McCraw v. First Union National Bancorp, Inc.

VAUGHN, Judge. ■ -We have not set out the minutes of and resolutions adopted in the meetings of the Executive Committee on 25 July 1966 or the. board meeting held the following day for we are of the opinion, and so hold, that plaintiff’s rights are limited to those set' out in the letter to him dated 23 August 1966. We will refer to a portion of the minutes to explain plaintiff’s claim. The minutes specify that plaintiff be granted early retirement and “receive total compensation from bank sources in the sum of $70,000 per annum until the date of his 65th birthday.” [Emphasis added.] The letter to plaintiff dated 23 August 1966 provides [27] that the $70,000 shall be reduced by amounts “received by you from the insurer of the Bank’s salary continuation plan and by all other payments direct or indirect 'in relation to . expenses and other fringe benefits payable to or for you’except, payments in connection with your continued participation in the Profit Sharing Plan, premiums on group life-insurance, the acquisition costs of certain automobiles and payments' of < certain expenses in connection with a house in Blowing Rock, North Carolina, all of which is more fully set forth hereinafter;” Payment to plaintiff under defendant’s group disability insurance plan are “amounts received” by plaintiff from the “insurer, of the Bank’s salary continuation plan” and . “other payments direct or indirect . . .. and other fringe benefits.” Plaintiff’s evidence is that defendant has paid plaintiff $70,000 each year, less the sum received under that plan. Plaintiff, therefore, has shown no right to recover under part (1) ..of his first claim. . r Part (2) of plaintiff’s first claim concerns ,thé fact .that defendant stopped making contributions to the profit sharing plan after 31 August 1966. We hold that this action was authorized by the express terms of paragraph 7 of the defendant’s letter to plaintiff which provides that plaintiff’s participation in the bank’s contributions would be based on plaintiff’s, compensation through 31 August 1966. Furthermore, plaintiff’s evidence discloses that, after 31 August 1966, he was not * an employee of defendant within the meaning of defendant’s profit sharing plan. The plan defines the term employee to mean “any person regularly employed by the bank whose customary employ (sic) is for thirty hours or more a week and who receives a regular stated salary from the bank other than a pension, wage, severance pay, retainer or fee under contract.” After 31 August 1966 defendant credited plaintiff’s profit sharing account with all earnings and other sums to which he claims he is entitled except for making additional contributions based on his alleged “earnings” as an “employee” after 31 August 1966. Each year plaintiff received a letter showing the balance in his account and, at his request, the entire sum was paid to him in April of 1971. Plaintiff’s evidence, therefore, fails to, show that he is entitled to recover under part (2) of his first claim. As to part (3) of the first claim, plaintiff admits that the evidence falls short of his allegations and we hold that he has shown no present right to relief under that part of his claim. [28] Plaintiff’s second claim concerns his right to exercise an option to buy a total of 5,000 shares of stock under a stock option agreement given him in 1963. The plan provides, in part: . . that if any termination of employment is due to retirement with the consent of the Bank, the optionee shall have the right ... to exercise his option, at any time within three months after such retirement. . . .” Plaintiff testified that he did not exercise his option within three months after 31 August 1966. He attempted to exercise the option so as to buy 1,000 shares on 11 December 1969. Plaintiff argues that he did not retire until 31 August 1970 and thus, until that time he was still an “employee” within the meaning of the plan. This argument is refuted by the plain language in paragraph 2 of defendant’s letter: “You are to accept early retirement effective 31 August 1966. . . Plaintiff’s evidence also tends to show that the terms “employee” and “employment” as used in defendant’s stock option plan are intended to have the meaning given them in Treasury Regulations' defining restricted stock option plans if such plans are to qualify for the favorable tax consequences applicable to transfers of stock as provided therein. Plaintiff, after 31 August 1966, was not an employee within the meaning of the Internal Revenue Code and Treasury Regulations dealing with restricted stock options. See 26 U.S.C.A. (I.R.C. 1954) §§ 424(a)(2)(A), 424(a)(2)(B), 3401(c); Treas. Reg. §§ 1.421-8(a) (2) (1961), 1.424(a) (11) (b) (1964), 31-3401(c)-1. Plaintiff failed to exercise his option within three months of his retirement on 31 August 1966. He has, therefore, shown no right to recover on his second claim. We have held that plaintiff’s rights in this case are limited to those set out in defendant’s letter of 23 August 1966, including the profit sharing and stock option plans to which the letter refers; that the meaning of those documents raises questions of law and not of fact; and that plaintiff’s evidence shows that defendant has complied with its obligations, as we understand .and interpret them to be. Having placed the case in this posture we are of the opinion that it is unnecessary to discuss questions relating to admission and exclusion of evidence, statutes of limitation, accord and satisfaction, election of remedies and «other matters raised in the briefs. Affirmed. Judges Britt and Morris concur.