kerkorian Dep. 233:21-235:21, Kerkorian Tr. Vol. C. 629:8-630:3. Specifically, those issues were (1) that Tracinda would have to sell shares down to a certain percentage, (2) the transaction would be tax-free, (3) the timing of-the transaction, and (4) the price. Kerkorian Dep. 234:18-235:21. As for governance structure, Kerkorian supported the Merger before he had any discussions with anyone about corporate governance. Kerkorian never expressed any interest in the composition of the Da-imlerChrysler Management Board to Eaton, and none of Tracinda’s analyses discuss the desire or need to preserve Chrysler’s existing management. At his deposition, Kerkorian testified that he would not have been concerned if Schrempp named a management team for the new company that left control firmly in the hands of the former Daimler executives. Kerkorian Dep. 349:18-22. York also testified at his deposition that he believed. that the “high level strategic benefits to the shareholders” were more important to investors than the “internal plumbing and nuts and bolts” of who was on the company’s new boards. York Dep. 269:12-24. In a memo prepared by Aljian to Kerko-rian referred, to by Aljian as the “deal memo,” Aljian noted that the Merger was to be a “merger of equals.” Aljian also noted that the Supervisory Board of the new company would be “all outside directors — 10 LABOR, 5C and 5D.” DX 107 at T 1921. With respect to the Supervisory Board, Aljian stated, “They appoint management, set their composition, major transactions such as this deal and social issues.” Id. Aljian and Kerkorian understood that the Supervisory Board was to be “the principal board” at DaimlerChrys-ler. Aljian Dep. 254:10-11, Kerkorian Dep. 49:25-50:5. Aljian also noted in his memo that an “Integration Board” is the board that would “act as an American board would perform but in an advisory way.”- DX 107 at T 001921. Aljian noted that this was the board that he was committed to be on. During his deposition testimony, Aljian said that he believed Tracinda was entitled to representation on the principal board of the Company, that being the Supervisory Board. Aljian also testified that he felt that it was an affront to a major shareholder that he was placed on the Integration Board, rather than the Supervisory Board. Aljian Dep. 253:11-13, 254:8-19. By May 1998, Chrysler’s Board, including Aljian, had met at least seven times to discuss the progress of the Merger negotiations. The Board received advice from its financial advisors, and its German and American attorneys. The Board also gave input regarding the further conduct of the negotiations. DX 20 at 47-49, Wilson Tr. Vol. H. 1711:5-1712:22, Lanigan Tr. Vol. I 2003:11-23, Schrempp Vol. K 2182:11-14, Valade Tr. Vol. L 2380:17-2381:12. Aljian was an active participant at these meetings and updated York whenever he got new information. York Dep. 166:10-22. As Tracinda stated in its press release materials, “We have been kept informed of the status [of the merger negotiations] by virtue of our board representation since February, and provided periodic input, including indicating our strong support.” DX 42. B. Kerkorian’s Discussions With Eaton Concerning The Merger During this time frame, Kerkorian also discussed the Merger with Eaton, but their discussions were on a general level. Kerkorian understood that the details about the Merger would eventually be incorporated into the Business Combination Agreement (“BCA”) and that a detailed proposal for effectuating the merger of equals would be presented to the Chrysler Board in early May 1998. DX 1 at ¶ 19, Kerkorian Tr. Vol. C. 647:24-648:4, 649:1-11. As for his conversations with Eaton, Kerkorian could not remember how many conversations he had with him prior to the Merger announcement, and couldn’t recall any specifics of conversations he had with Eaton after his initial conversation with Eaton during which he raised the idea of a transaction between Daimler-Benz and Chrysler. Kerkorian Dep. 205:6-16, 218:21-25, 219:7-9. Kerkorian acknowledged that he and Eaton “didn’t get into [the manner in which the Merger would be implemented] much.” Kerkorian Dep. 225:9-11. Eaton also testified that his conversations with Kerkorian were “reasonably general” and not on a very “deep level.” Eaton Tr. Vol. D. 762:11-23. Eaton did not discuss with Kerkorian the different boards for a German company and