agree with you what is it your client can do that my clients can pay one cent per pushchair to buy one percent of the company is subject to one percent of one cent a share for one percent or ten percent yeah i believe the options grant clearly states that the amount of the stock is one percent and the price per share is one cent per share so to execute his option he merely has to pay one cents per share to buy one percent of the company and that's clearly set forth in the options let me go back to judge for hundreds this first question so i make sure i understand it because i'm not sure that you two are on the same wavelength but the question is if if for whatever reason we remained in this case back and directed the judge to take into account extends again it's another which we found the terms of this to be ambiguous because you can interpret subject to in a couple different ways do you have other evidence not that you put into the record now but do you have other evidence that you would anticipate developing if this case went back well i would want to depose the parties and could be able to get a full explanation from this president c e o of what his intent was we go down that path we could talk to the head of h r not asking you what you could do do you want of folk more fully developed the record in this case and if so what's missing well i think the options grant has all the terms that it needs i don't think we need to fully develop the record but if you look at the in braga no case which was  cited i'm sorry mike not mcgonagall case it talked about if you have an agreement with the essential terms which i believe this one has that has a central terms adown if i support is the quantity of stock the price of stock if there are some non essential terms and that's what the court in the goggle talked about you can do a fact finding to determine if there were non essential terms that are required to exercise i don't really believe there are  is it your position that if you just articulated the terms of the agreement are clear and unambiguous is that your position or do you argue that they are ambiguous because if you argue that they are not ambiguous them developing the party intent w relevant well i believe the term subject to as used in this document is ambiguous i think there are multiple meanings of subject to some of which do not create a condition precedent i do believe though that this isn't an forcible agreement because it has all of the essential terms of what order what does this mean in this agreement that they could exercise this agreement outlining the terms  conditions were does that mean yes in a terms in condition if this sets forth all the terms what additional terms and conditions are you talking well i don't believe that there are any additional terms or conditions that you say we disregard that no i'm not saying that disregard it at all i'm saying when you look at this document it has all the subtle terms of price in quantity and identifies the parties in the stock what it did is it gave the ability to canada if you look closely at the document that says that they had a right to execute a definitive options agreement outlining the terms and conditions under which such actions may be exercised but if you say that that contains all of the terms and conditions what you're ever going to do then and you said there are no other other terms and conditions aren't you telling us to read that language the director who was just mentioned three plus rich and different that sort of violate the rules of construction i so your honor what that language does subject to this agreement outlining the terms and conditions when it does it gives candidate in the ability if it's so desired to come up with a subsequent document limited only to the terms and conditions under which the option may be ostracised what is there me know there are documents limited to well i'm just i'm just reading the language of this a great i'm trying to you told me that subject to is ambiguous what does what does terms in the options well it says oh one of the terms and conditions under which the options may be exercised the language in the document what that means is if candidates was so inclined it could have created a document putting some details about the means and what you can exercise the options the desire to put the burden on the company or the burden on your client the burden is on the company the company is the only answer to that could create any further terms and conditions under which the options may be exercise and he suggests this to you and you tell me why this is wrong your argument just goes too far at least in my opinion unless i hear something different today if we assume for a second that it's ambiguous if we agree with you on that then we have to figure out what to do if we send it back you keep saying well there's nothing else to do want to go back so that doesn't make any sense also ruling for you to say that it's complete doesn't make any sense because it obviates the whole idea of the terms and conditions under which it could be exercised for all we know the intent of the parties was he could exercise the stock option as long as he ambiguous yet it's clear and you win it just it doesn't make sense well if the terms subject to has multiple meanings some of which create a condition precedent and some of which don't i believe the document is construed against the draft situation where a word can have multiple meanings that's the only ambiguity that i see is that such a tool can have multiple meanings and then it's construed that against a drafter is far as those things that you just said those things can be placed in an options agreement and options agreement is basically a contract it could be very simple kind of simple agreement like we have here outlining the price and the quantity in the stock in question or it can be very complicated for you you would have  if we don't grant judgment in your favor this i want you