Nazaryan

FACTS

I.

THE PARTIES

FemtoMetrix develops “metrology” tools used by the semi- conductor industry to test silica wafers for defects. Raphael was FemtoMetrix’s president and chief executive officer while Rubin was chief financial officer. Larzelere was vice president of operations/business development and later the chief operations officer, and Rolfes was a member of the board of directors. In 2012, FemtoMetrix recruited plaintiff to be its first engineer. In 2015, plaintiff sued defendants, claiming FemtoMetrix issued fewer shares of company stock to him than it had promised.

II.

THE SETTLEMENT AGREEMENT

In 2017, the parties entered into a settlement agreement (the Agreement) whereby they settled the 2015 action and agreed plaintiff would receive certain shares of FemtoMetrix stock. The parties extensively negotiated how they would classify the settlement stock. Plaintiff initially proposed classifying the stock as founder’s stock and not compensation. FemtoMetrix’s counsel disagreed and argued FemtoMetrix could not affirm the tax consequences of the settlement. FemtoMetrix attempted to delete the provision. A few days later, it proposed language suggesting the stock was…