how they worked. Kerkorian Tr. Vol. B. 294:21-24. Although Eaton advised Kerkorian that he intended to retire after three years of serving as co-chairman with Schrempp, Eaton did not represent that Daimler-Chrysler would name a replacement co-chairman after he left, and Eaton did not indicate that Holden would assume a co-chairmanship position. PX 538, Eaton Tr. Vol. D 859:7-860:4, Stallkamp Vol. I 1981:19-24. During his deposition testimony, York stated that he understood that Schrempp would be the sole Chairman of DaimlerChrysler’s Management Board once Eaton retired. York Dep. 251:22-24. York also stated that he “had long felt ... that co-CEO arrangements in general don’t tend to work out very well.” York Dep. 253:17-25. None of what Eaton said to Kerkorian was said at the direction of Schrempp . or anyone else at Daimler-Benz, and Eaton did not report to Schrempp the details of any conversations he had with Kerkorian. Eaton Tr. Vol. D. 861:5-11, Eaton Dep. 91:5-16; Schrempp. Dep. 237:9-240:24. C. Tracinda Enters Into The Stockholder Agreement Simultaneously with the execution of the BCA and well-before Chrysler issued the Proxy/Prospectus, Tracinda, Kerkorian, Chrysler and Daimler-Benz entered into the Stockholder Agreement on May 6, 1998, which obligated Tracinda to vote its shares in favor of the Merger. DX 108, DX 43 at T 248-249, § 1.1, Kerkorian Tr. Vol. B 298:8-10. Daimler-Benz’s largest shareholder, Duetsche Bank, entered into a similar agreement to support the Merger. Eaton Tr. Vol. D. 881:23-882:7, Schrempp Tr. Vol. G. 1487:4-17. The Stockholder Agreement was negotiated at arm’s length, and Tracinda was advised by its in-house counsel and by the law firm of Fried, Frank, Harris, Shriver & Jacobson. Aljian Dep. 245:18-247:9, York Dep. 223:19-224:18, 237:24, 238:4. Tracinda’s lawyers and officers reviewed the BCA before signing the Stockholder Agreement to make sure that it reflected everything Tracinda wanted and expected from thé Merger, and Tracinda’s attorneys advised Kerkorian that the BCA was consistent with what Kerkorian told them he expected. Kerkorian Tr. C. 649:1-11, 652:10-15; Mandekic Tr. Vol. A. 120:15-121:1, 124:14-23, 160:9-29, 165:7-18; Aljian Dep. 245:18-246, DX 39. Daimler-Benz wanted Tracinda’s commitment to the Merger through the Stockholder Agreement; however, the Stockholder Agreement was not a prerequisite to the Chrysler Board’s approval of -the transaction. While Eaton and the Chrysler Board wanted Tracinda’s approval, they did not tell Kerkorian that his approval was a prerequisite to the Board’s approval of the Transaction, Eaton Tr. Vol. D. 765:8-10, 860:19-25; Wilson Tr. Vol. H. 1717:4-20, and members of the Chrysler Board of Directors testified that they would have approved the Merger even if Tracinda had not supported it. PX 967 at ¶ 5, PX 968 at ¶ 9, Wilson Vol. H. 1716:23-1717:3, Lanigan Tr. Vol. 1.2060:16-2061:16. Without the execution of the Stockholder Agreement, Tracinda would have been bound by the Standstill Agreement to vote its shares in the same proportion as that of other Chrysler shareholders. .DX 30 at 5. Substantively,' the Stockholder ’ Agreement did not use the term “merger of equals” and contained no representations concerning corporate governance. DX 43 at T 248-252, Kerkorian Dep. 260:2-261:3. However, the Stockholder Agreement did refer to the BCA. In addition, the Stockholder Agreement and the BCA both contained integration clauses indicating that the written agreements superseded all oral or other written understandings between the parties. DX 43 at T250, § 4.3, DX 20 at A-42, § 4.3. During his deposition, Ker-korian testified that he executed the Stockholder Agreement, because he believed the BCA fully reflected and effectuated the merger of equals. Kerkorian Dep. 226:2-12. D. Daimler-Benz’s Preliminary Views Regarding A Business Combination At nearly the same time that Tracinda was analyzing the possibility of a merger partner or acquiror for Chrysler, Daimler-Benz was also analyzing the possibility of partnering with another company. Daimler-Benz rejected potential partnerships with General Motors, Ford and Toyota, because it.was concerned that Daimler-Benz would take a junior partner role in such a combination. Schrempp Tr. Vol. H. 1574:12-21, 1575:9-11, 1575:21-25. Daimler-Benz considered a possible combination with Chrysler, because Chrysler had a good market position