Full opinion text
MEMORANDUM OPINION AND ORDER SARA LIOI, District Judge. This is a shareholders’ derivative action. Before the Court are two motions to dismiss Plaintiffs’ Second Amended Consolidated Shareholder Derivative Complaint (Doc. No. 23) (the “Complaint”). On April 27, 2007, Defendants Brian Bachman, James Bartlett, Philip Estler, Allan Gaff-ney, James Griswold, Hermann Hamm, Leon Hendrix, Jr., Mark Hoersten, Frederick Hume, Joseph Keithley, David Patri-cy, John Pesec, Mark Plush, Linda Rae, Ronald Rebner, N. Mohan Reddy, Gabriel Rosica, Terence Sheridan, Sherman Willows, and R. Elton White (collectively, the “Individual Defendants”) filed a motion to dismiss. (Doc. No. 28.) Also on April 27, 2007, nominal defendant Keithley Instruments, Inc., (“KEI”) filed its own motion to dismiss. (Doc. No. 32.) Both the Individual Defendants and KEI seek dismissal pursuant to Federal Rules of Civil Procedure 12(b)(6) and 23.1 based on Plaintiffs’ failure to make a pre-litigation demand on KEI’s board of directors (the “Board”) and Plaintiffs’ failure to plead particularized facts showing that demand was excused as futile. Individual Defendants also seek dismissal on the grounds that Plaintiffs’ substantive claims are barred by the applicable statutes of repose, are insufficient as a matter of law, and/or fail to satisfy applicable pleading standards. Plaintiffs filed separate opposition to each motion. (Doc. Nos. 36 & 38). Both the Individual Defendants and KEI filed replies. (Doc. Nos. 41 & 42.) 1. Statement of Facts and Procedural Background Plaintiff Michael C. Miller filed the initial complaint in this matter on August 15, 2006, in the Court of Common Pleas of Cuyahoga County, Ohio. Defendants removed the matter to this court on September 8, 2006, invoking federal question jurisdiction. (Doc. No. 1.) The Court consolidated this matter with three other actions under the caption of the instant case. (Doc. No. 33.) This consolidated derivative action arises from allegations that directors and officers of KEI manipulated stock option grants. A brief primer on the practices encompassed by the term “manipulated,” courtesy of the Delaware Court of Chancery, is instructive: Stock options “backdating” is a practice whereby a public company issues options on a particular date while falsely recording that the options were issued on an earlier date when the company’s stock was trading at a lower price. The options are purportedly issued with an exercise price equal to the market price on the date of the option grant. But, in fact, because the grant dates were falsified, the options were “in the money” when granted. The practice of “spring loading” stock options involves making market-value options grants at a time when the company possesses, but has not yet released, favorable, material non-public information that will likely increase the stock price when disclosed. Conversely, “bullet-dodging” options are granted just after the company releases negative information to the market thereby allowing the recipient the benefit of a lower exercise price that reflects the price decline caused by the negative information. Desimone v. Barrows, 924 A.2d 908, 918 (Del.Ch.2007) (citations omitted). The Complaint raises federal law claims under Sections 10(b), 14(a), and 20(a) of the Securities and Exchange Act of 1934, 15 U.S.C. § 78 et seq., (the “Exchange Act”), as well as a variety of state law claims. The named Plaintiffs are, and at relevant times have been, shareholders of KEI. (Compl. ¶ 13.) KEI is an Ohio corporation engaged in the design, development, and manufacture of electronic testing and measuring equipment. (Compl. ¶ 14.) The Individual Defendants all are current or former directors and/or officers of KEI. Defendants Bachman, Bartlett, Griswold, Hendrix, Keithley, Reddy and White are current members of KEI’s Board. Defendants Estler, Gaffney, Hamm, Hoersten, Hume, Keithley, Patri-cy, Pesec, Plush, Rae, Rebner, Rosica, Sheridan and Willows are, or were, KEI officers, each of whom is alleged to have received options to purchase KEI shares. Specific allegations regarding each of the Individual Defendants are as follows: A. Directors Defendant Bachman has served as a director since 1996, as a member of the Board’s Compensation Committee since 1997, and previously served on the Board’s Audit Committee from 2000 to 2001. (Compl. ¶ 16.) Defendant Bartlett has served as a director since 1983, on the Compensation Committee from 1995 to 1997 and from 2005 to the present, and on the Audit Committee since 1998. (Compl. ¶ 17.) Defendant Griswold has served as a director since 1989, on the Compensation Committee from 1996 to 2001, and on the Audit Committee from 1995 to 2001. (Compl. ¶ 18.) Defendant Hendrix has served as a director since 1990, on the Compensation Committee since 1998, and on the Audit Committee from 1995 to 1997. (Compl. ¶ 19.) Defendant Keithley has served as the Board’s Chairman since 1991. He has never served on the Compensation Committee. (Compl. ¶ 15.) Defendant Reddy has served as a director since 2001, and on the Compensation Committee from 2002 to 2004. (Compl. ¶ 20.) Defendant White has served as a director since 1994, on the Compensation Committee from 1995 to 2004, and on the Audit Committee from 1998 to 2004. (Compl. ¶ 21.) With the exception of Keithley, none of the current directors is alleged to have received any options. Defendants Bachman, Bartlett, Griswold, Hendrix, Keithley, Reddy and White are referred to collectively as the “Director Defendants.” The table below illustrates the dates of board and committee service for each of the relevant directors. Board Member Director_Compensation Committee Audit Committee Bachman_1996-present_1997-present_2000-2001_ Bartlett_1983-present_1995-1997, 2005-present_1998-present Griswold_1989-present_1996-2001_1995-2001_ Hendrix_1990-present_1998-present_1995-1997_ Keithley_1991-present_ Reddy_2001-present 2002-2004_ White_1994-present 1995-2004_1998-2004 B. Officers Defendants Estler, Gaffney, Hamm, Hoersten, Hume, Keithley, Patricy, Pesec, Plush, Rae, Rebner, Rosica, Sheridan and Willows are current or former KEI officers. Each is alleged to have received manipulated options to purchase KEI shares. Of note, Defendant Keithley, KEI’s President and CEO at all times relevant hereto, allegedly received at least 320,000 manipulated stock options. Keith-ley exercised these options, and the shares he acquired as a result were among the 3,400,000 shares he sold during the relevant time period. (Compl. ¶ 15.) These defendants are referred to collectively as the “Option Recipient Defendants.” C. The Option Grants The allegedly manipulated stock option grants were approved pursuant to KEI’s two stock option plans, the 1992 Stock Incentive Plan and the 2002 Stock Incentive Plan (the “Plans”). The Plans were approved by shareholders. (Compl. ¶ 49.) Both Plans provided that the price of any options granted was to be not less than 100% of the fair market value on the date of the grant. (Compl. ¶ 50-51.) The Plans also specifically delegated authority for their administration to the Compensation Committee. (Compl. ¶ 53.) KEI provided stock options to certain key executives on an annual basis as part of its compensation plan. In the Complaint, Plaintiffs identified eight of those annual grants (each year from 1995 to 2002) as subjects of alleged manipulation. Those eight grants encompass approximately 2.28 million