Court Opinion

ID: 6335357
Source: CourtListenerOpinion
Date Created: 2022-04-27 15:03:07.535564+00
Date Added: 2024-06-11T09:23:54.291792
License: Public Domain

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

ROBIN KNIGHT, derivatively on behalf       )
of Nominal Defendant UNIVERSAL             )
HEALTH SERVICES, INC.,                     )
                                           )
                  Plaintiff,               )
      v.                                   ) C.A. No. 2021-0581-SG
                                           )
ALAN B. MILLER, MARC D. MILLER,            )
STEVE G. FILTON, LAWRENCE S.               )
GIBBS, EILEEN C. McDONNELL,                )
WARREN J. NIMETZ, MARVIN G.                )
PEMBER, MATTHEW J. PETERSON,               )
MARIA SINGER, and ELLIOT J.                )
SUSSMAN,                                   )
               Defendants,       )
    and                          )
                                 )
UNIVERSAL HEALTH SERVICES, INC., )
                                 )
             Nominal Defendant.  )

                         MEMORANDUM OPINION

                       Date Submitted: January 24, 2022
                        Date Decided: April 27, 2022

Stephen E. Jenkins and Tiffany Geyer Lydon, of ASHBY & GEDDES, P.A.,
Wilmington, Delaware; OF COUNSEL: Gregory Mark Nespole, Daniel Tepper,
Correy A. Kamin, and Ryan C. Messina, of LEVI & KORSINSKY, LLP, New York,
New York, Attorneys for Plaintiff Robin Knight.

Francis G.X. Pileggi and Cheneise V. Wright, of LEWIS BRISBOIS BISGAARD &
SMITH LLP, Wilmington, Delaware; OF COUNSEL: Gary A. Orseck, Matthew M.
Madden, and Jason A. Shaffer, of KRAMER LEVIN ROBBINS RUSSELL,
Washington, D.C., Attorneys for Defendants Alan Miller, Marc Miller, Steve Filton,
Lawrence Gibbs, Eileen McDonnell, Warren Nimetz, Marvin Pember, Matthew
Peterson, Maria Singer, and Elliot Sussman, and Nominal Defendant Universal
Health Services, Inc.
GLASSCOCK, Vice Chancellor

                             1
       The oft-noted fact that corporate actions are “twice-tested” 1—first in light of

compliance with the DGCL, second for compliance with fiduciary duties—is neatly

illustrated by directors’ actions to set their own compensation. Those actions are

clearly authorized by statute, and just as clearly an act of self-dealing, subject to

entire fairness review. This case is another bloom on the hardy perennial of director

compensation litigation. The Plaintiff is a stockholder, challenging option awards

granted by certain Defendant corporate directors. The matter is before me on a

motion to dismiss.

       Here, among the Defendants are directors serving on a compensation

committee, who awarded themselves stock options based on a market price

determined as of what the Plaintiff stockholder characterizes as an obvious dip in

the market. Why this dip would have been “obvious” to the Defendant directors, but

not to the market itself, is not entirely clear in the complaint. Nonetheless, the

standard is entire fairness, and the Plaintiff has cleared the low hurdle of pleading

sufficient facts to make it plausible2 that the price and process of the option awards

transaction were not entirely fair. The Plaintiff pleads unjust enrichment against the

option recipients in light of the allegations of breach of the duty of loyalty; this claim

also survives.

1
 In re Investors Bancorp, Inc. S’holder Litig., 177 A.3d 1208, 1222 (Del. 2017) (citation omitted).
2
 By which term I mean “reasonably conceivable.” See Cent. Mortg. Co. v. Morgan Stanley Mortg.
Cap. Holdings LLC, 27 A.3d 431 (Del. 2011).

                                                2
      The Plaintiff also contends that the recipients of the awards, including non-

compensation committee directors and corporate officers, breached fiduciary duties

in accepting the awards, and that the awards themselves amount to corporate waste.

These allegations, I find, do not state a claim. My reasoning is set out below.

                                I. BACKGROUND

      The instant action deals with grants of equity compensation made to directors

and officers of Universal Health Services, Inc. (“UHS” or the “Company”) during

the market volatility taking place in March 2020.        As a sentient reader may

remember, the novel coronavirus, or COVID-19, became a worldwide concern in

March 2020. The market reacted to the emergence of the pandemic and to proposed

government relief packages in quick succession. At the same time, UHS prepared

to make its yearly equity compensation grants to its directors and officers at a pre-

planned meeting, aided by the assistance of its compensation consultant. The grants

were made—and the strike price set—on the same day that UHS stock hit its lowest

point during the pandemic.

      The Plaintiff, a UHS stockholder, challenges the grants, pleading two breach

of fiduciary duty claims, an unjust enrichment claim, and a corporate waste claim.

The Defendants—which comprise nominal defendant UHS and various UHS

directors and officers—move to dismiss, largely on basis of a fair process and a fair

price. I address the motion following a recitation of the pertinent facts, below.

                                          3
       A. Factual Overview3

              1. The Parties

       Plaintiff Robin Knight (the “Plaintiff”) is a common stockholder in the

Company.4

       Nominal Defendant UHS is a Delaware corporation in the healthcare

industry. 5

       The defendants in this action have made a singular motion to dismiss (the

“Motion to Dismiss”),6 though the defendants can be categorized into officer

defendants and director defendants generally. The officer defendants include Steve

Filton, the Company’s CFO; Marvin Pember, President of the Company’s acute care

division; and Matthew Peterson, President of the Company’s behavioral health

division (together, the “Officer Defendants”). 7 The director defendants include Alan

Miller, a director and the Chairman of the Company’s board of directors (the

“Board”);8 Marc Miller, a director, the CEO, and the Company’s overall President;9

3
  Unless otherwise specified, the facts in this section are drawn from the verified stockholder
derivative complaint or its incorporated documents (the “Complaint”). Verified Stockholder
Derivative Compl., Dkt. No. 1 [hereinafter “Compl.”]. The Complaint expressly incorporated
documents produced by the Company in response to the Plaintiff’s Section 220 inspection demand.
Compl. at 2. I consider the facts to be true as pled in the Complaint, in accordance with the
applicable standard on a motion to dismiss. This section therefore does not constitute formal
findings of fact.
4
  Id. ¶ 6.
5
  Id. ¶¶ 7, 1.
6
  See Defs.’ Mot. to Dismiss the Verified Stockholder Derivative Compl., Dkt. No. 19.
7
  Compl. ¶¶ 23–26.
8
  Id. ¶ 13.
9
  See id. ¶¶ 14, 16.

