Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Powers v. A&W Supply, Inc.

Court of Appeals of Tennessee, Knoxville

March 21, 2017

CLAYTON EDDY POWERS
v.
A&W SUPPLY, INC.

          Session Date: December 14, 2016

         Interlocutory Appeal from the Chancery Court for Knox County No. 189651-2 Clarence E. Pridemore, Jr., Chancellor

         This appeal arose from a contract dispute between the plaintiff employee and the defendant corporation regarding shares of corporate stock. The parties signed an agreement in June 1993, which provided that the plaintiff would become vested with the right to receive two and one-half percent of the total number of issued and outstanding shares of the corporation's capital stock so long as the plaintiff remained an employee in good standing with the corporation from the date of said agreement until the vesting date of December 31, 2001. It is undisputed that the plaintiff remained an employee in good standing with the corporation on the vesting date. Following the vesting date, the corporation never delivered stock certificates to the plaintiff or recognized the plaintiff as a shareholder within the company. The corporation terminated the plaintiff's employment in October 2014, and in November 2014, the plaintiff made his first inquiry about his ownership interest in the stock to which he was entitled under the agreement. The defendant company denied that the plaintiff owned any stock in the company. The plaintiff thereafter filed an action against the corporation, seeking specific performance, declaratory judgment, and damages resulting from breach of contract. The plaintiff filed a motion for partial summary judgment, requesting a determination that the plaintiff was automatically vested in two and one-half percent of the total number of shares of the corporation's capital stock. The defendant also filed a motion for summary judgment, averring that because the corporation never took action to transfer the shares of capital stock to the plaintiff on the vesting date, the plaintiff's cause of action accrued in 2001, rendering the plaintiff's present action time barred by the applicable statute of limitations. The trial court determined that the plaintiff was vested with ownership of the shares on the vesting date and that the plaintiff's action was not barred by the statute of limitations. Discerning no error, we affirm.

         Tenn. R. App. P. 9 Interlocutory Appeal; Judgment of the Chancery Court Affirmed; Case Remanded

          David L. Johnson, Nashville, Tennessee, for the appellant, A&W Supply, Inc.

          Kevin A. Dean, Knoxville, Tennessee, for the appellee, Clayton Eddy Powers.

          Thomas R. Frierson, II, J., delivered the opinion of the court, in which Charles D. Susano, Jr., and John W. McClarty, JJ., joined.

          OPINION

          THOMAS R. FRIERSON, II, JUDGE

         Clayton Eddy Powers began working as a sales representative for A&W Supply, Inc. ("A&W") in May 1988. Mr. Powers remained employed by A&W for over twenty-six years until his employment was terminated by A&W in October 2014. On June 24, 1993, Mr. Powers and A&W entered into a written agreement ("the Agreement"), which entitled Mr. Powers to become vested with the right to receive two and one-half percent of the total number of issued and outstanding shares in A&W's capital stock ("the Employee Shares") upon his continued employment in good standing with the corporation through the vesting date of December 31, 2001. The Agreement, signed by Mr. Powers and representatives of A&W, contained the following provisions in relevant part:

1. Ownership Interest in Shares. Provided that the Employee shall be an employee in good standing of the Company at all times from the date hereof through and including December 31, 2001 (the "Earnout Period"), the Employee shall on December 31, 2001 (the "Vesting Date") become vested with the right to receive from the Company that number of shares of the capital stock of the Company which is equal to two and one-half percent (2.5%) of the total number of issued and outstanding shares of the Company's capital stock on the Vesting Date (the "Employee Shares"). The Employee Shares shall be transferred to the Employee by the Company, and shall constitute additional compensation to the Employee from the Company.
2. Effect of Termination of Employment Prior to Vesting. Upon the termination of the Employee's employment with the Company at any time for any reason prior to such time as the Employee shall have become vested with the Employee Shares, all rights of the Employee to become vested with respect to or receive all or any part of the Employee Shares shall cease and terminate as of the effective date of termination of the Employee's employment. The Employee shall not be vested with or have any ownership interest in the Employee Shares by reason of employment with the Company for less than the entire Earnout Period, it being expressly understood and agreed that the Employee must be an employee of the Company in good standing at all times during the Earnout Period in order to be vested with respect to the Employee Shares.
3. Delivery of Certificate to Employee. Subject to the conditions and limitations set forth in this Agreement, at such time as the Employee has become vested with the Employee Shares, the Company shall execute and deliver, or cause to be executed and delivered, to the Employee, within thirty (30) days from and after the Vesting Date, a certificate or certificates representing the Employee Shares whereby the Company shall transfer the Employee Shares to the Employee, but subject to the terms, provisions, restrictions and limitations set forth in this Agreement, and such certificate or certificates shall bear an appropriate legend on the face thereof evidencing this fact.
4. Covenants and Agreements of Employee Relative to Employee Shares. At such time as the Employee shall become vested with the Employee Shares as provided in this Agreement, the Employee agrees that the Employee and the Employee Shares shall be subject to the following:
** *
(e) The Employee shall have the right from and after the Vesting Date to receive the Employee's pro rata share of all distributions from the Company with respect to its capital stock, which shall be paid and/or delivered to the Employee upon the same terms and conditions as the other shareholders of the Company. The Employee acknowledges and agrees, however, that the Employee shall not, solely by virtue of ownership of the Employee Shares, be entitled to receive, nor have the right to require the Company to make, any distributions or payments of any kind to the Employee with respect to its Employee Shares, and that all such distributions and/or payments by the Company with respect to its capital stock, including the Employee Shares, shall be made solely upon the determination of the board of directors and/or all shareholders of the Company acting pursuant to the charter and bylaws of the Company and applicable law[.]
** *
7. Additional Cash Compensation. The Employee acknowledges that the Employee shall have no vested or other interest in the Employee Shares until such time as the Employee Shares shall have vested pursuant to the terms of this Agreement.
** *
8. Severance Payment. The Company and the Employee agree that upon the termination of the Employee's employment with the Company prior to such time as the Employee has become vested with the Employee Shares as provided for in this Agreement, for any reason, the Employee shall be entitled to the severance payment described in this paragraph 8 (the "Severance Payment"), the acceptance of which by the Employee shall ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.