Former Intergraph Workers Awarded Millions in Stock
Four former employees of Intergraph Corp. have received $9.6 million in company stock in a federal court settlement ordered by U.S. District Judge E.B. Haltom Jr.
Although the settlement occurred several weeks ago, J. Allen Brinkley, an attorney for the group, said his clients received the final stock payments last week.
Michale Murray, James R. Bounds, Charles D. Brinkerhoff and Terry T. Schansman sued Intergraph, its stock bonus plan, Intergraph officers James and Nancy B. Meadlock and the Intergraph board of directors in federal court in 1985.
The group contended that although a 1972 profit-sharing plan set up by the company guaranteed employees the right to receive their funds on the termination, Intergraph amended the plan to prevent its employees from receiving any money until retirement. At that time, Intergraph was known as M & S computing.
Charging Intergraph’s actions were arbitrary and unreasonable, the four alleged that the company used the stock option, or profit-sharing plan, for its own purposes. The suit contended the firm forced employees at times to buy stock at inflated prices while selling it to private investors for less.
Alabama law quoted in the suit says that under the Employment Retirement Income Security Act of 1974, no modification or amendment of a retirement or trust plan that would adversely affect the benefits can occur unless it is required to comply with the Internal Revenue Code or other federal law.
Claiming financial hardship for himself and his family, Murray requested a partial distribution of his vested interests in Intergraph in 1985, according to the suit, but was denied that by Intergraph administrative officers and the board of directors.
The suit contended Intergraph failed to tell employees they would be unable to receive any funds from the plan until age 65. Murray and the others claimed they were led to believe the plan was a mechanism the company used to reward employees for unpaid overtime and that he would receive stock through the plan, and money after the company “went public.”
The plaintiffs claimed that refusal to pay any money out of the plan until an employee reaches age 65 violates terms of the plan.
A November 1985 memorandum from an Intergraph attorney to its employees said that the board of directors voted to ament the stock bonus plan to permit distribution of benefits to terminated employees, which would have settled the lawsuit.
However, the settlement order issued last month by Judge Haltom says Intergraph attempted to “renege on their settlement of this controversy with the four plaintiffs.”
Haltom stated in his order that the plaintiffs had “more than arguable merit” and that Intergraph apparently attempted to shortchange the four in the actual settlement by 9,587 shares worth $400,000.
“Defendants efforts here seeking to belatedly raise a dispute concerning ownership of the 9,587 shares… is akin to “Injun giving,” and the court declines to accommodate defendants’ ill-timed efforts,” Haltom’s order reads.
Murray’s part of the settlement amounts to about $3.5 million in stock shares, James R Bounds’ share amounts to roughly $600,000, he said Saturday. Brinkerhoff and Schansman could not be located by The Huntsville Times Saturday.
John Wynn, an attorney for Intergraph, said Saturday that the court-ordered settlement would not be appealed.
“It Wasn’t really from the company, you know.” Wynn said of the settlement. “It was with the retirement plan. They just received what they had put into the account.”
Harold Bowron, A Birmingham attorney who also represented Intergraph in the matter, declined to discuss the settlement.