with strong earnings that would permit comprehensive global business expansion, while maintaining the brand identity of Mercedes-Benz. Schrempp Tr. Vol. H. 1575:12-10, 1576:1-8. In. August or September 1995, Schrempp and Eckhard Cordes, then head of strategic planning at Daimler-Benz, commissioned Alexander Dibelius of Goldman, Sachs & Co. oHG (“Goldman Sachs”) to analyze a combination with Chrysler. PX 544 at ¶2; Dibelius Dep. 29:3-21, 130:7-23. Goldman Sachs’ 1995 study was code named “Project Blitz” and considered, among other things, a potential acquisition of Chrysler. PX 544 at 3-4. During this tíme, Daimler-Benz was structured as a . holding Company. Schrempp was Chairman of that holding company,, and Mercedes-Benz was. an AG with its own Management Board. The head of the Management Board of Mercedes-Benz AG contacted Chrysler about the possibility of a combination, but the idea was eventually abandoned as too complex. Schrempp Tr. Vol. F. 1223:12-1224:18 Defendants also consulted with others concerning the possibility of acquiring Chrysler. In the Spring of 1997, Defendants consulted with Ernst Stoeckl of TransAtlantic Consulting. The study prepared by TransAtlantic Consulting was code named “Project Dutch Boy” with Chrysler being referred to as “Christian” and Daimler-Benz being referred to as “Dutch Boys.” PX 27; PX 32; PX 34; Cordes Dep. 32:23-34:22. Daimler-Benz also spoke with Ruggero Maggnóni of Lehman Brothers about an acquisition 'of Chrysler. Schrempp Tr. Vol. G: 1482:10-20; Cordes Dep. 75:22-76:12; PX 37 at DCX 0183137. Project Blitz was also updated periodically, particularly after talks with Chrysler began. PX 45; PX 544 at ¶ 8-9. IV. The Daimler-Benz and Chrysler Negotiations Discussions between Chrysler and Daimler-Benz began in the fall of. 1997, at the Frankfurt Motor Show. At that time, Schrempp spoke to Bob Lutz, then president of Chrysler, about the possibility of Chrysler and Daimler-Benz talking again about a business combination. Schrempp Tr. Vol. F. 1233:19-1234:19. Lutz suggested that Schrempp speak with Eaton. Id. at 1234:20-22. Schrempp had his office arrange for a meeting with Eaton during the Detroit Motor Show. On January 12, 1998, Schrempp and Eaton met at Eaton’s office in Auburn Hills. Schrempp Tr. Vol. F. 1237:2-7. The meeting was short and polite, and Schrempp discussed with Eaton his thoughts about the likelihood of a consolidation in the world-wide automotive industry. Joint Pretrial Order, Ex. 1 at ¶ 7. Schrempp suggested that it might be beneficial if Daimler and Chrysler were to consider the possibility of a business combination. Id. At trial, Schrempp testified that he was personally against “unfriendly action” toward a company in terms of “attacking a company.” Schrempp Tr. Vol. F. 1236:8-10. During the meeting, Eaton told Schrempp that Chrysler was also doing studies and watching the world-wide situation. Schrempp Tr. Vol. F. 1237:22-23. Eaton indicated that he needed some time to consider the idea and told Schrempp he would get back to him. Schrempp Tr. Vol. F. 1237:2-25. Eaton called Schrempp at the end of January of 1998 to further their discussions. Schrempp and Eaton met again on February 12, 1998, in Geneva. Gary Valade, then CFO of Chrysler and Cordes who was 'responsible for Corporate planning and M & A at Daimler also attended the meeting. Schrempp Tr. Vol. F. 1238:10-14, Valade Tr. Vol. A. 176:19-177:1 (deposition excerpt); PX 277 at SC0000650. Va-lade’s notes indicate that Schrempp said that “We only want to consider a true merger, one management, one team, one Board” and “One board — One Management is the key.” PX 980 at DCX243217-243218; Schrempp Tr. Vol. K. 2129:10-25. According to Valade, the parties did not use the term “merger of equals,” but the parties contemplated a significant role for both management teams in any combined entity. Valade Tr. Vol. A. 177:10-22. (deposition excerpt). Valade also testified that, in addition to “a significant or an appropriate role for [Chrysler’s] management in the new company,” Eaton was also interested in a premium for Chrysler shareholders. Id. at 177:10-13. The role of management was discussed at subsequent meetings, and eventually the term “merger of equals” was used to describe the transaction. See, e.g., PX 987 at 3; Valade Tr. Vol. L. 2557:1-2559:2; Schrempp Tr. Vol. K. 2186:3-2187:6. The parties’ negotiations also included