shares. (Compl. ¶ 2.) According to Plaintiffs, these eight grants were made on dates on which KEI’s stock was trading at or near its lowest price of the relevant fiscal quarter and/or fiscal year. (Id.) Since 1997, KEI has tracked all option grants using computer software known as “Equity Edge.” (Compl. ¶ 60.) On September 9, 1995, defendants Hamm, Hume, Keithley, Rebner and Sheridan allegedly received option grants at an exercise price of $6.84 per share. According to Plaintiffs, these grants occurred after a significant drop in the share price, and just before a sharp rebound. Plaintiffs allege that these grants initially were approved by the Compensation Committee on July 6, 1995, but were not approved by the full Board until September 9, 1995. (Compl. ¶ 62-63.) On September 7, 1996, defendants Hamm, Hume, Keithley, Rosica and Reb-ner received option grants at an exercise price of $4.63 per share. Plaintiffs allege that the timing of these grants coincided with one of the lowest closing prices of KEI stock during the 1996 fiscal year. (Compl. ¶ 64.) The Compensation Committee purportedly approved the 1996 grants on August 22, 1996, and the full Board gave its approval on September 7, 1996. (Compl. ¶ 65.) The 1997 grants to Hoersten, Keithley, Rebner and Rosica are dated September 19, 1997, and were issued at a price of $5.72 per share. The Compensation Committee approved the grants on July 18, 1997, and the full Board followed suit on September 19, 1997. According to Plaintiffs, the price of KEI stock had increased by 8.21 % approximately ten trading days after the grant. (Compl. ¶ 66-67.) In 1998, Hoersten, Keithley, Patricy, Plush, Rae and Rosica received option grants at a price of $2.53. These grants passed the Compensation Committee on July 17, 1998, and received Board approval on September 11, 1998. Plaintiffs contend that the strike price of the 1998 grants coincided with one of the lowest closing prices of the year. Plaintiffs characterize this grant as a “bullet dodging” tactic, by which the option recipient defendants allegedly saved a collective $184,475. (Compl. ¶¶ 68-69.) The 1999 grants to Gaffney, Hoersten, Keithley, Patricy, Plush, Rae, Rosica and Willows were dated July 16, 1999, and carried a strike price of $4.13. According to Plaintiffs, the closing price on July 16, the purported date of the grant, was actually $4.22. The $4.13 price was the closing price on July 19, 1999. This discrepancy was explained as an error by someone identified as Ms. Best in erroneously entering the required information concerning the option grants into the Equity Edge software system. Plaintiffs contend that, following the 1999 grant, KEI stock rose by 72% by the end of the fiscal quarter (approximately two months later). (Compl. ¶¶ 70-72.) In 2000, defendants Gaffney, Hoersten, Keithley, Patricy, Plush, Rae and Rosica received options dated August 1, 2000, at a strike price of $45.13. According to the complaint, the grant date and price coincide with the lowest price of KEI stock during the fourth quarter of its 2000 fiscal year. The stock price proceeded to rise 56.22% by the end of the quarter, less than two months later. (Compl. ¶ 72.) The Board met on July 21, 2000. At that meeting, the Board discussed the handling of the 2000 option grants in light of considerable recent volatility in KEI’s stock price. (Compl. ¶ 73.) On August 1, 2000, a team of unidentified KEI executives met to discuss the option grants. (Compl. ¶ 74.) At some point during the process of considering the 2000 option grants, a printout of historical KEI stock prices showing prices from July 21, 2000 through August 3, 2000 was created. Some unidentified person circled the August 1, 2000 date as the lowest price during that period. (Compl. ¶ 75.) Unlike prior years, the members of the Compensation Committee are now unable to recall whether, in fact, the option grants were approved at the August 1, 2000 meeting. (Compl. ¶ 74.) Contrary to established policies and procedures, the August 1, 2000 grants were not entered into the Equity Edge software system until August 7, 2000, by which time the stock had risen to $57.00, 26.3% higher than on the purported date of the grant. (Compl. ¶ 76.) Defendants Keithley and Plush, neither of whom was on the Compensation Committee, allegedly participated in the decision process regarding the 2000 options. (Compl. ¶ 77.) The 2001 stock options recipients were Estler, Gaffney, Hoersten, Keithley, Plush, Rae and Rosica. The grant date was July 24, 2001 and the exercise price was $18.41. According to Plaintiffs, the grant date and price coincide with one of the lowest closing prices of the fiscal year. (Compl. ¶ 79.) The Compensation Committee and the full Board met on July 20, 2001 and approved the grants. As in 2000, a historical printout of stock price information was produced. The printout listed prices from July 20, 2001 through August 8, 2001. The lowest closing price during that period occurred on July 24, 2001. That date and price ultimately was selected for the options grants. According to Plaintiffs, Keithley and Plush again participated in the decision-making process regarding the option grants. Despite the formalized procedures for doing so, the grant information was not entered into the system until August 13, 2001. By that date, the stock price had risen by 14.2% from the price on the grant date. (Compl. ¶ 80.) Options were granted to Estler, Gaffney, Hoersten, Keithley, Pesec, Plush, Rae and Rosica in 2002. The grant date was July 23, 2002, and the exercise price was $13.76. According to Plaintiffs, the grant came after a significant price drop, and just before a sharp rise. (Compl. ¶ 81.) The Compensation Committee and the full Board met and approved the grants on July 19, 2002. Again a printout of historical stock prices was produced showing prices from July 19, 2002 to July 24, 2002. The lowest closing price in this range occurred on July 23, 2002. This date was circled on the printout, and was selected for the grant date and price. The information was not entered into the system until July 27, 2002. Despite having no role in the Compensation Committee, Keithley and Plush allegedly participated in the decision making. (Compl. ¶ 82.) D. SEC Filings KEI filed 10-K annual reports with the SEC for every fiscal year from 1995 to 2006 in December of each year. (Compl. ¶ 92.) Defendants Keithley and Plush, as CEO and CFO, respectively, filed certifications of KEI’s financial reports on each Form 10-Q and 10-K filed after August 2002, pursuant to the requirements of Section 906 of the Sarbanes-Oxley Act of 2002. (Compl. ¶ 93.) These certifications state that each 10-Q and 10-K “fully complies with the requirements of section 13(a) or 15(d) of the [Exchange Act],” and that the “information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.” (Compl. ¶ 93.) Plaintiffs allege that proxy statements filed with the SEC and disseminated to shareholders annually from 1995 to 2002 falsely reported the grant date of options. (Compl. ¶ 95.) Plaintiffs further allege that a total of thirty-three (33) Form 4 filings between November 6, 2003 and January 6, 2006 reported false grant dates. (Compl. ¶ 96.) E. Special Committee On August 11, 2006, two days after this action commenced, the Board appointed a special committee (the “Special Committee”) to review the company’s stock option practices from 1995 to the present. (Compl. ¶ 7.) KEI has not