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April 15 — A former Xamarin Inc. officer has filed a lawsuit alleging that the company improperly “stripped” the gains from his employee stock options following its merger with Microsoft Corp.
In his April 14 complaint, plaintiff Jonathan Gettinger asked the Delaware Chancery Court to use 8 Del. C. §205—which allows the court to validate defective corporate acts—to issue him stock options at an exercise price of $4.10 per share.
According to the complaint, as part of Gettinger accepting the position of senior vice president of marketing at startup Xamarin in November 2015, the company agreed to give him stock options representing one percent of the company's fully diluted equity. Under the agreement, the equity would vest in the event of a merger.
Gettinger said that just hours before the merger closed in March, the company issued him a “sham option” that set the exercise price at $12.05 per share, close to the deal price.
The plaintiff, who was not retained by Microsoft following the merger, claimed that the exercise price should have been set to the price in place at the time of his offer letter. He further said that other employees received “dramatically greater financial consideration.”
Microsoft announced in February that it would buy Xamarin. According to Bloomberg sources, Microsoft paid about $400 million for the software developer.
A Xamarin representative didn't immediately respond to a request for comment.
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The complaint is available at http://www.bloomberglaw.com/public/document/Jonathan_Gettinger_v_Xamarin_Inc_Docket_No_12208_Del_Ch_Apr_14_20.
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