Texas = Judiciary Online

Trial Court Cause No.=20 2005-63586

O P I N I O=20 N

=20 This case arises from a falling out between a corporate CEO = and his=20 former employer. = After Pride=20 International, Inc. fired Paul Bragg and paid him a severance owed = under=20 his employment agreement, Bragg sued Pride for breach of that = contract,=20 contending that the Pride owes him three times as much in = severance as it=20 had paid him. Pride = counter-claimed against Bragg for breach of fiduciary duty, = contending=20 that Bragg had misrepresented his opinion of the value of the = severance=20 package to Pride and its shareholders, in that he never disclosed = that he=20 thought the agreement (and others like it) was worth so much. The trial court granted = summary=20 judgment both to Pride and to Bragg, so that both received a = take-nothing=20 judgment. Both = appeal the=20 trial court=92s judgment. = We=20 conclude that the employment agreement is not ambiguous, and that = Bragg=20 failed to raise a fact issue as to breach of the agreement. We further conclude that = Pride has=20 raised no issue of fact under Delaware law as to any = material breach=20 of fiduciary duty. = We=20 therefore affirm.

Background

Bragg=92s Employment = with=20 Pride

=20 Pride hired Bragg as its chief financial officer = (=93CFO=94) in July=20 1993. In 1998, = Pride promoted=20 Bragg to President and Chief Operating Officer. In February 1999, the = parties=20 executed an employment agreement. =20 The following month, Pride promoted Bragg to Chief = Executive=20 Officer (=93CEO=94), after the current CEO, Ray Tolson, = retired.

Bragg served as = Pride=92s CEO=20 from March 1999 until June 2005, when Pride asked for, and = received,=20 Bragg=92s resignation. = Pride=92s=20 board chairman provided Bragg with a =93Summary of Separation = Benefits=94 term=20 sheet, which outlined the termination benefits that Bragg would = receive=20 pursuant to the February 1999 employment agreement. The following day, Bragg = executed=20 a resignation letter agreement. =20 Thirty days following his resignation, Pride paid Bragg $8 = million=20 in severance, as contemplated in the letter of=20 resignation.

The Employment=20 Agreement

The provisions in the = agreement=20 that govern Bragg=92s term of employment and termination are = sections 3.03=20 and 3.05. They=20 read:

3.03 TERM OF EMPLOYMENT (=93EMPLOYMENT = PERIOD=94).=20 Executive=92s regular employment (no Change in Control being = presently=20 contemplated) will commence on the Effective Date of this = Agreement and=20 will be for a term of two (2) years ending at 12:00 o=92clock = midnight=20 February 4, 2001; thereafter, the Term of Employment of Executive = will be=20 automatically extended for successive terms of one (1) year each=20 commencing February 5, 2001, and on February 5 of each year = thereafter,=20 unless Company or Executive gives written notice to the other that = employment will not be renewed or continued after the next = scheduled=20 expiration date which is not less than one year after the date = that the=20 notice of non-renewal was given. =20 All extended employment terms will be considered to be = within the=20 Employment Period while Executive is employed with the Company.=20

3.05 TERMINATION WITHOUT CHANGE IN = CONTROL. The Company shall have = the right=20 to terminate Executive at any time during the Employment Period = (including=20 extended term). = Should the=20 Company choose not to renew or extend the Employment period of = this=20 Employment Agreement or choose to terminate the Executive during, = or at=20 the end of, the Employment Period, or in the event of death or = disability=20 of the Executive, if the termination is not after a Change of = Control and=20 is not for cause, the Company shall, within thirty (30) days = following=20 such termination, pay and provide to the = Executive:

a. An amount equal to two full years of = his base=20 salary . . .

b. The Company shall provide to = Executive for a=20 period of two (2) full years following the Date of Termination, = life,=20 health, accident and disability insurance. . . = .

c. An amount equal to two (2) times the = target=20 award for the Executive under the Company=92s annual bonus plan = for the=20 fiscal year in which the termination occurs . . . = .

