Trellis Research v. Thaler CA2/2

I. Facts

A. Formation of Trellis Clark worked as an attorney, and Thaler worked as a software engineer. After dating periodically, they decided to go into business together instead. In February 2018, they formed Trellis as a Delaware corporation. Trellis is a Web site offering a database of trial courts’ tentative rulings for attorneys and law firms. Clark and Thaler agreed to run the Company as equal shareholders and co-directors. For marketing purposes, Clark was named CEO and Thaler was named CTO. B. Bylaws and Restricted Stock Purchase Agreement In addition to the Company bylaws, Clark and Thaler executed a Restricted Stock Purchase Agreement (RSPA). Under the RSPA, they were each allocated 4 million shares of Trellis common stock at $0.00001 per share for an aggregate purchase price of $40.00. The RSPA provided that Clark and Thaler would receive their respective Trellis shares based on their continued employment: (1) The shares would vest monthly over four years, but none would vest if the employees were terminated or left Trellis within the first year of employment (“one-year cliff”), and (2) If an employee separated from Trellis prior to the one-year cliff,…