Court Opinion

ID: 3119287
Source: CourtListenerOpinion
Date Created: 2015-10-16 08:20:07.450758+00
Date Added: 2024-06-11T12:47:04.609563
License: Public Domain

Opinion issued February 28, 2013.

                                    In The

                           Court of Appeals
                                    For The

                       First District of Texas
                         ————————————
                           NO. 01-10-00968-CV
                         ———————————
                HERCULES OFFSHORE, INC., Appellant
                                      V.
                       LAURA GUTHRIE, Appellee

                                     and

                      LAURA GUTHRIE, Appellant
                                      V.
                 HERCULES OFFSHORE, INC., Appellee

                 On Appeal from the 295th District Court
                          Harris County, Texas
                    Trial Court Case No. 2008-57175
                        MEMORANDUM OPINION

      Laura Guthrie sued her former employer Hercules Offshore, Inc. for breach

of an “Executive Employment Agreement,” claiming that Hercules owed her

money and had restricted her right to sell or transfer her stock and stock options.

Based on motions for summary judgment from both parties, the trial court rendered

judgment that Guthrie take nothing on her claim for stock option related damages

and that Hercules pay Guthrie damages of $316,000 for salary and bonus

compensation under the executive agreement, damages of $350,350 for restricted

stock, and attorney’s fees of $48,827.50, and court costs. Both parties appeal, and

we affirm in part and reverse and render in part.

                                   Background

      Guthrie was hired in May 2007 as Hercules’s vice president of human

resources. At the time she was hired, Hercules was anticipating merging with

TODCO (a division of The Overhead Door Corporation). Guthrie and Hercules

signed an “Executive Employment Agreement,” with an effective date of May 21,

2007. The agreement does not reflect the dates on which the parties signed it, but

in her deposition, admitted as summary-judgment evidence, Guthrie stated that she

signed it on May 3, 2007. The executive agreement contained the following

provision:

           6.  Obligations of the Company upon Termination and
      Upon Change of Control.
                                          2
             ....
             (b) Following a Change of Control: Good Reason or Other
      than for Cause. If, during the Employment Period, the Company shall
      terminate the Executive’s employment other than for Cause following
      a Change of Control . . .
                           (ii) if the Termination occurs within 24 months
      following a Change of Control, then effective as of the Date of
      Termination, each and every stock option, restricted stock award,
      restricted stock unit award and other equity-based and performance
      award that is outstanding as of the Date of Termination shall
      immediately vest and/or become exercisable and any contractual
      restrictions on sale or transfer of any such award (other than any such
      restriction arising by operation of law) shall immediately terminate.

      On May 21, 2007, Guthrie and Hercules signed a “2007 Restricted Stock

Agreement for Employees and Consultants,” which was effective that date. This

agreement awarded Guthrie 3,000 shares of restricted stock, which was to vest in

thirds on each of the next three anniversaries of the effective date of the agreement,

provided Guthrie remained employed. Paragraph 3(a) of this agreement provided

that in the event Guthrie’s employment was terminated, the nonvested stock shares

“shall be forfeited by the Participant to the Company.”

      Guthrie and Hercules also signed a “Stock Option Award Agreement,”

effective May 21, 2007, that allowed Guthrie the option to buy 21,500 shares of

common stock at the exercise price of $32.94 per share, and was to vest in thirds

on each of the next three anniversaries of the effective date of the stock option

agreement. This 2007 stock option agreement provided that, in the event Guthrie’s

employment was terminated without cause, the options would vest in full and

                                          3
could be exercised by Guthrie for up to three years from the date of termination.

The 2007 stock option agreement further provided that, in the event Guthrie’s

employment was terminated for any reason other than death, disability, or without

cause, the option could be exercised by Guthrie to the extent then vested for up to

three months from the date of termination.

