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1
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MEMORANDUM OPINION
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EXTRACTED KEY WORDS
PLAINTIFF DIRECTORS DEFENDANTS PLAN SHAREHOLDERS CORPORATE WASTE STOCK OPTION FACTS COMPLAINT BREACH FIDUCIARY DUTY ALLEGATIONS DEL COURT MOTION ALLEGE DISMISS CHANCERY LOYALTY IIG AUTHORITY FAILURE EMPLOYEE TRANSACTION DEMAND BUSINESS CONCLUSORY NON-EMPLOYEE DIRECTORS SUPPORT |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
MICHELE S. CRIDEN, >>
Plaintiff, >>
V. ) C.A. No. 17082
>
JONATHAN L. STEINBERG, BRUCE L. )
SOKOLOFF, PETER M. ZIEMBA and )
S. CHRISTOPHER MEIGHER, III, >
Defendants. >>
INDIVIDUAL INVESTOR GROUP, INC. ,)>
Nominal Defendant. >
Submitted: February 17, 1999
Decided: March 23, 2000
MEMORANDUMOPINION
Pamela S. Tikellis and James C. Strum of Chimicles & Tikellis, Wilmington,
Delaware. Attorneys for Plaintiff.
Barry M. Klayman and Todd C. Schiltz of Wolf, Block, Schorr and Solis-Cohen,
Wilmington, Delaware. OF COUNSEL: Richard J. Morvillo, Luther Zeigler
and Kenneth F. Rossman of Crowell & Moring, Washington, D.C. Attorneys
for Individual Defendants.
Kenneth J. Nachbar of Morris, Nichols, Arsht & Tunnell, Wilmington,
Delaware. Attorneys for Nominal Defendant.
STEELE, V.C.
Plaintiff files this shareholder derivative action complaining that the board
of directors of Individual Investor Group, Inc. improperly re-priced stock options
issued under a shareholder approved plan. Plaintiff alleges that the re-pricing
constituted corporate waste and that the directors breached their fiduciary duty of
loyalty. Defendants move to dismiss plaintiff's claims for: (1) failure to make
pre-suit demand under Court of Chancery Rule 23.1; and, (2) failure to state a
SNIPPETS:
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2
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REPLY BRIEF IN SUPPORT OF DEFENDANTS MOTION TO DISMISS
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EXTRACTED KEY WORDS
COMPLAINT REPRICING STOCK OPTION ALLEGATIONS MOTION FAILURE DISMISS EMPLOYEE STOCK OPTION ALLEGE DEL TRANSACTIONS DEFENDANTS AMENDED COMPLAINT WASTE FACTS DIRECTORS PLAINTIFF FAILS BUSINESS JUDGMENT RULE DEMAND PURPOSES FACTUAL ALLEGATIONS STEINBERG INFERENCES SHAREHOLDERS PARTICULARITY STOCK PRICE FIDUCIARY DUTY STOCK OPTION PLAN PLEADING STANDARDS FIRST REPRICING |
ORMNAL
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE 1 /
IN AND FOR NEW CASTLE COUNTY
>
MICHELE S. CRIDEN, >1
Plaintix 1>
V. >>
JONATHAN L. STEINBERG, BRUCE L. > C. A. No. 17082
SOKOLOFF, PETER M. ZIEMBA, and >
S. CHRISTOPHER MEIGHER, III, >>
Defendants, >>
INDIVIDUAL INVESTOR GROUP, INC. 1>
Nominal Defendant. >)