                                              4
Lawrence Gibbs; Eileen McDonnell; Warren Nimetz; Maria Singer; and Elliot

Sussman (the “Director Defendants,” and, together with the Officer Defendants, the

“Defendants”).10

        This Memorandum Opinion refers to defendants Gibbs, McDonnell, Nimetz,

Singer, and Sussman as the “Outside Director Defendants” at times.

        Alan and Marc Miller are also the Company’s controllers, together holding

87.6% of the Company’s voting power per the Company’s 2021 proxy statement.11

This Memorandum Opinion refers to Alan and Marc Miller in certain instances as

the “Controller Defendants.”

        Alan Miller is also affiliated with the Federation of American Hospitals

(“FAH”), a lobbying group of for-profit hospitals and health systems.12 FAH

lobbied Congress to pass relief bills associated with the novel coronavirus in the first

quarter of 2020. 13

        Finally, the Board’s compensation committee (the “Compensation

Committee”) consists of Gibbs, McDonnell, and Sussman (together, the

“Compensation Committee Defendants”).          14
                                                    The Compensation Committee is

governed by its charter, which outlines among other things the duty of its members

10
   Id. ¶¶ 17–21.
11
   Id. ¶ 15.
12
   Id. ¶ 56.
13
   Id.
14
   Id. ¶¶ 17, 18, 21.

                                           5
to determine the form and amount of compensation of the non-management

members of the Board. 15

               2. COVID-19 and its Effects on the Market and the Company

       The occurrence of the COVID-19 pandemic in March 2020 is integral to the

allegations at bar. COVID-19 had wide-ranging effects on the market, particularly

in March 2020, when it first emerged on a global scale.16 UHS was no exception.17

       From December 2019 to February 2020, the Company’s stock price was fairly

stable; it traded between $123.74 and $147.78 per share.18 From February to March

2020, however, UHS saw its stock price drop by over 50%. 19 UHS stock reached its

lowest point on March 18, 2020, closing at $67.69 per share.20 This was the lowest

closing price for UHS stock since September 2013. 21

       On March 6, 2020, the federal government enacted its first-phase coronavirus

relief legislation.22 This “Phase 1” provided over $8 billion for vaccine development

and public health funding. 23 Phase 2 followed shortly after on March 18.24 While

Phase 2 was being considered in Congress, the media began reporting on an

15
   Id. ¶ 89.
16
   See id. ¶¶ 29–37.
17
   See id.
18
   Id. ¶ 28.
19
   See id. ¶ 2.
20
   Id. ¶ 35.
21
   See id.
22
   Id. ¶ 39.
23
   Id.
24
   Id. ¶ 52.

                                         6
anticipated third round of legislation.25 Phase 3 of federal coronavirus relief was

signed into law on March 27.26

       By March 30, 2020, the Company’s stock price had rebounded to a closing

price of $100.13 per share.27

       On March 12, 2020 28—after Phase 1 of federal coronavirus relief, but before

Phase 2 of federal coronavirus relief—the Company’s CFO, Filton, attended a

healthcare conference and answered questions from analysts. 29 When asked whether

the Company would continue its share repurchase plan in 2020, Filton noted that the

planned buyback program had been established before the rise of COVID-19, which

had “changed [things] dramatically,” but that the Company still had a “point of view

right now that the earnings power of our business has changed very little in the last

month or 6 weeks,” even though the market valuation had declined precipitously.30

Filton went on to say that the Company

               certainly view[ed] the current situation as a buying
               opportunity. But also, we acknowledge that this is a pretty
               uncertain period. So we’ll continue to evaluate how this

25
   See, e.g., id. ¶¶ 41, 45–50.
26
   Id. ¶ 53.
27
   Id. ¶ 75.
28
   The Plaintiff has not pled what time of day Filton spoke with analysts, though she references the
closing price of the Company’s stock on March 12, 2020 ($99.80 per share). See id. ¶ 64. If the
speech were given during the day on March 12, the more appropriate closing price would have
likely been that of March 11, 2020. I assume, given the procedural posture before me, that the
named stock price is at least informative of Filton’s statements, despite the tumult of the stock
market in March 2020.
29
   Id. ¶ 63.
30
   Id.

                                                 7
              plays out . . . . But I think in our minds, if anything, it has
              created more of a buying opportunity for us. 31

       On that same day, March 12, at least one independent analyst following UHS

set a year-end 2020 price target for UHS of $127, using a model that purportedly

incorporated the effects of COVID-19. 32 How such a model was possible (or

accurate) this early in the development of the pandemic is not explained in the

Plaintiff’s complaint (the “Complaint”).

              3. The Equity Award Grants

                     a. Background to the March 2020 Compensation Committee
                     Meeting

       The Complaint is silent on the historical practice with respect to UHS’s equity

compensation grants. The Complaint does state that books and records obtained

from the Company in response to a Section 220 demand “are expressly incorporated

into this Complaint.”33 The Defendants attach a number of exhibits to their opening

brief in support of the Motion to Dismiss which are identified as Section 220 books

and records.34 Of the Section 220 exhibits, only one provides information pertinent

to the scheduling of the March 2020 meeting—Exhibit D, an email sent September

4, 2019 identifying the UHS Board Meeting Dates for 2020. 35 From this one can

31
   Id. ¶ 64.
32
   Id. ¶ 65.
33
   Id. at 2.
34
   See Opening Br. Supp. Defs.’ Mot. to Dismiss the Verified Stockholder Derivative Compl. 5
n.1, Dkt. No. 20 [hereinafter “OB”].
35
   OB, at Ex. D.

                                             8
glean that the March 18, 2020 Board meeting date was set at least six months in

advance; that is, as the Defendants point out, the timing was likely not driven by the

effect of the pandemic on stock price.

       The Defendants attached a number of public Securities & Exchange

Commission (“SEC”) filings as exhibits as well.36 I can “take judicial notice of the

contents of an SEC filing, but only to the extent that the facts contained in them are

not subject to reasonable dispute.”37 One of the SEC filings contains the Company’s

stock incentive plan (the “Stock Incentive Plan”).38 This fact, and facts regarding

the contents of the Stock Incentive Plan, are not subject to reasonable dispute, and

at any rate, the Plaintiff has not disputed them in filing her answering brief. As such,

I take judicial notice of the Stock Incentive Plan and its contents for the purposes of

this Memorandum Opinion.