debate concerning the corporate form, i.e. whether the new company should be a German AG, a U.S. corporation or a third alternative. See, e.g., Schrempp Tr. Vol. K. 2138:24-2139:7, Vol. G. 1452:16-1453:2; Eaton Tr. Vol. D. 771:11-772:24; Wilson Tr. Vol. H. 1711:19-1712:3; Valade Tr. Vol. K. 2371:1-7. In addition, the parties discussed the exchange ratio for shareholders, and the compensation and stock options for Chrysler’s management. See, e.g., Valade Tr. Vol. L. 2386:16-2397:16; PX 998 at DCX 243250-243251; Schrempp Tr. Vol. F. 1243:23-1244:22; 1246:19-1248:10, 1251:4-11; Cordes Dep. 142:4-143:22, 156:16-24; Eaton Dep. 69:3-70:21. From January 1998 until May 7, 1998, when the BCA was signed, Chrysler and Daimler-Benz conducted extensive arm’s length negotiations. Chrysler and Daimler-Benz were each assisted by their own independent lawyers, investment bankers and accountants. Eaton Tr. Vol. D. 771:19-772:1, Schrempp Vol. F. 1240:17-19, 1243:15-21, Vol. G. 1525:19-22, Wilson Tr. Vol. H. 1711:5-14, Lanigan Tr. Vol. 1.2003:11-22, Valade Tr. .Vol. K. 2371:1-7. Gentz was not a participant in the Merger negotiations with Chrysler, Schrempp Tr. Vol. G. 1460:15-17, Gentz .Tr. Vol. K. 2299:6-15 (deposition excerpt), and was not made aware of the negotiations until late April 1998. Cordes Dep. 172:23-173:6. Both Chrysler and Daimler-Benz believed each was negotiating from a position of financial strength, and each made it a point to express this view in public interviews and meetings. Schrempp Tr. Vol. H. 1576:14-1577:7; Eaton Tr. Vol. D. 729:20-730:15; PX 157 at DCX 0157860, PX 177 at DCX 0001740, PX 316 at DCX 0036132-33. Schrempp and Eaton also believed, as York had independently concluded on behalf of Tracinda, that there was going to be a consolidation in the automotive industry leaving the strongest companies with the best chances for survival. Eaton Tr. Vol. D. 727:23-723:3; Schrempp Tr. Vol. H. 1573:6-16; Eaton Dep. 14:11-21. V. The Chrysler Board Approves The Merger As the merger negotiations between Chrysler and Daimler-Benz progressed, the Chrysler Board was regularly kept apprised. DX 20 at 47-49. Like Schrempp, Eaton and York, the Chrysler Board and other executives at Chrysler also believed that the automotive industry was moving toward a consolidation, Stallk-amp Tr. Vol. 1.1987:13-15, 2001:1-10, 2075:20-2076:7, Wilson Dep. 13:16-14:21. Indeed, this commonly shared view eventually became one of the reasons Chrysler’s directors recommended the transaction to .Chrysler’s shareholders. DX 20 at 50.- In addition to this factor, the Chrysler Board also considered other aspects of the Merger in making its decision, including but not limited to, the “merger of equals” structure and the value to their shareholders. Id. The Chrysler Board was advised by its outside attorneys, and was informed that as a result of the contemplated transaction “no one person or group of persons would control the combined company or be in a position by itself to block the sale of the combined company.” DX 549 at T5846. With respect to the value the Chrysler shareholders were to receive, the Chrysler Board received a fairness opinion by Credit Suisse First Boston (“CSFB”). CSFB analyzed the Merger as a strategic business combination not involving a sale or change in control and opined that the Merger was fair to Chrysler stockholders from a financial point of view. In making this determination, CSFB compared the Merger to sixteen announced or completed transactions which it viewed as comparable. PX 146 at T5845-5846, DX 20 at 57. For each precedent “merger of equals” transaction, CSFB listed one company as the “acquiror” and one company as the “target.” DX 140 at DCX 26457. CSFB also noted that the distribution of seats on the combined company’s boards was not always equal between the acquiror and the target. Id. On May 6, 1998, the Chrysler Board of Directors unanimously approved the Merger and recommended that the Chrysler stockholders do the same. DX 550. Also on May 6, the Chrysler Board approved amending the employment agreements of Eaton, Valade and Stallkamp to add two events giving rise to “good reason” for those executives to terminate their employment. These additions were a breach or other failure of Daimler-Chrysler, Daimler-Benz, or Chrysler to perform any of the covenants or agreements set out in Article IV or VIII of the BCA or the May 7, 1998 