      On May 8, 2008, Guthrie and Hercules signed a “2008 Restricted Stock

Agreement for Employees and Consultants,” which was effective on February 14,

2008. The 2008 stock agreement awarded Guthrie 7,800 shares of restricted stock,

which was to vest in thirds on each of the next three anniversaries of the

agreement’s effective date, assuming her continued employ. Like the 2007 stock

agreement, the 2008 agreement, too, provided that, in the event Guthrie’s

employment was terminated, the nonvested stock shares “shall be forfeited by the

Participant to the Company.” Guthrie and Hercules also signed another “Stock

Option Award Agreement,” effective February 14, 2008 allowing Guthrie to

purchase 17,000 shares of common stock at an exercise price of $25.64 per share,

which was to vest in thirds on each of the next three anniversaries of that

agreement’s effective date.      The 2008 stock option agreement contained

termination provisions similar to the 2007 stock option agreement.

      On July 11, 2007, Hercules merged with the other company, leaving

Hercules stockholders with a minority ownership in the merged company, which

                                        4
kept the name Hercules. In responding to discovery, Hercules admitted that this

constituted a change of control for purposes of the executive agreement. 1 New

corporate managers asked Guthrie to waive portions of the executive agreement,

but she did not do so.

      Hercules terminated Guthrie on June 23, 2008. As of that date, one-third of

the restricted stock (1,000 shares) under the 2007 stock agreement and one-third of

her options (7,166.67 options) under the 2007 stock option agreement had vested,

but none of her restricted stock or options under the 2008 stock agreement and

2008 stock option agreement had vested. In her deposition, Guthrie stated that she

had approximately 10 telephone conversations with Hercules, beginning from the

time she was terminated, in which she asked the company to honor her

employment agreement.       On July 28, 2008, Guthrie sent Hercules an e-mail

contending that she had been fired without cause and that all of her restricted stock

and stock options vested without restriction on the date of her termination. On

August 7, 2008, Hercules responded that her termination was for cause.

      Guthrie filed suit for breach of contract in September 2009, claiming

damages for Hercules’s alleged failure to (1) pay her all benefits and (2) remove

restrictions on her stock and options. In May 2009, both parties filed a written

1
      The answer was as follows:
            [F]or purposes of this litigation Hercules does not contend “that
            the Merger did not constitute a ‘Change [of] Control,’ as that
            term is defined in Guthrie’s Employment Agreement.”
                                         5
stipulation that Guthrie’s employment was terminated other than for cause. In

November 2009, Hercules filed a motion for partial summary judgment on

Guthrie’s claim for stock-related damages. See TEX. R. CIV. P. 166a (a) - (c). As

grounds, Hercules first claimed Guthrie failed to prevent her damages by not

invoking the following provision in the executive agreement:

             8.    Full Settlement; Resolution of Disputes.
             ....
             (b) If there shall be any dispute between the Company and
      the Executive (i) in the event of any termination of the Executive’s
      employment by the Company, whether such termination was for
      Cause, or (ii) in the event of any termination of employment by the
      Executive, whether Good Cause existed, then, unless and until there is
      a final, nonappealable judgment by a court of competent jurisdiction
      declaring that such termination was for Cause or that Good Reason
      did not exist, the Company shall pay all amounts, and provide all
      benefits, to the Executive and/or the Executive’s family or other
      beneficiaries, as the case may be, that the Company would be required
      to pay or provide pursuant to Section 6(a) or 6(b) hereof as though
      such termination were by the Company without Cause or the
      Executive with Good Reason; provided, however, that the Company
      shall not be required to pay any disputed amounts to this paragraph
      except upon receipt of an undertaking (which need not be secured) by
      or on behalf of the Executive to repay all such amounts to which the
      Executive is ultimately adjudged by such court not to be entitled.

