| Rockwood v Vicarious Visions, Inc. |
| 2007 NY Slip Op 07975 [44 AD3d 1229] |
| October 25, 2007 |
| Appellate Division, Third Department |
| Glenn Rockwood, Respondent, v Vicarious Visions, Inc.,Appellant. |
—[*1] McNamee, Lochner, Titus & Williams, P.C., Albany (Scott C. Paton of counsel), forrespondent.
Rose, J. Appeal from an order of the Supreme Court (Williams, J.), entered October 10, 2006in Saratoga County, which, among other things, denied defendant's motion for summaryjudgment dismissing the complaint.
As compensation for his services as a member of defendant's board of directors, plaintiff wasgranted stock options by two agreements: one in 1998 giving him the option to purchase 7,500shares of defendant's stock (the 1998 agreement) and a second in 1999 giving him the option topurchase 15,000 shares annually (the 1999 agreement). The 1998 agreement provided a variableexpiration date for exercise of its option depending on plaintiff's "Date of Termination." The1999 agreement provided an expiration date for its options of 10 years from the date of eachgrant. Plaintiff resigned from defendant's board in March 2001. When his attempt to exercise hisearned options in 2005 was rejected by defendant as untimely, plaintiff commenced this actionseeking to compel defendant to allow him to exercise his options. Defendant moved for summaryjudgment dismissing the complaint and plaintiff cross-moved for summary judgment on hisclaims. Finding that the 10-year expiration period provided in the 1999 agreement applies to allof plaintiff's options, Supreme Court granted plaintiff's cross motion and denied defendant'smotion. Defendant appeals, arguing that the 1998 agreement provided that plaintiff's 1998options would expire 90 days after he left its board of directors. We agree.[*2]
Clause 4 (d) of the 1998 agreement clearly provides thatthe option expires 90 days after the participant's "Date of Termination." Clause 8 (a) then statesthat a participant's " 'Date of Termination' shall be the first day . . . on which theParticipant's employment with [defendant] . . . terminates for any reason." While"employment" has been variously defined in different contexts, we conclude that here, as theterm is usually and commonly understood (see e.g. Matter of Modern Med. Lab. vDowling, 232 AD2d 901, 902 [1996]), it describes any relationship in which one personprovides services for another in exchange for compensation (see Black's Law Dictionary566 [8th ed 2004]). Thus, we read the 1998 agreement to provide that plaintiff's 1998 optionexpired 90 days after he terminated his compensated relationship with defendant by leaving itsboard of directors. If the term "employment" were read more narrowly to exclude plaintiff'srelationship with defendant, then the references to employment in the 1998 agreement wouldhave no purpose (see Utica Mut. Ins. Co. v Preferred Mut. Ins. Co., 180 AD2d 195, 197[1992]).
As for plaintiff's contention that the 1999 agreement effected a novation of the 1998agreement, we are satisfied that the later agreement merely shows an intent to restate the numberand price of option shares earned in 1998 so as to reflect an impending stock split. There is noevidence of an intent to extinguish the 1998 agreement (see First Call Friendly Note Buyers, Inc. v McMenamy, 40 AD3d1239, 1240 [2007]). Thus, the 1999 agreement did not alter or supercede the expirationprovisions of the 1998 agreement.
Mercure, J.P., Crew III, Peters and Spain, JJ., concur. Ordered that the order is modified, onthe law, without costs, by reversing so much thereof as granted plaintiff's cross motion forsummary judgment as to his right to exercise the 1998 stock option and denied defendant'smotion with respect to said stock option; cross motion denied to that extent, motion granted tothat extent and said claim dismissed; and, as so modified, affirmed.