In Pfeiffer v. Leedle, C.A. No. 7831, 2013 WL 5988416 (Del. Ch. Nov. 8, 2013), the Delaware Court of Chancery held that the business judgment rule did not protect a board’s decision to approve stock option grants that exceeded the maximum number of options permitted under the company’s stock incentive plan. Plaintiff brought a shareholder derivative action challenging the grants, and the defendant directors moved to dismiss for failure to make a pre-suit demand. The court agreed with defendants that the business judgment rule protects directors if they follow proper procedures, even if they do not “actually. . . make the ‘correct’ decision.” The court emphasized that directors can be liable only if they “knowingly or deliberately failed to adhere to the terms of a stock incentive plan.” The court observed that “[o]ne way that a plaintiff can allege sufficiently a knowing and deliberate failure on the part of a board is by demonstrating that the alleged action was a clear and unambiguous violation of the company’s stock incentive plan.” The court concluded that because the “plaintiff presents particularized factual allegations that indicate that the board clearly violated an unambiguous provision of a stock plan, it is proper to infer that such violation was committed knowingly or intentionally and, therefore, that demand should be excused.”