      Because Guthrie did not provide Hercules with an “undertaking,” Hercules

argued that any diminution of the stock value was a result of Guthrie’s own

inaction. The second ground was that no breach occurred because Guthrie never

exercised her options under the terms paragraph 5 of the 2007 and 2008 stock

option agreements by giving written notice, setting out the number of shares, and

                                        6
tendering full payment. Alternately, Hercules argued that any breach occurred on

August 7, 2008, when the market value of the stock was lower than her option

exercise prices. The third ground was that the terms of the 2007 and 2008 stock

agreements control over paragraph 6(b) of the executive agreement, and Guthrie

therefore forfeited her unvested shares as of the date of her termination.

      Guthrie, too, filed a motion for partial summary judgment in November

2009, arguing that, because Hercules had stipulated that her emloyment had been

terminated for “other than for cause” within 24 months of a merger that Hercules

conceded was a change in control under the executive agreement, she was, as a

matter of law under paragraph 6(b) of the executive agreement, entitled to

$316,000 and the vesting of all her restricted stock and stock options as of June 23,

2008. On November 30, 2009, the trial court granted Guthrie’s motion in part,

awarding her $316,000 under paragraph 6(b) of the executive agreement for salary

and bonus compensation. On December 4, 2009, the trial court denied Hercules’s

motion.

      In January 2010, after a change in trial judges, Hercules filed a new motion

for summary judgment that was essentially the same as the one previously denied.

A new paragraph was added to the motion, which addressed the effect of paragraph

7 of the executive agreement:

            7.     Non-exclusivity of Rights. Except as provided in
      Section 6(a)(ii), 6(a)(iii), 6(c) and 6(d) of this Agreement, nothing in
                                          7
      this Agreement shall prevent or limit the Executive’s continuing or
      future participation in any plan, program, policy or practice provided
      by the Company or any of its affiliated companied for which the
      Executive may qualify, nor shall anything herein limit or otherwise
      affect such rights as the Executive many have under any contract or
      agreement with the Company or any of its affiliated companies.
      Amounts which are vested benefits or which the Executive is
      otherwise entitled to receive under any plan, policy, practice or
      program of or any contract or agreement with the Company or any of
      its affiliated companies at or subsequent to the Date of Termination
      shall be payable in accordance with such plan, policy, practice or
      program or any contract or agreement except as explicitly modified by
      this Agreement.

Without citation to authority, Hercules argued that the executive agreement cannot

supersede or modify the subsequent stock agreements, presuming—without

discussion—a true conflict between the agreements.

      In March 2010, Guthrie filed a new motion for summary judgment, arguing

that, as a matter of law, (1) her unvested restricted stock and unvested stock

options vested on the date of her termination, (2) her damages are based on the

price of Hercules stock on the date Hercules breached, which she argues is the date

of her termination, and (3) she is entitled to an award of attorney’s fees. Guthrie

attached summary-judgment evidence that she should be awarded $562,782.39 for

her stock-related damages 2 and $71,588.64 in attorney’s fees.

2
      For the stock options, this was calculated by multiplying (1) the difference
      between the June 23, 2008 stock closing price ($35.75) and the two exercise
      prices ($32.92 for 2007 and $25.64 for 2008) by (2) the relevant quantity of
      outstanding 2007 and 2008 stock options Guthrie claims vested on June 23,
      2008, for a total of $212,432.39. For the restricted stock awards, this was
                                         8
      On June 28, 2010, the trial court ruled on the then-pending

summary-judgment motions by (1) granting Hercules’s motion as to Guthrie’s

claim for stock options and rendering summary judgment that she take-nothing on

that claim and (2) granting Guthrie’s motion on her breach-of-contract claims for

restricted stock awards and concluding that the date of the breach was June 23,

2008. On October 6, 2010, the trial court rendered a final judgment that Guthrie

take nothing on her claim for stock option related damages and that Hercules pay

Guthrie damages of $316,000 for salary and bonus compensation under the

executive agreement, damages of $350,350 for restricted stock, and attorney’s fees

of $48,827.50, and court costs. 3 Both Hercules and Guthrie filed notices of appeal.

