Hercules Offshore, Inc. v. Laura Guthrie

CourtCourt of Appeals of Texas
DecidedFebruary 28, 2013
Docket01-10-00968-CV
StatusPublished

This text of Hercules Offshore, Inc. v. Laura Guthrie (Hercules Offshore, Inc. v. Laura Guthrie) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hercules Offshore, Inc. v. Laura Guthrie, (Tex. Ct. App. 2013).

Opinion

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. ....

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