Sanders v. Wang

In Sanders v. Wang (1999 WL 1044880 [Del Ch Ct, Nov. 8, 1999, No. 16640]), shareholders filed a derivative suit asserting that the directors, sitting on a compensation committee, granted stock options to a majority of board members in excess of the actual number of options authorized by the employee stock option plan. In determining that the alleged facts raised doubt as to the board's exercise of valid business judgment under Aronson, the chancery court stated that a board's knowing and intentional decision to exceed the shareholders' grant of authority raised doubt regarding whether the board's decision in that case was a valid exercise of business judgment and was, therefore, sufficient to excuse a failure to make a demand. (Id.)