Richards Layton & Finger

The Delaware Court of Chancery Revisits Director Equity Awards

May 24, 2017

The Delaware Court of Chancery recently held that stockholder approval of an equity incentive plan that included relatively broad sub-limits on the number of shares available specifically for awards to non-employee directors provided “advance ratification” of subsequent awards to the non-employee directors. The Court’s opinion provides significant guidance to corporations and practitioners in drafting and seeking stockholder approval of equity incentive plans, and in defending against challenges to awards made to directors under stockholder-approved plans.