disclosed the composition of the Special Committee or the basis for the alleged independence of its membership. (Compl. ¶ 9.) The Special Committee retained the law firm of Jones Day to conduct the internal corporate investigation. (Compl. ¶ 7.) On September 14, 2006, the United States Securities and Exchange Commission (“SEC”) began its own investigation into option practices at KEI. (Compl. ¶ 100.) The Special Committee announced its findings in a press release issued December 29, 2006. (Compl. ¶ 90.) The press release set forth the following findings: (1) there was no evidence that the stock options grants were backdated (i.e. that the grant date was altered to reflect a date prior to the date of actual Board approval of the grant); (2) there was a multi-day delay in setting the exercise price for the options grants in 2000, 2001, and 2002, which resulted in lower exercise prices than existed on the actual date the grants were approved; (3) although the plans required the options to be priced on the date of Board approval, the Special Committee found no intentional misconduct on the part of any KEI employees responsible for administering the option grants; (4) the dates selected for the 2000, 2001 and 2002 grants were the appropriate measurement dates for accounting purposes; (5) with respect to the non-annual grants (generally given to new hires and existing employees upon promotion), management exceeded some aspects of the authority granted by the plans, but these grants involved small numbers of shares, and the procedural deviations were largely the result of ministerial errors. (Compl. ¶ 90.) The press release also indicated that KEI would not restate any historical financial statements. (Compl. ¶ 8.) In addition to the press release, Jones Day authored an outline (the “Outline”) of the Special Committee’s findings. (Compl. ¶ 9.) According to Plaintiffs, the Outline acknowledged that (1) certain option grants carried exercise prices that were lower than the stock price on the date those grants were approved by the Board; (2) the Board did not possess documentation to support the grant date and price regarding certain other grants; and (3) management exceeded its authority under the stock option plans (specifically, that Keithley and Plush, without any formal delegation of authority, were involved in selecting grant dates and exercise prices regarding the 2000, 2001 and 2002 options that were beneficial to themselves, despite the fact that the plans require the Compensation Committee (of which they were not members) to select and approve grants). (Compl. ¶ 9.) The Outline specifically stated that, “[o]n a few occasions between April 2000 and January 2003, discretionary stock option grant dates were selected based in part upon the price of the Company’s stock on the grant date.” (Compl. ¶ 59.) At the time this action was commenced, the Board consisted of ten members: defendants Bachman, Bartlett, Griswold, Hendrix, Keithley, Reddy and White, and non-parties Brian Jackman, Thomas Sapo-nas, and Barbara Scherer (the “Demand Board”). (Compl. ¶ 136.) Plaintiffs did not ask the Demand Board to initiate action against the company based on the alleged options manipulation. (Compl. ¶ 135.) II. Law and Analysis A. Legal Standard In deciding a motion to dismiss, the allegations in the complaint are taken as true and viewed in the light most favorable to the non-moving party. A claim will not be dismissed “unless it appears beyond a reasonable doubt that the plaintiff can prove no set of facts to support his claim which would entitle him to relief.” Hiser v. City of Bowling Green, 42 F.3d 382, 383 (6th Cir.1994); see also Dana Corp. v. Blue Cross & Blue Shield Mut. ofN. Ohio, 900 F.2d 882, 885 (6th Cir.1990). Generally, a claim need only give fair notice as to the grounds upon which it rests. In re DeLorean Motor Co., 991 F.2d 1236, 1240 (6th Cir.1993). However, in a shareholder derivative suit, a plaintiff must allege, with particularity, that a pre-suit demand was made upon the Board or the reasons for not doing so. See Fed.R.Civ.P. 23.1; Ohio Civ. R. 23.1. This requirement differs substantially from the principles of notice pleading. See McCall v. Scott, 239 F.3d 808, 815 (6th Cir.2001) (citing Brehm v. Eisner, 746 A.2d 244, 254 (Del.2000)). On a motion to dismiss under Rule 12(b)(6), the court must accept all factual allegations in the complaint as true. Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 127 S.Ct. 2499, 2509, 168 L.Ed.2d 179 (2007). The court must also construe the complaint in the light most favorable to the nonmoving party. Bloch v. Ribar, 156 F.3d 673, 677 (6th Cir.1998). The court need not, however, accept the plaintiffs legal conclusions and unwarranted factual inferences. Morgan v. Church’s Fried Chicken, 829 F.2d 10, 12 (6th Cir.1987). To survive a motion to dismiss under Rule 12(b)(6), the plaintiff must allege either direct or inferential allegations regarding all of the material elements necessary to sustain recovery under some viable legal theory. Columbia Natural Res., Inc. v. Tatum, 58 F.3d 1101, 1109 (6th Cir.1995). A well-pleaded allegation is one that alleges specific facts and does not merely rely upon conclusory statements. In the context of a motion to dismiss a securities fraud claim, a court “may consider the full text of the SEC filings, prospectus, analyst’s reports and statements ‘integral to the complaint,’ even if not attached, without converting the motion into one for summary judgment under Fed.R.Civ.P. 56.” Bovee v. Coopers & Lybrand C.P.A., 272 F.3d 356, 360-61 (6th Cir.2001) (citing I. Meyer Pincus & As-socs., P.C. v. Oppenheimer & Co., Inc., 936 F.2d 759, 762 (2d Cir.1991)). In addition, the Court may consider documents to which the plaintiffs refer in their complaint, even if the plaintiffs do not attach them as exhibits, as long as these documents are central to plaintiffs’ claims. Weiner v. Klais & Co., 108 F.3d 86, 89 (6th Cir.1997). Similarly, the Court may consider public records and matters of which a court may take judicial notice without converting the motion to dismiss into a motion for summary judgment. Jackson v. City of Columbus, 194 F.3d 737, 745 (6th Cir.1999). B. Demand Futility Defendants move to dismiss this action based upon Plaintiffs’ failure to make a pre-litigation demand to the Board. Federal Rule of Civil Procedure 23.1 provides that in a shareholder derivative action, the complaint must “allege with particularity the efforts, if any, made by the plaintiff to obtain the action the plaintiff desires from the directors or comparable authority and, if necessary, from the shareholders or members, and the reasons for the plaintiffs failure to obtain the action or for not making the effort.” Motions to dismiss for failure to allege demand futility are considered under Fed. R.Civ.P. 12(b)(6). McCall, 239 F.3d at 815. Whether to excuse the failure to make demand is determined under the substantive law of the state of incorporation. Kamen v. Kemper Fin. Servs. Inc., 500 U.S. 90, 96-97, 111 S.Ct. 1711, 114 L.Ed.2d 152 (1991). KEI is an Ohio corporation, so the Court applies Ohio law to determine whether demand may be excused. In Ohio, the “directors of a corporation are charged with the responsibility of making decisions on behalf of the corporation and are the proper parties to bring a suit on behalf of the corporation or, in their business judgment, to forego a lawsuit.” In re Ferro