The section 3.05 = severance=20 benefits also include the value of the Executive=92s retirement = plan, stock=20 options, and life, health, hospitalization, medical, and accident = benefits=20 to the Executive=92s spouse and dependents for same term as the = Executive=92s=20 benefits. =20

Though Bragg = acknowledges that=20 he received severance pay pursuant to the agreement=92s provision = dealing=20 with termination, he contends that he is entitled to $17 million = in=20 additional compensation. = He=20 urges that, under section 3.03 of the agreement, the term of his=20 employment had =93renewed=94 the February before he resigned, and = thus,=20 Pride=92s termination was not effective until the end of the = renewal period=20 for the purpose of calculating his severance. Under his reading of = section 3.03=20 of the agreement, Bragg contends that he should have continued to = receive=20 the salary and benefits he received as a current employee, listed = in=20 section 3.04 of the agreement, through the end of his renewal = period, plus=20 the severance. = Section 3.04=20 of the agreement sets forth Bragg=92s compensation during the = Employment=20 Period. It=20 reads:

3.04 COMPENSATION AND BENEFITS. During the Employment = Period the=20 Executive shall receive the following compensation and=20 benefits:

a. He shall receive an annual base = salary of not=20 less than his [sic] annual base salary which is $334,000, with the = opportunity for increases, from time to time thereafter, which are = in=20 accordance with the Company=92s regular executive compensation=20 practices. = Executive=92s salary=20 will be reviewed at least annually by the Compensation Committee = of the=20 Board of Directors.

b. . . . [H]e shall be eligible to = participate on=20 a reasonable basis, and to continue his existing participation, in = annual=20 bonus, stock option and other incentive compensation plans which = provide=20 opportunities to receive compensation in addition to his annual = base=20 salary which are the greater of: (i) the opportunities provided by = the=20 Company for Executives with comparable duties, or (ii) the = opportunities=20 under any such plans in which he was participating immediately = prior to=20 the Effective Date of this Agreement.

c. . . . [H]e shall be entitled to = receive and=20 participate in salaried employee benefits including, but not = limited to:=20 medical, life, health, accident and disability insurance and = disability=20 benefits . . . .

Section 3.04 benefits = also=20 include retirement benefits, paid vacations, use of Company car, = and=20 participation in incentive stock and benefit plans.

Pride denies that = section 3.03=20 requires it to compensate Bragg beyond the amount set forth in = section=20 3.05. It observes = that=20 section 3.05 grants it the =93right to terminate [Bragg] at any = time=20 (including any extended term).=94

The Breach of = Fiduciary Duty=20 Claim

During Bragg=92s = tenure, he=20 rejected claims against Pride advanced by two departing officers, = under=20 sections 3.03 and 3.05 of the employment agreement, which urged = the very=20 interpretation he now makes against Pride. These former officers, = John=20 O=92Leary, a former president of Pride, and Jonathan Talbot, a = former=20 vice-president of marketing, had employment agreements similar to = Bragg=92s=20 agreement. Both = O=92Leary and=20 Talbot advanced claims for additional compensation under the same=20 interpretation of section 3.03 that Bragg now advances, and Bragg, = as CEO,=20 rejected them. In = addition,=20 In March 1999, the head of the compensation committee asked Bragg = to=20 summarize the severance due to the outgoing CEO, Ray Tolson, if = Pride=20 terminated him without cause. =20 Bragg included in Tolson=92s benefits only the severance = outlined in=20 section 3.05. =20

In response to = Pride=92s contract=20 defenses, Bragg testified that he had always understood his = contract to=20 require additional compensation under the section 3.03 renewal=20 provision. = Bragg=92s assertion=20 that he had held this opinion while CEO but did not advise Pride = of it or=20 otherwise act to clarify the language prompted Pride to = counter-sue him=20 for breach of fiduciary duty, contending that Bragg had failed to = disclose=20 material information to Pride=97namely, Bragg=92s understanding of = the=20 employment agreement.

The Trial Court=92s=20 Ruling

=20 In October 2006, the trial court granted summary judgment=20 dismissing with prejudice Bragg=92s breach of contract claim for = additional=20 compensation under section 3.03 of the agreement. In December 2006, the = trial court=20 granted summary judgment dismissing with prejudice Pride=92s = counterclaim=20 against Bragg for breach of fiduciary duty. The trial ordered that = both=20 parties take nothing by their suits.

