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IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE BRIAN T. OLSON, ) ) Plaintiff, ) ) v. ) ) O. ANDREAS HALVORSEN, DAVID C. ) OTT, VIKING GLOBAL INVESTORS LP, ) VIKING GLOBAL PARTNERS LLC, ) VIKING GLOBAL PERFORMANCE LLC, ) and VIKING GLOBAL FOUNDERS LLC, ) ) Defendants. ) ____________________________________) ) VIKING GLOBAL PERFORMANCE LLC, ) DANIEL CAHILL and THOMAS ) PURCELL, ) ) Defendant-Counterclaim ) Plaintiff and Third-Party ) Plaintiffs, ) ) v. ) ) BRIAN T. OLSON, ) ) Plaintiff-Counterclaim ) Defendant and Third) Party Defendant) Counterclaimant. )

C.A. No. 1884-VCL

MEMORANDUM OPINION AND ORDER Submitted: February 17, 2009 Decided: May 13, 2009

Collins J. Seitz, Jr., Esquire, Bradley R. Aronstam, Esquire, CONNOLLY BOVE LODGE & HUTZ, LLP, Wilmington, Delaware; R. Scott Garley, Esquire, Jeffrey L. Nagel, Esquire, Mark W. Stoutenberg, Esquire, GIBBONS P.C., New York, New York, Attorneys for Brian T. Olson. Martin P. Tully, Esquire, Jon E. Abramczyk, Esquire, MORRIS NICHOLS ARSHT & TUNNELL LLP, Wilmington, Delaware; Bruce Birenboim, Esquire, Susanna Buergel, Esquire, PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP, New York, New York, Attorneys for the Defendants and Counterclaim Plaintiffs.

LAMB, Vice Chancellor.

A founder of a successful hedge fund brings this action against his two cofounders and entities created to run the fund, claiming that they failed to pay him for his equity interest in the enterprise after he was let go. At trial, the co-founders proved that there was an oral agreement reached, before any operations began, that all earnings would be paid out annually, with no deferral of compensation, and that a departing member would receive only his accrued compensation and the balance of his capital account. Following trial, the court concludes that agreement was never superceded by any other agreement relating to deferred compensation or post-termination rights. Thus, the departing founder is not entitled to any further payment. A. The Parties The plaintiff in this action is Brian T. Olson, one of the founders of Viking Global, an investment management firm and hedge fund. The defendants are the two other co-founders of Viking, O. Andreas Halvorsen and David C. Ott, and the various entities through which Viking conducted its business: Viking Global Investors LP, a Delaware limited partnership ("Investors"); Viking Global Partners LLC, a Delaware limited liability company ("Partners"); Viking Global Performance LLC, a Delaware limited liability company ("Performance"); and Viking Global Founders LLC, a Delaware limited liability company ("Founders"). 1

Performance is also a counterclaim plaintiff in this action. Daniel Cahill, Viking's president, and Thomas Purcell, a top analyst at Viking, are both members of Performance and are third-party plaintiffs, as well. Cahill and Purcell join Performance in asserting claims against Olson. B. The Facts1 Halvorsen, Olson, and Ott worked together at Tiger Management, which was, at the time, one of the world's largest hedge funds. Halvorsen joined Tiger in early 1992. By 1996, Halvorsen had risen to be director of equity investments, the number two person on the investment side of Tiger and second only to the hedge fund's founder, Julian Robertson. Halvorsen was involved in Tiger's hiring of both Ott and Olson. In early 1999, frustrated with Robertson's management, Halvorsen decided to leave Tiger to form his own hedge fund, Viking.2 Dissatisfied with his compensation, Olson also resigned from Tiger at the end of 1998, but stayed at the fund for a few months to help find his replacement. Halvorsen considered Olson a brilliant analyst and contacted him to discuss the possibility of Olson joining Viking after he finished with his responsibilities at Tiger. Halvorsen also contacted Ott, who was still at Tiger, about joining Viking.

