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Table 1 sets forth the dates on which petitioner’s ISOs were
granted and the number of MGC shares petitioner was entitled to
purchase under each ISO.
Table 1
Grant Grant date Shares
1 4/1/96 540,000
2 9/4/98 22,500
3 9/4/98 45,000
4 3/1/99 15,000
5 3/1/99 22,500
Petitioner’s ISOs provided for exercise prices, i.e., the price
petitioner would pay for each MGC share, ranging from $0.55 to
$5.33. Petitioner’s ISOs originally were scheduled to vest on
various dates between 1997 and 2003.
Petitioner was not granted any additional MGC stock options
after March 1, 1999. During the period in question, petitioners
owned less than 10 percent of the total combined voting power of
all classes of MGC’s stock.
Petitioner unilaterally determined the specific terms and
conditions of the ISOs that he received under the share option
agreements. The MGC board did not appoint a committee to
administer the MGC stock option plan, and the MGC board did not
play any role in consummating the share option agreements
described above.
B. Petitioner’s 1999 Employment Agreement With MGC
On November 1, 1999, petitioner entered into a comprehensive
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Last modified: May 25, 2011