Corp. Derivative Litig., 511 F.3d 611, 617-18 (6th Cir.2008) (“Ferro II”) (quoting Drage v. Procter & Gamble, 119 Ohio App.3d 19, 24, 694 N.E.2d 479 (1st Dist.1997)). Ohio state law provides that “[ejxcept where the law, the articles, or the regulations require action to be authorized or taken by shareholders, all of the authority of a corporation shall be exercised by or under the direction of its directors.” Ohio Rev.Code § 1701.59(A). Under Ohio law, it is presumed that any action taken by a director on behalf of the corporation is taken in good faith and for the benefit of the corporation. Ohio Rev.Code § 1701.59(C)(1); Drage, 119 Ohio App.3d at 25, 694 N.E.2d 479 (citation omitted). The board of directors has the primary authority to file a lawsuit on behalf of the corporation. Flarey v. Youngstown Osteopathic Hosp., 151 Ohio App.3d 92, 95, 783 N.E.2d 582 (7th App.Dist.2002) (citing Wadsworth v. Davis, 13 Ohio St. 123, 130-131 (1862)). The shareholders may make a demand on the directors to bring a suit on behalf of the corporation, but no shareholder has an independent right to bring suit unless the board refuses to do so and that refusal is wrongful, fraudulent, or arbitrary, or is the result of bad faith or bias on the part of the directors. Drage, 119 Ohio App.3d at 24, 694 N.E.2d 479 (citing Cooper v. Cent. Alloy Steel Corp., 43 Ohio App. 455, 459-60, 183 N.E. 439 (5th Dist.1931)). An exception to the general demand rule permits a shareholder to proceed with an independent suit without making a demand when the shareholder can demonstrate that the demand would have been futile. Ohio Civ. R. 23.1. “Futility means that the directors’ minds are closed to argument and that they cannot properly exercise their business judgment in determining whether the suit should be filed. It is not enough to show that the directors simply disagree with a shareholder about filing a suit.” Drage, 119 Ohio App.3d at 25, 694 N.E.2d 479. Establishing demand futility under Ohio law “is not an easy task.” In re Ferro Corp. Derivative Litig., No. 1:04CV1626, 2006 WL 2038659 at *5 (N.D.Ohio Mar. 21, 2006) (“Ferro I”) (citations omitted). The demand requirement is not a procedural technicality. “Rather, it serves the very important purpose of ensuring that before a shareholder derivative suit is brought, the company’s board of directors has considered all possible intracorporate remedies.” Grand Council of Ohio v. Owens, 86 Ohio App.3d 215, 221, 620 N.E.2d 234 (10th Dist.Ct.App.1993) (quoting Smachlo v. Birkelo, 576 F.Supp. 1439, 1443 (D.Del.1983)). Corporate management must have the first opportunity to initiate litigation, since the responsibility for determining whether or not the corporation should pursue a claim in court ordinarily is an issue of internal management that rests within the discretion of the directors. Davis v. DCB Fin. Corp., 259 F.Supp.2d 664, 670 (S.D.Ohio 2003). To excuse demand, a plaintiff must overcome the presumption that the board of directors can make an unbiased, independent business decision about whether it would be in the corporation’s best interests to bring a lawsuit. Drage, 119 Ohio App.3d at 25, 694 N.E.2d 479. Accordingly, “a bare allegation that the directors would not want to sue themselves or each other does not show that demand would be futile.” Id.; see also Carlson v. Rabkin, 152 Ohio App.3d 672, 680-81, 789 N.E.2d 1122 (1st App.Dist.2003). Plaintiffs are required to show that the presumption of independence does not exist. Id. at 26, 694 N.E.2d 479. “Ohio courts have found a demand presumptively futile ‘where the directors are antagonistic, adversely interested, or involved in the transactions attacked.’ ” Ferro II, 511 F.3d at 618 (quoting Bonacci v. Ohio Highway Express, Inc., No. 60825, 1992 WL 181682, at *4 (Ohio Ct.App. 8th Dist. July 30, 1992)). “Examples of when a demand would be excused as futile include when all directors are named as wrongdoers and defendants in a suit, when there is self-dealing by the directors such that the directors gain directly from the challenged transactions, or when there is domination of nondefendant directors by the defendant directors.” Carlson, 152 Ohio App.3d at 681, 789 N.E.2d 1122. The shareholders bear the burden of proving futility. Drage, 119 Ohio App.3d at 25, 694 N.E.2d 479. Demand futility is assessed with respect to the board as it existed at the time the complaint was filed. McCall, 239 F.3d at 816; Drage, 119 Ohio App.3d at 26, 694 N.E.2d 479. To establish futility, Plaintiffs must show that a majority of the Board members are subject to a disqualifying interest. McCall, 239 F.3d at 826; Drage, 119 Ohio App.3d at 29, 694 N.E.2d 479. To excuse demand in this case, Plaintiffs must set forth particularized facts establishing that a least five of the ten KEI Board members as of August 9, 2006, were not sufficiently disinterested, and therefore could not have considered a demand fairly. A director is considered interested when, for example, he will receive a personal financial benefit from a transaction that is not equally shared by the stockholders, or when a corporate decision will have a “materially detrimental impact” on a director but not the corporation or its stockholders. Rales v. Blasband, 634 A.2d 927, 936 (Del.1993). While the mere threat of personal liability is not sufficient, reasonable doubt as to the disinterestedness of a director is created when the particularized allegations in the complaint present “a substantial likelihood” of liability on the part of a director. See Rales, 634 A.2d at 936 (quoting Aronson v. Lewis, 473 A.2d 805, 815 (Del.1984)); In re Baxter Int’l, Inc. S’holders Litig., 654 A.2d 1268 (Del.Ch.1995). The Court must examine the totality of the circumstances, McCall, 239 F.3d at 816-17 (citing Harris v. Carter, 582 A.2d 222, 229 (Del.Ch.1990)), but aggregation of a number of factors, none of which individually excuses demand, does not excuse demand. In re Pfizer Inc. Derivative Sec. Litig., 503 F.Supp.2d 680, 686 (S.D.N.Y.2007); Rist v. Stephenson, Nos. 05-CV2326 & 05-CV-2600, 2007 WL 2914252, at *11 (D.Colo. Oct. 1, 2007). 1. Creation of Special Committee Plaintiffs first contend that demand would have been futile, and no inquiry into the disinterestedness of individual directors is needed, because the Board responded to this lawsuit by creating the Special Committee, which the Board tasked with investigating Plaintiffs’ claims. Plaintiffs argue that the creation of the Special Committee by the Board may be viewed by the Court as a concession of demand futility. In support of this proposition, Plaintiffs cite In re FirstEnergy S’holder Derivative Litig., 320 F.Supp.2d 621, 626-27 (N.D.Ohio 2004). In FirstEnergy, the corporate defendant created an independent committee to investigate derivative claims raised by the plaintiffs. 320 F.Supp.2d at 626-27. The court concluded that the plaintiffs pleaded demand futility with sufficient particularity. Id. at 624. In a footnote, the FirstEnergy court stated: “If a board responds to a derivative suit by appointing a special litigation committee with the sole authority to evaluate whether to pursue the litigation before making a motion to dismiss for failure to make a demand, then a court may conclude that the board has conceded its disqualification and therefore demand may be excused.” 