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Additional background facts are set forth in this court's opinion at the summary judgment stage of this case. See Olson v. Halvorsen, 2008 WL 4661831 (Del. Ch. Oct. 22, 2008). 2 Halvorsen's last day at Tiger was February 17, 1999. In mid-2000, Tiger returned all its capital to its outside investors and ceased operating in its original form.

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The February 1999 Meeting: Viking's Core Principles

After a few initial conversations, Halvorsen, Olson, and Ott met at Halvorsen's home in late February 1999 for a more in-depth discussion regarding the new Viking enterprise. At this February meeting, the three founders discussed the governance, investment strategy, compensation, and logistics related to the formation of Viking. Halvorsen, Olson, and Ott agreed that Viking would be governed by an operating committee made up of the three of them and decisions would require a two of three vote, subject to a Halvorsen veto. The three founders agreed to allow Halvorsen a veto because he had the most experience among them and would contribute about $50 million to the fund, while Olson and Ott would each contribute somewhere between $2 million and $4 million. The three founders also agreed that the fund would be a long/short equity fund and each would manage a portfolio within their area of expertise. Olson would manage a telecommunications, media, and technology ("TMT") portfolio. Ott would manage a consumer portfolio, and Halvorsen would manage a financial services portfolio. In addition, initially, Halvorsen would be the Chief Investment Officer (the "CIO") and would manage a CIO portfolio not tied to a specific industry, but rather focused on the most attractive investments from the sectorbased portfolios. 3

As a function of Tiger's deferred compensation system, each of Halvorsen, Olson, and Ott forfeited large sums of money upon resigning. Wanting to avoid at Viking the perceived unfairness of the Tiger compensation system, they decided, at the February 1999 meeting, that all the profits at Viking would be paid out annually. Each year, after all other employees were paid, Halvorsen would receive 55% and Olson and Ott would each receive 22.5% of the profits.3 In the event of a sale of Viking, the three founders discussed splitting the equity proceeds 66% to Halvorsen, 20% to Olson, and 14% to Ott. Ott wanted to think about this equity split, and later agreed to the percentages. Shortly thereafter, Ott explained to the other two that these "equity" percentages were useless and ridiculous, because if they paid out all of the profits each year, there would be no equity to split. Halvorsen agreed with Ott's logic. The three founders later changed the equity percentages to 55% to Halvorsen and 22.5% to each of Olson and Ott, to match their profit-sharing percentages. Halvorsen, Olson, and Ott each testified that at the February meeting they all agreed that if any one of them left Viking he would only be entitled to his earned compensation and his capital account (the "cap and comp" agreement). Halvorsen testified that the three founders reached this
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Months later, the three founders divided their annual compensation into two separate percentages: a job percentage (also called the work percentage) and a residual percentage (also called equity, management, or non-work percentage). The job percentage represented the three founders' contributions to Viking through their investment-related activities and was essentially a proxy for their replacement cost. The residual percentage represented the three founders' compensation for all of the other services they performed for the firm.

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decision based on their shared belief that one should be compensated fully for what one contributes (not a partial amount due to deferred compensation) and that, as a quid pro quo, one should not continue to take a paycheck after one leaves the firm and stops contributing. As to logistics, the three founders decided that Halvorsen would be primarily responsible for raising capital and hiring employees, Olson would deal with the lawyers regarding formation of the necessary entities, and Ott, who was still employed at Tiger and had less time, would locate office space. Also in early 1999, although he could not remember exactly when or for what purpose, Olson created a document summarizing the terms by which Viking would be operated. Olson shared this document with Halvorsen and Ott. The terms largely track the discussions the three founders had at the February meeting, and Olson admitted that, at the time he drafted the term sheet, the three founders had agreed that each would only be entitled to his accrued compensation and capital account balance upon leaving Viking. 2. The Viking Entities Are Formed

A few months after the February meeting, the three founders, with the advice of counsel, decided to create three Delaware entities to carry on the Viking business: (1) Performance, a limited liability company, to collect Viking's performance fees of 17.5% to 20% of the annual gains of the hedge fund per year; 5

