Airborne Freight Corporation, a Delaware Corporation, and v. John D. McPherson And

Airborne Freight Corporation, a Delaware corporation with its principal place of business in Seattle, Washington, brought this action for injunctive relief against John D. McPherson, a resident of San Mateo County, California. The District Court granted the Corporation’s motion for Summary Judgment. McPherson appealed.

In 1947, Appellant founded Airborne Freight Corporation, a California corporation (hereinafter “Airborne — California”). Appellant was Chairman of the Board, President, Treasurer and principal shareholder of Airborne — California. In 1967, Appellant was approached by representatives of Pacific Air Freight Corporation (hereinafter “Pacific”) about the possibility of a merger of Airborne — California and Pacific. The eventual result of the negotiations was a three-way merger among Airborne — California, Pacific, and Appellee (hereinafter “Airborne — Delaware”), the surviving corporation.

During negotiations, counsel for Pacific submitted a proposed form of the merger agreement to Appellant and counsel for Airborne — California. Section 3 of the proposed form was as follows:

Upon inquiry of counsel for Airborne —California, it was concluded that the two year…