Summary=20 Judgment

We=20 review a trial court=92s summary judgment de novo. Valence=20 Operating Co. v. Dorsett, 164=20 S.W.3d 656, 661 (Tex.=20 2005); Provident Life & = Accident=20 Ins. Co. v. Knott, 128=20 S.W.3d 211, 215 (Tex. 2003). Under = the=20 traditional standard for summary judgment, the movant = has the=20 burden to show that no genuine issue of material fact exists and = that the=20 trial court should grant a judgment as a matter of law. Tex. R. Civ. P. = 166a(c); KPMG=20 Peat Marwick v. Harrison = County = Hous. Fin.=20 Corp., 988 = S.W.2d=20 746, 748 (Tex. = 1999). In our review, we take as true all evidence favorable to = the=20 nonmovant, and indulge every reasonable inference and resolve any = doubts=20 in the nonmovant=92s favor. =20 Dorsett, 164=20 S.W.3d at 661; Knott, 128 S.W.3d at 215; = Sci.=20 Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 = (Tex.=20 1997). = Our=20 task is to =93consider whether reasonable and fair-minded jurors = could=20 differ in their conclusions in light of all of the evidence = presented.=94=20 Goodyear Tire = & Rubber=20 Co. v. Mayes, 236 S.W.3d 754, 755=9656 (Tex. 2007) (citing Wal-Mart Stores, Inc. v.=20 Spates, 186 S.W.3d 566, 568 = (Tex. 2006);=20 City of Keller v. Wilson, 168 S.W.3d 802, = 822=9625=20 (Tex.=20 2005)). When, as = here, a=20 summary judgment does not specify the grounds on which it was = granted, we=20 will affirm the judgment if any one of the theories advanced in = the motion=20 is meritorious. Joe v. Two Thirty Nine Joint Venture, 145 = S.W.3d=20 150, 157 (Tex. = 2004).

BRAGG=92S=20 APPEAL

=20 Bragg contends that Pride breached its employment agreement = with=20 him by (1) failing to compensate Bragg for its failure to give him = notice=20 of non-renewal of the agreement before terminating his position as = CEO;=20 (2) awarding $400,000 as his 2004 bonus rather than $1.023 = million; and=20 (3) requiring him to pay the employee portion of the insurance = premiums=20 for the benefits provided to him after his termination. Bragg contends that the = agreement=20 is, at a minimum, ambiguous on these matters, thus precluding = summary=20 judgment. Pride = responds that=20 section 3.05 of the agreement unambiguously provides that Pride = may=20 terminate Bragg at any time without notice, including during any = extended=20 term, and expressly sets forth all severance compensation, whether = the=20 termination be =93during, or at the end of, the Employment = Period.=94

Contract=20 Interpretation

Our=20 primary concern in interpreting a contract is to ascertain and = give effect=20 to the intent of the parties as it is expressed in the=20 contract. Seagull Energy E & P, = Inc. v. Eland=20 Energy, Inc., 207 S.W.3d 342, 345 (Tex. = 2006). To achieve this = objective, =93courts=20 should examine and consider the entire writing in an effort to = harmonize=20 and give effect to all the provisions of the contract so that none = will be=20 rendered meaningless.=94 =20 Dorsett,=20 164 S.W.3d at 662. =20

Whether=20 a contract is ambiguous is a question of law = for the=20 court. Heritage = Res., Inc.=20 v. NationsBank, 939=20 S.W.2d 118, 121 (Tex. 1996). If the contract is so = worded that=20 it can be given a certain or definite legal meaning or=20 interpretation, then it is not ambiguous, and a court should construe the contract as = a matter of=20 law . SAS Inst., Inc. v.=20 Breitenfeld, 167=20 S.W.3d 840, 841 (Tex. 2005) = (quoting Coker v. Coker, 650 = S.W.2d 391,=20 393 (Tex. 1983)); ACS = Investors, Inc.=20 v. McLaughlin, 943=20 S.W.2d 426, 430 (Tex. 1997). An = unambiguous contract=20 is construed according to = the plain=20 meaning of its express = wording. Dorsett,=20 164 S.W.3d at 662. Unambiguous contracts are enforced as written. Heritage Res., = Inc., 939 S.W.2d at 121.=20

