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Court Of Chancery Again Explains Requirements For Ratification Defense

Larkin v. O’Connor, C.A. 11338-CB (Transcript) (March 22, 2016)

This is an interesting decision because it explains the requirements for stockholder ratification of grants under a stock option plan. The stockholders have to vote not just on the plan itself, but on the actual grants for ratification of those grants to occur. Merely mentioning the actual grants in the proxy statement without having a separate vote on those grants themselves is not sufficient to constitute ratification.

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