       One other fact pertinent but not pled in the Complaint is the history of dates

on which the Compensation Committee met to grant equity awards. The Defendants

stated in their opening brief that the Company’s stock option grants, since 2014,

have almost always been made at a meeting held in March, except for one meeting

held in April. 39 The Plaintiff did not dispute this fact in answering the Motion to

36
   See, e.g., OB 5 n.1; see also id. at Exs. A, B, C, H, I, J, and K.
37
   MicroStrategy Inc. v. Acacia Rsch. Corp., 2010 WL 5550455, at *4 (Del. Ch. Dec. 30, 2010).
38
   OB, at Ex. C [such exhibit hereinafter “SIP”]. I note that the exhibit produced to the Court
appears to have some typographical errors (missing punctuation, extra spacing, missing numbers).
Luckily, the exhibit is publicly available for review.
39
   OB 8–9, 9 n.3.

                                               9
Dismiss—in fact, she quoted the language in her answering brief for the proposition

that the Compensation Committee treated the option grant process as though 2020

“were any other normal year when it manifestly was not.” 40 Thus, although not pled

in the Complaint, the Plaintiff has conceded the pertinent meetings were generally

held in March or April.

       With this historical context established, I turn to the challenged March 2020

grants.

                      b. March 2020

       The Compensation Committee met on March 18, 2020, prior to market open,

to make equity compensation grants.41 The Compensation Committee was joined

by director Nimetz, a non-independent director, at the Compensation Committee’s

invitation. 42 The Company’s compensation consultants also attended the meeting

and delivered a presentation, including a final recommendation with respect to the

equity grants and comparisons to the Company’s “peer group.” 43

40
   Pl.’s Answering Br. Opp’n Defs.’ Mot. to Dismiss the Verified Stockholder Derivative Compl.
8, Dkt. No. 24 [hereinafter “AB”].
41
   Compl. ¶¶ 68, 71. The Compensation Committee meeting minutes from March 18, 2020 were
part of the exhibits furnished by the Defendants as Section 220 books and records. See OB 5 n.1.
Because the Complaint expressly incorporated these documents, I consider the meeting minutes in
the following discussion.
42
   Compl. ¶ 69; OB, at Ex. F (Compensation Committee meeting minutes from March 18, 2020).
43
   See Compl. ¶¶ 70, 77; OB, at Ex. F.

                                              10
       Defendants Alan Miller and Filton then entered the meeting, and the members

discussed proposed performance bonuses for executive officers. 44                             The

Compensation Committee then “decided to defer any discussion or approval of the

specific bonus formulae . . . for the Company’s executive officers [in fiscal year

2020] given the significant uncertainties created by the recent emergence of the

Covid-19 crisis.”45

       The Compensation Committee then turned to discussion of recommended

options, presumably still in the presence of Nimetz and Alan Miller.46                        The

Compensation Committee “reviewed the previously distributed recommendations of

management as to the grant of stock options and ‘premium priced’ stock options to

the senior executives,” among other proposed grants.47 The committee members

then adopted a resolution to grant the options (the “March 2020 Awards”).48 The

resolution adopted by the Compensation Committee purports to specify the closing

sale price of the common stock as the strike price of the stock options, though it

would not be determined until later that day. 49

44
   Compl. ¶ 70; OB, at Ex. F.
45
   Id.
46
   This inference goes in favor of the Plaintiff, for although the meeting minutes do not specify
that Nimetz and Miller remained in the room, they also fail to specify that Nimetz and Miller left.
See Compl. ¶ 71; OB, at Ex. F. And of some note, the minutes did specify when the compensation
consultants left the meeting. Id.
47
   Id.
48
   Id.
49
   Id. (“RESOLVED, that stock options be and hereby are granted . . . and such Stock Options shall
(i) have an exercise price per share equal to the closing sale price of UHS Class B common stock

                                                11
       The Complaint avers that by March 30, 2020, Phase 3 of the federal

coronavirus relief had been enacted, and the Company saw a dramatic improvement

in its stock price comparative to that of March 18.50 The closing price of UHS

common stock on March 30 was $100.13 per share, as opposed to the closing price

on March 18 of $67.69 per share.51

       B. Procedural History

       The Complaint in this action was filed on July 7, 2021. 52 The Defendants

moved to dismiss on September 3, 2021. 53 Following briefing,54 I heard oral

argument on the Motion to Dismiss on January 24, 2022.

                                       II. ANALYSIS

       The Plaintiff presses four separate causes of action: (1) a breach of fiduciary

duty claim against the Compensation Committee Defendants for granting the March

2020 Awards; (2) a breach of fiduciary duty claim against all Defendants for

accepting the March 2020 Awards; (3) a corporate waste claim against the

Compensation Committee Defendants for granting the March 2020 Awards; and (4)

on March 18, 2020 []of $67.69 for the market priced stock options . . . .”). Presumably, the
resolution was adopted sans parenthetical, which was added in later as the minutes were finalized.
This matter has some limited import, however, as the Compensation Committee Defendants argue
that the market had eight hours to react to the news of the grants. Reply Supp. Defs.’ Mot. to
Dismiss the Verified Stockholder Derivative Compl. 19 n.5, Dkt. No. 27 [hereinafter “RB”].
50
   Compl. ¶ 75.
51
   Id.
52
   See Compl.
53
   Defs.’ Mot. to Dismiss the Verified Stockholder Derivative Compl., Dkt. No. 19.
54
   See OB; AB; RB.

                                               12
an unjust enrichment claim against all Defendants for accepting the March 2020

Awards.55

       The Motion to Dismiss seeks dismissal of all four causes of action for failure

to state a claim.56 The familiar standard for motions to dismiss applies. 57 Dismissal

of any of the causes of action will be inappropriate unless the Plaintiff would not be

entitled to recover under any reasonably conceivable set of circumstances

susceptible of proof. 58 The Plaintiff is entitled to all reasonable inferences in her

favor. 59

       Given its implications with respect to the remaining claims, I begin my

analysis by addressing the corporate waste claim first.

       A. The Corporate Waste Claim

       The Plaintiff brings a corporate waste claim against the Compensation

Committee Defendants for granting the March 2020 Awards.60

       A showing of corporate waste with regard to a transaction requires more than

a demonstration that the transaction was costly to the company, badly conceived, or

inefficient and improvidently entered. It requires a showing that the fiduciaries

55
   See Compl. ¶¶ 114–28.
56
   Defs.’ Mot. to Dismiss the Verified Stockholder Derivative Compl., Dkt. No. 19.
57
    This is a derivative action; nonetheless, the Defendants have not sought dismissal under
Chancery Court Rule 23.1. The Complaint alleges demand was excused, plausibly so given the
self-interested nature of some of the transactions. See Compl. ¶¶ 104–13.
58
   Stein v. Blankfein, 2019 WL 2323790, at *8 (Del. Ch. May 31, 2019).
59
   Id.
60
   Compl. ¶¶ 119–21.