                                    Discussion

Summary judgment standard

      The standard of review for a traditional summary judgment is well

established: (1) the movant for summary judgment has the burden of showing that

no genuine issue of material fact exists and that it is therefore entitled to summary

judgment as a matter of law; (2) in deciding whether there is a disputed material

      calculated by multiplying the outstanding shares that vested on June 23,
      2008 times that day’s stock closing price ($35.75), for a total of
      $350,350.00.
3
      In its final judgment, the trial court recited that it had “previously ruled on
      the parties’ pending motions for summary judgment,” a reference to its June
      28, 2010 rulings.

                                         9
fact issue precluding summary judgment, evidence favorable to the nonmovant will

be taken as true; and (3) every reasonable inference must be indulged in favor of

the nonmovant and any doubts resolved in the nonmovant’s favor. See, e.g., Nixon

v. Mr. Property Mgmt. Co., 690 S.W.2d 546, 548–49 (Tex. 1985).

      When both parties move for summary judgment, and the trial court grants

one motion and denies the other, the losing party may challenge the denial of its

motion as well as the grant of summary judgment to the opposing party. Jones v.

Strauss, 745 S.W.2d 898, 900 (Tex. 1988); Am. Motorists Ins. Co. v. Occidental

Chemical Corp., 16 S.W.3d 140, 143 (Tex App.—Houston [1st Dist.] 2000). If the

appellate court finds the law contrary to the trial court, it can reverse and render

judgment for the appealing party. Jones, 745 S.W.2d at 900; Am. Motorists Ins.,
16 S.W.3d at 143.

Hercules’s appeal

      In its first issue, corresponding to its third ground for summary judgment,

Hercules claims the trial court erred in rendering summary judgment on Guthrie’s

claims for damages for unvested restricted stock. Hercules acknowledges the

provisions of paragraph 6(ii) of the executive agreement that immediately vests

stock on the date of termination, 4 but argues that the provision in paragraph 3(a) of

4
      (ii) if the Termination occurs within 24 months following a Change of
      Control, then effective as of the Date of Termination, each and every
      stock option, restricted stock award, restricted stock unit award and
                                         10
the 2007 and 2008 stock agreements 5 nonetheless result in Guthrie forfeiting her

unvested restricted stock. We disagree.

      Hercules’s argument is premised on the existence of a conflict between the

two provisions and that the 2007 and 2008 stock agreements were signed after the

executive agreement. 6 There is, however, no conflict. Paragraph 6(ii) of the

executive agreement is a specific provision that is only effective if “Termination

occurs within 24 months following a Change of Control.” Hercules acknowledges

that Guthrie was terminated within 24 months after a change of control, the merger

of Hercules and TODCO. Hercules also acknowledges that specific contractual

provisions control over general provisions. See, e.g., Forbau v. Aetna Life Ins.

Co., 876 S.W.2d 132, 133–34 (Tex. 1994). Had Guthrie been terminated in the

absence of a change of control or more than 24 months after the merger, paragraph

      other equity-based and performance award that is outstanding as of
      the Date of Termination shall immediately vest and/or become
      exercisable and any contractual restrictions on sale or transfer of any
      such award (other than any such restriction arising by operation of
      law) shall immediately terminate.
5
      If, however, . . . Company and its Subsidiaries terminate the
      Participant’s employment . . . , then the shares of Restricted Stock that
      have not previously vested in accordance with the vesting schedule . .
      ., as of the date of such termination of employment . . . , shall be
      forfeited by the Participant to the Company.
6
      We note that the executive agreement, 2007 stock agreement, and
      2007 stock option agreement were all effective on the same day,
      regardless of when each was signed.

                                          11
3(a) of the 2007 and 2008 stock agreements would apply. In addition, paragraph 7

of the executive agreement acknowledges the possibility of “future participation in

any plan, program, policy or practice provided by the Company.”