to assume that for a second we're then struggling with you seem to say send it back but then you seem to say but it doesn't make any difference when it goes back because there is no other evidence that's relevant in this case but our position is that if it gets remanded back they can the court can say you can do some discover to look at the end of the parties the first thing you do is you look at this document and this document showed it tend to give my client an option we could do discovery about it doesn't show the terms of the option beyond the percentage and the number of shares another words we don't have any idea why the parties never reduced this agreement to a definitive options agreement we the record is silent we have affidavits from both sides neither speak to the main operative question as to you enter into this agreement and then the guy works there for what ten years or longer never there's never a hint in this record as to whether that was ever further discussed whether there was there were draft agreements whether people forgot about it we have no idea and the trial court did not allow us to do it to discover they wanted us to do this but you had a chance to put in an affidavit you could have put in exactly why there is no agreement if there if there is in fact an answer from your perspective i could tell my clients affidavit i believe contains his facts of what he was thinking what he was doing but because i have been able to depositions i can't get to the other side's perspective beyond the simple affidavit about when you're sitting down we don't even have your side  side thank you little tall for me i'm going to reduce it don't put that down you're going to disappear there yes vertically challenged as they say and he just good morning your honors eric linden from all in terms of the discovery at the district court level the parties stipulated to allow the court to rule on the motion for summary judgment before they spent a bunch of money taking depositions because as i mean they moved for s the district court level as well neither party i think wanted to spend a lot of money taking depositions in quebec and in iowa and ohio until the court ruled on what both sides at the time thought was a clear and unambiguous subject to has a long history as the case law reflects of being the typical language a draft or uses to indicate a condition precedent if this court determines that subject to is ambiguous shutters will be well w rummage through the drafting community because that's the language that drafters use say you do you disagree that there are not alternator multiple meanings of that term that are  all present in that yours no i disagree and let me tell you why because this is something that wasn't in our brief remember subject to can be subject can be pronounced two ways i can be subject to or it can be subjected to so you can be subjected to discrimination for instance that doesn't mean that it's a condition it means that your under the influence of discrimination so that the alternate def letters are in me just added to letters you can be subject to discrimination either way it means that you're under the influence of discrimination not that it's a condition to something and i think the alternate definitions that the appellant proposes here is the second second way to pronounce subject that the district court acknowledged the terms subject to can mean contingent on or it can mean under the influence of some later action you disagree with that conclusion of the district court could mean one of two things i think depending on how the district court meant under the influence of i might not disagree with that i think that is much more likely the subject subject to the way you pronounce subject to another case law says that if it can mean two different things then we look to the of the parties the district court here seems to simply applied a presumption which is what you're arguing that subject to always means contingent on just what the cases say well i think that how do we figure out what the intent of the parties was well i think this is just like the in case which is where the the options agreement was subject to the compensation committees determination this sort of goes to the the points that the court was trying to eliminate to get out of the other side what what will the record reflect if we go back to the district court and i think the simple answer is there is no record there are no other  as far as i'm aware any other there were no discussions there were no negotiations there were no drafting just like the in case where it was subject to the compensation committees basically unfettered discretion as to what the terms and conditions would of an options agreement that's what we have here your honor i think that when it says subject to terms and conditions what the in bragg no court said was that was an illusionary promise and it came up with a bunch of examples of the kinds of things the compensation committee could have done to nullify the grant of options which is why it found it to be illusionary contracted said they could have given her zero options they could have done a b and c  they could have they could have waited forever to issue the options they could have put a strike price on so high that it rendered the options valueless and there are a lot of terms here that were never discussed that were in the in the  testimony our own argument were with solely within the unfettered discretion of my client so in light of what you just why wouldn't it be prudent to thin the case back to the district court and have the district court determined effort pain the intent of the parties within the threat in life and that an appropriate way appropriate disposition because your honor i believe there is no ambiguity well there's two reasons that i believe there is no ambiguity in the use of the language subject to that pivotal role pivotal intended to give itself the discretion to decide when and if