$1.6 Million U.S.D.C. Verdict for Unvested Stock Options Affirmed by Ninth Circuit Court of Appeals - CAD; Technology Giant Fired Key Employee to Deprive Him of Options.

OXNARD, Calif.--(BUSINESS WIRE)--July 2, 1999--

The Law Offices of David M. Karen announced today that the Ninth Circuit Court of Appeals has affirmed the $1.6 million judgment for Plaintiff, Forrest L. Fleming, against his former employer, Defendant, Parametric Technology Corp. of Waltham, Mass.

The jury had found Fleming was terminated in bad faith and was therefore entitled to the value of his stock options, though unvested at time of termination. The Court of Appeals agreed, finding "there was substantial evidence to support the verdict."

While stock options are routinely used by start-up companies to lure and reward key employees, the eight-person jury unanimously determined that Fleming was terminated by Parametric Technology senior executives Steve Walske and Dick Harrison, to specifically deprive Fleming of his unvested options. U.S. Federal Court Judge, Honorable Robert M. Takasugi, presided over the three-week trial and had denied the Defense motion for new trial.

David M. Karen, lead trial attorney, prosecuted the Breach of the Covenant of Good Faith and Fair Dealing cause of action for the Plaintiff. Attorney Karen stated that "while the Ninth Circuit opinion will not be published, the decision still is useful as businesses are learning that they can't use people and throw them away when it is financially convenient for them to do so.

"Employees whose compensation is deferred with stock options to be realized in the future cannot be uniformly deprived of unvested options by termination. That Microsoft sought to file an amicus brief in this case, an effort denied by the Court, confirms this decision is particularly relevant.

"Especially in the technology industry, where the custom is to offer stock options as a way to attract and then defer the rewards to key employees, it shows you can't have all schtick and no carrot."

Attorney David M. Karen practices in Oxnard, specializing in trial of all civil litigation matters. For more information, call 805/988-4848 or e-mail at [e-mail].