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Corporations Keyed to Hazen
In re Walt Disney Co. Derivative Litigation
Citation:
906 A.2d 27 (Del. 2006)Facts
In August 1995, Michael Ovitz and The Walt Disney Company entered into an employment agreement under which Ovitz would serve as president of Disney for five years. In December 1996, Ovitz was terminated without cause, resulting in a severance payout to Ovitz valued at approximately $130 million. The Disney compensation committee met twice. The minutes of the first meeting reflect that the committee approved the terms of the OEA. The parties disagree over whether the compensation committee members knew, at the time they approved the OEA, that the value of the option component of the severance package could reach the $92 million order of magnitude if they terminated Ovitz without cause after one year. The record shows that the committee members were so informed. The compensation committee members derived their information about the potential magnitude of an NFT payout from two sources. Appellants contend that the committee members breached duty of care.
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