In=20 contrast, =93[a] = contract is=20 ambiguous when its meaning is uncertain and doubtful or is = reasonably=20 susceptible to more than one interpretation.=94 Id. We=20 determine whether a contract is ambiguous by examining it as a = whole, in=20 light of the circumstances present when the parties entered the=20 contract. = Universal Health=20 Servs., Inc. v. Renaissance Women=92s Group, P.A., 121 S.W.3d 742, 746 = (Tex.=20 2003). = If a=20 court determines a contract is ambiguous, then a factfinder may = consider=20 extraneous evidence to ascertain the true meaning of the = instrument. Nat=92l Union Fire Ins. Co. = of=20 Pittsburgh, Pa. v. CBI Indus., Inc., 907 S.W.2d 517, 520 = (Tex. = 1995). If an ambiguity exists, = either=20 patent or latent, contract interpretation becomes a fact issue, = resolved=20 by deciding the parties=92 true intent. Coker, 650 S.W.2d at = 394; Quality=20 Infusion Care, Inc. v. Health Care Serv. = Corp., 224 S.W.3d = 369, 379=20 (Tex. App.=97Houston [1st Dist.] 2006, no = pet.).=20

Analysis

Here, the parties = agree that=20 Pride did not notify Bragg of the expiration of the employment = agreement=20 as authorized in section 3.03. The dispute concerns whether Pride = was=20 required to give one-year=92s notice under pain of continuing to = pay Bragg a=20 salary or whether, as expressed in section 3.05, Pride could = terminate at=20 any time (including during the Employment Period) so long as it = provided=20 the agreed-upon severance. = Bragg reads sections 3.03 and 3.05 as enumerating separate=20 obligations, triggering multiple remedies, requiring Pride to = provide=20 salary and compensation under section 3.04 of the agreement as if = he=20 remained in Pride=92s employ, in addition to severance benefits = until the=20 agreement expired. = Pride=20 observes, however, that notice of non-renewal does not trigger any = compensation other than that defined in section 3.05 because = section 3.05=20 expressly allows Pride to terminate an executive at any time, = including=20 =93during the Employment Period,=94 provided that it compensates = the Executive=20 with the severance benefits enumerated in that section.

We agree with the = trial court=20 that sections 3.03 and 3.05 are not ambiguous. Section 3.03 sets forth = the period=20 of Bragg=92s employment, or as the agreement defines it, the = =93Employment=20 Period.=94 It = declares: =93All=20 extended employment terms will be considered to be within the = Employment=20 Period while the Executive is employed with the Company.=94 Bragg asserts that this = sentence=20 relates only to an employee=92s voluntary departure, but the = provision=20 contains no limiting language. =20 Section 3.03 says that when an employee is employed with = the=20 company, he is within his employment period, and thus is entitled = to=20 compensation under section 3.04. =20 It does not suggest that a fired employee nonetheless = continues to=20 be within the employment period. =20 Under section 3.03, an executive who is not employed with = the=20 company is not within any =93employment = period.=94

Tacitly conceding = this=20 interpretation of section 3.03 to be reasonable, Bragg claims that = section=20 3.04 suggests otherwise. =20 Section 3.04, which outlines an executive=92s compensation = and=20 benefits, during employment, states: =93During the Employment = Period, the=20 Executive shall receive the following compensation and benefits. . = .=20 .=94 Bragg urges us = to construe=20 this language in conjunction with yet another section of the = agreement,=20 section 2.06, which defines =93termination=94 as used in the=20 agreement:

=93[T]ermination shall mean termination, = prior to=20 the expiration of the Employment Period, of the employment of the=20 Executive with the Company {including death and disability (as = described=20 below)} for any reason other than cause (as described below) or = voluntary=20 resignation (as described below). =20 Termination includes =93Constructive Termination=94 as = described=20 below. Termination = includes=20 non-renewal or failure to extend this Agreement at the end of any=20 employment term, except for cause.

The agreement then = elaborates=20 on the various kinds of termination, including disability, cause,=20 constructive termination, and voluntary resignation. Section 2.06 concludes = by=20 stating:

Termination that entitles the Executive = to the=20 payments and benefits provided in the =93Termination Payments and = Benefits=94=20 Section hereof shall not be deemed or treated by the Company as = the=20 termination of the Executive=92s employment or the forfeiture of = his=20 participation, award, or eligibility, for the purpose of any plan, = practice or agreement of the Company referred to in the = Compensation and=20 Benefits Section hereof.

