This section contains the nature of the case and procedural background.

By 2018, Stollmeyer had grown Mindbody to over $1 billion market capitalization, 98% of his net worth was 'locked inside' Mindbody's 'extremely volatile' stock, while Stollmeyer could only sell 'tiny bits' of his stake in the public market under his 10b5-1 plan. Stollmeyer was motivated to sell in 2018. He held shares of super-voting Class B stock that would automatically convert to shares of common stock in October 2021. As of 2018, those shares enabled Stollmeyer to control 19.8% of Mindbody's fully diluted voting power, giving him the second-largest block of votes. After October 2021, those same shares would carry less than 4% of the Company's fully diluted voting power. Mindbody's largest stockholder-IVP-faced the same circumstances and was looking to exit. Stollmeyer was simultaneously serving as the CEO and CTO of Mindbody after the Board terminated the CTO in April. By late 2018, he was 'physically and emotionally exhausted' and wanted out. Together, IVP and Stollmeyer controlled over 44% of the Company's voting power. After October 2021, that would fall to 6%. The Board embarked on a sale process. The Board knew that Stollmeyer wanted to resign as CEO within two to three years, but did not know that he wanted to sell the Company sooner or that IVP wanted to sell as well. Stollmeyer did not disclose his need for liquidity to any Mindbody director at any time during the sale process. Neither Stollmeyer nor Liaw (serving in IVP's director seat) disclosed IVP's desire to exit. Jeff Chang of Qatalyst Partners introduced Stollmeyer and Vista. Stollmeyer did not have Board authorization to disclose that he was planning to step down in two or three years or that he had two people in mind to succeed him. After the September 4 meeting, Stollmeyer did not tell the Board that he had disclosed this information to Vista. The fact that Stollmeyer told Vista that he was looking for a 'good home' for Mindbody indicated that Stollmeyer had tipped off Vista that Mindbody was considering a near-term sale and that Stollmeyer would be leading the process. On September 5, 2018, Stollmeyer advised the Board that he had met with Vista, but he did not give a full report on the meeting. He did not report on his discussion with Qatalyst about a potential sale. The Board instructed Stollmeyer to keep them in the loop, not get 'too far advanced' in his conversations, and to 'get smart on the topic' of selling the Company. Stollmeyer attended Vista's CXO Summit on October 9. At the summit, he met with executives from Vista portfolio companies. Wealth creation for CXOs who took their companies private with Vista was a lucrative endeavor. Vista portfolio company executives had earned $488.6 million since 2017. Stollmeyer texted Mindbody's President, Michael Mansbach, that the Vista presentations are 'mind-blowing/inspiring.' Stollmeyer focused on Vista's 2016 acquisition of Marketo for $1.8 billion and subsequent sale of Marketo in 2018 for $4.75 billion. The Board was aware that Stollmeyer was attending the CXO Summit, but Stollmeyer did not have Board authorization to tell Vista that he was focused on finding a home for Mindbody. Stollmeyer never told the Board that he had done so. Stollmeyer left the CXO Summit with the impression that Vista really loved him, and he loved them. Vista felt the same, touting internally that Stollmeyer 'loved' them and that they 'built a strong relationship with [Stollmeyer].' After the CXO Summit, Vista began drafting a memorandum about Mindbody for its Investment Committee, the group tasked with deciding whether to approve or reject an acquisition. Stollmeyer conceded at trial that he did not have authorization to tell Vista in mid-October 2018 that he intended to explore a take-private for Mindbody. On October 15, 2018, Vista called Stollmeyer and expressed an interest in acquiring Mindbody. Saroya (Vista) told Stollmeyer that Vista would pay a substantial premium to Mindbody's recent trading price, which closed at $33.27 on October 15. Vista was a pro at acquiring companies, and its strategy was to move fast. Vista's goal was to 'try to get ahead of' any competitors in the Company's sales process. Vista also gamed out ways to block other bidders. Vista requested a market study. Vista retained Bain & Co. to conduct the study. A typical market study takes between two and five weeks to complete, so it was an advantage for Vista to request it before the Company launched its sale process. The study was expensive-the final price tag for the four-week analysis was $960,000-so Vista would not have contracted for it without some confidence that Mindbody would be running a sale process. On October 17, 2018, Stollmeyer sent an email to Mansbach, White, and Lytikainen with the heading 'Highly Confidential - For Your Eyes and Ears Only. Stollmeyer relayed Vista's expression of interest and that Vista 'would pay a substantial premium to recent trading range and see the stock correction an opportunity.' Stollmeyer told the email recipients that he 'plan[ned] to socialize this possibility to the Board [of] Directors individually over the next week' and further said '[p]lease do not hint or otherwise discuss with them or anyone else until I have a chance to do so and give you the green light.' Stollmeyer acknowledged