(2) Investors, a limited partnership, to pay Viking's expenses, employ Viking's staff, enter into operational contracts on Viking's behalf, and collect a management fee of 1.5% of the hedge fund's assets under management each year; and (3) Partners, a limited liability company, to serve as the general partner of Investors. The certificates of formation for these three entities were executed on April 8, 1999 and filed with the Secretary of State of Delaware the following day. 3. The Long-Form Operating Agreements For The Viking Entities

Olson directed counsel to draft operating agreements for the Viking entities. On April 8, 1999, Viking's counsel sent Olson a first draft of the operating agreement for Partners. Counsel later provided drafts of the operating agreements for Performance and Investors. These drafts reflected the oral agreements reached by the three founders at the February meeting and the core principles listed in Olson's term sheet.4 Each of these drafts were over 10 pages in length and came to be known during the course of this litigation as the long-form agreements. 4. The Short-Form Operating Agreements For The Viking Entities

In April 1999, the long-form agreements were not yet in final form and the Viking entities needed operating agreements to facilitate the entering of a real

Section 3.03 describes an "Executive Committee" (later called the "Operating Committee") with the power to act on a two of three vote, subject to Halvorsen's veto. Section 3.01(e) vests the Executive Committee with the power to require members to retire from Viking. Sections 5.03, 5.05, and 5.06 provide that a departing member is only entitled to accrued compensation and his capital account balance.

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estate lease and the opening of bank accounts. Thus, Olson asked Viking's counsel to draft short-form operating agreements for Investors and Partners. After a few changes requested by Olson, all three founders signed short-form agreements for Investors and Partners on May 10, 1999.5 On September 8, 1999, the three founders also executed a short-form agreement for Performance. The short-form agreements are skeletal (each only three or four pages in length) and do not contain all of the terms agreed upon by the founders at the February meeting. The shortform agreements do, however, appear to be drafted in line with the core principles. Each short-form agreement provides that a member will be entitled to receive his accrued compensation and capital account balance upon departure. 5. The Long-Form Drafting Process Continues

After the short-form agreements were executed, Olson continued to work with the attorneys to refine the long-form agreements for the Viking entities. Between April 1999 and the launch of Viking on October 1, 1999, over a dozen drafts of the long-form agreements were produced. During this period, Olson maintained responsibility for interacting with Viking's outside counsel.6 By late 2000, the drafting process had come to a halt even though none of the three
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Throughout this litigation, Olson insisted on referring to the short-form agreements as the "boilerplate" agreements even though counsel specifically drafted the agreements to be in line with the core principles of Viking and modified the short-form agreements at Olson's request. 6 Following Viking's launch, Brian Smith (Viking's Chief Financial Officer) and Carl Casler (then Viking's Treasurer) assumed some of the responsibility for working with the lawyers on the long-form drafts.

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founders had signed any of the draft long-form agreements for Investors or Partners. As a result of a potential dispute with an employee, the three founding members agreed to supersede the short-form agreement for Performance by signing the Limited Liability Company Agreement of Viking Global Performance LLC dated September 28, 1999.7 That agreement was amended on January 11, 2002 (the "Performance Long-Form Agreement"). The Performance Long-Form Agreement provided that the Operating Committee could remove members with or without cause. Also, the Performance Long-Form Agreement reflected the three founders' original oral agreement at the February meeting that a member would receive only his accrued compensation and his capital account balance upon departure. In light of the executed Performance Long-Form Agreement, Olson admits that he is not entitled to any interest in Performance beyond his accrued compensation and capital account balance. 6. The Founders Earnout And The Founders Entity

In mid-1999, Olson raised a new compensation concept with Halvorsen and Ott. Olson proposed that upon departure from Viking a founding member (or his

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Olson testified that he is confident that the original long-form agreement for Performance was not signed until 2001, despite it being dated in 1999. While looking for guidance in how to properly terminate an employee at the end of 2000, the founders realized that the long-form agreement for Performance was unsigned. The founders then signed the long-form agreement for Performance to assure that they did not find themselves in an uncertain position again. It is unclear why the three founders did not sign the other long-form operating agreements at that time.

