C. L. Grimes Case Summary

Words: 143
Pages: 1

C.L. Grimes, a shareholder sued against Defendant Board of Directors and CEO James L. Donald to invalidate Donald’s employment agreement which Grimes believed effectively abdicated the Board’s management powers to Donald. Donald and the Board agreed upon an agreement that would run until Donald’s 75th birthday. The agreement provided a salary, incentive plans and health insurance. The agreement secured Donald the “the general management of the affairs of the Company.” The agreement also provided that if Donald was “constructively terminated without cause,” he would be eligible for a colossal retirement package. Grimes understood this provision as the Board abdicating their management responsibilities to Donald. Grimes wrote the Board, demanding