                                            13
knowingly entered a transaction of virtually no value to the corporation. To

withstand a motion to dismiss, it must be reasonably conceivable from the pleadings

that the directors authorized an exchange that was “so one sided that no business

person of ordinary, sound judgment” could conclude that the corporation received

sufficient consideration.61 Put differently, the corporation must have essentially

made a “gift” to the recipient of corporate assets,62 a gift that returned nothing in

terms of incentives or goodwill. A successful waste claim will lie where directors

“approve a decision that cannot be attributed to ‘any rational business purpose.’”63

In this sense, it is a close kin to a claim of bad faith.

       Even according the Plaintiff the benefit of all inferences, the corporate waste

cause of action must be dismissed for failure to state a claim. As the Complaint itself

acknowledges, the March 2020 Awards formed “equity compensation” for their

recipients.64      The Compensation Committee’s charter clarifies that the

Compensation Committee is to “[r]eview and determine the form and amount of

compensation of the non-management members of the Board, including cash, equity-

based awards and other compensation” and to “review and approve the granting of

options in accordance with [performance targets.]” 65 Thus, the March 2020 Awards

61
   Glazer v. Zapata Corp., 658 A.2d 176, 183 (Del. Ch. 1993).
62
   See Calma ex rel. Citrix Sys., Inc. v. Templeton, 114 A.3d 563, 590 (Del. Ch. 2015).
63
   Id. (quoting Sinclair Oil Corp. v. Levien, 280 A.2d 717, 720 (Del. 1971)).
64
   See Compl. ¶ 79.
65
   Id. ¶ 89. The Stock Incentive Plan also supports this finding, as the “Purpose” section describes
the awards made under the plan as “equity-based compensation incentives to key personnel of the

                                                14
were not donative in nature but part of a formula of compensation for the work of

Company officers and directors.

       The Plaintiff alleges that the compensation paid to the Defendants was

“excessive on its face,” 66 but this statement is conclusory and, to my mind, inapt.

The compensation awarded, even if “excessive,” clearly had a business purpose. 67 I

note also that if the March 2020 Awards appear excessive, that view is benefitted by

hindsight. At the time of granting, as the Complaint notes, the March 2020 Awards

had a strike price equivalent to the closing price established later that day.68

       In order to constitute waste, the grants must be without business purpose.

Based on the allegations, the cause of action is insufficiently pled. The claim for

corporate waste must be dismissed.

       B. The Breach of Fiduciary Duty Claims

       The Plaintiff has pled two distinct breach of fiduciary duty claims. The first

is aimed at the Compensation Committee Defendants for breach of fiduciary duty in

granting the March 2020 Awards. The second is directed at all Defendants and posits

a breach of fiduciary duty for accepting the March 2020 Awards.

Company and its affiliates in order to attract, motivate, reward and retain such personnel and to
further align the interests of such personnel with those of the stockholders of the Company.” See
SIP § 1.
66
   Compl. ¶ 81.
67
   Id.
68
   See id. ¶ 72 (stating that the Compensation Committee granted awards “at strike prices of either
the closing price on that day ($67.69) or the closing price plus 10%”).

                                                15
       The organization of these causes of action requires a somewhat convoluted

analysis. The first cause of action implicates, as I discuss below, different standards

of review for different grants. The Plaintiff also appears to plead different theories

for sustaining a breach of fiduciary duty claim throughout her papers—inviting

consideration of the awards under both the garden-variety duty of loyalty, suggesting

purely a lack of entire fairness,69 and under a consideration of the Compensation

Committee Defendants’ good faith or lack thereof.70 The Plaintiff asserts that this

second theory survives “apart from whether” the March 2020 Awards are subject to

entire fairness review. 71

       I first address whether the Plaintiff has stated a claim of breach of duty of

loyalty predicated upon bad faith by the Compensation Committee Defendants,

because the Plaintiff has, in my understanding, pled that the question of good or bad

faith is an independent basis for liability. I then evaluate the breach of duty of loyalty

cause of action against the Compensation Committee Defendants for granting the

March 2020 Awards more generally. The breach of duty of loyalty against all

Defendants for accepting the March 2020 Awards is addressed third.

69
   AB 13–30; see Compl. ¶¶ 115–17.
70
   AB 32–33; Compl. ¶ 117.
71
   AB 33.

                                           16
               1. The Plaintiff Has Not Established a Breach of Fiduciary Duty
               Cause of Action Predicated Upon Bad Faith

       The Plaintiff makes a standalone argument that regardless of the applicable

standard of review used to assess the March 2020 Awards’ grants, a separate breach

of fiduciary duty action should lie against the Compensation Committee Defendants

due to their alleged bad faith. 72

       Bad faith is among the hardest of corporate claims to maintain. It comes into

play, typically, where no other species of the breach of duty of loyalty can be

alleged—that is, where the fiduciaries approving a transaction are not themselves

interested, and where they do not lack independence from those who are. Bad faith,

under Delaware law, can be shown when the director in question engages in an

“intentional dereliction of duty” or “conscious disregard for one’s responsibilities,”

or where one acts “with the intent to violate applicable positive law.” 73 Scienter is

required; the stockholder must allege that the director acted inconsistently with his

fiduciary duties “and, most importantly, that the director knew he was so acting.”74

       The Plaintiff has not made such a showing here. First, there is no pleading

(and correctly so, as it would not be supportable based on these facts) that the

72
   Id. at 32–33; Compl. ¶ 117.
73
   City of Birmingham Ret. & Relief Sys. v. Good, 177 A.3d 47, 55 (Del. 2017) (citations omitted).
74
   Id. (citing In re Massey Energy Co., 2011 WL 2176479, at *22 (Del. Ch. May 31, 2011)
(emphasis in original)).

                                               17
Compensation Committee Defendants acted with the intent to violate applicable

positive law.

      The second standard is also not satisfied. The Plaintiff has attempted to make

a showing of scienter, but what she pleads in connection with this cause of action is

that the Compensation Committee Defendants consciously disregarded potential

circumstances arising from COVID-19.75             There is no allegation that the

Compensation Committee Defendants knowingly acted inconsistently with their

fiduciary duties. If anything, under the facts pled, the Compensation Committee

Defendants, perhaps, would have been wise to take into account external factors,

such as the macroeconomic effects of COVID-19 and the government’s reaction

thereto, in making their determination to grant awards on March 18. That is the

Plaintiff’s hindsight theory.     But nothing in the pleadings indicates that the

Compensation Committee Defendants knowingly acted against the corporate

interest, or saw a duty to act or to refrain from acting, but refused.