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estate) would be paid an earnout, through a new entity to be called Founders. Halvorsen and Ott considered the idea interesting, but Olson did not detail how the earnout would work at their first meeting, and the three founders left the issue open for discussion. On July 14, 1999, Olson sent a memorandum to outside counsel stating that Viking would "probably" create another entity called Founders which would "embody some equity-like features relating to [the three founders'] ownership of the management company."8 Olson testified that, a month or two later, the three founders held a second meeting to discuss the earnout concept. Also, Olson testified that he distributed a term sheet to facilitate discussion about the earnout. Halvorsen and Ott, however, both testified that they had not seen this term sheet before the litigation.9 Olson instructed the attorneys to begin work on an operating agreement for Founders in line with the terms he set forth in the term sheet. The document the

JX 190. The purported term sheet appears to be instructions to a lawyer, not the basis for a discussion with partners. For example, the document contains a note in Olson's handwriting that says "To Richard Metsch," one of Vikings' outside lawyers. No copies of this document with Halvorsen's or Ott's handwriting were found in discovery. Moreover, the document does not actually contain the phrase "term sheet" anywhere. The document contains orders such as "include a `frustration of purpose' paragraph" (JX 36), suggesting that it was prepared as instructions for an attorney. Lastly, the document refers to Halvorsen and Ott in the third (not the second) person and Olson in the first person, again suggesting the document was created to go from Olson to the attorneys and not to Olson's co-founders.
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attorneys prepared provided that, upon retirement or death, each founder would receive a declining percentage of his interest in Viking for six years following his departure. Olson and the outside attorneys went through nine drafts of the Founders operating agreement, dating as late as December 2000. The drafting of the Founders operating agreement took place over about a year and a half, and at no point during that process did Olson discuss with his partners the changes he was making to what he now claims was their "agreement." A number of these changes differed significantly from the term sheet Olson claims he showed Halvorsen and Ott. For example, the term sheet stated that Founders' profit pool percentage in Performance and Investors would remain constant. Later drafts of the Founders agreement departed from this concept, stated that Founders' interest in those entities was residual and variable, and stated that if changes were made in Founders' share of Performance and Investors a retired member's profit pool percentage must be adjusted to maintain, as nearly as practicable, that member's economic interest.10

This change was significant because at trial the defendants showed that over time Viking's analysts would demand more and more compensation. These demands would decrease the draw of the three founders. If the three founders were required to keep a retiree's draw constant, in the face of increased payouts to the employees, any additional money needed to fund the earnout would have to come from the two founders who were still at Viking doing the work. This possibility was starkly inconsistent with the original understanding that Viking profits were for the people still working at Viking.

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Olson also added a requirement to the draft Founders operating agreement that Halvorsen keep over 89% of his capital in the fund or forfeit his veto. This concept was entirely absent from the term sheet. On April 23, 2001, CFO Brian Smith sent Halvorsen the draft Founders agreement and noted that Halvorsen had a question about the clause requiring him to maintain over 89% of his capital in the fund or lose his veto right. Halvorsen testified that he had never agreed to place any contingencies on his veto rights, was shocked to see such a clause in the draft Founders agreement, and had asked Smith about the clause. Both changes discussed above substantially track Olson's handwritten notes to the outside attorneys and were admittedly never discussed with Halvorsen or Ott. From 1999 until 2001, Halvorsen and Ott received various drafts of the Founders agreement, but never discussed them or the earnout concept in general with Olson after the two brief meetings in the summer of 1999. None of the three founders ever signed a Founders operating agreement and both Halvorsen and Ott convincingly testified at trial that at no time did they agree to or make promises to Olson regarding the Founders earnout. At Olson's direction, outside counsel filed a certificate of formation for Founders on September 28, 1999. Thereafter, also at Olson's direction, Founders was made a member of Performance. Founders was never made a partner of

