Donnawell v. Hamburger

Dist. Ct. did not err in dismissing plaintiff-shareholder’s derivative lawsuit alleging that defendants violated corporation’s incentive plan by authorizing corporation’s CEO to receive more stock options than what he was entitled to receive under terms of said plan. Plaintiff had failed to make requisite demand on corporation to correct alleged improper award of stock options, which was required by Delaware law before plaintiff could pursue instant lawsuit. Moreover, futility doctrine did not apply, where there was no doubt either that defendants were disinterested members of corporation’s Compensation Committee that approved award of stock options, or that award was product of valid exercise of business judgment. Moreover, record showed that Compensation Committee could validly award said options to CEO.