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Compliance December 23, 2005
Options Program Not ERISA Governed
December 23, 2005 (PLANSPONSOR.com) - Because the
employer's stock option plan was not an Employee Retirement
Income Security Act (ERISA)-governed welfare or benefit
program, an employee can't sue under ERISA over the company's
refusal to allow him to exercise his options.
Reported by Fred Schneyer
In ruling for the employer, Telecorp Communications Inc, Senior US District Judge Jaime Pieras, Jr., of the US District Court for the District of Puerto Rico said the stock option plan lacked the required ongoing administrative scheme. Both parties agreed the plan did not involve the administration of funds.
During his four years of employment, employee Omar Hoyos participated in the plan and signed various stock option agreements that were subject to the plan, Pieras said.
The case is Hoyos v. Telecorp Communications Inc., D.P.R., No. 04-2313, 12/20/05.