Opinion ID: 2103794
Heading Depth: 1
Heading Rank: 3

Heading: The stock options.

Text: These fall into three groups. First, the options to Weingart, Levy and Robinson. These three were the operating executives of Amtote. So important was the retention of their services that the sellers of the Amtote stock required that the stock be deposited in a voting trust and that these three men should be three of the five voting trustees. All entered into employment agreements with Universal, and the option contract itself required the optionee to remain in its employ for eighteen months, and contained a covenant forbidding the optionee to engage in any competitive business for ten years. We see no basis for assailing the validity of these options. Second, the Rumbaugh option, granted in connection with the contract to employ him as president; and third, the options to six key employees. All these options were granted by a disinterested board of directors. All of them were granted with conditions and under circumstances which were such that the corporation may reasonably expect to receive the contemplated benefit from the grant. Beard v. Elster, Del., 160 A.2d 731, 737. There is little doubt that the instant case is ruled by our decision in the Beard case. Our conclusion is that the plaintiff below, and the objector here, would be confronted with many obstacles, legal and factual, in the trial of the issues. These obstacles are clearly serious, and their existence is sufficient to justify a settlement. Moreover, we think the amount was sufficiently substantial to be within a range that would justify the Vice Chancellor in exercising his discretion in approving the settlement. The argument based on the supposed gross disparity between the amount demanded  about $78,000,000  and the amount to be paid, depends upon the fallacious contention that the plaintiff proved an open-and-shut case justifying such a recovery. As we have shown, this is simply not the fact. We think that the Vice Chancellor rightly exercised his discretion in approving the settlement, and his judgment is affirmed.