Litigation relating to Stock Awards
> > > Checklist: Contractual Precautions against Benefit Plan Litigation
*** NEW ***
2017.02.07 Stock Award Web Process Works: Non-compete Enforced. As a general matter, employers “win” when they seek to enforce stock plan terms that have been fairly disclosed -- and accepted -- by award recipients. ADP recently had such a victory. In a case decided under New Jersey Law, the 3rd Circuit upheld the granting of a preliminary injunction against two former employees who had joined a competitor in violation of restrictive covenants set forth in their stock awards. The former employees argued that ADP’s web-based system for issuing stock awards did not adequately alert them to the consequences of the stock awards they accepted. They lost because . . . continued at New Jersey Law.
2017.01.21 Equity Awards - ISO Tax Claims from Shortened Vesting Schedule . . . Employers often assume that they will avoid litigation when acting in what they believe will be the best interests of their employees. For instance, shortening a vesting schedule from 4 years to 6 months would seem favorable to stock option holders. Until they sue. That's what Uber faces from a complaint alleging that the shorter schedule deprived them of the tax benefits available for incentive stock options.
Deference to Committee Decisions
Employment Terminations on Eve of Vesting
ERISA Claims re Stock Awards
Forfeitures through Claims Releases
Merger-related Cashouts of Stock Options
In business transactions, the parties generally address the target company's stock awards in a manner that honors the contractual rights of employees. Costly lessons come, however, when deal terms run afoul of the change-in-control provisions within the target's stock award plan and/or award agreements.
Options: Post-employment Exercise
Options expiring during Black-out Period
Valuation of Employer Stock
Copyright © Joseph Poerio. All rights reserved.