and how to issue any the ones that both of you argue that there is really no ambiguity what you come to resolve correct but that doesn't mean that both sides are wrong the ones i mean it doesn't mean that it that one side can't be right and one side can't be wrong  district court obviously found that one side was right and we're asking you to affirm that decision i think when you have a document which says that pivotal was pleased to grant provide you with a grant of object options subject to execution of a definitive actions agreement there's only one way to read that which is that any options agreement is subject to and without that definitive agreement there are no options and that's you're doing is you're reading out any possibility that subject to has a second meaning i have your bull i think you both cited under ohio law did you not correct so a person goes on to say whether a provision in  agreement is a condition preceding is a question of intent and intent is ascertained by considering not only the language of a particular provision which is what you're focusing in on but also the language of the entire agreement and its subject matter carette of the subject matter seems to be you wanted this guy to stay on as an employee you said he was going to get a stock option now i agree it says subject to and we have to figure out what that means but then there's just sort of radio silence in this record after that why was there never any discussions why did this guy continue to work ten years without asking that it be reduced to writing why did your client not then want to reduce it to writing we don't think my client's affidavit sheds it's not directly  honor but my client's affidavit does shed some light on that issue which is that there were performance issues that my client identified in mr quality's performance and he was his his position was eliminated but he was terminated by my client it wasn't a voluntary germination so i surmise i don't some eyes i actually know that if my client were to be asked why was there never a definitive options agreement prepared the answer would be because shortly after he started to to work in two thousand and seven there were some performance issues that were identified by my client and  i think that's the answer that you will hear if this case goes back to the trial court but again i think the language that curiosity's question how much money are we talking about  i don't know your honor i mean one percent of or i mean it could be a problem i don't i honestly don't know the answer to that question i think my client has a successful now today accessible credit card processor not so much thanks to mr quizes performance but be that as it may i think that there is some value there i don't i don't really know substantial  think it is worth fighting about your honor i think that if it if it wasn't worth fighting about my client is a businessman and he would've resolve this dispute if it wasn't worth fighting about i think that's probably a fair way to to respond to your question  but you seem to suggest that the reason there was no agreement is performance problems the only mention of performance problems in your client's affidavit isn't paragraph seven where it's there were myriad performance deficiencies dating back to two thousand and seven this agreement if i understand it right is two thousand and four correct that's right i think the point the point to make is that there was some period of time between two thousand and four and two thousand and seven when the performance problems arose but i'm i believe that the language of this agreement was designed and whether it's designed or not in the clear and i believe the clear and unambiguous reading of it is that and and as appellant says my client had the sole discretion to decide what those terms and conditions were and that's his argument on appeal as to why you know the fault is ours  in the sense that there was no definitive agreement ever produced it was solely in your control well it was solely in my control my client's control my client had the ability then under that argument to create any and condition then it wanted right it could have created a term a condition having to do with duration and having to understand why it it's solely in your client's control and i don't get that if if he had come back to you after a year and said hey how about this agreement and your client h imposed a condition on the agreement that was that made it impossible for him to ever exercise that his option at that point was to walk it was to quit correct so this is like it was when there's bargaining power here on both sides you can you can propose what the terms are he can accept and stay or he can negotiate and change them or you can quit correct but again the how does that put it solely within your client because that's his argument as to why this is the good faith argument that he says my client did not exercise good faith or fair dealing in drafting and options agreement and therefore should be held responsible should not be able to rely upon the subject to language in the agreement because it took no steps to satisfy the condition that says argument on appeal which is that and that pivotal had the sole control to decide what those terms and could conditions were and therefore it's not his fault that nothing happened for ten years and my response is there's no reason why he couldn't have proposed terms and conditions and and if it really was in the sole control of pivotal to decide what those terms and conditions were this case is on all fours essentially with the him brag no case where that was solely in the power of the option grant or to decide whether an on what terms and conditions options would be granted and the good  correct but here we know it's one percent and it's one cent right but we don't know when how those shares going to be issued how are they going to be exercised the frequency of the grants the exercise period the vesting