320 F.Supp.2d at 627, n. 5. FirstEnergy does not, however, stand for so expansive a proposition as Plaintiffs suggest, and in any event, is distinguishable on its facts. As Defendants point out, Plaintiffs’ argument ignores the critical distinction between a special litigation committee and an investigatory committee. The distinction lies in the authority vested in the committee by the Board. Creation of a special litigation committee vested by the board with the power to determine whether to pursue certain litigation can imply that the board is not disinterested. See FirstEnergy, 320 F.Supp.2d at 627 (citing Peller v. Southern Co., 911 F.2d 1532, 1537 (11th Cir.1990)). No case so much as suggests that the creation of a special litigation committee ipso facto establishes demand futility. In FirstEnergy, the existence of the special litigation committee was just one of many factors supporting a finding of demand futility. Other factors included the detailed allegations of wrongdoing against each of the defendant directors, the complaint’s recitation of numerous intertwining relationships between directors suggesting a lack of independence, the existence of an “insured versus insured” coverage exclusion in the directors’ insurance policy, and that FirstEnergy already was the subject of a pending criminal investigation and civil lawsuits. 320 F.Supp.2d at 624-25. Moreover, FirstEnergy is distinguishable because, as a matter of fact, the committee created by KEI in this case was not a special litigation committee, as it lacked any authority to determine whether the company would pursue litigation arising out of its stock options practices. Furthermore, Ohio case law establishes that the futility issue “must be determined by looking at the positions of the parties when the derivative suit is initially filed.” Drage, 119 Ohio App.3d at 26, 694 N.E.2d 479. The Board did not create the committee until after the filing of the first derivative suit. Under Drage, the fact is, therefore, completely irrelevant. Id. Accordingly, the Court rejects Plaintiffs’ contention that demand should be excused as futile based solely on the creation of the Special Committee by the Board. 2. Receipt of Personal Financial Benefit Plaintiffs assert that Defendant Keithley is interested by virtue of his receipt of 320,000 allegedly manipulated stock options. It is well established that ordinary director compensation alone is insufficient to show demand futility. Loveman v. Lauder, 484 F.Supp.2d 259, 269 (S.D.N.Y.2007); In re Coca-Cola Enters., Inc. Derivative Litig., 478 F.Supp.2d 1369, 1376 (N.D.Ga.2007). In addition to his receipt of options, Plaintiffs also allege that Keithley impermissibly participated in the review and approval of certain option grants from which he benefited personally, despite provisions in the Plans designed to prevent such conflicts. KEI’s shareholder constituency did not share equally in the benefit to Keithley from the option grants. Because Keithley may have had a hand in approving his own option grants, contrary to the terms of the shareholder approved stock option Plans, the Court concludes that Plaintiffs have pleaded sufficient facts giving rise to reasonable doubt that Keithley was not disinterested. See In re Zoran Corp. Derivative Litig., 511 F.Supp.2d 986, 1008 (N.D.Cal.2007) (finding allegations that six of eight board members received backdated options sufficient to render them interested and excuse demand). None of the other nine directors on the Demand Board received any options at all, and therefore did not receive a personal financial benefit from the allegedly manipulated options. Accordingly, the Court concludes that this argument serves to establish only that Keithley possessed a disabling interest. In order to excuse demand as futile, Plaintiffs must show that at least four other members of the Demand Board were not disinterested. 3. Control Plaintiffs allege in the Complaint (though not at all in the response to the motion to dismiss) that the entire Board is controlled by Keithley, based on two facts: (1) Keithley is the son of the company founder and (2) Keithley controls 60.2% of the voting power of KEI shares. (Complaint at ¶ 139.) A controlled director is one who is dominated by another party, whether through close personal or familial relationship or through force of will. A director may also be deemed “controlled” if he or she is beholden to the allegedly controlling entity, as when the entity has the direct or indirect unilateral power to decide whether the director continues to receive a benefit upon which the director is so dependent or is of such subjective material importance that its threatened loss might create a reason to question whether the director is able to consider the corporate merits of the challenged transaction objectively. Telxon Corp. v. Meyerson, 802 A.2d 257, 264 (Del.2002) (citations omitted). Plaintiffs’ allegations in this regard are eonclu-sory. Plaintiffs have pleaded no particularized facts demonstrating that Keithley controls any individual director, let alone the entire Board. The argument rests entirely on the two facts stated above. Such superficial allegations, particularly those regarding majority voting power, are rejected routinely as insufficient to establish that a board of directors is controlled. See e.g. In re IAC/InterActiveCorp Sec. Litig., 478 F.Supp.2d 574, 600 (S.D.N.Y.2007); Zimmerman v. Braddock, No. 18473-NC, 2005 WL 2266566, at *8 (Del.Ch. Sept. 8, 2005), Beam v. Stewart, 833 A.2d 961, 978-79 (Del.Ch.2003); Kaster v. Modification Sys., 731 F.2d 1014, 1019-20 (2d Cir.1984). 4. Personal/Business Relationships Plaintiffs also contend that defendant Reddy lacks independence because of his longstanding personal and professional relationship with Keithley. (Complaint at ¶ 136f.) Again, Plaintiffs make no mention of this contention in opposing the motion to dismiss. Directorial independence “may be compromised by financial, familial or social ties to other persons who are interested in the board’s decision, but only if the plaintiffs plead facts that would support the inference that the director would be more willing to risk his or her reputation than to risk the relationship with the interested person.” In re Sonus Networks, Inc. S’holder Derivative Litig., 499 F.3d 47, 67 (1st Cir.2007) (citing Beam ex rel. Martha Stewart Living Omnimedia, Inc. v. Stewart, 845 A.2d 1040, 1052 (Del.2004)). The only fact set forth in the Complaint regarding the relationship between Reddy and Keithley is that both serve on the board of directors at another unaffiliated company. In all likelihood, such an allegation' — that two individuals on a board also serve together on another board — could be levied against hundreds, if not thousands, of public company directors. Nothing about the relationship between Reddy and Keithley, as alleged by Plaintiffs, so much as hints at an inference that Reddy would sacrifice his personal reputation for the sake of his relationship with Keithley. This allegation falls far short of what is required to establish a reasonable doubt about Reddy’s independence. 