991 A.2d 1120
SYNOPSIS: Plaintiff retirees appealed a judgment by the Court of Chancery of the State of Delaware that dismissed their claims against defendant directors for breach of their fiduciary duty, the implied covenant of good faith and fair dealing in the company's stock plan, and for unjustly enriched themselves.
-This case involved two former high-level employee/directors who had retired after long terms of service.
-Throughout their tenure they received annual grants of stock pursuant to an "Officer Rights Stock Plan."
-Under that plan, Booz Allen had a right to redeem (call) the retired officers stock at book value. -Book value was approximately $120/share.
-The Company negotiated to sell a part of its business at a price that translated to a total venture value of more than $700 per share.
-Despite prior assurance to the retired shareholders that it would not do so, the Company exercised the call prior to the sale.
-The retired shareholders then sued.
-The transaction in question closed four months after the retirees' put rights expired.
-The retirees claimed that had the transaction occurred earlier, they would have been able to participate in the $ 60 million purchase price.
-The state supreme court found, inter alia, that the directors did nothing unfair and breached no fiduciary duty by causing the company to exercise its absolute contractual right to redeem the retired stockholders' shares at a time that was most advantageous to the company's working stockholders.
-Just as the retirees failed on the merits of their breach of contract claim, they failed to prove that the directors unjustly benefited from the pre-transaction redemption, in contravention of the fundamental principles of justice or equity and good conscience. Accordingly, their claims were properly dismissed.
OUTCOME: The judgment was affirmed.
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