Marriage of Hug
Court of Appeal of California
201 Cal. Rptr. 676 (1984)
Paul (plaintiff) and Maria Hug (defendant) were married in 1972, when Paul took a position with Amdahl Corporation (Amadahl). Amdahl had a plan for offering stock options to important employees for the primary purpose of recruiting and retaining high-quality employees, as well as providing an incentive for performance. In 1972, Paul received a stock option to purchase 1,000 shares of Amdahl stock at $20 per share. In 1974, that stock option was modified to provide Paul with the option to purchase 1,000 shares of Amdahl stock at $1 per share. Additional stock options were granted in 1974 to purchase another 1,300 shares at $1 per share and in 1975 to purchase 800 shares at $5 per share. Each of the stock options was required to be exercised over a four-year period. In 1976, Paul and Maria were separated. The trial court heard evidence as to the purpose of the stock options and determined that the stock options were granted primarily by Amdahl in order to initially recruit Paul in 1972 and then to compensate him for quality performance during his employment. The trial court apportioned the stock options as of the date Paul began employment with Amdahl, giving Maria a substantial interest in the stock options. Paul appealed the trial court's ruling.
Rule of Law
Holding and Reasoning (King, J.)
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