United States District Court, D. South Carolina, Greenville Division
C. Coggins, Jr. United States District Judge
matter is before the Court for review of Defendant's
decision to deny Plaintiff's claim for stock option
benefits under a Deferred Compensation Program Plan
(“the Plan”) governed by the Employee Retirement
Income Security Act of 1974, 29 U.S.C. § 1132(a)(1)
(“ERISA”). The parties have filed a joint
stipulation and respective memoranda in support of judgment
pursuant to the Court's Specialized Case Management Order
for ERISA benefit cases. The parties agree that the Court may
dispose of this matter consistent with the joint stipulation
and memoranda. After a thorough review, the Court affirms the
denial of benefits.
was employed by Defendant as a Director of Consumer Sales for
the Urethane Foam Division. ECF No. 20-1 at 9. On December
29, 2005, Plaintiff elected to defer $17, 614.00 of his
compensation under the Plan. Id. at 37-38. This
amount was used to acquire options to purchase 3, 835 shares
of company stock at a proposed purchase price of $22.96 per
share. Id. at 9. The options were granted as of
December 29, 2005. See ECF No. 20-2 at 6 § 4.2.
Pursuant to the terms of the Plan, the options vested and
could be exercised any time after March 15, 2007, until the
options expired. See id. at 7 § 4.4. According
to the terms of the Plan, the options were valid for the ten
years following the grant date, at which point the options
expired. Id. at 6 § 4.3; 20-1 at 39-40. Thus,
the o p t i o ns expired on December 29, 2015. EC F No. 20-1
at 6. The Plan allowed a participant 30 days after the
expiration date to pay the exercise price and any other
required amounts; when no action occurred on the part of
Plaintiff, the exercise was void. ECF No. 20-2 at 7 §
4.4. Plaintiff failed to contact Defendant concerning the
exercise of the options prior to the expiration date or
within the 30-day period following the expiration date.
October 2015, Defendant sent Plaintiff written correspondence
regarding the upcoming expiration of the options; however, it
appears the mail was sent to an incorrect address. ECF No.
20-1 at 2, 6, 8. On or about July 27, 2016, one of
Defendant's employees was able to reach Plaintiff by
phone. Id. at 11. Defendant's employee informed
Plaintiff that he was due compensation and would receive more
information. Id. Plaintiff received a phone call
from Annette Garner, Compensation Manager, who told him that
the prior phone call was an error and that he was not due any
compensation because the options had expired. Id. at
August 9, 2016, Plaintiff sent correspondence to Garner's
email address and addressed to the Committee Members
informing that that he had received correctly addressed mail
from Defendant's Retirement Plan. 20-1 at 11. Thereafter,
Defendant informed Plaintiff that his August 9, 2016,
correspondence had been forwarded to the legal department and
was construed as a claim for benefits. Id. at 9-11.
Defendant denied Plaintiff's claim on August 18, 2016.
Id. . a t 9 -10. P la i ntiff appealed, and
Defendant issued a final denial letter on October 17, 2016.
Id. at 6-7.
parties agree that the following terms, as defined by the
Plan, are relevant to the curre nt a c ti o n:
3.2 Election. A Participant's Election must be
made on or before December 31 for Compensation relating to
the following calendar year, except that newly eligible
Participants may make an Election during the calendar year
within 30 days of first becoming eligible for participation
for Compensation earned subsequent to the date of Election.
Elections may be modified or withdrawn until such time as an
original Election could no longer be made.
The Committee may provide for Elections at any other times
with respect to all or any part of Compensation or
Contributions to the extent that such Elections are
consistent with the requirements of Section 409A.
4.2 Grant Date. Options will be granted as of the
last business day in December of each year or such other date
as the Committee determines (the "Grant
4.3 Term of Options. The term of an Option will
expire 10 years after the Grant Date (t he
4.4 Exercise of Options. Options will be exercisable
on March 15th of the year following the year the
compensation is earned and vested. However, despite any later
specified date for exercise, any vested portion of an Option
will become exercisable in full upon the death or Disability
of the Participant.
An Option may be exercised by delivering a written notice to
the Company accompanied by payment of the Exercise Price for
the shares purchased. Such payment may be made in cash, by
delivery of shares of L&P Common Stock (held for at least
6 months) or a combination of cash and Common Stock. Any such
Common Stock will be valued at the per share closing price of
the Company's common stock on the trading day immediately
preceding the date of exercise or at such other time as
determined by the Committee. No. shares will be delivered in