that the 'conversation' with Vista was 'progressing rapidly.' Stollmeyer waited until October 23-eight days after Vista's expression of interest-to begin contacting the remaining Board members. Stollmeyer omitted key elements of his discussions with Vista and key pieces of information that he had shared with his management team. Four of Mindbody's six outside directors-Cunningham, Goodman, Herman, and Smith-did not know about IVP's desire for a near-term exit. They did not know that Vista viewed the downturn in Mindbody's stock price as a buying opportunity or that Vista planned to make an offer based on a premium over the Company's trading price, which meant that a further downturn in the Company's stock price would result in a lower bid. They did not know that Stollmeyer had already interacted with Vista on multiple occasions, had spoken with a portfolio company CEO about his experience selling to Vista, and had told Vista that he planned to step down in two to three years. On October 26, 2018, the Board discussed Vista's expression of interest and whether to form a transaction committee to explore a potential acquisition. The Board created the Transaction Committee by unanimous written consent on October 30, 2018. Its members were Liaw, Goodman, and Cunningham, with Liaw as chair. The Transaction Committee's initial mandate was to interview financial advisors and make a recommendation to the Board on whether to engage one or more financial advisors to assist in reviewing strategic alternatives. That was it. On October 31, the Transaction Committee met with Mindbody's Chief Legal Officer and outside counsel who advised the Board on a regular basis. With the assistance of outside counsel, the Transaction Committee prepared 'guidelines for communications, potential conflicts and disclosure matters' (the 'Guidelines'). The Guidelines required management to obtain 'authorization for outbound communications to potential strategic parties or financial advisors, timely reporting of indications of interest or strategic inquiries to the board or Strategic Transaction Committee, and flagging any potential conflicts.' The Transaction Committee adopted the Guidelines during the October 31 meeting, and Lytikainen emailed the Guidelines to the Board on November 2. Stollmeyer received and reviewed the Guidelines. By September 2018, Mindbody's internal Q4 revenue forecast stood at $69.40 million, down from May's $72 million forecast. On November 2, Mindbody's head of financial planning and analysis ('FP&A'), Craig Heinle, advised that his best estimate had risen to $67.8-$68.2 million. Stollmeyer suggested guiding to $67-69 million. That evening, however, Stollmeyer and White presented a revised forecast of $68.1 million and a revised proposed guidance range of $66-68 million, for which 'the midpoint would give us $1.1M in cushion.' The Audit Committee recommended guidance of $65-67 million. Stollmeyer led the November 6 earnings call during which Mindbody announced its Q3 revenue miss and issued Q4 guidance of $65-67 million. Friedman recalled Stollmeyer sounding 'depressed' and listened to the call 'in shock.' Mindbody stock fell 20%-from a November 6 close of $32.63 per share to a November 7 close of $26.18 per share. The stock fell so far that Stollmeyer suggested to Liaw that Mindbody buy back shares. Stollmeyer and Liaw knew that lowered guidance would make a sale more attractive. Vista equated a lower stock price with a lower deal price, leading to a greater profit in a future exit. Vista had recognized huge gains in software companies by purchasing them when they experienced stock price 'dislocation,' then selling on the 'rebound.' Chang said in mid-November, writing internally that 'Rick's bogey is $2bn,' which equates to $40 per share. Evidence showed that Stollmeyer wanted a deal price of at least $40 per share. The parties are accused of bantering that specific number around with terms such as 40 minutes or a 4-handle by year-end. Stollmeyer ignored the Guidelines and informed Vista that Mindbody would be running a sales process. Stollmeyer tipped Vista to the sales process on November 10. On November 14, 2018, the Transaction Committee convened to decide on hiring an investment banker. They engaged with Qatalyst. Mindbody identified fourteen potential buyers, including both financial sponsors and strategic acquirers. Vista was not supposed to know that Mindbody had started a sale process until November 30 at the earliest. But Vista already knew and was ready to sprint. Vista had provided its expression of interest on October 15. Stollmeyer had tipped Vista about the process on November 10. There is even evidence that Vista gained additional insight into the schedule, because on November 27, Stahl texted a colleague that 'Monti and I are going to be sprinting at Mindbody starting next week.' Vista received Bain's final market study on December 13, 2018, two days before other financial sponsors gained access to Mindbody's data room. On December 14, Vista's Investment Committee authorized a formal bid for Mindbody. Seven parties gained access to Mindbody's data room. The data room opened on December 15. Vista's outlook on Mindbody's value initially soured after gaining access to the data room, because 'there was less near-term growth than what we had previously anticipated.' Vista