REPLY BRIEF IN SUPPORT OF
DEFENDANTS' MOTION TO DISMISS
Barry M. Klayman Kenneth J. Nachbar
Todd C. Schiltz MORRIS, NICHOLS,
WOLF, BLOCK, SCHORR AND ARSHT & TUNNELL
SOLIS-COHEN, LLP 1201 North Market Street
920 King Street, Suite 300 P.O. Box 1347
Wilmington, DE 1980 l-33 19 Wilmington, DE 19899-l 342
(302) 777-5860 (302) 575-7294
Richard J. Morvillo Attorneys for Nominal Defendant
KIRKPATRICK & LOCKHART LLP
1800 Massachusetts Avenue, N. W.
2nd Floor
Washington, DC 20036- 1800
(202) 778-9000
Attorneys for the Individual Defendants
DSW:32658.1
TABLE OF CONTENTS
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Argument . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SNIPPETS:
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3
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OPENING BRIEF IN SUPPORT OF DEFENDANTS MOTION TO DISMISS
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EXTRACTED KEY WORDS
STOCK OPTION STOCK OPTION REPRICING ALLEGATIONS EMPLOYEE STOCK OPTION REPRICING DECISION DEMAND DIRECTORS DEL TRANSACTION FACTS DEFENDANTS AMENDED COMPLAINT COURT FIDUCIARY DUTY SUPR STEINBERG PARTICULARIZED FACTS DISINTERESTED DIRECTORS PRESUIT DEMAND EXERCISE PRICE SHAREHOLDER REASONABLENESS NON-EMPLOYEE STOCK OPTION BUSINESS JUDGMENT INDIVIDUAL INVESTOR ACCORDING UNDERWATER STOCK OPTION PLANS COMPENSATION |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE P
IN AND FOR NEW CASTLE COUNTY
>
MICHELE S. CRIDEN, >>
Plaint$ >>
V. >
>
JONATHAN L. STEINBERG, BRUCE L. >
SOKOLOFF, PETER M. ZIEMBA, and > C. A. No. 17082
S. CHRISTOPHER MEIGHER, III, >>
Defendants, 1>
INDIVIDUAL INVESTOR GROUP, INC. > -:
> . -
Nominal Defendunt. >>
OPENING BRIEF IN SUPPORT OF
DEFENDANTS' MOTION TO DISMISS
Barry :M. Klayman Kenneth J. Nachbar
Todd C. Schiltz MORRIS,NICHOLS,
WOLF,BLOCK,SCHORRAND ARSHT&TUNNELL
SOLIS-COHEN, LLP 1201 North Market Street
920 King Street, Suite 300 P.O. Box 1347
Wilmington, DE 19801-3319 Wilmington, DE 19899-1342
(302) 777-5860 (302) 575-7294
Richard J. Morvillo Attorneys for Nominal Defendant
Luther Zeigler
Kenneth F. Rossman
CROWELL&MORING LLP
1001 Pennsylvania Avenue, NW
Washington, DC 20004-2595
(202) 624-2655
Attorneys for the Individual Defendants
DSW:31429.1
TABLE OF CONTENTS
STATEMENT OF NATURE AND STAGE OF THE PROCEEDINGS . . . . . . . . . . . . . . . . . . . 1
THE AMENDED COMPLAINT'S ALLEGATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SNIPPETS:
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4
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OPENING BRIEF
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EXTRACTED KEY WORDS
COURT DIRECTORS STOCK OPTION DEL SUPPORT STOCK OPTION REPRICING STEINBERG DEFENDANTS TRANSACTION REPRICING DECISION EMPLOYEE STOCK OPTION DELAWARE ALLEGATIONS FACTS DEMAND INDIVIDUAL INVESTOR FIDUCIARY DUTY COMPLAINT INDIVIDUAL INVESTOR GROUP PARTICULARIZED FACTS NON-EMPLOYEE STOCK OPTION DISINTERESTED DIRECTORS BUSINESS JUDGMENT SHAREHOLDER MORING LLP NORTH MARKET STREET WILMINGTON ATTORNEYS EXERCISE PRICE |
ORIGINAL
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
MICHELE S. CRIDEN,
Pluintl$
V.
JONATHAN L. STEINBERG, BRUCE L.
SOKOLOFF, PETER M. ZIEMBA, and C. A. No. 17082
S. CHRISTOPHER MEIGHER, III,
Defendants,
INDIVIDUAL INVESTOR GROUP, INC.
Nominal Defendant.
OPENING BRIEF IN SUPPORT OF
DEFENDANTS' MOTION TO DISMISS
Barry M. Klayman Kenneth J. Nachbar
Todd C. Schiltz MORRIS, NICHOLS,
WOLF, BLOCK, SCHORR AND ARSHT & TUNNELL
SOLE-COHEN, LLP 1201 North Market Street
920 King Street, Suite 300 P.O. Box 1347
Wilmington, DE 19801-3319 Wilmington, DE 19899-1342
(302) 777-5860 (302) 575-7294
Richard J. Morvillo Attorneys for Nominal Defendant
Luther Zeigler
Kenneth F. Rossman
CROWELL & MORING LLP
100 1 Pennsylvania Avenue, NW
Washington, DC 20004-2595
(202) 624-2655
Attorneys for the Individual Defendants
SNIPPETS:
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5
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COMPLAINT
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EXTRACTED KEY WORDS
INDIVIDUAL INVESTOR RE-PRICING PRICE STOCK INVESTOR GROUP EXERCISE DIRECTORS PLAINTIFF STRIKE PRICE DEMAND STEINBERG COURT SOKOLOFF MARKET SHAREHOLDER PETER MATERIAL TIMES DEFENDANT JONATHAN LOSS LOSSES NOMINAL DEFENDANT ZIEMBA CHRISTOPHER MEIGHER COMMON STOCK BUSINESS ALLEGATIONS SUBSTANTIAL AMOUNT INDEPENDENCE DUTY |
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
------------------------------------ X
MICHELE S. CRIDEN, ::
Plaintiff, .. C.A. No.
. :
V. ..:
JONATHAN L. STEINBERG, :
BRUCE L. SOKOLOFF, :
PETER M. ZIEMBA, AND :
S. CHRISTOPHER MEIGHER, III ::
Defendants, : . .
:
INDIVIDUAL INVESTOR GROUP, INC. ::
Nominal Defendant.
----------------------------------- t
Plaintiff, Michele S. Criden, by and through her undersigned
attorneys, sue defendants Jonathan L. Steinberg, Bruce L.
Sokoloff, Peter M. Ziemba, S. Christopher Meigher, III, and
Individual Investor Group, Inc., and allege, upon information and
belief, as follows:
PARTIES
1. Plaintiff, Michele S. Criden, owns, and has owned at
all relevant times to this action, common stock of Nominal
Defendant, Individual Investor Group, Inc.
2. Nominal Defendant, Individual Investor Group, Inc.,
("Individual Investor Group11 or llCompany18) is a Delaware
Corporation with its principal place of business at 1633
Broadway, 38th Floor, New York, New York 10019. Individual
Investor Group is in the business of publishing magazines that
provide market and financial information to individual investors.
Its stock is publicly traded on the NASDAQ stock market.
3. At all material times, Defendant Jonathan L. Steinberg
was and is Chief Executive Officer and Chairman of the Board of
Individual Investor Group.
4. At all material times, Defendant Bruce L. Sokoloff was
and is a director of Individual Investor Group.
5. At all material times, Defendant Peter M. Ziemba was
and is a director of Individual Investor Group.
6. At all material times, Defendant S. Christopher
Meigher, III was and is a director of Individual Investor Group.
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