      The Plaintiff also puts forth a one-paragraph argument that the Compensation

Committee Defendants failed to disclose in the Company’s proxy statement for 2021

that the March 2020 Awards were issued without the Compensation Committee

having “considered the foregoing” (apparently the macroeconomic effects of

75
   AB 32 (“[The] members of the Compensation Committee . . . granted the March 2020 Awards
in conscious disregard of matters ranging from merely material to world historic.”).

                                           18
COVID-19, though this is unclear from the briefing). 76 The Plaintiff appears to posit

that this failure to disclose is itself another ground for a breach of the duty of loyalty.

This cause of action, if such it is, is missing from the Complaint.77 To the extent not

waived, this cause of action fails to state a claim. Directors are required to provide

stockholders with “accurate and complete information material to a transaction or

other corporate event that is being presented to them for action.”78 The Plaintiff has

not pled that the 2021 proxy statement requested stockholders to take any action in

connection with the March 2020 Awards and therefore cannot establish liability for

insufficient disclosure. 79

       Altogether, the Plaintiff has not made out a standalone basis for liability based

on bad faith or inadequate disclosure.

76
   Id. at 33.
77
   The only reference in the Complaint close to addressing a disclosure claim is the mention of the
Compensation Committee Defendants owing “the fiduciary duties of good faith, loyalty, and
candor.” Compl. ¶ 115 (emphasis added).
78
   Malone v. Brincat, 722 A.2d 5, 10 (Del. 1998).
79
   The Plaintiff’s citations are also unavailing to her. She cites Weiss v. Swanson, 948 A.2d 433
(Del. Ch. Mar. 7, 2008), for the proposition that shareholders have a right to the full truth as relates
to executive compensation, and therefore directors have a duty to disclose all material information.
Id. at 442. This is true. But the context of Weiss, and Tyson Foods, upon which Weiss relies,
differs because the stockholders had been asked in both instances to approve the incentive plan by
which the equity awards were being made. See generally id. (“There is no dispute that the
challenged options were granted pursuant to stockholder-approved option plans.”); see also In re
Tyson Foods, Inc. Consol. S’holder Litig., 919 A.2d 563, 593 (Del. Ch. 2007). Here, the Plaintiff
has not pled that the stockholders had been asked to vote upon the March 2020 Awards or
otherwise ratify the Compensation Committee’s actions.

                                                  19
               2. The Duty of Loyalty Cause of Action Against the Compensation
               Committee Defendants for Granting the March 2020 Awards

       Section 141(h) of the Delaware General Corporation Law (the “DGCL”)

authorizes the board to “fix the compensation of directors.” 80 UHS’s Stock Incentive

Plan is one method of compensating directors and officers for services to the

Company.81 The Stock Incentive Plan vests the Compensation Committee with the

authority, “acting in its discretion,” to “select the persons to whom Awards shall be

made, [and] prescribe the terms and conditions of each Award and make

amendments thereto.” 82 The Compensation Committee meeting minutes imply that

only the Compensation Committee Defendants voted to approve the awards in

question here. 83

       The Compensation Committee granted the March 2020 Awards to individuals

in varying factual postures. Because of this, different standards of review will apply

to the Compensation Committee Defendants’ choices in making the grants. “As in

nearly all pleadings stage challenges to the viability of a breach of fiduciary duty

claim in the corporate context, deciding the proper standard of review . . . will be

80
   8 Del. C. § 141(h).
81
   See SIP § 1.
82
   Id. § 4(b).
83
   See, e.g., OB, at Ex. F (“The Committee discussed the proposed grants and after a review of the
value of the options and the number of options outstanding, the [sic] unanimously agreed to adopt
the following resolutions . . . .”).

                                               20
outcome determinative.”84 I parse the varying applicable categories of defendants

below.

                      a. Awards Granted by the Compensation Committee to the
                      Outside Director Defendants

       The Compensation Committee granted March 2020 Awards to each of the

Outside Director Defendants, including themselves. The applicable standard of

review here is straightforward. As Investors Bancorp 85 teaches, although the DGCL

permits directors to fix their own compensation, such an action is necessarily self-

interested, even when accomplished under a preexisting equity incentive plan.86

Self-interested compensation decisions are subject to the entire fairness standard of

review, unless      a “fully informed, uncoerced, and disinterested majority of

stockholders” has approved the compensation decisions and therefore ratified

them. 87

       Ratification of the underlying equity incentive plan (under which the directors

made the awards) by stockholder vote may in some circumstances cleanse the award,

but only where the actions of the directors applying the plan are, effectively,

ministerial.88 Where “directors exercised discretion and determined the amounts and

84
   Tornetta v. Musk, 250 A.3d 793, 805 (Del. Ch. 2019).
85
   Investors Bancorp, 177 A.3d 1208.
86
   Id. at 1217.
87
   See id.
88
   See generally id.

                                              21
terms of the awards after stockholder approval [of the equity incentive plan],” 89 and

where a plaintiff has properly alleged a breach of fiduciary duty claim, stockholder

approval of the equity incentive plan is insufficient to dislodge the entire fairness

standard of review. 90 Where directors lack discretion entirely in making the awards,

or where stockholders have approved the specific director awards, however, the

stockholder approval trumps the directorial conflict.91

       This stringent ratification requirement strikes a balance between “a decision

by the stockholders to give the directors broad legal authority” and the stockholders’

ability to “rely upon the policing of equity to ensure that that authority would be

utilized properly.”92     The directors’ self-interested actions of granting director

compensation are therefore “twice-tested” for both legal authorization and equitable

use of that same authorization.93

       The Stock Incentive Plan at issue here, like the one in Investors Bancorp,

affords the Compensation Committee considerable discretion in making awards.94

It is not self-executing as was the stockholder-approved plan in Kerbs v. California

Eastern Airways, Inc., where the equity incentive plan listed grants of unissued stock

89
   Id. at 1222.
90
   Id. at 1223.
91
   Id. at 1222.
92
   Sample v. Morgan, 914 A.2d 647, 664 (Del. Ch. 2007).
93
   Investors Bancorp, 177 A.3d at 1222 (citing Sample, 914 A.2d at 672)).
94
   See generally SIP.

