Robert S. Gaynor and Janet Stone v. James L. Buckley, Julian N. Cheatham, Robert B. Pamplin, John S. Brandis and Georgia-Pacific Corporation

Appellant Robert S. Gaynor, with appellant Janet Stone as plaintiff-inter venor, brought a stockholder’s derivative action to cancel certain stock options issued by appellee Georgia-Pacific Corporation (G-P) to appellee John S. Brandis, one of its officers. The other named appellees are members of G-P’s board of directors.

The facts are not in dispute, and are more fully stated in the opinion of the trial court. (D.Ore., 1962, 203 F.Supp. 620 ) In brief, G-P hired Brandis as chief forester shortly after it began major operations in Oregon. Brandis was allowed to retain his interests in several lumber and wood-products companies, and he later increased these holdings. Early in 1956, Brandis was made a vice president of G-P, and its board voted to grant him an option to purchase 10,000 shares of G-P, over a six-year period commencing on January 1, 1958, at 95 per cent of current market price. The actual stock option (and employment) agreement was executed by G-P and Brandis on February 7, 1956, and ratified by the board on April 25, 1956. To insure Brandis’ complete attention to the affairs of G-P, the agreement provided that the option was to terminate on December 31, 1958, unless…