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Executive Compensation Litigation John L. Utz

Executive Compensation Litigation John L. Utz. www.utzmiller.com. Executive Compensation Litigation. Stock Option Backdating Ryan v. Gifford (Del. Ch. 2007) – p. 27 and Newsletter Vol. 3 No. 4.

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Executive Compensation Litigation John L. Utz

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  1. Executive Compensation LitigationJohn L. Utz www.utzmiller.com

  2. Executive Compensation Litigation • Stock Option Backdating • Ryan v. Gifford (Del. Ch. 2007) – p. 27 and Newsletter Vol. 3 No. 4. The court was “convinced that the intentional violation of a shareholder-approved stock option plan, coupled with fraudulent disclosures regarding the directors’ purported compliance with that plan, constitute conduct that is disloyal to the corporation. . ..”

  3. Executive Compensation Litigation • Spring-Loaded Options • In re Tyson Foods, Inc. (Del. Ch. 2007) – p. 32 and Newsletter Vol. 3 No. 4. Allegations that “directors that approved spring-loaded (or bullet-dodging) options (a) possessed material non-public information soon to be released that would impact the company’s share price, and (b) issued those options with the intent to circumvent otherwise valid shareholder-approved restrictions upon the exercise price of the options” would satisfy the plaintiff’s requirement to show adequately at the pleading stage that a director acted disloyally and in bad faith and is therefore unable to claim the protection of the business judgment rule.

  4. Executive Compensation Litigation • Clawbacks • In re Tyson Foods, Inc. (Del. Ch. 2007) – p. 32 • Scrushy v. Tucker, 2006 WL 932013 (Ala. 2006) • FPL: Settlement following Klein v. FPL Group, Inc., 2004 WL 302292 (S.D. Fla. 2004) • Olander v. Compass Bank (5th Cir. 2004) – Newsletter Vol. 1 No. 1

  5. Executive Compensation Litigation • Clawbacks (cont.) • WorldCom, Inc. v. Boyne (4th Cir. 2003) – p. 96 • International Business Machines Corp. v. Martson, 37 F.Supp.2d 613 (S.D. N.Y. 1999) • International Business Machines Corp. v. Bajorek, 191 F.3d 1033 (9th Cir. 1999) • Foley v. American Electric Power (S.D. Ohio 2006) – Newsletter Vol. 2 No. 9

  6. Executive Compensation Litigation • Clawbacks (cont.) • ERISA Plans: Importance of top-hat status (to avoid vesting requirements) • Thornton Oil Corp. v. Perconti (Ky. App. 2003) – p. 46 • Fields v. Thompson Printing Co., Inc. (3d Cir. 2004) – p. 46

  7. Executive Compensation Litigation • Fiduciary Claim: Disclosure, Treatment of Backdated Options in Merger • Louisiana Municipal Police Employees’ Retirement Systems v. Crawford, 918 A.2d 1172 (Del. Ch. 2007) • Stock Options: Blackout Necessary Under Securities Laws • In re Cendant Corp. Securities Litigation (3d Cir. 2006) – Newsletter Vol. 3 No. 2

  8. Executive Compensation Litigation • Attorney-Client Privilege: Top-Hat Plan • Marsh v. Marsh Supermarkets, Inc. (S.D. Ind. 2007) – p. 43 • SERP Compensation Definition: Stock Option Gains • Adams v. Louisiana-Pacific Corp. (4th Cir. 2006) – p. 50

  9. Executive Compensation Litigation • SERP Compensation Definition: Severance Pay • Gilliam v. Nevada Power Company, 2007 WL 1557483(9th Cir. 2007) • SERP Compensation Definition: Retention Compensation • Craig v. The Pillsbury Non-qualified Pension Plan (8th Cir. 2006) – p. 52

  10. Top-Hat Plan: Definition • Bakri v. Venture Mfg. Co. (6th Cir. 2007) – p. 56 • Guiragoss v. Khoury (E.D. Va. 2006) – p. 56 • Top-Hat Plan: Release, Fiduciary Claims, Estoppel • Callahan v. Unisource Worldwide, Inc. (D. Conn. 2006) – p. 57

  11. Executive Compensation Litigation • Top-Hat Plan: Retroactive Addition of Exhaustion of Remedies Requirement • Eastman Kodak Company v. STWB, Inc. (2d Cir. 2006) – p. 58 • Oral Promise: ERISA Fiduciary Claim, Equitable Relief • Eastom v. Redmond (N.D. Ind. 2006) – p. 60

  12. Executive Compensation Litigation • Oral Grant of Options • Aretakis v. General Signal, Inc. (D. Mass. 2006) – p. 70 • State Wage Payment Statutes • Paolini v. Albertson’s Inc. (9th Cir. 2007) – p. 80 • Stock Options: Failure to Tender Payment with Exercise Notice • Deal v. Consumer Programs, Inc. (8th Cir. 2006) – p. 81

  13. Executive Compensation Litigation • Stock Option Vesting: Acceleration Upon Termination, Share Price Trigger • Ziegler v. HRB Management, Inc. (6th Cir. 2006) – p. 82 • Employer’s Ability to Modify Retiree Welfare Benefits • Markowitz v. Celanese Corp. (D. N.J. 2006) – p. 84

  14. Executive Compensation Litigation • Covenants Not to Compete • Morris v. Schroeder Capital Management International (2d Cir. 2007) – p. 91 • Separation Agreement: Characterization of Termination, Equity Compensation, Fraud • Healy v. MCI WorldComm Network Services, Inc. (9th Cir. 2007) – p. 102

  15. Executive Compensation Litigation • Severance: Outsourcing, Prior Employer’s Representations • Engler v. Cendant Corp. (E.D. N.Y. 2006) – p. 104 • Garnishment of Retirement Benefits: Criminal Restitution • U.S. v. Novak (9th Cir. 2007) – p. 105

  16. Executive Compensation Litigation • Split Dollar Life Insurance: Employer’s Rights Extinguished by Employment Release • Goldring v. Franklin Equity Leasing Co. (Mo. Ct. App. 2006) – p. 106 • Severance Benefits: Change of Control, Comparable Benefits • Kolkowski v. Goodrich Corp. (6th Cir. 2006) – p. 106

  17. Executive Compensation Litigation • Stock Options: Negligent Misrepresentation, Period for Exercise • First Marblehead Corp. v. House, 473 F.3d 1 (1st Cir. 2006) • Waste: Entrenchment of Board and Key Executives • Sample v. Morgan, 40 EBC 2389 (Del. Ch. 2007)

  18. www.utzmiller.com

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