Opinion ID: 2976706
Heading Depth: 3
Heading Rank: 2

Heading: Lack of Full Consideration

Text: Goulson also argues that the release is not enforceable because Yorkshire did not pay him the full promised consideration. He contends that he is not bound by the release because Yorkshire first breached the Option Exercise Notice agreement by failing to repurchase his shares of restricted stock. That is, in the words of Stefanac, “the release is unfair.” 435 Mich. at 165. According to the April 23, 2002 Option Exercise Notice, “all restricted stock granted by the Company” was to become “fully vested” immediately before the “effective time” of the thenimminent merger between Yorkshire and TRICON Global Restaurants, Inc. JA 182. In ¶ 3 of the - 13 - No. 07-2232 Goulson v. Yum! Brands, Inc., et al. accompanying form which Goulson executed on April 24, 2002, Goulson expressly understood that “all my shares of Restricted Stock” would become fully vested immediately before the effective time, that he would receive payment for them, less withholding taxes, in conjunction with the closing of the merger, and that his shares would then cease to be outstanding. JA 185. As Goulson argues, the release contained in ¶ 5 of the same form is expressly conditioned on the vesting of his restricted stock and receipt of payment therefor. Id. Since he had never submitted any written notice of his intent to relinquish or forfeit the 1,198 shares awarded to him in 1998 and 1999, as required by § 9 of the RSA Agreements, see JA 145, 152, Goulson contends he had necessarily retained ownership of the shares. And since he did not receive the promised repurchase payment for his 1,198 shares as they vested in conjunction with the Yorkshire-TRICON merger, Goulson contends Yorkshire breached the condition precedent to enforcement of the release. There are several obvious flaws in this argument. First, the terms of the RSA Agreements, at § 7, see id., make it clear that Goulson’s interests in the 1,198 restricted shares would have been automatically forfeited at the time of his separation from Yorkshire, September 30, 2000, but for the severance package, which offered him accelerated vesting of the restricted shares. In other words, notwithstanding the § 9 general written notice requirement, Goulson did not have to give written notice to relinquish his interests in the restricted shares; if he separated from Yorkshire for any reason other than death, disability or retirement, he would forfeit them automatically. In the severance package, in what amounted to a permissible written amendment of the RSA Agreements however, Yorkshire offered to rescue him from this automatic forfeiture. The severance package offered accelerated vesting. JA 157. - 14 - No. 07-2232 Goulson v. Yum! Brands, Inc., et al. The terms of the severance package are silent on whether and how Goulson needed to expressly accept or decline the offered vesting. Nonetheless, considering the record as a whole, there is no genuine issue of material fact as to whether some further communication from Goulson was mutually understood to have been required in response to the offer. According to Michael Allen, Yorkshire’s former Senior Vice President of Human Resources, when interests in restricted shares vested, Yorkshire needed to know whether the recipient was going to exercise the option of accepting vesting because of the income tax liability incurred at the time of vesting. Allen dep. pp. 46-48, JA 554. Consistent with this understanding, Allen expected that Goulson would advise him whether he intended to exercise his option to accept vesting of his restricted shares prior to September 30, 2000. Id. p. 60, JA 557. Allen believed that Goulson “most certainly” understood this. Id. p. 66, JA 559.4 Indeed, Goulson’s September 26, 2000 letter to Allen, requesting an extension of time “relative to the acceptance of the stock” pending Yorkshire’s decision on whether to shoulder his income tax liability, evidences his understanding that he needed to accept the vesting to make the conveyance complete. JA 160. Yet, despite this manifest understanding, even as his request for extension was not granted and he received notice that Yorkshire would not be assuming responsibility for his potential tax liability, Goulson did nothing “relative to the acceptance of the 4 In fact, Allen further testified that George specifically told him “he was not going to elect his restricted stock award.” Id. p. 66-68, JA 559. This testimony is controverted, as Goulson denies making any such statement. Goulson dep. pp. 121, 125, 132, JA 665, 666, 668. The district court appropriately refrained, therefore, from relying on this statement in its analysis, as do we. - 15 - No. 07-2232 Goulson v. Yum! Brands, Inc., et al. stock.” He “essentially filed it [i.e., the notice that Yorkshire would not assume responsibility for the tax liability] and didn’t think another thing about it.” Goulson dep. p. 119, JA 665. Against this backdrop, Goulson’s present argument that, despite his silence in September 2000—a silence that continued unabated until the summer of 2003—he believes he retained some undefined interest in the restricted shares in April 2002, rings hollow. So forgotten were the restricted shares that even when Goulson received the Option Exercise Notice on April 23, 2002, advising him that Yorkshire’s records indicated he held zero shares of restricted stock, he did not question it. Further, in relation to whether Goulson received full consideration for the release, there is no dispute that Goulson received the full promised compensation for all options and restricted shares of record, as set forth in the notice, which incorporated the attachment listing. This is the promised consideration in exchange for which he executed the release. Pursuant to the attachment listing, the ¶ 3 term “all my shares of Restricted Stock,” for which Goulson could expect to receive payment, was defined as consisting of zero shares. Though he was expressly urged to read the notice and attachment carefully, he did not question Yorkshire’s statement that he held zero shares of restricted stock. Instead, he executed the release the next day, expressly giving up his right to enforce any claim, “known or unknown,” and undisputedly got what he bargained for—just not what he much later hoped he was entitled to. Hence, Goulson’s lack-of-full-consideration argument falls far short of demonstrating by a preponderance of the evidence that “the release is unfair.” Nor is the evidence sufficient to create a genuine issue of material fact. - 16 - No. 07-2232 Goulson v. Yum! Brands, Inc., et al.