letter' agreement between Chrysler and Daimler-Benz with respect to corporate governance. PX 148 at T005857-58; PX960. Following the Chrysler Board’s approval, Daimler-Benz, Chrysler and Daimler-Chrysler signed the BCA which memorialized their agreements. DX 20 at 49. The BCA, dated May 7, 1998, was signed late in the evening of May 6, 1998, and filed with the SEC on May 8, 1998. Joint Pretrial Order, Ex. 1 at ¶ 10. The BCA was later amended and restated as of July 31, 1998, and included in the Proxy/Prospectus filed with the SEC on August 6, 1998. Id.; DX 20 at 50, T 153. In a televised trans-Atlantic press conference originating in London, Chrysler and Daimler-Benz formally announced the Merger on May 7, 1998. Joint Pretrial Order, Ex. 1 at ¶ 11. During that press conference, Eaton publicly announced that he would retire before Schrempp. DXs 276, 280, 324. Also on May 7, 1998, Tra-cinda issued a press release announcing its support for the Merger. The Press Release said nothing about a “merger of equals” and it did not mention corporate governance or structure of the merged company. DX 47. VI. Shareholder Approval Is Sought: The Proxy/Prospectus Following the Merger announcement, the Proxy/Prospectus was prepared and approved by Chrysler’s directors. The Proxy/Prospectus was filed with the SEC on August 6, 1998, and mailed to Chrysler’s shareholders with a cover letter from Eaton to seek their approval for the transactions contemplated by the BCA. DX 20; Joint Pretrial Order, Ex. 1 at ¶ 13. The Proxy/Prospectus was also furnished to Daimler-Benz shareholders in the United States. DX 20 at 2 (T 000005), 8 (000017). The Proxy/Prospectus included four annexes: (1) the BCA, (2) the Opinion of CSFB, (3) an English translation of the opinion of Goldman, Sachs & Co. oHG, and (4) an English translation of the Articles of Association (Satzung) of DaimlerChrysler AG. Joint Pretrial Order, Ex. 1 at ¶ 13, DX 20. In bold face type, the Proxy/Prospectus contained a clause disclaiming reliance on representations not contained in the Proxy/Prospectus Statement. DX 20 at 5 (bold type in original). The Proxy/Prospectus described in detail the terms of the proposed transaction. It disclosed that upon consummation of the transaction, “Chrysler will become a wholly owned subsidiary of DaimlerChrysler AG and Daimler-Benz will be merged with and into DaimlerChrysler AG, with Daim-lerChrysler AG remaining as the surviving entity.” DX 20 at 11. The Proxy/Prospectus explained that DaimlerChrysler would have two “operational headquarters” one located in Auburn Hills, Michigan, and one in Stuttgart, Germany, and that the official language of DaimlerChrysler. AG would be English. DX 20 at A-17, Schrempp Vol. F 1266:25-1267:9, The Proxy/Prospectus also disclosed that the merged entity would be formed under German law and governed by the laws of Germany. DX 20 at T 10, 139-151. To highlight the differences between a German AG and a United States corporation, the Proxy/Prospectus contained twelve pages detailing the differences between shareholder rights under Delaware law, which governed Chrysler, and shareholder' rights under German law governing the new company. Id. at 130-141 (T139-150). The Proxy/Prospectus also disclosed that the parties considered three options for the place of incorporation- of the merged entity, Germany, the United States, and Holland, but that Germany was eventually selected .because of its tax'advantages. As for corporate governance, the Proxy/Prospectus reiterated the terms of the BCA, noting that the compositions for the Board were initial compositions which were to be recommended by-Daimler-Benz and Chrysler and subject to the powers and rights of the DaimlerChrysler Shareholders, Supervisory Board and Management Board. DX 20 at A-16. Specifically, the Proxy/Prospectus provided that Chrysler and Daimler-Benz would recommend that: ' ' . . , . (1) for at least two years following consummation of the Merger, the current chairman of the Daimler-Benz Supervisory Board would continue as Chairman of the DaimlerChrysler Supervisory Board; (2) upon consummation of the Merger, the DaimlerChrysler Supervisory Board would consist of twenty members with five shareholder representatives recommended by Daimler-Benz and five recommended by Chrysler along with ten labor representatives; • (3)upon consummation of the Merger, the “DaimlerChrysler Management