Fox v. CDX Holdings: Delaware Court of Chancery Disallows Escrow Holdback from Stock Options Due to Terms of Incentive Plan | Practical Law
The Delaware Court of Chancery held in Fox v. CDX Holdings that a company breached its stock option plan by assigning an arbitrary and capricious value to the options being cashed out in a merger. The court also held that, despite the terms of the merger agreement, the option plan did not allow any portion of the cash consideration payable to the option holders to be held back in escrow.