      Hercules does not argue how the general provisions of the 2007 and 2008

stock agreements modify or supersede the specific provision paragraph 6(ii) of the

executive agreement. Documents pertaining to the same transaction may be read

together, even if they are executed at different times and do not reference each

other, and courts may construe all the documents as if they were part of a single,

unified, instrument. In re Laibe Corp., 307S.W.3d 314, 317 (Tex. 2010). There is

no dispute here that all the documents were part of the same transaction, i.e.,

Gurhrie’s employment and benefits. Hercules could have, but did not, include a

provision in the 2007 and 2008 stock agreements that the forfeiture of unvested

stock on termination controls over any other agreement between the parties.

      We overrule issue one.

      In its second issue, corresponding to its first ground for summary judgment,

Hercules first claims the trial court erred in rendering summary judgment awarding

restricted stock damages because Guthrie failed to prevent her damages by not

invoking paragraph 8(b) of the executive agreement, the “undertaking” provision. 7

7
      Paragraph 8(b) provides:
      If there shall be any dispute between the Company and the Executive
      (i) in the event of any termination of the Executive’s employment by
                                        12
Again, we disagree. Paragraph 8(b) does not purport require Guthrie to submit an

“undertaking” in order to claim any right she is otherwise entitled. Instead of

restricting Guthrie, paragraph 8(b) requires Hercules to tender the alleged amounts

and benefits owed her in advance of a final, nonappealable judgment, in exchange

for her unsecured promise to repay Hercules should she lose her lawsuit. Nothing

in the executive agreement requires Guthrie to provide an “undertaking” before

filing suit against Hercules.

      In its brief, Hercules contends that Guthrie is responsible for any damages in

the diminution of value of the restricted stock between the date she was terminated

and the date of the breach, because she could have provided the “undertaking” and

forced Hercules to provide the benefits in dispute. This is a mitigation-of-damages

argument, something that was not expressly raised in Hercules’s pending motion

      the Company, whether such termination was for Cause, or (ii) in the
      event of any termination of employment by the Executive, whether
      Good Cause existed, then, unless and until there is a final,
      nonappealable judgment by a court of competent jurisdiction
      declaring that such termination was for Cause or that Good Reason
      did not exist, the Company shall pay all amounts, and provide all
      benefits, to the Executive and/or the Executive’s family or other
      beneficiaries, as the case may be, that the Company would be required
      to pay or provide pursuant to Section 6(a) or 6(b) hereof as though
      such termination were by the Company without Cause or the
      Executive with Good Reason; provided, however, that the Company
      shall not be required to pay any disputed amounts to this paragraph
      except upon receipt of an undertaking (which need not be secured) by
      or on behalf of the Executive to repay all such amounts to which the
      Executive is ultimately adjudged by such court not to be entitled.

                                        13
for summary judgment. We, therefore, cannot consider it on appeal. See TEX. R.

CIV. P. 166a(c).

      Hercules next claims that the trial court erred in rendering summary

judgment on the value of Guthrie’s unvested restricted stock because she made no

attempt to sell the stock. Like the mitigation-of-damages argument, this was not

expressly raised in Hercules’s pending motion for summary judgment, and we

cannot consider it on appeal. See id.

      We overrule issue two.

      In its third issue, Hercules claims the trial court erred in rendering summary

judgment for the value of the restricted stock on the date of Guthrie’s termination

because, it claims, there is no summary-judgment evidence that Guthrie would

have sold the restrictive stock on her termination date. Once again, this was not

expressly raised in Hercules’s pending motion for summary judgment, and we

cannot consider it on appeal. See id. Hercules also argues that the damage award

was unwarranted because of the reasons it argues in issues one and two, which we

have overruled.

      We overrule issue three.

Guthrie’s appeal

      In her sole issue on appeal, Guthrie contends that “[t]he trial court

improperly granted summary judgment in favor of Hercules on [her] claim for

                                        14
stock options.” She contends that she “is entitled to judgment as a matter of law in

the amount of $212,432.39 on that claim.”

