Falkowski

I. INTRODUCTION

Plaintiffs in this class action were employees of Cemax-Icon, Inc. (Cemax) at the time of its merger with defendant Imation Corp. (Imation). The merger resulted in Cemax becoming a wholly owned subsidiary of Imation, with plaintiffs continuing as employees of Cemax. At the time of the merger, Imation replaced plaintiffs’ Cemax employee stock options with options to purchase Imation stock. Soon after the merger, Imation granted plaintiffs future rights to additional Imation stock options. A year later, Imation sold Cemax to another company and cancelled all of plaintiffs’ unexercised Imation stock option rights.

The incentive stock option plans under which plaintiffs’ options had been issued permitted Imation to cancel the option rights if plaintiffs’ employment with Imation or its affiliated corporations terminated. Plaintiffs contend that because they were never terminated from employment with Cemax, which continued as an operating corporate entity after its sale by Imation, the cancellation of their option rights constituted a violation of the terms of these plans. The parties submitted cross-motions for summary judgment in the trial court. The…