Bragg suggests that = the word=20 =93agreement=94 in this last sentence includes the employment = agreement=20 itself. Thus, he = asserts, his=20 termination under section 3.05 should not be deemed a termination = of his=20 employment for the purpose of his employment agreement, but = instead, he=20 remained within his Employment Period even after termination for = purposes=20 of calculating the money owed to him until the expiration of the = period=20 following renewal of the agreement. =20 Like the trial court, we disagree with Bragg=92s = interpretation. Section 2.06 = refers to the=20 compensation and benefits in section 3.04; it does not modify=20 =93termination=94 as defined under the agreement. The only reasonable = construction=20 of =93plan, practice or agreement=94 in section 2.06 is as a = reference to the=20 insurance, stock, and retirement plans for which Bragg continues = to be=20 eligible under his severance package as described in section = 3.05. If we applied Bragg=92s=20 interpretation and construed =93agreement=94 in section 2.06 to = include the=20 Employment Agreement as a whole, it would render the last sentence = of=20 section 3.03 and the entirety of section 3.05 meaningless. That is not a reasonable = interpretation. See Dorsett,=20 164 S.W.3d at 662 (=93Courts should examine and consider the = entire writing=20 in an effort to harmonize and give effect to all the provisions of = the=20 contract so that none will be rendered=20 meaningless.=94).

Bragg=20 further relies on section 3.05(j), a savings clause, which states: = =93The=20 Company=92s obligation under this Section to continue to pay or = provide . .=20 . insurance to the Executive and [his dependents] during the = remainder of=20 the Employment Period shall be reduced=94 when Executive is = provided these=20 benefits by another employer. =20 According to Bragg, if the employment period were over, = section=20 3.05(j) would be meaningless, because there would be no employment = period=20 during which to provide insurance benefits. Section 2.06, however, = states that=20 the Employment Period is not treated as terminated with respect to = the=20 employee benefit plans made a part of the severance package under = section=20 3.05. Bragg thus is = treated=20 as within his Employment Period under section 3.05(j) only for = purposes of=20 the insurance and other benefits expressly provided as a part of = his=20 severance.

=20 Finally, Bragg contends that sections 3.03 and 3.05 are = ambiguous=20 when read together because section 3.03 requires notice of = termination,=20 while section 3.05 allows an employee to be terminated at any = time. We conclude that these = sections=20 can be harmonized without creating any ambiguity. =

Section=20 3.03 creates a term of employment for Bragg, or an Employment = Period. The contract guaranteed = Bragg a=20 term of at least one, and as much as two years=92 employment under = his=20 extended term.[1] Section 3.05 allows = Pride to=20 terminate an executive at any time, including =93during, or at the = end of=20 the Employment Period,=94 as long as it pays the executive the = benefits=20 enumerated in section 3.05. =20 Bragg contends that an interpretation that section 3.05 is = the sole=20 compensation when Pride terminates an employee without notice = renders=20 section 3.03 meaningless. = We=20 disagree. The = severance=20 provided in section 3.05 provides = Bragg with=20 two years=92 salary and benefits, which is the maximum amount of = time that=20 an employee could have received salary and benefits under the = agreement=20 upon automatic renewal. =20 Section 3.05 thus provides salary and benefits for at least = the=20 same amount of time that an employee would receive them if he had = been=20 provided notice under section 3.03. =93When an = employment=20 contract requires a certain period of notice, the employment may = be=20 cancelled on shorter notice or upon none at all if the employee is = paid=20 wages or salary for the specified notice period.=94 Hussong v. Schwan's Sales = Enter.,=20 Inc., 896 S.W.2d 320, 326 (Tex. App.=97Houston [1st Dist.] = 1995, no=20 writ); see also Stolz v. Wells, 43 S.W.2d 163, 165 (Tex. = Civ.=20 App.=97Beaumont 1931, no writ). =20 With the severance payment, Pride paid Bragg his salary for = the=20 specified notice period. =20

