In Re Tyson Foods, Inc. Consolidated Shareholder Litigation

2007 WL 2351071 (Del.Ch. 2007)

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Nature of the Case

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Facts

See IN RE TYSON FOODS, INC. CONSOLIDATED SHAREHOLDER LITIGATION 919 A.2d 563 (Del.Ch. 2007). Ds maintain that the challenged stock options were, in fact, “non-qualified stock options” under Tyson’s Stock Incentive Plan and move for judgment on the pleadings as to Count III. Under the spring-loaded option prima face case, a plaintiff must allege that options were issued according to a shareholder-approved employee compensation plan. Second, a plaintiff must allege that the directors that approved spring-loaded (or bullet-dodging) options (a) possessed material non-public information soon to be released that would impact the company’s share price, and (b) issued those options with the intent to circumvent otherwise valid shareholder-approved restrictions upon the exercise price of the options.