      Guthrie’s motions for partial summary judgment on her stock‑option claims

argued that (1) because Hercules stipulated that it terminated her employment

without cause on June 23, 2008, she was entitled to the immediate vesting of all of

her stock options under paragraph 6(b)(ii) of the Executive Agreement, (2)

Hercules refused to award her the options, and (3) her damages were based on the

amount of stock that should have been awarded her at the time of her termination

according to the terms of the 2007 and 2008 Stock Option Agreements and the

difference between the price of Hercules’s stock on the date Hercules breached the

agreement, i.e., the date of her termination, and the price she would have had to

pay on that date to exercise the options. The trial court granted Hercules’s motion

for summary judgment as to Guthrie’s claims for stock options.

      Hercules’s motion for summary judgment sought a take-nothing judgment

for Guthrie’s stock-option claims based on two grounds: (1) Guthrie failed to

prevent her damages by not invoking paragraph 8(b) of the Executive Agreement,

the “undertaking” provision and (2) no breach occurred because Guthrie never

exercised her options under the terms of paragraph 5 of the 2007 and 2008 Stock

Option Agreements or, alternately, any breach occurred at a time when the market

                                        15
value of the stock was lower than her option exercise prices, so that Hercules owed

her no damages.

      We hold that Guthrie is entitled to damages with respect to her stock options

as of the date of her termination under paragraph 6(b)(ii) of the Executive

Agreement. We further hold that her damages with respect to her stock options

should be measured, like her damages on her restricted stock claims, based on the

price of Hercules’s stock on the date of Hercules’s breach of the Executive

Agreement, namely the date of her termination without cause, which was the date

her stock options vested under paragraph 6(b)(ii) of her Executive Agreement and

Hercules failed to reward them.

      Guthrie relies on the Texas Supreme Court’s opinion in Miga v. Jensen for

the proposition that the “damage award resulting from a breach of an agreement to

purchase securities is the difference between the contract price and the fair market

value of the asset at the time of breach, not the difference between the contract

price and the value of the shares sometime subsequent to the breach.” 96 S.W.3d
207, 215 (Tex. 2002) (quoting Sharma v. Skaarup Ship Mgmt. Corp., 916 F.2d
820, 826 (2d Cir. 1990)). We agree that Miga is controlling on this issue.

       In Miga, an individual, Jensen, offered Miga the option to buy a portion of

his own stock in a privately-held corporation. When Miga tried to exercise the

option, Jensen refused to honor their agreement and Miga sued. Miga, 96 S.W.3d
16
at 209. The issue on appeal was the proper measure of damages caused by

Jensen’s beach of its agreement to sell Miga stock when Miga sought to

exercise his stock option.    The Texas Supreme Court held, “Because Jensen

breached the contract on the same day Miga attempted to exercise his option, the

correct measure of damages for Jensen’s failure to perform on his promise is the

traditional one [for breach of contract]: ‘the difference between the price

contracted to be paid and the value of the article at the time when it should [have

been] delivered.’” Id. at 215 (quoting Randon v. Barton, 4 Tex. 289, 293 (1849)).

      In Miga, the Supreme Court held that the proper measure of damages was

the value of the stock on the date the Stock Option Agreement was breached,

minus the exercise price—exactly the measure Guthrie argues we should use here.

Only the act that constituted the breach was different: Jensen refused to sell the

stock after offering Miga the option to buy it at a certain price; Hercules refused to

accept Guthrie’s claim that she was entitled to the stock option as of the date of her

termination and to award the options to her. Guthrie could not attempt to purchase

Hercules’s stock with something Hercules refused to grant her: the option to buy

the stock on the date she was terminated.

      The supreme court in Miga specifically observed that its holding was

“consistent with the approach of at least two Texas courts of appeals that have

addressed breach damages for contracts involving corporate” and that this measure

                                         17
“has the support of other jurisdictions,” including the New York Court of Appeals.

