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Oatway v. American International Group

April 14, 2003

DEREK J. OATWAY APPELLANT
v.
AMERICAN INTERNATIONAL GROUP, INC., PLAN ADMINISTRATOR OF STOCK OPTION PLAN; AMERICAN INTERNATIONAL GROUP, INC., A DELAWARE CORPORATION; 1987 EMPLOYEE STOCK OPTION PLAN, AN EMPLOYEE WELFARE BENEFIT PLAN



On Appeal From the United States District Court For the District of Delaware (D.C. No. 01-cv-00033) District Judge: Honorable Gregory M. Sleet

Before: Becker, Chief Judge, McKEE and Hill, *fn1 Circuit Judges.

The opinion of the court was delivered by: Hill, Circuit Judge

PRECEDENTIAL

Submitted pursuant to Third Circuit LAR 34.1(a) November 4, 2002

OPINION OF THE COURT

Appellant Derek J. Oatway appeals the district court order granting appellees', American International Group, Inc., American International Group, Inc., Plan Administrator, and 1987 Employee Stock Option Plan (collectively, AIG), motion to dismiss his amended complaint pursuant to Fed. R. Civ. Proc. 12(b)(6) on the ground that it fails to state a claim under the Employee Retirement Income Security Act of 1974 (ERISA), as amended, 29 U.S.C. § 1001 et seq. *fn2 Based upon the following, we affirm the judgment of the district court.

I. FACTUAL AND PROCEDURAL BACKGROUND

Oatway was a full-time employee of AIG from 1983 to 1992. During his employment, in consideration of his performance as a key employee, Oatway and AIG entered into two written incentive stock option agreements *fn3 giving Oatway the right to purchase a set number of AIG common stock shares at a set price per share as provided for in AIG's 1987 Employee Stock Option Plan (1987 Plan). The first was the January 18, 1990 Incentive Stock Option, giving Oatway the option to purchase 200 shares at $96 per share under the 1987 Plan. The second was the October 11, 1990 Incentive Stock Option, giving him the option to purchase 200 shares at $58.625 per share under the 1987 Plan. *fn4 The agreements were identical in nature. Blank spaces in the agreements were filled in by the parties to reflect the particular date of execution, the number of shares subject to the stock option grant, and the set price per share.

The stated purpose of the 1987 Plan was:

[T]o advance the interest of [AIG] by providing certain of the key employees of AIG and of any parent or subsidiary corporation of AIG, upon whose judgment, initiative and efforts the successful conduct of the business of AIG largely depends, with an additional incentive to continue their efforts on behalf of such corporations, as well as to attract to such corporations people of training, experience and ability. (Emphasis added.)

Under the Plan, each stock option granted to key AIG employees by its board of directors expired ten (10) years from the date of its issuance. An option could not be exercised by an AIG employee until one year after its date of issuance, and then only in predetermined installments. Unexercised options rolled over into subsequent years remaining within the ten-year term. If an employee terminated his or her employment with AIG prior to "normal retirement age," or age 65, then he or she had ninety days within which to exercise his or her remaining AIG stock options.

Oatway retired prior to normal retirement age in 1992. AIG advised him that he had ninety days, or until November 1992, within which to exercise all his options. Oatway alleges that, after he complained to the company about the short duration of time, AIG relented and reinstated the original ten year term.

Eight years passed. Oatway discovered, on or about January 25, 2000, that his option exercise date under the January 18, 1990, incentive stock agreement had expired one week earlier. He claims that he notified AIG by facsimile of his intent and desire to exercise his January 18, 1990 option, but the company refused to honor his request.

Ten more months passed. On October 1, 2000, Oatway attempted to exercise his options, both under the January 18, 1990, and the October 11, 1990, incentive stock option agreements. AIG refused his attempt. ...


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