Section 3.05 = contemplates the=20 possibility that an executive could be terminated =93during=94 his = employment=20 period and outlined the benefits owed in such an event. A severance pay = provision=20 serves =93to = assure a worker=20 whose employment has terminated certain funds while he seeks = another job.=94=20 Martin v. Mann Merchandising, = Inc., 570 = S.W.2d 208,=20 209 (Tex. Civ. App.=97Eastland 1978, writ ref=92d n.r.e.). Section 3.05 = accomplishes that=20 purpose by unambiguously enumerating the benefits available = in the=20 event of termination regardless of whether it occurs due to = expiration of=20 the employment period or earlier, due to Pride=92s exercise of its = right to=20 fire an executive at any time during the employment period. We hold that the = exercise of=20 an express right to terminate without cause terminates an = agreement that=20 is then in effect because there has been no notice of = non-renewal. Because the contract = does not=20 require Pride to pay $17 million additional compensation under = section=20 3.03, Pride did not breach the contract by failing to provide = additional=20 compensation beyond the $8 million it paid pursuant to its = obligation=20 under section 3.05. =20

2004 Annual=20 Bonus

=20 Bragg contends that Pride also breached its contract by = improperly=20 reducing his 2004 incentive bonus. =20 According to Bragg=92s summary judgment evidence, his = target bonus=20 was $1,023,000, yet he received only $400,000 from Pride. Bragg asserts that = although Pride=20 had discretion to award bonuses, its discretion is limited, and = Pride was=20 required to treat Bragg on the same basis that it treated other = Pride=20 executives of comparable duties who received proportionally larger = bonuses. With = respect to=20 bonuses, Section 3.04 contract states:

=93[Bragg] shall be eligible to = participate on a=20 reasonable basis . . . in incentive compensation plans which = provide=20 opportunities to receive compensation in addition to his annual = base=20 salary which are the greater of: (i) the opportunities provided by = the=20 Company for Executives with comparable duties; or (ii) the = opportunities=20 under any such plans in which he was participating immediately = prior to=20 the Effective Date of this Agreement.=94

Bragg does not = contend that he=20 was not given comparable participation opportunities in incentive=20 compensation plans, only that his bonus was lower than comparable=20 executives. = Pride=92s proxy=20 statements state that any bonus is discretionary. The employment agreement = merely=20 provides that Bragg is eligible to receive bonuses, but it does = not=20 require that they be paid; rather, it refers to incentive plans = that are=20 separate from the agreement. =20 Bragg has failed to raise a fact issue that his 2004 bonus = was=20 nondiscretionary under the employment agreement. We thus hold that the = trial court=20 properly granted summary judgment on this = claim.

Insurance=20 Benefits

=20 Bragg=92s final issue is that Pride breached its employment = agreement=20 by not paying the employee portion of his insurance benefits = provided=20 under section 3.05(b), which states: =93The Company shall provide = to=20 Executive for a period of two (2) full years following the Date of = Termination, life, health, accident, and disability = insurance. These benefits are not = to be less=20 than the highest benefits furnished to the Executive during the = term of=20 this Agreement.=94 = This section=20 does not support Bragg=92s contention that Pride must pay the = employee=92s=20 share of insurance premium costs. =20 It merely obligates Pride to provide coverage and benefits = that=20 match those Bragg received while in Pride=92s employ, which it has = done. We hold that = the=20 contract does not require Pride to pay Bragg=92s share of his = insurance=20 costs if he paid them as an employee, and thus, Pride did not = breach its=20 contract. The trial = court=20 therefore properly granted summary judgment on this=20 claim.

PRIDE=92S=20 APPEAL

Pride contends that = Bragg=20 breached his fiduciary duty by failing to disclose to Pride his = personal=20 opinion that his employment agreement obligated Pride to pay him = both=20 severance pay under section 3.05 and a salary until his employment = period=20 otherwise would expire. = It=20 further contends that Bragg misrepresented the extent of Pride=92s = potential=20 liability for his and similar employment agreements in failing to = disclose=20 his interpretation of the agreement. =20 We agree with the trial court that Bragg is entitled to = summary=20 judgment on Pride=92s claim.

