Merola v. Exergen Corp.

668 N.E.2d 351 (1996)

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Nature of the Case

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Facts

Exergen was formed in 1980, and from its inception until date of trial, Pompei, the founder was the majority shareholder as well as president. Pompei owned 60% of the shares issued. At all relevant times, Pompei actively participated in and controlled the management of Exergen and as the majority shareholder, had power to elect and change Exergen's board of directors. Merola (P) began working for Exergen on a part-time basis in 1980 as he was also employed by Analogic Corporation. P was offered full-time employment with Exergen and understood that if he came to work for Exergen, he would have the opportunity to become a major shareholder and enjoy continuing employment with Exergen. P resigned from Analogic in March 1982 and began working full time for Exergen. P also began purchasing shares when the company made periodic offerings to its employees. P purchased 4,100 shares at $2.25 per share and another 1,200 shares for $5 per share. P was not offered additional stock options after 1983. P was terminated and sued. P alleged that Exergen was a closed corporation and that Pompei as majority stockholder violated his fiduciary duties to P by terminating his employment without cause. This was affirmed by the trial judge and adopting the jury's conclusion only awarded P for the termination of his employment; $50,000. The appeals court affirmed but modified the judgment against Exergen; there was no basis for liability by Exergen to P. D, Pompei, appealed.