                                              22
in specific amounts to named executives based on a mathematical formula.95 The

Kerbs plan left no room for discretionary decisions by the directors.96 No such

formula constrained the directors here. Similarly, the Stock Incentive Plan did not

specifically enumerate the amount or total value of awards to be received by each

director.97

       Rather, the UHS Stock Incentive Plan sets an aggregate share limitation for

the number of common stock shares that may be issued under the Plan, and a yearly

award limit with respect to any individual employee.98 So long as the Compensation

Committee made grants consistent with those two limitations, the remainder of the

awards-based decisions lay within the Compensation Committee’s discretion. The

stockholders, therefore, did not know “precisely what they [were] approving.”99

Accordingly, so long as the Plaintiff has pled sufficient facts to properly allege a

breach of fiduciary duty claim against the Compensation Committee Defendants, the

Outside Director Defendants’ awards, at least, will be subject to entire fairness

review.

       When entire fairness is the applicable standard of review, this “conclusion

normally will preclude dismissal of a complaint on a Rule 12(b)(6) motion to

95
   Investors Bancorp, 177 A.3d at 1222. (citing Kerbs v. Cal. E. Airways, Inc., 90 A.2d 653 (Del.
1952)).
96
   Id. at 1218.
97
   See generally SIP.
98
   Id. § 3.
99
   Stein, 2019 WL 2323790, at *7 (quoting Investors Bancorp, 177 A.3d at 1222).

                                               23
dismiss.”100 At least at the pleadings stage, the reason for precluding dismissal is

that “[a] determination of whether the defendant has met [its] burden will normally

be impossible by examining only the documents the Court is free to consider on a

motion to dismiss.”101 Many other cases have followed this approach. 102 Certain

cases have granted motions to dismiss at the entire fairness stage, but generally

where plaintiffs fail to allege any evidence of unfair process or price. 103

       The facts alleged in support of a lack of entire fairness here are not

overwhelming, but are sufficient. The pleading burden here is low, met so long as

“some facts” implying lack of entire fairness have been alleged.104 The Complaint

100
    Orman v. Cullman, 794 A.2d 5, 21 n.36 (Del. Ch. 2002).
101
    Id.
102
    Berteau v. Glazek, 2021 WL 2711678, at *15 (Del. Ch. June 30, 2021) (“Even in a self-
interested transaction . . . to state a claim, a shareholder must allege some facts that tend to show
the transaction was not fair.”); In re CBS Corp. S’holder Class Action & Deriv. Litig., 2021 WL
268779, at *46 (Del. Ch. Jan. 27, 2021) (citations omitted); Salladay v. Lev, 2020 WL 954032, at
*1 (Del. Ch. Feb. 27, 2020) (“It is nearly as axiomatic that, where entire fairness is the standard of
review, a motion to dismiss is rarely granted, because review under entire fairness requires a record
to be meaningful.”); see id. at *8 (citations omitted) (“Where entire fairness is the standard of
review, and where, as here, a plaintiff alleges facts making it reasonably conceivable that the
transaction was not entirely fair to stockholders, the granting of a motion to dismiss is
inappropriate, because the burden is on the defendants to develop facts demonstrating entire
fairness.”); Klein v. H.I.G. Cap., L.L.C., 2018 WL 6719717, at *16 (Del. Ch. Dec. 19, 2018);
Hamilton Partners L.P. v. Highland Cap. Mgmt., L.P., 2014 WL 1813340, at *12 (Del. Ch. May
7, 2014); Olenik v. Lodzinski, 208 A.3d 704, 719 n.74 (Del. 2019); Calma, 114 A.3d at 589;
Sciabacucchi v. Liberty Broadband Corp., 2018 WL 3599997, at *15 (Del. Ch. July 26, 2018).
103
    Solomon v. Pathe Commc’ns Corp., 1995 WL 250374, at *5 (Del. Ch. Apr. 21, 1995); Monroe
Cty. Emps.’ Ret. Sys. v. Carlson, 2010 WL 2376890, at *2 (Del. Ch. June 7, 2010); Capella
Holdings, Inc. v. Anderson, 2015 WL 4238080, at *5 (Del. Ch. July 8, 2015) (citation omitted)
(internal quotations omitted) (“Even when entire fairness scrutiny would otherwise seem to apply,
a plaintiff must first make factual allegations in its complaint that, if proved, would establish that
the challenged transactions are not entirely fair to state a claim.”).
104
    Stein, 2019 WL 2323790, at *8.

                                                 24
pleads the following, implying lack of entire fairness: first, that the Compensation

Committee disregarded certain considerations related to the emergence of the

COVID-19 pandemic; 105 second, that the Company’s peers even in its self-selected

peer group received significantly less compensation; 106 third, that the Company,

speaking through its CFO, considered the Company stock a “buy” even at a price

over $20 in excess of the strike price established for the March 2020 Awards;107

fourth, that at least one analyst identified a year-end price target for the Company of

$127, using a model that purported to incorporate the effects of COVID-19; 108 and

finally, that Alan Miller was “actively lobbying” the federal government via his

activities with FAH, and therefore “knew or had reason to know of the timing and

extent of federal grants,” including relief that UHS might reasonably expect to

receive.109

       These facts are sufficient to raise a reasonably conceivable inference of an

unfair transaction at the plaintiff-friendly pleading stage. This finding does not

preclude the Compensation Committee Defendants from establishing that the March

2020 Awards were in fact entirely fair. But, at this stage, with sufficient pleading

accomplished, the breach of fiduciary duty claim against the Compensation

105
    Compl. ¶ 73.
106
    Id. ¶¶ 77–78.
107
    Id. ¶¶ 63–66.
108
    Id. ¶ 65.
109
    Id. ¶ 73.

                                          25
Committee Defendants for granting the March 2020 Awards to the Outside Director

Defendants, including themselves, must go forward.

                      b. Awards Granted by the Compensation Committee to the
                      Controller Defendants

       The analysis with respect to March 2020 Awards granted to the Controller

Defendants proceeds in much the same way. 110 Although neither of the Millers is a

director seated on the Compensation Committee, given their control block (which

the Defendants describe in their public filings),111 they are controlling stockholders

and entire fairness applies to transactions whereby they receive a non-ratable

benefit.112 Here, in a transaction where Marc and Alan Miller each received

compensation that was not shared equally among the stockholders—the March 2020

Awards—a non-ratable benefit exists, and therefore entire fairness is the standard of

review.

