Delaware Affirms Adequacy of Equity Awards as Non-Compete Contract Consideration Despite Forfeiture

In early February 2026, the Supreme Court of Delaware issued a very important and potentially far-reaching decision, finding equity awards that are later forfeited or clawed back can constitute adequate consideration for restrictive covenants. The court relied upon fundamental contract law principles relating to when consideration is measured, a key issue in enforcing restrictive covenants in long-term incentive plans and other types of contingent equity awards.... By: Littler