| III. |
EMPLOYMENT CASES IN WHICH STOCK OPTIONS ARE AN ELEMENT OF DAMAGES |
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A. |
Claims of Fraudulent Inducement |
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1. |
These claims generally allege fraudulent or negligent inducement during the interview/hiring process by the offer of stock options that are not received upon hire or which vest on a schedule contrary to that promised to the prospective employee. |
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B. |
Breach of Employment Contract and/or Breach of Stock Option Agreement |
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1. |
These claims are generally based on the termination of the employment contract, resulting in the loss of future options and/or a forced early exercise of options within a defined period after termination, or a failure to honor the terms of a stock option agreement. |
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C. |
Claims Arising From the Exercise of Options |
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1. |
Disputes sometimes arise over whether the employee properly notified the employer of the exercise of options and/or whether the employer properly complied with the request. |
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D. |
Wrongful Termination or Failure to Promote |
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1. |
In such cases, the employee generally argues that he or she lost options that would otherwise have vested, were forced to exercise options early, and/or suffered the loss of the stock option appreciation as a result of the adverse employment action. |
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E. |
Fall Out From Corporate Mergers or Acquisitions |
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1. |
These cases generally involve a forfeiture of options as a result of the corporate transaction at issue. |
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F. |
Disputes Involving "Claw-Back" Provisions |
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1. |
"Claw-Back" provisions in stock option agreements generally provide that the optionee forfeits the proceeds of any stock options exercised within a defined period of time before leaving employment to work for a competitor. |