schedule the conditions to exercise the effect of terminations of employment all of those are open items for which there is nothing in the record you think price and quantity is just sort of irrelevant i don't think it's irrelevant but i don't think that you can base  a a binding in forcible contract simply because i'm an options agreement simply because you have the price in the quantity term because that's not the way options agreements work and that's why that's why the document says subject to terms and conditions my point is the district court relied upon it if i remember it was three different cases and they had different faxes oftentimes see to the extent those that those are binding on us were trying to figure out which of those cases this one seems to be closest to and to say this is exactly the same as imbruglia well is a bit of a stretch shall we say i i i understand that there this is a more definitive agreement than the one that  issue and in broad no i don't dispute that obviously but but i believe that there are a whole host of terms and conditions which are standard operating fair in options agreements which are not addressed by the one paragraph document that we're fighting that that the presumption is a gets something that's an illusory promise the presumption is against a condition preceding the way in which you're defining this do you agree that that's what ohio law says i agree that ohio law has a presumption against conditions precedent yes because they're trying to avoid forfeitures basically correct now but you but then you just a moment ago you said well this jesus was just a loser a promise because we use the word subject too isn't that exactly what the us trying to avoid not if it's clear and unambiguous i mean again they try to avoid the courts i think recognized below you can't create a contract for the parties if the language is clear and unambiguous and sub subject susceptible to only one reasonable interpretation which i submit that's what the court just recorded here then it is what it is and there is nothing to construe all right thank you  will come out how come you're in ten years your client never exercised in any of these actions or attempted to buy any of this stuff well i don't believe that's in the record but from talking to my client he was waiting to make sure this company became valuable and went public and i think the intent was always this call the company at some point tom would go public and adapt point in time his options would have hopefully significant value for him well it may be as simple as the options had no value for the first eight out of his ten years and we simply don't know you can't tell that from the affidavit at all so that's back i think to where we were discussing before if we're trying to figure out what the intent of the parties was we're how do we divine that from the record as it's presented to us which is why we're saying isn't there something to develop if it goes back and then you are automatically revert to do you get everything you need there's no point in sending it back i want to understand i understand and i think you were talking about you had mentioned earlier judge that there was a couple different cases you're trying to sort out which one this falls under and i think this falls under the methodical case which talked about if you have the essential terms you can then do fact discovery regarding non essential but potentially relevant terms and there's been some talk by opposing counsel of vesting schedules and strike prices and stuff like that would it be an essential term to know whether this option could be whether you had to be in good standing as an employee to exercise to know how long after you got fired you had it you had the ability to exercise this option that is in other words you get fired and then you have to exercise it within thirty days or you can exercise it in thirty years you would that be an essential term i don't believe those are essential terms those are relevant they could be relevant but i don't believe they're essential if this is an essence is a contract and the parties can choose the terms they put it to and they chose not to put such  i agree to buy your house so we agree on a price for your house how long i can take to actually close that transaction is relevant but not in essential terms so in other words i can bind you to sell that house to me but i can wait thirty years before i actually pay you for the house if i wanted to make that essential term i should put that into you don't think that is an essential term i don't think it's essential to ok i think if they wanted to to be a term they had the option create the contract that way you can tell i'm trying to come up with an analogy that has such an obvious seems to me answer that saying that the other way is to sort of a silly answer but maybe i didn't do a good enough job in my analogy no and no no no no i'm sorry no no i'm saying you're from understand exactly just i've heard that before very closely monitors mcgonagle and look at mcgonagle also missing was the term that you suggested about an exercise period if you go to the mcgonagle case there was a letter some of this one it was missing a price  missing an exercise period it was also missing the effect of terminations of employment some questions that you had asked me those are all missing from the options that are in mcgonigle but the court still held that there was a non discretionary promise in that case because it had an amount and didn't have any expressed contingencies in it so of all the cases of course in mcgonigle the person was was offered an agreement and he declined to sign he that he did so how can you circuit mediator yes we were did you guys mediate this case yes we did would it make sense to try to get from your perspective after this argument the other says well we're always willing to talk about is what i'm asking it not asking you what he thinks what you think he is wants to do are