Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Ciolino v. Ameriquest Transportation Services

August 10, 2009

JOSEPH CIOLINO, PLAINTIFF,
v.
AMERIQUEST TRANSPORTATION SERVICES, INC., DEFENDANT.



The opinion of the court was delivered by: Irenas, Senior District Judge

OPINION

In this case, Plaintiff Joseph Ciolino ("Ciolino") alleges that Defendant Ameriquest Transportation Services, Inc. ("Ameriquest") violated the terms of his employment contract by diluting his ownership interest in Ameriquest stock. Presently before the Court is Ameriquest's Motion to Dismiss the Complaint for Failure to State a Claim. For the reasons that follow, the Motion will be denied.*fn1

I.

A.

The factual recitation that follows accepts as true the facts as alleged in the Complaint and provided in the exhibits thereto. In March, 1998, the parties entered into a Memorandum of Understanding ("MOU") in connection with Ciolino's acceptance of an executive position with Ameriquest.*fn2 (Compl. ¶ 5; Compl. Ex. A--- Memorandum of Understanding) Pursuant to the MOU, Ciolino's compensation package included a base salary, performance bonuses, commissions, and stock options. (See Compl. Ex. A ¶ 1) In paragraph 1D, the MOU provided the following with respect to Ciolino's stock options:

Stock options amounting to 2% of the outstanding and issued shares as of the date of employment will be awarded to "employee" upon his first day of employment. The per share price of the options will be at the Initial Offering price (adjusted for stock splits) of $25 per share. The exercise date of the options will be five years at offering (I.P.O.) from the first day of employment. Anti dilution provisions will be incorporated with the options so that the options associated with the original 2% will not fall below that percentage of the outstanding stock prior to any Initial Public Offering of the company. Options will fully vest after five years or at initial public offering within I.P.O. Guidelines[] of employment and should the employee leave the company prior to the five year vesting period or Initial Public Offering he will forfeit all interest in the aforementioned stock options.

Additional stock options will be made available to employee as performance compensation. A pool of up to 8% of the outstanding and issued stock will be set aside for management stock options from which the performance compensation options will be issued. The 8% pool will be in addition to the aforementioned 2% stock option. Performance compensation will be awarded on [an] annual basis. Additional stock options will be made available of up to 3% of outstanding and issued stock over a 5 year period or prior to an initial public offering. Antidilution provisions will be incorporated as is stated in Item 1D regarding the original 2% stock optio[n] award . . . for a tota[l] of 5%.*fn3

(Compl. Ex. A. ¶ 1D)

Ciolino exercised his option to purchase five percent of Ameriquest's stock.*fn4 (Compl. ¶ 7) Subsequently, Ameriquest issued additional shares of its stock to other shareholders, but did not offer to issue additional shares to Ciolino. (Id.) As a result, Ciolino currently owns less than five percent of the outstanding Ameriquest stock.*fn5 (See id.)

By letter to Ameriquest dated December 22, 2008, Ciolino sought an accounting of the outstanding shares of Ameriquest stock, as well as tender of sufficient shares, the purchase of which would restore his ownership interest to five percent. (Compl. ¶ 8) Ameriquest rejected Ciolino's requests. (Compl. ¶ 9)

Thereafter, Ciolino sought access to a multitude of Ameriquest's books and records, pursuant to the New Jersey Business Corporation Act, N.J.S.A. § 14A:1-1 et seq.*fn6 (Compl. ¶ 9) His stated purpose in making that request was to "determine the value of [his] interest in Ameriquest, to determine the extent and nature of the loss caused to [him] by Ameriquest's wrongful dilution of [his] shareholder interests . . ., and to determine whether the corporation is being properly managed." (Compl. ¶ 11) Ameriquest offered only to comply in part with Ciolino's request, by "mak[ing] only certain of the requested items, such as its share register and minutes, available for inspection." (Compl. ¶ 10) The company refused to comply with the remainder of Ciolino's inspection demand. (Id.)

B.

Ciolino initiated the current action by filing a two count Complaint. Count I alleges that Ameriquest breached the MOU by diluting Ciolino's stock ownership interest, and seeks a declaration that Ciolino is "entitled to a current and continuing undiluted five percent (5%) interest in Ameriquest." (Compl. ΒΆΒΆ 14, 15) Count II alleges that Ameriquest violated the New Jersey Business Corporation Act by refusing Ciolino's demand to review its books and records, ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.