5. Failure to Void Stock Options Plaintiffs contend in the Complaint (though, as appears to be their wont, not in the opposition) that demand should be excused because the Board failed to void the stock option grants at issue after discovering, via the Special Committee investigation, that those grants were not made in compliance with the Plans. Plaintiffs argue that the Board’s failure to take action to recover the gains of those defendants who received the allegedly manipulated options is not protected by the business judgment rule, and therefore saddles its members with a disqualifying interest. (Compl. ¶ 140.) This argument ignores that, as a matter of Ohio law, demand futility is assessed as of the filing of the initial complaint. Drage, 119 Ohio App.3d at 26, 694 N.E.2d 479. The Board did not receive the results of the Special Committee investigation until well after Plaintiffs commenced this lawsuit, and therefore, anything reported to the Board by the Special Committee is not appropriately considered in assessing demand futility. Accordingly, the Court finds that this argument cannot be used by Plaintiffs to support their contention that demand should be excused. 6. Insured Versus Insured Exclusion The Complaint also includes an allegation that demand would be futile because KEI’s directors and officers liability insurance policy contains an “insured versus insured” exclusion that disclaims coverage for lawsuits between directors. (Compl. ¶ 141). Plaintiffs do not advance this contention in their response to support the demand futility argument. Courts examining Delaware law reject this argument routinely. See Coca-Cola Enters., 478 F.Supp.2d at 1377; Halpert Enters. Inc. v. Harrison, 362 F.Supp.2d 426, 433 (S.D.N.Y.2005). At first glance, however, this argument appears to have enjoyed some success in one Ohio court: Certainly, a provision prohibiting directors from bringing suits against each other would deprive the directors of the ability to exercise independent judgment as to the advisability of instituting action against any officer or director for mismanagement, and thereby [divest them] of the power to govern this aspect of the corporation’s affairs. Drage, 119 Ohio App.3d at 27, 694 N.E.2d 479. The appearance of success, however, is illusory; the Drage court ultimately rer fused to excuse demand. Id. at 26-31, 694 N.E.2d 479. Furthermore, the Court concurs with the assessment of the district court in Ferro I that this statement is dicta, is not authoritative, does not bind a federal court applying state law, and is based on citation to three cases, of which none remain good law. Ferro I, 2006 WL 2038659, at *7. The Court also agrees that, if the Ohio Supreme Court were to consider this issue, it would reject the dicta from Drage, and conclude, as have the vast majority of courts, that the presence of an “insured versus insured” exclusion in a D & O policy does not render pre-litigation demand futile. Id. at *8; accord In re Goodyear Tire & Rubber Co. Derivative Litig., Nos. 5:03CV2180, 5:03CV2204, 5:03CV2374, 5:03CV2468, 5:03CV2469, 2007 WL 43557, at *6 (N.D.Ohio Jan. 5, 2007). 7. Potential Liability of Compensation Committee Members Finally, the Court addresses Plaintiffs’ contention that demand must be excused because a majority of the Board lacked the requisite disinterestedness because those who served on the Compensation Committee and approved the allegedly backdated options face a substantial likelihood of liability. Specifically, Plaintiffs argue that individual defendants Bachman, .Bartlett, Griswold, Hendrix, Reddy and White (a majority of the Demand Board’s ten members), each of whom serves or served on the Compensation Committee, must be deemed interested because each bears a substantial likelihood of personal liability-based on their alleged complicity in the backdating activities. The demand futility issue thus turns entirely on whether the allegations in the Complaint sufficiently establish a substantial likelihood of liability as to any four of the following group of directors: Bachman, Bartlett, Griswold, Hendrix, Reddy and White. The allegations against these directors are, for the most part, not individualized, but rather are generic statements regarding the group based on their status as members of the Compensation Committee and the Board. Plaintiffs do not make any specific statements regarding actions taken, or knowledge possessed, by particular directors. Assuming for purposes of this analysis that the option grants identified by Plaintiffs were indeed backdated, the allegations against these individual directors effectively consist of the following: (a) that each of the individuals was a member of both the Compensation Committee and the Board at large at times when the allegedly manipulated grants were issued; (b) that the individuals, in their capacity as Board and Compensation Committee members, approved the option grants; (c) that the individuals knew, or are chargeable with knowledge, that the shareholder approved stock option Plans required option grants to reflect the fair market price on the date of the grant; (d) that backdated option grants violated the terms of the Plans; and (e) that the Board’s directors and officers (“D & 0”) insurance policy contained an “insured versus insured” exclusion. The relevant question for purposes of demand excusal is whether these allegations support a reasonable inference that a majority of the individual directors on the Demand Board bear a substantial likelihood of personal liability. Generally, to show that the potential for liability rises to a “substantial likelihood,” the plaintiff must plead particularized facts “detailing the precise roles that these directors played at the company, the information that would have come to their attention in these roles, and any indication as to why they would have perceived the [wrongdoing].” Guttman v. Huang, 823 A.2d 492, 502 (Del.Ch.2003). “Mere membership on a committee or board, without specific allegations as to defendants’ roles or conduct, is insufficient to support a finding that the directors were conflicted.” CNET, 483 F.Supp.2d at 963. In this case, Plaintiffs allege no facts explaining what role, if any, each individual director played in the alleged wrongdoing. Plaintiffs repeatedly allege that the options backdating was “knowing and intentional,” but make no particularized allegations regarding whether or when any director knew of the alleged options manipulation, or that any director intentionally backdated any option grant. a. Options Backdating Cases Plaintiffs rely heavily on the Delaware Court of Chancery opinion in Ryan v. Gifford, 918 A.2d 341 (Del.Ch.2007). In Ryan, a derivative action arising from allegations of options backdating, the Delaware Court of Chancery denied the defendants’ motion to dismiss on demand futility grounds. The court first applied the Ar-onson analysis that permits demand excu-sal where the plaintiff raises a reason to doubt whether the challenged transactions constituted a valid exercise of business judgment, and found that the plaintiff established futility. Id. at 354. The facts were as follows. The plaintiff alleged that the board of directors ignored limitations set out in the company’s stock option plans and in doing so exceeded the shareholders’ express grant of authority. Id. at 355. Specifically, the stock option plans permitted the board to delegate option granting powers to a committee. Id. at 353. The board in fact delegated the responsibility to a three-member compensation committee, which constituted half of the six-member board. Id. The terms of the stock option plans required the exercise price of options to be set at 100% of the fair market value of the stock on the date of the grant. Id. at 354. The plans did not give the board (or the committee) the power to contravene the provisions of the