Breach of Fiduciary = Duty Under=20 Delaware = Law

Because Pride is = incorporated=20 in Delaware,=20 Delaware law = governs Pride=92s=20 breach of fiduciary duty claim.[2] In a breach of fiduciary = duty=20 case, the plaintiff must prove that: (1) a fiduciary duty exists; = and (2)=20 a fiduciary breached that duty. See=20 O=92Malley v. Boris, 742 A.2d 845, 849=9650 (Del. 1999) = (analyzing breach=20 of fiduciary duty claim based on two-part test). In addition to his CEO = title, Bragg=20 also served as a director. = Directors of Delaware corporations have a = fiduciary=20 relationship with both the stockholders and the corporation upon = whose=20 board they serve.[3] Malone v. Brincat, 722 A.2d 5, 10 (Del. = 1998). The director=92s = fiduciary duty to=20 both the corporation and its shareholders is a =93triad: due care, = good=20 faith, and loyalty.=94 Id.; see also = Cede & Co. v. = Technicolor,=20 Inc., 634 A.2d=20 345, 361 (Del. 1993).=20

These = general=20 fiduciary duties specifically include a duty of disclosure. Malone, 722 A.2d at 10. = This duty obligates = directors to=20 provide the stockholders with accurate and complete information = material=20 to a transaction or other corporate event. Id.; see also Mills Acquisition Co. = v.=20 Macmillan, Inc., 559 A.2d 1261, 1283 = (Del.=20 1988) (fiduciaries may not =93use superior information or = knowledge to=20 mislead others in performance of their own fiduciary = obligations=94). Disclosure does not = mean, however,=20 that a board must know every fact, and directors have no duty to = disclose=20 speculative or contingent information. See Benihana of Tokyo, Inc. v. = Benihana,=20 Inc.,=20 891 A.2d 150, 179 (Del. Ch. 2005); Arnold v. Soc=92y for Sav. = Bancorp, Inc.,=20 650 A.2d 1270, 1280 (Del. 1994) (Generally,=20 =93Delaware law does not require = disclosure=20 of inherently unreliable or speculative information which would = tend to=20 confuse stockholders or inundate them with an overload of=20 information.=94). =20 Rather, directors are responsible for considering material = facts=20 that are reasonably available, not those that are immaterial or = out of the=20 board=92s reasonable reach. =20 Benihana, 891 A.2d at = 179.; Brehm v. = Eisner, 746=20 A.2d 244, 259 (Del. 2000). = The term =93material=94 in this context means =93relevant = and of a=20 magnitude to be important to directors in carrying out their fiduciary duty of=20 care in decision-making.=94 =20 Benihana, 891 A.2d at = 179 (quoting=20 Brehm, 746 A.2d at = 260=20 n.49). This meaning = is=20 distinct from the use of the term =93material=94 in the quite = different=20 context of disclosure to stockholders in which =93[a]n omitted = fact is=20 material if there is a substantial likelihood that a reasonable=20 shareholder would consider it important in deciding how to = vote.=94 Brehm, 746 A.2d at 260 n.49; = O=92Malley=20 v. Boris, 742 A.2d 845, 850 (Del. 1999). In other words, =93there = must be a=20 substantial likelihood that the disclosure of the omitted fact = would have=20 been viewed by the reasonable investor as having significantly = altered the=20 =91total mix=92 of information made available.=94 Rosenblatt v. Getty Oil=20 Co., = 493=20 A.2d 929, 944 (Del. 1985) (quoting TSC Indus., Inc. v. = Northway,=20 Inc., 426 U.S. 438, 449 = (1976)). A threshold question, = therefore,=20 is whether the information that Pride alleges should have been = disclosed,=20 or was disclosed but was allegedly false and misleading, is = material.=20 If this information = is not=20 material as a matter of law, the allegations will not support a = claim that=20 Bragg violated his disclosure duties.

Analysis

Pride contends that = Bragg=92s=20 opinion concerning his employment agreement is material because: = (1) if=20 Bragg=92s opinion as to the interpretation of the agreement were = correct,=20 Pride=92s potential liability under his and similar agreements = could have=20 been increased by sixty to one-hundred million dollars; (2) = Bragg=92s=20 opinion concerned employment contracts other than his own, and as = CEO, his=20 opinion was material to the negotiation of those contracts; and = (3) if=20 Pride had known about Bragg=92s opinion, it would have taken = actions to=20 expressly nullify such an interpretation. We hold that, in this = context,=20 these reasons are insufficient to raise an opinion to the level of = a=20 material disclosure.