Board shall initially consist of 18 members. In general, 50 percent . of such members would be designated by Chrysler and 50 percent by Daimler-Benz, and there will be two additional members responsible for Daimler-Benz’ non-automotive businesses.” DX 20 at 16-17. In addition, the Proxy/Prospectus and the BCA disclosed the formation of the Integration Committee, which later became known as the Shareholder Committee. DX 20 at A-17, Schrempp Tr. 1402:8-18, Wilson Tr. 1700:8-11, 1700:16-19. The Integration Committee was described as having a “consultative function” and would consist of the Co-Chairmen, and 12 or more members (including the co-chairmen), “50% of which shall be designated by Chrysler and 50% of which shall be designated by Daimler-Benz.” DX 20 at A-17. The Proxy/Prospectus also reiterated Eaton’s previous public announcement that he intended to retire from his position as Co-CEO and Co-Chairman of DaimlerChrys-ler after three years. In a standalone paragraph under the heading “Governance of JDaimlerChrysler AG Following the Chrysler Merger,” the Proxy/Prospectus disclosed that the BCA “contains no provision th,at would bar governance changes after the [DaimlerChrysler] Transactions have been consummated.” DX 20 at 16-17. With respect to the term “merger of equals,” the Proxy/Prospectus uses the term at least 13 times, ■ but it is not expressly defined. The term “merger of equals” is first used as a- broad description of the characteristics of the combination of the various constituencies of Daimler-Benz and Chrysler. This use of the term “merger of equals” is exemplified in Eaton’s cover letter, which refers to “two companies of equal financial strength under joint leadership of both management groups with its common equity about evenly split between the two shareholder groups.” DX 20 at T 1. The term “merger of equals” is next used to refer to the specific governance structure for Daimler-Chrysler following the Merger. When used in this manner, the term “merger of equals” refers to that which is provided for in the BCA. Id. at 16, 51. This usage of the term appears for the first time under the caption “Governance of DaimlerChrys-ler AG Following The Chrysler Merger.” As used here, the Proxy/Prospectus states that the governance structure “reflect[s] that the Transactions contemplate a ‘merger of equals.’ ” Id. at 16; see also id. at 93. The next sentence elaborates on the referenced- “merger of equals” by reciting almost verbatim the provisions of the BCA. Id. at 16-17; see also id. at 93-94. This description is followed by the cautionary language that the BCA does not bar governance changes after the Transactions. Id. at 17. The term “merger of equals” - is also used in the context of the CSFB fairness opinion. In this regard, the term is used not only to refer to the Transactions contemplated by the BCA, but also to refer to “a strategic business combination not involving a sale of control” which includes precedent “merger of equals” transactions some of which involved equal representation from the constituent companies in the combined company’s post-merger governance, and some .of which did not. Id. at 57. After reviewing the draft Proxy/Prospectus, the SEC sought clarification of the meaning of the term “merger of equals.” PX 227 at DCX 76402. In response, outside counsel for Chrysler and Daimler-Benz referred the SEC to the second paragraph in Eaton’s cover letter to the Chrysler shareholders. PX 243 at T2454. The Proxy/Prospectus also disclosed numerous risks related to the Merger, including “the difficulties inherent in integrating two large enterprises with geographically dispersed operations, incorporated in different countries.” DX 20 at 52, 24. The Proxy/Prospectus pointed out that in these circumstances, “[tjhere can be no assurance that this integration, and the synergies expected from that integration, will be achieved as rapidly or to'the extent currently'anticipated.” Id. at 24. The Proxy/Prospectus and the BCA also disclosed the interests of Chrysler executives in the Transactions. These interests included the right to receive substantial sums of■ DaimlerChrysler stock upon closing worth millions of dollars and substantial cash payments. PX 277 at SC 0000671. The BCA also disclosed that “if the employment of Chrysler’s executive officers were terminated within two years after the Chrysler Merger, such persons