which would occur as long as Disney did not terminate Ovitz for
gross negligence or malfeasance.
The final agreement was negotiated and signed after Ovitz began serving the corporation.
After barely a year of employment, Ovitz sought to exit the Company and Eisner assisted him in obtaining a non-fault termination. Eisner sent a letter to the board indicating that Ovitz would receive a non-fault termination. The board never approved granting the non-fault termination, as was allegedly required by the corporation’s by-laws, never questioned it and never sought a fault-based termination.
The director defendants once again moved to dismiss, arguing that the
action was derivative and that the plaintiffs failed adequately to allege that
demand was excused because a majority of the board was disinterested
and independent and monetary damages were not available for a breach of
the duty of care under the Company’s exculpatory charter provision.
This time the Chancellor denied the motion to dismiss, holding that the
amended complaint gave reason to doubt that the directors exercised
business judgment, stating:
defendant disregarded care about
directors consciously and intentionally their responsibilities, adopting a “we don’t the risks” attitude concerning a material
corporate decision. Knowing or deliberate indifference by a director to his or her duty to act faithfully and with appropriate care is conduct, in my opinion, that may not have been taken honestly and in good faith to advance the