Id. (citing Hurst v. Forsythe, 584 S.W.2d 314, 316–17 (Tex. Civ. App.—

Texarkana 1979, writ ref’d n.r.e.); Bowers Steel, Inc. v. DeBrooke, 557 S.W.2d
369, 373 (Tex. Civ. App.—San Antonio 1977, no writ); see also Hermanowski v.

Acton Corp., 729 F.2d 921, 922 (2d Cir. 1984); Simon v. Electrospace Corp., 269
N.E.2d 21, 26 (N.Y. 1971)).

      Here, the 2007 Stock Option Agreement allowed Guthrie the option to buy

21,500 shares of common stock at an exercise price of $32.94 per share, which

vested in thirds on each on the next three anniversaries of the effective date of the

Stock Option Agreement. The 2007 Stock Option Agreement provided that, in the

event Guthrie was terminated without cause, the options would vest in full and

could be exercised by Guthrie for up to three years from the date of termination.

The 2007 Stock Option Agreement further provided that in the event Guthrie was

terminated for any reason other than death, disability, or without cause, the option

could be exercised by Guthrie, to the extent then vested, for up to three months

from the date of termination.

      The 2008 Stock Option Agreement allowed Guthrie to buy 17,000 shares of

common stock at an exercise price of $25.64 per share, which were to vest in thirds

on each of the next three anniversaries of the effective date of the Stock Option

                                         18
Agreement, but which would vest in full on the date Guthrie was terminated

without cause.

      Hercules breached the stock option contract by failing to acknowledge that

Guthrie’s termination was without cause and to accelerate the stock options that

Guthrie had accrued and to award them to her on the date of her termination, in

breach of the 2007 and 2008 Stock Option Agreements.

      Under the plain terms of the Stock Option Agreements, the time set for

issuance of the stock options was the date on which Guthrie’s employment was

terminated without cause. Because the stock options were vested as of the date of

the breach, Guthrie had the right to exercise the options at any time within three

months after the date of delivery. She testified under oath that she asked Hercules

10 times by telephone to honor the Executive Agreement and that each time it

refused. She also sent Hercules an email on July 28, 208, approximately one

month after her termination, contending that she had been terminated without

cause and that all of her restricted stock and stock options had vested without

restriction on the date of her termination. On August 7, 2008, Hercules responded

that her termination was for cause. We see no requirement under Miga that she do

more when Hercules had manifested its clear refusal from the date of her

termination to honor her contention that her stock had vested on that date, June 23,

                                        19
2008. Therefore, we hold that Guthrie’s damages should be measured as of the

date of her termination. See Miga, 96 S.W.3d at 215.

      We further hold, in accordance with controlling law, that Hercules owes

Guthrie (1) the value of the amount of stock that could have been purchased with

the stock options she was owed as of the date of her termination, i.e., the price of

21,500 shares of Hercules’ common stock on June 23, 2008, minus the exercise

price on that date of $32.94 per share on that date, plus the price of 17,000 shares

of common stock on that date, minus the exercise price of $25.64 per share, for a

total of $212,432.39. See Miga, 96 S.W.3d at 215; see also Mackie v. Petrocorp

Inc., 329 F. Supp. 2d 477, 511 (S.D.N.Y. 2004) (suit for breach-of-warrant

contracts never exercised when breach consisted of termination of perpetual nature

of warrants decided under Texas law, citing Miga and stating, “The court in Miga

relied on cases decided by the New York Court of Appeals and the Second Circuit

Court of Appeals to supports its decision”); Simon, 269 N.E.2d at 26; Sharma, 916
F.2d at 825–26.

                                        20
                                   Conclusion

      We affirm the judgment of the trial court with respect to Hercules’s appeal.

We reverse the judgment of the trial court with respect to Guthrie’s appeal and

render judgment awarding Guthrie damages of $212,432.39 on her stock option

claims.

                                             Jim Sharp
                                             Justice

Panel consists of Justices Jennings, Keyes, and Sharp.

                                        21