Calma v. TempletonAnnotate this Case
At issue in this derivative action were awards of restricted stock units (RSUs) that were granted to non-employee directors of Citrix Systems, Inc. (Citrix) (the RSU Awards). The majority of the directors’ compensation consisted of these RSU Awards, which the board’s compensation committee granted under Citrix’s Equity Incentive Plan (Plan). Citrix stockholders approved the Plan. Plaintiff-stockholder brought this action contending that the RSU Awards were, when combined with the cash payments that Citrix’s non-employee directors receive, “excessive” in comparison with the compensation received by directors at certain of Citrix’s peers. Plaintiff asserted claims for breach of fiduciary duty (Count I), waste of corporate assets (Count II), and unjust enrichment (Count III). Defendants moved to dismiss the complaint for failure to state a claim and for failure to make a pre-suit demand upon Citrix’s board. The Court of Chancery (1) denied Defendants’ Court of Chancery Rule 23.1 motion, as demand was futile; and (2) granted Defendants’ Court of Chancery Rule 12(b)(6) motion as to Count II but denied it as to Counts I and III, concluding that it was reasonably conceivable that the non-employee directors’ total compensation was not entirely fair to Citrix and that Defendants were unjustly enriched by the RSU Awards.