       This is true even despite the fact that the Millers are not “outside” directors,113

and despite the fact that neither of Marc or Alan Miller sat on the Compensation

Committee. Ultimately, they still stood on “both sides of [the] transaction.” 114 In

110
    I note that the Complaint does not allege a cause of action for breach of duty against the
Controller Defendants for influencing the March 2020 Awards, either to themselves or to others.
111
    Id. ¶¶ 15–16.
112
    In re Ezcorp Inc. Consulting Agreement Deriv. Litig., 2016 WL 301245, at *11 (Del. Ch. Jan.
25, 2016); Tornetta, 250 A.3d at 807.
113
    See, e.g., OB 6 (referring to the directors other than Alan and Marc Miller as the Company’s
“five outside directors”).
114
    Weinberger v. UOP, Inc., 457 A.2d 701, 710 (Del. 1983) (citation omitted).

                                              26
Kahn v. Tremont Corp., our Supreme Court held that entire fairness remains

applicable in such a circumstance even when an independent committee—such as

the Compensation Committee here—is utilized, “because the underlying factors

which raise the specter of impropriety can never be completely eradicated and still

require careful judicial scrutiny.”115 The underlying risk is that the independent

committee members who pass upon the transaction in question—here the granting

of equity awards—might “perceive that disapproval may result in retaliation by the

controlling stockholder.” 116 In Tornetta v. Musk, the Court observed that “in the

CEO compensation context,” the decisionmaker “knows full well the [controller]

CEO is staying with the company whether [or not] his compensation plan is

approved,” furthering the risk of retaliation.117 In Tornetta, the decisionmaker in

question was the minority of ratifying stockholders,118 but the principle applies

equally, I think, to outside directors as decisionmakers, given the controlling

stockholder’s ability to elect directors.

       The Compensation Committee Defendants’ grant of March 2020 Awards to

the Controller Defendants must be reviewed for entire fairness. As determined

115
    Kahn v. Tremont Corp., 694 A.2d 422, 428 (Del. 1997) (citing Weinberger, 457 A.2d at 710).
116
    Id. at 428. This axiom applies forcefully here given the inference that Alan Miller, one of the
two individuals making up the control block, appears to have sat in on the Compensation
Committee’s discussion and resolution with respect to the directors’ receipt of the March 2020
Awards. See supra notes 44–46 and accompanying text.
117
    See Tornetta, 250 A.3d at 809.
118
    See id.

                                                27
above, the Plaintiff has pled sufficient facts to impugn the entire fairness of the

transaction at the pleading stage. The breach of fiduciary duty cause of action

against the Compensation Committee Defendants for granting the March 2020

Awards to the Controller Defendants therefore survives the Motion to Dismiss.

                         c. Awards Granted by the Compensation Committee to the
                         Officer Defendants

          I turn finally to the grants made to the Officer Defendants. As a matter of first

priority, I note that despite Marc Miller’s position as the Company President and

CEO, he is excluded from the definition of Officer Defendants used in this

Memorandum Opinion. 119 As such, my finding here will not apply to Marc Miller.

          The standard of review applicable to the Officer Defendants’ grants is the

business judgment rule, unless the Plaintiff pleads (1) facts from which it may be

reasonably inferred that the Board or Compensation Committee lacked

independence (for example, if they were dominated or controlled by the individual

receiving the compensation); or (2) facts from which it may be reasonably inferred

that the Board or Compensation Committee, while independent, nevertheless lacked

good faith in making the award.120 I have found above that the Compensation

Committee Defendants did not act in bad faith in making the awards. The Plaintiff

has not pled facts relating to the Compensation Committee’s lack of independence

119
      See supra notes 7 and 9 and accompanying text.
120
      See Gagliardi v. TriFoods Int’l, Inc., 683 A.2d 1049, 1051 (Del. Ch. 1996).

                                                 28
for purposes of granting the March 2020 Awards. As such, the Compensation

Committee Defendants’ grant of the March 2020 Awards to the Officer Defendants

is protected by the business judgment rule.

       The business judgment rule can, of course, be dislodged by the successful

pleading of a corporate waste cause of action.121 As above, corporate waste has not

been successfully pled here.

       The Motion to Dismiss should be granted with respect to the Compensation

Committee Defendants’ grant of March 2020 Awards to the Officer Defendants.

              3. Breach of Duty Against All Defendants for Accepting the March
              2020 Awards

       Separately from the grants of the March 2020 Awards, the Plaintiff has also

pled a breach of fiduciary duty claim against all Defendants for accepting the March

2020 Awards.

       In assessing the breach of fiduciary duty cause of action for acceptance of the

challenged awards, I have found it helpful to begin with a definition of the duty of

loyalty. The Delaware Supreme Court in Guth v. Loft stated that the duty of loyalty

is

              a rule that demands of a corporate officer or director,
              peremptorily and inexorably, the most scrupulous
              observance of his duty, not only affirmatively to protect
              the interests of the corporation committed to his charge,

121
  In re Walt Disney Co. Deriv. Litig., 906 A.2d 27, 74–74 (Del. 2006) (citing In re J.P. Stevens
& Co. S’holders Litig., 542 A.2d 770, 780 (Del. Ch. 1988)).

                                              29
               but also to refrain from doing anything that would work
               injury to the corporation, or to deprive it of profit or
               advantage which his skill and ability might properly bring
               to it.122

       The Plaintiff asserts that each of the Defendants named in this case has

violated the duty of loyalty “by accepting the March 2020 Awards despite knowing

that the March 2020 Awards were issued at strike prices that did not reflect the real

value of the Company.” 123 Put differently, the Plaintiff believes that the Defendants

knew or should have known that the stock price of UHS on March 18, 2020 was not

reflective of the actual value of the Company, and that, freighted with this

knowledge, the Defendants should have rejected the March 2020 Awards. 124 The

Plaintiff asks me to credit this inference given the procedural posture of the case.125

       The Plaintiff cites two cases for the proposition that a director or officer “can

breach fiduciary duties . . . by accepting compensation that is clearly improper,”126

but there appears to be a relative lack of caselaw fleshing out what might constitute

“clearly improper.” The Plaintiff first points to Howland v. Kumar, in which the

122
    Guth v. Loft, Inc., 5 A.2d 503, 510 (Del. 1939).
123
    Compl. ¶ 124.
124
    The Complaint does not expressly plead how the Defendants accepted the March 2020 Awards,
or whether the fact that they failed to reject the awards is to the Plaintiff’s mind a sufficient basis
for liability. Given that I am being asked to make an inferential leap regarding the mental state of
the Defendants, the manner of so-called “acceptance” (whether formally enshrined in contract or
whether simply granted by resolution) might have been of some probative import.
125
    AB 34 (“At this point in the proceedings, Plaintiff is entitled to the inference that the Individual
Defendants knew or should have known these facts . . . .”).
126
    Howland v. Kumar, 2019 WL 2479738, at *3 (Del. Ch. June 13, 2019) (internal quotations
omitted) (citation omitted); Pfeiffer v. Leedle, 2013 WL 5988416, at *10 (Del. Ch. Nov. 8, 2013).

