Facts
Donald was employed as the CEO of DSC. His contract contained a provision that if the board of directors unreasonably interfered with his management, that he may declare his employment terminated and qualify for payments.
Procedural History
Shareholders brought a declaratory action to invalidate the compensation agreement.
Reasoning/Analysis
The Court found that Section 141(a) permits a board of directors to delegate managerial duties. The board has broad discretion in fashioning a managerial structure appropriate in moving the corporation towards the achievement of corporate goals. The agreement with Donald does not formally foreclose DSC’s directors from exercising their business judgment. Not enough has been pleaded to permit a fact finder to infer the financial consequences flowing from the agreement with Donald would be such to render the agreement a de facto abdication of directorial obligation. It is thus appropriate to dismiss the claim.
Judgment/Outcome
The court dismissed the claim of the shareholder.
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