First, Bragg did not = fail to=20 disclose factual information not otherwise available to = Pride. On the contrary, Pride = drafted the=20 disputed employment contract in consultation with legal = counsel. Moreover, Pride=92s = directors knew=20 that conflicting views concerning the interpretation of section = 3.03=20 existed because former directors and employees had unsuccessfully = pursued=20 claims based on the same understanding of the contract during = Bragg=92s=20 tenure with the company. =20 Bragg=92s opinion, therefore, would not have provided new = information=20 to the Board and would not have assisted the Board in its = decision-making=20 duties. =20

Pride contends that = Bragg=92s=20 opinion is material because if it had known about Bragg=92s = opinion, it=20 would have taken corrective action. =20 Pride, however, did not take any corrective action when = former=20 president O=92Leary advanced a claim consistent with Bragg=92s = opinion. Bragg=92s opinion thus = was not=20 material to the Board or the shareholders in its decision-making = process,=20 as it already had the opinion of another high-ranking officer that = the=20 employment agreement was ambiguous. =20

Pride further = contends that=20 Bragg made false representations to the shareholders when he = signed proxy=20 statements that were inconsistent with his true opinion regarding = section=20 3.03. When = confronted with=20 the former directors=92 claims, Pride maintained its belief that = section=20 3.03 did not provide compensation for terminated employees beyond = that=20 expressed in section 3.05. = Bragg adopted proxy statements on behalf of Pride that = reflected=20 Pride=92s position in regard to its employment agreements. He was not required to = provide the=20 shareholders with speculative information based upon his personal = opinion=20 about the contract=92s interpretation when Pride already had = determined that=20 this was an incorrect interpretation. See Cede & Co. v. = Technicolor,=20 Inc., 634 A.2d 345, 372 (Del. 1993) (affirming trial court=92s = finding=20 that there was no need to disclose share value which target = director=20 initially deemed acceptable, without consulting investment = advisors,=20 because non-disclosure was =93plainly not material=94); see also In re Best Lock = Corp.=20 S=92holder Litig., 845 A.2d 1057, 1070=9675 (Del. = Ch. 2001)=20 (dismissing disclosure claims because alleged misrepresentations = were=20 immaterial); In re Lukens = Inc.=20 S=92holders Litig., 757 A.2d 720, 735=9636 (Del. Ch. 1999) = (granting=20 motion to dismiss because alleged omission or misrepresentation = did not=20 meet materiality test).

Second, Bragg had no = duty to=20 disclose his private views as to the interpretation of the = agreement in=20 the context of negotiating and renewing his own employment. In such a context, a = corporate=20 officer acts in his individual capacity, as it is evident that the = company=20 and the employee are adverse to each other in the context of = negotiating=20 that employee=92s compensation. =20 See In re Walt = Disney Co.=20 Derivative Litigation, 906 A.2d 27, 49=9651 (Del. = 2006) (holding president did not breach his = fiduciary duty=20 when he negotiated and accepted severance provisions of employment = agreement or when he accepted a full payout upon=20 termination).

Because the = shareholders and=20 directors had prior knowledge that conflicting views existed = regarding its=20 employment agreement and chose not to take corrective action, = Bragg=92s=20 opinion would not have =93significantly altered the =91total = mix=92 of=20 information.=94 TSC Indus., 426 = U.S. at 449. We thus hold that = Bragg=92s opinion=20 was not material. = Bragg=20 therefore did not breach his fiduciary duty by failing to disclose = it. =

Conclusion=20

=20 We conclude that the employment agreement in dispute is not = ambiguous as to the severance the company owes upon firing its = chief=20 executive, and that Bragg has failed to raise a fact issue as to = his claim=20 that Pride breached the agreement. =20 We further conclude that Pride has raised no issue of fact = under=20 Delaware=20 law that Bragg materially breached his fiduciary duty to the = company. We therefore affirm the = judgment=20 of the trial court.

&nbs= p; = ; = &= nbsp; =20 Jane=20 Bland

&nbs= p; = ; = &= nbsp; =20 Justice

Panel consists of = Chief Justice=20 Radack and Justices Jennings and Bland.