plans. Id. The plaintiff identified nine option grants over a six-year period, each of which was granted “during the lowest market price of the month or year in which it was granted.” Id. The plaintiff supported the backdating allegations with an empirical analysis performed by Merrill Lynch comparing the stock price performance following option grants to the firm’s general stock price performance over longer time periods. The comparison measured the aggressiveness of the timing of the option grants, and revealed that the average annualized return on option grants to management was 243%, nearly ten times higher than the general 29% market returns on the stock during the same period. Id. In a footnote, the court addressed the defendants’ argument that the plaintiffs allegations regarding the directors’ knowledge were not particularized sufficiently because they did not directly allege knowledge on behalf of the directors: [I]t is difficult to understand how a plaintiff can allege that directors backdated options without simultaneously alleging that such directors knew that the options were being backdated. After all, any grant of options had to have been approved by the committee, and that committee can be reasonably expected to know the date of the options as well as the date on which they actually approve a grant. Nor is it a defense to say that directors might not have had knowledge that backdating violated their duty of loyalty. Directors of Delaware corporations should not be surprised to find that lying to shareholders is inconsistent with loyalty, which necessarily required good faith. Id. at 355, n. 35. The court in Ryan concluded, in the alternative, that demand also was futile under the Rales test, which applies when the entire board does not approve the challenged transaction and requires pleading of particularized facts creating a reasonable doubt that a majority of the directors would have considered the demand independently and disinterestedly. Id. The court in Ryan stated, in broad language seized upon here by Plaintiffs, that [a] director who approves the backdating of options faces at the very least a substantial likelihood of liability, if only because it is difficult to conceive of a context in which a director may simultaneously lie to his shareholders (regarding his violations of a shareholders-approved plan, no less) and yet satisfy his duty of loyalty. Backdating options qualifies as one of those “rare cases [in which] a transaction may be so egregious on its face that board approval cannot meet the test of business judgment and a substantial likelihood of director liability therefore exists.” Id. at 355-56, (quoting, in part, Aronson, 473 A.2d at 815). The court found the plaintiffs allegations that three members of the six-person board approved the allegedly backdated options, and another member accepted them, sufficient to establish a substantial likelihood of director liability as to a majority of the board. Id. at 356. Significantly, the plaintiffs complaint included specific allegations that four directors were familiar with the company’s stock option plans and recommended the most recent plan for approval by shareholders. Id. at 356, n. 38. Several subsequent courts, confronting similar allegations of options backdating and the Ryan decision, found Ryan distinguishable. See In re Computer Sciences Corp. Derivative Litig., No. CV 06-5288 MRP, 2007 WL 1321715 (C.D.Cal. Mar. 26, 2007); In re CNET Networks, Inc. S’holder Derivative Litig., 483 F.Supp.2d 947 (N.D.Cal.2007); In re Openwave Sys. Inc. S’holder Derivative Litig., 503 F.Supp.2d 1341 (N.D.Cal.2007); Desimone v. Barrows, 924 A.2d 908 (Del.Ch.2007); In re PMC-Sierra, Inc. Derivative Litig., No. C 06-05330 RS, 2007 WL 2427980 (N.D.Cal. Aug. 22, 2007); In re Verisign, Inc., Derivative Litig., 531 F.Supp.2d 1173 (N.D.Cal.2007). The shared theme of the opinions distinguishing Ryan is their common view that the factual allegations they faced did not rise to the level of detail and persuasiveness of those presented in Ryan. Careful examination of the facts of several of these cases is instructive. In Computer Sciences, the complaint alleged that the compensation committee of the board bore responsibility for review and approval of stock option awards to the company’s insiders. Computer Sciences, 2007 WL 1321715, at *8. Three director-defendants served on the compensation committee, but only two of them served during the period in which backdating occurred. The court found such allegations — which consisted of (1) service by the individuals on the compensation committee (2) at the time the allegedly backdated options were issued (3) where the compensation committee was specifically responsible under its charter for reviewing and approving stock option awards — sufficiently particularized to create a reasonable doubt as to the interestedness of the two directors who served on the compensation committee when allegedly backdated options were approved “due to their direct participation in the options backdating transactions as the primary gatekeepers for CSC’s options grant process [¶]... ].” Id. The court ultimately determined not to excuse demand as futile because the plaintiff was able only to impugn the disinterestedness of three directors (one alleged recipient of backdated options, and the two compensation committee members), which constituted less than a majority of the board. Id. at *15. The court specifically addressed the Ryan decision, and while finding it factually distinguishable, stated its view of Ryan’s effect on the demand futility analysis in the context of options backdating allegations: The Court acknowledges the view advanced in [Ryan ], that a director faces a “substantial likelihood” of liability for options backdating, but notes that this “rule” only applies to directors who directly approved or received the backdated options, or who are dependent on those who did, and only when plaintiffs allege with particularity that the options backdating occurred. To apply this view as a rule ascribing liability and interest to all directors when the core allegations of backdating are comparatively weak and lack particularity would circumvent the demand requirement in every case where backdating and spring-loading of options is claimed. Id. Computer Sciences thus appears to agree with Ryan’s conclusion that directors who, as members of a compensation committee charged with administering a company’s stock option plan, approve backdated options, are subject to a disqualifying interest because they face a substantial likelihood of liability. Other courts, however, confronted with very similar facts, found them insufficient to raise a reasonable doubt regarding the disinterestedness of any director. As in the instant case, in CNET, the plaintiffs alleged that all the director-defendants “ratified” the backdated option grants. 