would receive an estimated lump sum severance payment in the amount of $24,435,997 for Mr. Eaton, $5,487,445 for Mr. Stallkamp, [and] $4,601,383 for Mr. Valade ....” PX 277 at SC 0000672. At .his deposition, which he confirmed at trial, Kerkorian testified that he did not get into the specifics of the Proxy/Prospectus because he had already approved the Merger. Kerkorian Dep. 279:8-14, Kerko-rian Tr. Vol. C. 663:4-665:1. Kerkorian and York did not read much of the Proxy/Prospectus and testified that Man-dekie was responsible for reviewing the document and briefing Kerkorian. Man-dekic realized that the composition of the Management Board was an initial composition which could change, and was aware of the language on page 17 of the Proxy/Prospectus that the BCA did not bar changes to the corporate governance structure. However, Mandekic testified that he did not place significance on the provisions and did not bring them to Kerkorian’s attention. Mandekic Tr. Vol. A. 126:7-11, 171:6-25, 172:1-13, 166:18-167:13. From the time the Merger was announced until it closed in November, Aljian sent Kerkori-an at least seven memos, none of which mentioned the post-merger management of the new company. DXs 84-90. After the Proxy/Prospectus was issued to the shareholders, Eaton and Defendants engaged in a media campaign to promote the Merger that was disclosed in the BCA and the Proxy/Prospectus in an attempt to gain the support of' Chrysler’s shareholders. Press releases were issued, and Schrempp and Eaton held a series of press conferences. See, e.g., PX 159 at DCX 44763-64; PX 165; PX 156; PX 159; PX 338; Schrempp Tr. Vol. G. 1472:15-22, 1595:1-9; Eaton Tr. Vol. D. 816:24-817:17. Both Schrempp and Eaton were aware of the need to have the public understand that the Merger was a “merger of equals.” Stallkamp Tr. Vol. 1.1905:15-1906:15; PX 186 at DCX0045679; PX 218 AT DCX 0058036.- Outside consultants were also hired to assist in this effort. PX 265. At the same time, Schrempp also engaged his shareholders in publicity efforts intended to foster their support for the Merger. For example, Schrempp gave a speech to Daimler-Benz shareholders in which he stated, “one thing is for certain: our proud company, Daimler-Benz, will not become the subject of decisions of others.” PX .308 at DCX 0007501; Schrempp Tr. 1434:18-1439:11. VII. The Formation Of DaimlerChrys-ler On September 18, 1998, Chrysler held a special meeting of its shareholders to vote on the transaction. DX 20 at Tl; Joint Pretrial Order, Ex. 1 at ¶ 14. Chrysler shareholders voted overwhelmingly, by 97% of the votes cast, to approve the Merger. Id. at ¶ 15; DX 1 at ¶ 28. The Merger closed on November 12, 1998, and DaimlerChrysler global shares were traded for the first time on November 17, 1998. Joint Pretrial Order, Ex. 1 at ¶ 16. As a result of the Merger, all shareholders of Chrysler and all shareholders of Daimler-Benz became shareholders of the new company, Daimler-Chrysler. Eaton Tr. Vol. D 863:21-864:2; DX 20 at T5. Chrysler’s shareholders received approximately 42% of DaimlerChrysler’s outstanding shares and Daimler-Benz shareholders received approximately 58% of those shares. DX 20 at T 5. The Merger closed consistent with the provisions in the BCA. Tracin-da’s Aljian and Kerkorian acknowledged that the provisions of the BCA wei*e satisfied at closing. Kerkorian Dep. 226:2-12, 272:9-12; Aljian Dep. 326:5-330:5. A. The Supervisory Board In accord with German law and the provisions of the BCA and Proxy/Prospectus, DaimlerChrysler has a two tier system consisting of a Supervisory Board and a Management Board. The capital members of the Supervisory Board are elected by the shareholders. DX 20 at 132; Bux-baum Tr. Vol. H. 1619:25-1620:4. In addition to shareholder representatives, the Supervisory Board also has labor representatives. Id.; Buxbaum Tr. Vol. H. 1615:6-9. In the event of a tie between the shareholder and labor votes, the Chair of the Supervisory Board, who represents the shareholders, breaks the tie. Id.; Buxbaum Tr. Vol. H. 1694:18-1695:7. The Supervisory Board appoints and removes members of the Management Board, oversees the management of the company, and is ultimately responsible for significant corporate transactions like major asset sales and acquisitions. Buxbaum Tr. Yol. H. 1618:3-24, 1623:19-1624:8, 1615:10-1616:24. From the time the Merger was completed, through