Opinion ID: 2558869
Heading Depth: 1
Heading Rank: 3

Heading: The Lawsuit and Trial

Text: Following the awards under the 2005 Plan, Seidman filed a complaint in the General Equity Part of the Chancery Division [7] alleging, among other things, that the stock option grants and restricted stock awards made to Bancorp's directors were wrongful and improper[.] [8] Specifically, he claimed that the awards are clearly not designed to retain the services of the [director-defendants;] that the awards unduly and inappropriately reward the [director-defendants] without leaving sufficient shares and options available to attract new qualified people[;] that, [u]pon information and belief, these awards are not consistent with any study or survey[;] and that [t]hese awards constitute an unreasonably large portion of the net earnings of [Bancorp]. A non-jury trial was conducted during the spring of 2007. [9] In its broadest strokes, the dispute centered on the effects of Bancorp's decision to convert from a state-chartered mutual savings and loan association to a state-chartered stock savings and loan association under the mutual holding company structure, and the actions taken as a result thereof. At its core, Seidman's complaint was that the Bank and Bancorp should have converted fully into a stock entity without the mutual holding company structure, and that the choice to convert Bancorp as it had was designed solely to benefit its insiders, and not for a proper corporate purpose.