Intershop Communications Ag v. Superior Court

This petition arises from a lawsuit for breach of a stock options exchange agreement (hereafter exchange agreement). The plaintiff in the action, Frank R. Martinez, is a California resident who was an employee of Intershop Communications, Inc., the U.S. subsidiary of Intershop Communications AG. Intershop the parent is a German corporation whose stock is publicly traded on the German stock exchange. By the terms of the exchange agreement, the employees of Intershop the subsidiary were allowed to exchange their stock options in the subsidiary for shares of stock in the parent. After plaintiffs employment was terminated, he sued Intershop subsidiary and parent, alleging that pursuant to the exchange agreement he was due 7,812 additional shares valued at more than $5 million.

The exchange agreement contained a choice-of-law and forum selection clause: “The conclusion and the performance of this Agreement is governed by and has to be construed in accordance with the laws of the Federal Republic of Germany. To the extent permitted by the applicable laws the parties elect Hamburg to be the place of jurisdiction.” In accordance with that contractual provision, defendants…