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eBook details

• Title: Hermanowski v. Acton Corp.
• Author : United States Court of Appeals for the Second Circuit
• Release Date : January 07, 1984
• Genre: Law,Books,Professional & Technical,
• Pages : * pages
• Size : 60 KB

Description

In April 1975, plaintiff Charles Hermanowski agreed to terminate his employment contract as president of defendant Acton Corporation in return for $25,000 cash and a five year non-qualified stock option to purchase 50,000 shares of Acton's common stock at $2 per share. In June 1976, Acton notified Hermanowski that his stock option had been cancelled. Hermanowski rejected that view and, in September 1979, sought to exercise a portion of the option by tendering a bank check for $10,000 and requesting delivery of 5,000 shares of stock. Acton returned the check stating that Hermanowski had ""no exercisable stock option"". After trial of Hermanowski's resulting suit against Acton, the district court determined in a thorough, carefully drafted opinion that Acton had breached the stock option contract, that the breach occurred in November 1979 when Acton refused to deliver the stock, and that there was no merit in Acton's claim of an anticipatory breach in June 1976 when it had purported to repudiate the option agreement. We agree with the district court's reasoning on the issue of breach, and therefore affirm on Acton's appeal, substantially for the reasons set forth in the decision of the district court. We write only to consider Hermanowski's contention on the cross-appeal that the district court made an error in its calculation of damages. We agree with Hermanowski that the district judge correctly concluded (1) that the date of the breach was November 12, 1979, the date on or about which plaintiff learned that the defendant breached the agreement; (2) that the measure of damages should be determined as of that date; and (3) that the proper measure of damages is the difference between the market value of the stock and the option price. Our concern is over his calculation of the option price.

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