Court Opinion

ID: 163959
Source: CourtListenerOpinion
Date Created: 2010-08-14 08:08:05+00
Date Added: 2024-06-11T09:00:57.692419
License: Public Domain

F I L E D
                                                                     United States Court of Appeals
                                                                             Tenth Circuit
                     UNITED STATES COURT OF APPEALS
                                                                            OCT 16 2003
                            FOR THE TENTH CIRCUIT
                                                                       PATRICK FISHER
                                                                                 Clerk

    JOHN PRESSPRICH,

                Plaintiff-Appellant,

    v.                                                   No. 02-1469
                                                  (D.C. No. 00-N-1806 (MJW))
    AEROFLEX, INC.,                                        (D. Colo.)

                Defendant-Appellee.

                             ORDER AND JUDGMENT            *

Before TYMKOVICH , HOLLOWAY , and ANDERSON , Circuit Judges.

         After examining the briefs and appellate record, this panel has determined

unanimously that oral argument would not materially assist the determination of

this appeal.   See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is

therefore ordered submitted without oral argument.

         Plaintiff appeals the district court’s grant of summary judgment in this

contract action. We have jurisdiction under 28 U.S.C. § 1291, and we affirm.

*
      This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
We review the district court’s summary judgment ruling de novo, applying

the same legal standard used by the district court under Fed. R. Civ. P. 56(c).

See Simms v. Okla. ex rel. Dep’t of Mental Health & Substance Abuse Servs.       ,

165 F.3d 1321, 1326 (10th Cir. 1999).

      The facts are not in dispute. Defendant Aeroflex, Inc. acquired all

outstanding stock of UTMC Microelectronic Systems, Inc. in 1999, thereafter

holding UTMC as a wholly owned subsidiary. At the time of the closing,

Aeroflex granted plaintiff and certain other employees of UTMC stock options as

an inducement to remain employed by UTMC after Aeroflex’s acquisition. The

stock agreement allowed the optionees to purchase a total of five thousand shares

of stock by exercising the option after one year from the date of the agreement for

not more than half the allowed shares and after two years for up to the entire

number of granted shares. The agreement further provided that any unexpired

option would terminate at the termination of the optionee’s employment, except

that the optionee retained a sixty-day grace period after termination in which to

purchase “all or part of the shares with respect to which such [o]ptionee is

entitled to exercise such option.” Aplt. App. at 77.

      Plaintiff voluntarily terminated his employment with UTMC approximately

eleven months after signing the stock option agreement. Within sixty days after

termination, he attempted to exercise his stock option, which defendant declined

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on the ground that plaintiff was not entitled to exercise his stock option under the

terms of the agreement. Plaintiff then commenced this action in state district

court; defendant removed the matter to federal court based on diversity of

citizenship.

       Under Colorado law, the primary goal of contract interpretation is to

determine and give effect to the parties’ intent.   Ad Two, Inc. v. City & County of

Denver ex rel. Manager of Aviation      , 9 P.3d 373, 376 (Colo. 2000). Moreover,

barring ambiguity, the intent of the parties is to be determined by the language

of the instrument itself.   Atlantic Richfield Co. v. Farm Credit Bank of Wichita    ,

226 F.3d 1138, 1149 (10th Cir. 2000). Here, neither party argues that the terms

of the stock option agreement are ambiguous. Rather, plaintiff contends that

“there is nothing in the agreement that required [him] to remain with the company

for at least a year before being entitled to exercise the option.” Aplt. Br. at 6.

We disagree.

       The stock option in this case specifically intended and contemplated

plaintiff’s continued employment with the company. The incentive for that

continued employment was a stock option partly exercisable after one year and

fully vested after two. Plaintiff admitted that on the date he voluntarily

terminated his employment, he was not entitled to exercise any portion of his

stock option. Aplt. App. at 44. He further admitted he was advised by

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defendant’s representatives that the stock option would terminate the day his

employment terminated.   Id. at 43-44.

      We fully concur with the reasoning of the district court that plaintiff’s

stock option expired when he terminated his employment with defendant and that

the two-month grace period only applied to his exercising the option he had at

termination. Since he had no such option then, there was nothing for him to later

exercise.

      Accordingly, for these and substantially the reasons stated by the district

court in its September 30, 2002 Order and Memorandum of Decision, the

judgment of the district court is AFFIRMED.

                                                    Entered for the Court

                                                    William J. Holloway, Jr.
                                                    Circuit Judge

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