Calma v. Templeton

114 A.3d 563 (Del.Ch. 2015)

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Nature of the Case

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Facts

P challenges awards of restricted stock units (RSUs) that were granted to eight non-employee directors of Citrix. The majority of the directors' compensation consisted of these RSU Awards, which the board's compensation committee granted under the Company's 2005 Equity Incentive Plan. That Plan was approved by a majority of Citrix's disinterested stockholders in informed and uncoerced votes. P contends that the RSU Awards were, when combined with the cash payments that non-employee directors received, are 'excessive' in comparison with the compensation received by directors at certain of Citrix's 'peers.' P proffers three theories of liability: (i) breach of fiduciary duty, (ii) waste of corporate assets and (iii) unjust enrichment. P contends that Ds must establish the entire fairness of the RSU Awards as conflicted compensation decisions because the Plan does not have any 'meaningful limits' on the annual stock-based compensation that directors can receive from the Company. Ds moved to dismiss under Rule 12(b)(6) for failure to state a claim upon which relief may be granted, and under Court of Chancery Rule 23.1 for failure to make a pre-suit demand upon the board or to plead facts excusing such a demand. Ds concede that Citrix stockholders were not asked to ratify the specific RSU Awards at issue here.