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Investors, as contemplated in the draft Founders operating agreement, and Olson did not voice concern over this fact while at Viking.11 From 2000 to 2005, at Olson's direction, Smith ran certain amounts of the three founders' residual income through the Founders entity. These amounts ranged from approximately $3.9 million in 2004 to $84.9 million in 2001 and totaled almost $200 million. At trial, Smith stated that he ran money through Founders for bookkeeping purposes because Olson directed him to do so.12 Smith described Founders as mere vestige. 7. Olson Threatens To Leave Viking in 2001, Renegotiates Percentages, But Founders Is Not Mentioned

Olson's TMT portfolio performed extremely well in the early days of Viking, and by the end 2001 Olson was dissatisfied with his compensation.13 Olson demanded that no one at Viking be paid more than he.14 When Halvorsen refused to agree to Olson's demand, Olson announced that he was leaving Viking. Cahill, the head trader at Viking who later became Viking's president, convinced Olson and Halvorsen to address their differences and negotiate a mutually acceptable solution, which they did over a period of two or three weeks.

Olson did, however, ask Smith to make Founders a partner of Investors in June of 2000. Olson did not request resolutions be drawn to this effect, did not request a vote of the Operating Committee (as required), or follow up on this request. 12 Smith stated that there was no tax reason to run money through Founders as opposed to one of the other Viking entities. 13 Olson was paid over $28 million in 2000 and over $42 million in 2001. 14 Halvorsen was paid over $55 million in 2000 and over $78 million in 2001.

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It was unclear from the record whether Olson actually left the Viking offices during the period of dispute. As part of the negotiations, Halvorsen, Olson, and Ott agreed to reallocate their compensation percentages so that Halvorsen's share decreased and Olson's share increased.15 Olson admitted that the three founders did not discuss the impact of these changes in percentages on the earnout he claims already existed or on their purported entitlement to the fair value of the Founders entity. It was clear at trial that Halvorsen and Ott thought that by readjusting these percentages only annual compensation would be affected, not retirement benefits. Both Halvorsen and Ott testified that they agreed to increase Olson's compensation because of the value he was adding to the fund, but would have never agreed to increase his retirement

For 2002 and 2003, Halvorsen's job percentage would drop dramatically and his residual percentage (also called management or equity percentage) would drop slightly relative to the other founders. Halvorsen's job percentage went from 15.65% in 2001 to 2.99% in 2002 and 2003 and would be renegotiated in 2004. Olson's job percentage went from 6.40% in 2001 to 8.69% in 2002 and 2003 and would be renegotiated in 2004. Halvorsen's residual or equity percentage went from 19.70% in 2001 to 20.69% in 2002 and 2003, and to 19.55% in 2004 and beyond. Olson's residual or equity percentage went from 8.06% in 2001 to 14.99% in 2002 and 2003, and to 16.12% in 2004 and beyond. As between Halvorsen, Olson, and Ott, the residual or equity percentages went from 55%/22.5%/22.5% to 45.48%/32.95%/21.57% (for 2002-2003) to 42.99%/35.44%/21.57% (for 2004 and beyond), respectively. Olson's job and management percentages would be increased so that Olson and Halvorsen would be paid roughly the same amount in 2002 and 2003. After 2003, they agreed to come back to the table and re-evaluate, with Halvorsen starting the negotiations with a higher residual percentage and the job percentage being open for debate. Ott's compensation stayed basically flat. Ott's job percentage went from 6.40% to 4.81% and his residual percentage went from 8.06% to 9.81%. Ott's total take went from 14.46% to 14.62%, but his residual percentage relative to the other two founders actually went down slightly.

