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Bearden v. E.I. Du Pont De Nemours And Company

United States Court of Appeals, Eleventh Circuit

December 30, 2019

JAMES W. BEARDEN, Plaintiff-Appellant,

          Appeal from the United States District Court for the Middle District of Georgia D.C. Docket No: 5:16-cv-00158-TES

          Before WILLIAM PRYOR, MARTIN, and SUTTON, [*] Circuit Judges.


         This appeal requires us to interpret the word "retirement" in the Award Terms of stock options granted to James Bearden by his former employer E.I. du Pont de Nemours and Company. Under the terms of the award, an employee who leaves the company "due to retirement" keeps the original expiration date of his stock options. But an employee who leaves for other reasons must exercise his stock options by his last day of employment. The parties disagree about whether "retirement" requires an employee both to reach a certain age and to be employed a certain number of years. Although Bearden satisfied the age requirement, he had not yet satisfied the years-of-service requirement. After concluding that an employee is eligible for retirement within the meaning of the Award Terms only upon satisfying both criteria, the district court granted summary judgment to DuPont. We affirm.

         I. BACKGROUND

         We divide our background discussion in three parts. First, we review the facts that led to this dispute. Second, we review the terms of Bearden's stock option awards. Third, we review the procedural history of this appeal.

         A. Bearden Works for DuPont, DuPont Grants Him Stock Options, and Bearden Exits the Workforce.

         From 1980 to 2004, Bearden was an employee of either Griffin Corporation or a joint venture of Griffin and DuPont. Bearden officially became an employee of DuPont in January 2005 after DuPont acquired all of Griffin's interest in the joint venture. Bearden lived and worked during this time in Georgia, although DuPont is incorporated and headquartered in Delaware.

         While Bearden worked for it, DuPont granted him several stock options, including for the years 2009, 2010, and 2011. Bearden left the workforce at the age of 67 after working for DuPont for a little over 10 years. By the end of his last day of employment, Bearden had not exercised any of these stock options. When he later checked on these options, he learned that the options had expired. After Bearden asked DuPont for an explanation, DuPont reviewed the matter. It explained to Bearden that the expiration date of the stock options accelerates when an employee leaves and does not qualify for retirement, as that word is defined by the Award Terms. Because Bearden left without exercising his stock options and did not qualify for retirement, his stock options expired on his last day of employment.

         B. The Terms of Bearden's Stock Option Awards.

         Adopted by DuPont's shareholders, the Equity and Incentive Plan was designed to "attract, motivate[, ] and retain" certain officers, employees, independent contractors, and nonemployee directors of DuPont. It was created to allow for "performance-based compensation" through the "grant[ing of] stock options . . . and other stock-based awards." Per the "Governing Law" provision, "[t]he Plan and all determinations made and actions taken pursuant hereto shall be governed by the laws of the State of Delaware without giving effect to the conflict of laws principles thereof."

         The Equity and Incentive Plan is "administered by the [Compensation] Committee." It provides the Compensation Committee broad discretion in administering the plan, including the powers to determine when and how an award might be conferred or canceled, "to construe and interpret" any award, to "correct any defect" in any award, to "supply any omission" in any award, and to "reconcile any inconsistency" in any award. All "decision[s] of the [Compensation] Committee as to all questions of interpretation and application of the Plan shall be final, binding and conclusive on all persons." An award is "evidenc[ed]" by a set of "Award Terms," which is defined as a "written agreement, contract, or other instrument or document."

         The Award Terms evidencing the 2009 to 2011 stock option awards explain that Bearden "ha[s] been granted stock options under the E.I. du Pont de Nemours and Company Equity and Incentive Plan . . ., subject to the following Award Terms" and "the terms of the [Equity and Incentive] Plan itself, which is hereby incorporated by reference." Each set of Award Terms fixes the expiration date for the stock options as "no later than" seven years after issuance but cautions: "[T]he option[s] may expire sooner. Please refer to 'Termination of Employment' below."

         The "Termination of Employment" section explains that an employee who leaves the company before exercising the options might trigger an earlier expiration date depending on how and when the employee departs the company. It then describes four different kinds of termination scenarios: (1) Retirement, (2) "Lack of Work, Divestiture to Entity Less than 50% owned by DuPont, or Total and Permanent Disability," (3) Death, or (4) "Any Other Reason (such as voluntary termination)." A retiring employee keeps the original seven-year expiration date. But an employee who leaves DuPont for "Any Other Reason" must exercise his options "by the date on which [he] terminate[s] employment." The ...

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