                                                  30
company’s compensation committee, with knowledge that a significant patent was

about to issue in favor of the company, “repriced” underwater stock options

belonging to the company directors and officers. 127 The Howland Court found it

reasonably conceivable that all of the defendants except one had breached their duty

of loyalty by “misusing corporate information and processes to benefit themselves”

rather than the company. 128 The Court treated the excluded defendant, Campisi,

separately, stating that the complaint with respect to Campisi “provide[d] no basis

from which to infer knowledge of the patent issuance prior to the Repricing,

involvement in the decision to withhold news of the patent issuance, or involvement

in the Repricing by Campisi,” and that therefore there were no facts supporting any

wrongdoing by Campisi.129         The breach of fiduciary duty cause of action as

applicable to Campisi was dismissed.130

       The second case cited by the Plaintiff is Pfeiffer v. Leedle, in which Leedle

received stock options under an incentive plan.131 The pertinent plan prohibited any

individual from receiving in excess of 150,000 stock options in a single calendar

year.132 Leedle received over 400,000 options in 2011 and 285,000 options in

127
    Howland, 2019 WL 2479738, at *2.
128
    Id. at *4.
129
    Id. at *5.
130
    Id.
131
    Pfeiffer, 2013 WL 5988416, at *8.
132
    Id.

                                          31
2012. 133 The Court found that, “[a]s to the breach of fiduciary duty claim, the

Complaint supports a reasonable inference that Leedle knew or should have known

that his receipt of more than 150,000 Stock Options in a year violated the Plan.”134

The Court refused to dismiss the breach of fiduciary duty claim (and an unjust

enrichment claim) against Leedle at the pleadings stage.135

        The “clearly improper” standard, if standard it is, is nascent in its

development. Delaware courts have found that actions for breach of fiduciary duty

for accepting compensation can survive a motion to dismiss where (1) the

compensation awarded was ultra vires, and the recipients knew it, or (2) where

compensation was repriced advantageously in light of confidential and sensitive

business information which the recipients knew, and which they accordingly used to

the company’s detriment. It is in way of this knowledge, in both cases, that the

compensation was “clearly improper,” and accepting such was redolent of scienter.

        What is the standard that must be applied to the facts when considering

whether such a breach of duty has been pled? I conclude that what is required is a

defendant’s knowingly wrongful acceptance of compensation, and that the standard

must be bad faith. That is, there must be a sufficient pleading of scienter to support

a bad faith claim, which serves as a claim based on breach of the duty of loyalty.

133
    Id.
134
    Id. at *10.
135
    See id.

                                         32
But, as discussed above, there is an insufficient record to sustain even a claim that

the Compensation Committee Defendants making the awards acted in bad faith,

much less that the recipients’ acceptance violated that standard. All that is alleged

is that option awards were made at what proved to be the bottom of the market.

       Unlike Howard, the instant case does not plead nonpublic facts known to the

company and the Defendants that give rise to an inference of “clearly improper”

compensation in the form of the March 2020 Awards. And unlike Pfeiffer, there is

no allegation that the awards violated the Stock Incentive Plan, let alone that the

Defendants were aware of the same.

       With respect to the cause of action alleging breach of fiduciary duty by all

Defendants for accepting the March 2020 Awards, the Motion to Dismiss is

granted.136

       C. The Unjust Enrichment Claim

       For the third time in as many months, I am asked to dismiss an unjust

enrichment claim as duplicative of another substantive claim in the action.137 Here,

unjust enrichment is pled, I note, against all award recipients. Given the fact that I

have found that the fiduciary duty claim against the Compensation Committee

136
    Obviously, the claim against the Compensation Committee Defendants for accepting the self-
dealing awards merges with the breach of duty claim against the Compensation Committee
Defendants for making the awards.
137
    See Lockton v. Rogers, 2022 WL 604011, at *16–17 (Del. Ch. Mar. 1, 2022); Sorenson Impact
Found. v. Cont’l Stock Transfer & Tr. Co., 2022 WL 986322, at *13 (Del. Ch. Apr. 1, 2022); see
also OB 40.

                                             33
Defendants in part survives, and that I have dismissed the claims against the other

award recipients, I do not find the unjust enrichment claim against all Defendants

truly duplicative, at least of the remaining breach of duty claims.

       The elements of unjust enrichment are: (1) an enrichment, (2) an

impoverishment, (3) a relation between the enrichment and impoverishment, (4) the

absence of justification, and (5) the absence of a remedy provided by law.138 The

case for unjust enrichment here, I think it is fair to state, is not strong. It relies upon

much inference: that the Compensation Committee set its own awards in an unfair

manner; that, to be consistent, the Compensation Committee set the other awards in

the same wrongful manner; that the Company was impoverished thereby; and that

the Defendants were thus enriched, unjustly. 139 At this stage, however, the Plaintiff

is entitled to those inferences. She has, accordingly, stated a claim for unjust

enrichment against all Defendants.

                                   III. CONCLUSION

       The Motion to Dismiss is DENIED IN PART and GRANTED IN PART. For

clarity, the Motion to Dismiss the cause of action for breach of fiduciary duty in

granting the March 2020 Awards is DENIED as to the Compensation Committee

138
   Nemec v. Shrader, 991 A.2d 1120, 1130 (Del. 2010).
139
   I note also that the Complaint does not fully specify how the awards were made, whether the
Defendants entered into any contractual arrangement to receive the awards, and how that may
affect any “enrichment” purportedly received by the Defendants. I need not decide this now, for
the claim survives the pleadings stage regardless.

                                              34
Defendants, insofar as it applies to awards made to the Outside Director Defendants

and Controller Defendants. The Motion to Dismiss the cause of action for breach of

fiduciary duty in granting the March 2020 Awards is GRANTED as to the

Compensation Committee Defendants, insofar as it applies to awards made to the

Officer Defendants.

      The Motion to Dismiss the causes of action for breach of fiduciary duty for

accepting the March 2020 Awards and for corporate waste is GRANTED.

      The Motion to Dismiss the cause of action sounding in unjust enrichment is

DENIED.

      The parties should submit an appropriate form of order.

                                        35