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benefits without, at the very least, requiring him to stay at Viking for a substantial period of time. If, as Olson argues, the three were actually readjusting future compensation and retirement payouts, Olson could have left the day after the renegotiation and walked away with a massive sum of additional money, without conveying any additional benefit to Viking. Halvorsen testified, "I'm just trying to understand how I could possibly, if it was an issue that we had a retirement plan, I would possibly agree to someone who had just walked out the door . . . [to] double his retirement benefits and he can walk out the door that minute."16 Ott testified to the same effect, stating: I would think if anyone had the thought that [the job and residual percentage renegotiations] created a long-term obligation, that we would have had further discussion and, at a minimum, at least say, `Well, you need to commit to stick around for this period of time . . .' because otherwise [Olson] could have left the next day and all you have done is given [him], per his analysis, tens of millions of dollars.17 The three founders did not discuss the effect of the renegotiation on departure payouts nor did they discuss entering into an agreement with Olson obligating him to stay at Viking for any period of time. From this, it is logical to conclude that the three founders believed the "cap and comp" agreement was still in place.

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Tr. 1337. Tr. 656.

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Founders Resurfaces

Founders was largely off the radar screen from 2001 until 2004. In the summer of 2004, it reappeared. Cahill, who became Viking's president in 2003, testified that as he dug into Viking's various entities and operating agreements he uncovered the draft Founders agreement. Cahill testified at trial that he was alarmed by the earnout concept because he had been "told just the opposite on several occasions, that you only get paid if you work at Viking."18 Cahill testified that Olson told him personally on multiple occasions that the three founders' "equity" would be retired for no consideration if they left Viking.19 After reviewing the draft Founders agreement, Cahill met with Halvorsen, Olson, Ott, and Smith to inquire about the earnout concept. Cahill was informed by each of the three founders that no agreement had ever been reached regarding an earnout. At trial, Smith testified that he believed that the three founders never agreed upon

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Tr. 1233. Cahill testified that Olson told him the founders were only entitled to "cap and comp" upon departure in 1999 when Viking was attempting to lure Cahill away from Bear Stearns to become their head trader. Cahill was given a 5% "equity" interest in the firm, which, like the founders would affect his annual compensation, but not his retirement payment. Additionally, in 2003 Viking's top analysts were clamoring for additional compensation and asked Cahill to make sure that the founders' "equity" would be available for distribution when the founders left the firm, or scaled back involvement. Cahill testified that he confirmed with Olson that the "cap and comp" agreement was in place and reported back to the analysts. Purcell also testified that on numerous occasions Olson told him that the founders would take only their "cap and comp" when they left Viking.

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the proposed earnout and that the draft Founders operating agreement had never been finalized. In an effort to resolve open questions about Founders, Cahill listed Founders on the management committee agendas from July 2004 until November 2004.20 Olson received the management committee agendas and attended the majority of the management committee meetings, but never asked why Founders was on the agenda and never insisted that the Founders operating agreement had already been agreed to. Despite appearing on the management committee agenda for months, Olson testified that Founders was not discussed at the actual meetings. Smith testified that in December 2004, before departing on paternity leave, he reminded Halvorsen, Olson, and Ott that the issues surrounding Founders had not been addressed. Both Cahill and Smith came away from the discussions in the second half of 2004 believing that there had been no resolution on the draft Founders agreement or the earnout concept.21

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For example, on July 16, 2004, the management committee agenda read "Brian Smith will schedule a meeting to figure out the Founders Agreement." JX 55 at 3. Viking's management committee was a group larger than the Operating Committee that met periodically to look at various aspects of the business. Initially, the management committee consisted of Halvorsen, Olson, Ott, Cahill, and Smith. 21 Cahill testified at trial that because he had told Viking employees in 2003 that the founders would only be paid "cap and comp" if they left Viking, he would have felt obligated to correct that statement if he ever uncovered information leading him to conclude that the founders had agreed to a scheme allowing them to take their equity with them. Cahill never uncovered such information.

