Case Name: Rose Udofp, on Behalf of Herself as a Shareholder of Babcock and Wilcox Company, and on Behalf of All Others Similarly Situated, Respondent-Appellant, v. George C. Zipf et al., Appellants-Respondents, et al., Defendants
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1977-06-14
Citations: 58 A.D.2d 533
Docket Number: 
Parties: Rose Udofp, on Behalf of Herself as a Shareholder of Babcock and Wilcox Company, and on Behalf of All Others Similarly Situated, Respondent-Appellant, v George C. Zipf et al., Appellants-Respondents, et al., Defendants.
Judges: 
Reporter: Appellate Division Reports
Volume: 58
Pages: 533–533

Head Matter:
Rose Udofp, on Behalf of Herself as a Shareholder of Babcock and Wilcox Company, and on Behalf of All Others Similarly Situated, Respondent-Appellant, v George C. Zipf et al., Appellants-Respondents, et al., Defendants.

Opinion:
— Order, Supreme Court, New York County, entered November 9, 1976, unanimously modified, on the law, to reverse that portion denying defendants-appellants' motion for summary judgment dismissing the complaint and to grant that motion to the extent of dismissing the complaint and severing the action as to them, and otherwise affirmed, without costs and without disbursements. This derivative stockholders' action rests upon a claim by a stockholder that the directors improperly reduced the exercise price of certain extant stock options which had been granted to officers and employees. Acting in accordance with and by authority of the option plan itself, the directors properly exercised responsible business judgment to reduce the exercise price to the then market price, which was lower. To have done otherwise would have rendered the plan useless. The applicable New Jersey Business Corporation Act, similar to our section 717 of the Business Corporation Law, was not violated by this change, not of the plan, but of the price, as specifically authorized. Neither favoritism to any particular person nor detriment to the corporation was demonstrated. Concur — Murphy, P. J., Lupiano, Evans, Capozzoli and Markewich, JJ.