became more excited after meeting with Mindbody's sales team. Stahl texted Saroya that 'the sale strategy was terrible and they have started fixing a lot of things.' Stahl believed that Vista could achieve significant long-term gains after buying Mindbody. On December 18, 2018, three days after the data room opened, Vista submitted an offer to acquire the Company for $35 per share. Vista conditioned its offer on Stollmeyer and IVP entering into a voting and support agreement. The remaining potential bidders were much further behind in their diligence than Vista. By December 20, only Vista and one other bidder, H&F, remained. The Board authorized Qatalyst to make a counteroffer of $40 per share. Qatalyst had recommended that figure, which matched both the top of Vista's range and the number that Stollmeyer had said he wanted. On December 20, Vista bumped to $36.50 per share. H&F needed two more weeks and told Qatalyst that they had 'no path to $40.' The full Board convened to discuss Vista's $36.50 per share bid on December 21. The deal price of $36.50 per share represented a premium of approximately 68% over the closing price of Mindbody's Class A common stock on December 21. Qatalyst said it could render a fairness opinion for the $36.50 per share offer. On December 21, the Board directed management to accept the bid and negotiate a merger agreement. The Merger was publicly announced on December 24, 2018. Vista's Mike McMullan described how Vista had secured the deal. He bragged that Vista was 'able to conduct all of our outside-in work before the process launched,' which enabled Vista 'to move swiftly in the process to provide the MINDBODY Board with a highly certain offer within 3 days of receiving data room access.' Section 6.3(b) of the Merger Agreement gave Vista the right to 'a reasonable opportunity to review and comment' on the Proxy Materials before they were filed. The Merger Agreement mandated that Mindbody 'may not file the Proxy Statement or any Other Required Company Filing with the SEC without first providing [Vista] and its counsel a reasonable opportunity to review and comment thereon.' Section 6.3(d) obligated Vista to notify Mindbody if it became aware of any facts that, if not disclosed, would render the Proxy Materials materially misleading or incomplete. The preliminary proxy omitted any references to Stollmeyer's meeting with Vista in August, Stollmeyer's attendance at the CXO Summit in October, or Vista's expression of interest on October 15. Mindbody filed the preliminary proxy on January 9, 2019. Stahl (Vista) texted Saroya (Vista) on January 10 to remind him to stick to their story, which required saying that 'Jeff [Chang] called you on 11/30, inviting us into the process.' On January 11, Luxor filed a Schedule 13D stating that the proposed Merger Agreement 'significantly undervalues' Mindbody. The definitive proxy omitted any reference to Stollmeyer's meeting with Vista in August, Stollmeyer's attendance at the CXO Summit in October, or Vista's expression of interest on October 16. Stollmeyer reviewed and signed the definitive proxy as CEO. On January 23, 2019, Mindbody filed the definitive proxy with the SEC. On January 4, 2019, Mindbody determined preliminarily that its Q4 revenue had come in around $68.3 million. This figure reflected 37% growth year over year and a 'massive beat against the Street's $66 million consensus midpoint.' Before the Merger closed, Mindbody stockholders filed federal securities class actions in California and Delaware. Luxor filed an enforcement action in the Court of Chancery under 8 Del. C. § 220 to obtain books and records concerning the Merger. Mindbody issued supplemental disclosures (the 'Supplemental Disclosures'). Vista had the opportunity to review the Supplemental Disclosures before filing. The stockholders approved the Merger during a special meeting on February 14, 2019. The Merger closed the next day. The terms of Stollmeyer's post-deal employment resembled his pre-deal employment. Stollmeyer took the same salary and bonus in 2019. He received a stock grant equal to 1.7% of the post-transaction equity, assuming full vesting and no forfeiture. Eventually, Luxor sought leave to amend its complaint. It added aiding and abetting claims against IVP and Vista. Liaw, IVP, and Vista moved for dismissal. Stollmeyer moved for summary judgment. The court denied all three motions. Liaw and IVP agreed to a settlement, which the court approved. That left only Stollmeyer and Vista as defendants. The court found that Stollmeyer breached his fiduciary duty of loyalty under Revlon. The trial court held that Mindbody's proxy disclosure deficiencies defeated Corwin cleansing because the stockholder vote was not fully informed. The court found that Vista aided and abetted Stollmeyer's breach of his duty of disclosure by 'failing to correct the proxy materials to include a full and fair description of its own interactions with Stollmeyer.' The trial court relied on Vista's contractual obligation to review the Proxy Materials and notify Mindbody if there were any material omissions. The trial court found that Vista personnel reviewed the Proxy Materials, knew about Vista's interactions that were omitted and the significance of those omissions, and failed to speak up. Ds appealed.

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