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Olson's Personal Financial Statements

In 2003 and 2004, Olson was asked to prepare personal financial statements setting forth his net worth. Olson listed the amount of his capital account balance as his interest in the Viking entities in both 2003 and 2004, but did not list the value of the equity (either through a fair value analysis or an earnout concept) that he now claims to have. In his signed 2004 personal financial statement, Olson represented to the U.S. Trust Company of Connecticut that the document was both correct and complete.22 10. Olson's Sabbatical

While Olson achieved remarkable returns in 2000 and 2001, the returns on his portfolio decreased substantially over the next few years. Olson communicated his disappointment in both his returns and his role at Viking at a management committee meeting at the end of 2004.23 On March 6, 2005, Olson sent an email to Halvorsen, Ott, and Cahill announcing that he had decided to step away from managing the TMT portfolio and take a six-month sabbatical. During that time, Olson stated that he would work on some personal goals that he had developed

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The 2003 personal financial statement produced in the record does not have a signature page. Olson's profit or loss as an analyst was roughly $216.7 million in 2000, $316.1 million in 2001, $41.2 million in 2002, $94.0 million in 2003, $38.7 million in 2004, and $-1.2 million in 2005. At trial, Purcell questioned whether all the profit listed should have been attributed to Olson, as opposed to other analysts.

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before starting at Viking and that he would think about how he could transition into another role at Viking when he returned. One of the different roles Olson suggested in his email was running a separately managed fund, even though he realized that opening a separate fund would present a number of challenges for Viking. Before he left, Olson told Cahill that he could not be 100% sure that he would return to Viking. Another reason for Olson's sabbatical appears to have been his dissatisfaction with the proposal, made immediately before his leave, to make Ott co-CIO with Halvorsen. Ott and Halvorsen later did become co-CIOs and the management committee changed the compensation formula for the CIO role while Olson was on sabbatical.24 Ott, Halvorsen, and Smith testified that the change was not expected to have a material effect on Halvorsen's and Ott's compensation; nevertheless, Olson was not pleased. During his sabbatical, Olson received periodic updates about the business decisions taking place at Viking, but did not regularly receive agendas or participate in management committee meetings.

The primary driver of Halvorsen's and Ott's compensation was changed from the profits of their individual portfolios to the profits of the firm as a whole.

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Alternatives For Olson Are Discussed

Viking failed to find a replacement to run Olson's TMT portfolio, shut the portfolio down, and managed those funds in the CIO portfolio. In June 2005, Halvorsen asked Cahill, with the assistance of Viking management, to study what role Olson could play should he return. Cahill analyzed the possibility of starting a second fund, as suggested in Olson's departing email, but came to the conclusion, along with other members of Viking's management, that a separate fund would not be in the best interest of Viking and its investors.25 During his attempt to find a new role for Olson, Cahill came to believe that, by and large, Viking operated more efficiently without Olson and that a number of employees resented Olson's overbearing management style. 12. Olson Is Terminated

After discussing Cahill's findings, Halvorsen and the other management committee members unanimously determined that there was no longer a place at Viking for Olson. On August 23, 2005, Halvorsen sent Olson an email to schedule a meeting to discuss observations related to Olson's future role at Viking. The three founders agreed to meet on August 29, 2005 at the Viking offices. During that meeting, Halvorsen informed Olson that he would not be permitted to return to
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Ott explained at trial that if Viking had two funds it would be forced to make decisions that would advantage one group of investors at the expense of another.

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Viking at the end of his six-month sabbatical. Also at this meeting, Olson, for the first time in years, asked about Founders. Halvorsen said they had not given Founders any thought. On October 17, 2005, the Operating Committee removed Founders as a member of Performance by written resolution. Also by written resolution of the Operating Committee, dated as of December 1, 2005, Olson was retired as a member of Performance, Investors, and Founders, effective 30 days later. Viking paid Olson his compensation for all of 2005 and the full balance of his capital accounts in each Viking entity. C. Procedural History On January 12, 2006, Olson filed suit. On February 1, 2008, Olson amended his complaint, making claims for (1) breach of contract, (2) breach of fiduciary duty, (3) civil conspiracy, (4) right to fair value and interest in the Viking entities pursuant to 6 Del. C.

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