Yeng Sue Chow v. Levi Strauss & Co.

This is an appeal from a summary judgment granted in favor of respondent in an action brought for rescission of a stock repurchase option and for restitution. The relevant facts of the case are not in dispute and may be summarized as follows:

Appellant is the widow and executrix of the estate of Arthur Chow, deceased (“Arthur”). Arthur was employed by Levi Strauss & Co. (“the Company”) from 1959 until his death on May 27, 1970. During the period of his employment Arthur acquired 11,295 shares of the Company’s common capital stock under employee stock purchase plans. Under these plans key employees were allowed to purchase the stock on favorable terms, but at the same time granting a repurchase option to the Company in case they intended to resell or otherwise dispose of the shares or in the event of termination of their employment. Thus, all the shares acquired by Arthur were subject to the repurchase option under which the Company was entitled for a period of 30 days after Arthur’s death to buy them back at book value.

Shortly after Arthur’s death, on June 4, 1970, the Company duly exercised its option right and, by an agreement entered into on August 27, 1970, it…