Newberger v. Rifkind
California Court of Appeal
104 Cal. Rptr. 663 (1972)
Myron Newberger and four other employees (plaintiffs) of Avnet, Inc. received written, signed stock options from Lester and Robert Avnet, the company's principal shareholders, exercisable in full after five years. Robert Avnet died two years later, and when the plaintiffs tried to exercise their options three years after that (still employed at Avnet, Inc.), the executors of Robert's estate refused to honor them. The plaintiffs sued Robert Rifkind and the other executors, along with Robert's widow (defendants). The trial court ruled for the defendants, and the plaintiffs appealed.
Whether an employee's continued employment after receiving a written stock option can constitute sufficient consideration to make the option binding despite the grantor's later death.