483 F.Supp.2d at 963. The court in CNET found the plaintiffs’ allegations of ratification vague: “It is very unclear as to what plaintiffs mean by ratifying the grants — it could be post hoc approval, willingness to participate in a coverup, or knowing that the grants were backdated, or any number of transgressions. Plaintiffs go into no further detail in their allegations.” Id. The court concluded that “merely alleging that they ratified the grants as board members, without more, is not sufficient to plead with particularity that [the board members] were not disinterested or independent or that their decisions were not the product of valid business judgment.” Id. at 965. Assessing the independence of two directors who served on the compensation committee when backdated options were issued, the CNET court stated that “where plaintiffs merely allege that approval was given without more, the facts pleaded simply do not support the inference that these two board members were not independent or disinterested or that their decisions were not protected by the business judgment rule.” Id. at 966. In Verisign, another case distinguishing Ryan, the court agreed with both of Ryan’s statements (a) that directors who approve backdated options face at least a substantial likelihood of liability, and (b) that options backdating qualifies as one of those “rare cases” where a transaction may be sufficiently egregious on its face that it loses the protection of the business judgment rule. Verisign, 531 F.Supp.2d at 1192-93 (citing Ryan, 918 A.2d at 355-56). Facing similar allegations of ratification by the board, the Verisign court went on to distinguish Ryan on the facts. In Verisign, the plaintiffs failed to provide any explanation regarding which of the directors allegedly “authorized” the backdated options, which directors “approved” the options, and/or which directors “ratified” the options, or what form the alleged authorization, approval and ratification took. Id. The court in Verisign also concurred with CNETs characterization of the ratification concept as too vague to support an inference of liability. Id. Faced with the plaintiffs’ contention that Ryan stands for the proposition that demand is excused upon a mere allegation that a company granted backdated options, the Verisign court did not disagree, but distinguished Ryan on grounds that the complaint failed to particularly allege “which director or directors approved which grant, or when such grant was approved and how it was backdated — and [included] no allegations showing how or why a particular director would know that the options were backdated.” Id. Moreover, in contrast to Ryan, a majority of the VeriSign directors at the time of the complaint were not on the board at the time of the alleged backdating. Id. Regarding the plaintiffs’ allegations that certain board members served on various committees (including the compensation committee), and thus “the Board ‘should have been aware’ that VeriSign used different measurement dates when computing compensation costs for certain stock option grants; and claim that under the charters and policies of these three Committees, the directors had an obligation to investigate the differences in measurement dates and recorded dates of option grants,” the court found such allegations “wholly insufficient” to excuse demand. Id. at 1194. To support this conclusion, the court in Verisign repeated its determination that the complaint failed to allege facts describing the part each director played, by virtue of committee service or otherwise, in the alleged wrongdoing. Id. Here, Plaintiffs’ allegations regarding the actual involvement of the individual directors in the alleged wrongdoing are similarly vague. Upon close examination, however, the facts alleged in Ryan, which that court found sufficient to excuse demand, were not so highly particularized. The cases distinguishing Ryan on the basis of its highly particularized allegations do not address in detail the exact allegations present in Ryan and absent from the distinguishing cases that make the difference. One that several courts cite as a distinguishing factor — the Merrill Lynch statistical analysis — is a rather compelling factor not presented here or in any other case where demand was not excused. It is clear, however, that such a detailed statistical analysis is not required to survive a motion to dismiss. CNET, 483 F.Supp.2d at 957-58. The Court is satisfied that Plaintiffs in this case have alleged the existence of backdated or otherwise manipulated option grants with particularity. The Outline commissioned at KEI’s behest essentially admits as much. The narrow question at issue then is whether such allegations, plus the rather generalized allegation that a majority of the current directors served on the Compensation Committee that approved the allegedly manipulated options were granted, is, without more, sufficient to excuse demand as futile because those directors bear a substantial likelihood of liability. Under Ryan, this would appear to be enough. The Complaint in this case contains virtually no factual allegations about the knowledge of the individual directors regarding the terms of the option grants at the time they approved them. Similarly little is said about what the directors actually did to approve the option grants. Nor, apparently, did the complaint in Ryan contain such specifics. The factual allegations in this case regarding approval by the Compensation Committee of manipulated option grants virtually mirror those of Ryan. The Plans permitted the Board to delegate responsibility for administering the company’s stock option Plans to the Compensation Committee. The Board did so. The Plans also required the price of option grants to be set at 100% of fair market value on the date of the grant. The Compensation Committee approved grants where the price was not set at 100% of the fair market value on the date of the grant, thus exceeding its authority under the Plans. Nowhere does the Ryan court’s decision reveal specific allegations regarding knowledge on the part of directors regarding backdated options. The court in Ryan characterized the board’s decision to exceed the authority granted by the shareholder-approved stock option plans as “knowing and intentional,” but the specific factual basis for this characterization vis-á-vis the individual directors, if any, is not stated. Ryan thus appears to stand for the proposition that members of a compensation committee vested with authority to approve stock option grants, who in fact approve option grants that contravene the terms of stock option plans, face a substantial likelihood of liability for that conduct. This is so, under Ryan, without specific factual allegations regarding knowing wrongdoing on the part of the individual directors. Rather than requiring such allegations, the court in Ryan assumed, based on the facts, that such individuals could not have approved backdated stock options without acting at least recklessly. The court charged the directors on the compensation committee who approved the option grants with knowledge of the date of the options as well as the date of the actual grant. Ryan, 918 A.2d at 355. The court in Ryan also assumed that by certifying that stock options were granted in conformance with the terms of the company’s stock option plans when they in fact were not, the individuals making such representations effectively were lying to shareholders. Id. at 355-56. These assumptions were not without foundation. As here, the stock option plan in Ryan required the exercise price of a grant to be set at fair market value on the date of the grant, and identified the board or a committee designated by the board as administrators of its terms. Id. at 346. Accordingly, it is not a stretch to conclude that the compensation committee members who approved stock option grants that did not comply with the requirements of the shareholder-approved plan faced a substantial likeli