and including November 27, 2000, half of the shareholder representatives on the DaimlerChrysler Supervisory Board were those originally designated by Chrysler and half of the shareholder representatives were those originally designated by Daimler-Benz. Schrempp Tr. Yol. F 1215:17-22; Wilson Tr. Vol. H. 1720:9-1721:12; Valade Tr. Vol. L 2459:6-10; PX 968 at ¶ 8, 11. The Chrysler designees were five former outside directors of Chrysler: (1) Robert E. Allen, former Chairman/CEO of AT & T, (2) Robert J. Lanigan, former Chairman/CEO of Owens-Illinois, Inc., (3) Lynton R. Wilson, Chairman of BCE, Inc., (4) Peter A. Magowan, Chairman of Safeway, Inc. and President/Managing General Partner of the San Francisco Giants, and (5) G. Richard Thoman, COO of Xerox Corporation. DX 141. B. The Board of Management In contrast to the Supervisory Board, the Management Board manages the daily operations of the company. As stated in the BCA and the Proxy/Prospectus, the DaimlerChrysler Management Board initially consisted of 18 members, ten of whom were designated by Daimler-Benz, including two who were responsible for Daimler-Benz’s non-automotive business, and eight of whom were designated by Chrysler. There were no “non-voting” members of the Management Board. Schrempp Tr. Vol. F. 5-13; Valade Tr. Vol. L. 2406:14-17. The Management Board did not take formal votes, but acted by consensus and then reported the results of their discussions and their suggestions to the Supervisory Board. Holden Tr. Vol. C. 576:23-577:5, 590:20-23; Valade Tr. Vol. L. 2406:5-13. The Management Board functions as a board of equals with collective responsibility for the operations.of the company. The operation responsibilities of Management Board members, as executives, were kept separate from the operations of the entire company. Stallkamp Vol. I 1852:15-23. In this way, Management Board members would report to other individuals in connection with their respective operational responsibilities. For example, Holden, in his role as Executive Vice President for Chrysler Sales and Marketing reported to Stallkamp, the-President of DaimlerChrys-ler ■ corporation. Holden Tr. Vol. C. 577:12-578:9. Holden also had responsibility for daily operations of Mercedes-Benz passenger cars in Canada, the U.S. and Mexico. Although Holden kept Stallkamp informed about these issues, he communicated more with Jurgen Hubbert and Dieter Zetsche. The reporting structure used by Daim-lerChrysler AG was similar to the one previously utilized by Chrysler. Holden Tr. Vol. C. 579:13-580:7. . The fact that members of the Management Board reported to other individuals in their operational role did not diminish their responsibilities as Management Board members. Id. Former Chrysler executives who served on the DaimlerChrysler’s Board of Management had the opportunity to provide their input into all the operations of DaimlerChrysler, including the former Daimler-Benz divisions such as Mercedes, Smart, DASA and the Commercial Vehicle Division. Holden Tr. Vol. C. 542:9-544:2; Eaton Tr., Vol. D. 877:2-8. Former Chrysler executives were free to participate in Management Board meetings and to bring issues before the Management Board, and their views and opinions were taken seriously by the members of the Board who previously worked for Daimler-Benz. Holden Tr. Vol. C 574:16-575:25; Stallk-amp Tr. Vol. 1 1864:12-15. C. The Integration Committee/Shareholder Committee The BCA also provided that the Management Board was to establish an Integration Committee that served a consultative function. With regard to the composition of the Integration Committee, the BCA provided that fifty percent of the members of the Integration Committee were to be designated by Chrysler and fifty percent were to be designated by Daimler-Benz. DX 20 ' at A-17. Upon consummation of the Merger, the Integration Committee was established in accordance with the requirements of the BCA; however, the Integration Committee was later renamed the Shareholder Committee. The Shareholder Committee functioned by taking business items from the agenda of the Supervisory Board for review and comment. Wilson Tr. Vol. H 1700:20-1701:2. Aljian was a member of the Shareholder Committee from its inception. DX 141, Schrempp Vol. F. 1212:21-23. Between the closing of the Merger and the end of November 2000, Aljian attended at least twelve meetings of the shareholder Co