DALLAS (CN) - Japanese financial services giant Orix reneged on promised stock options to a longtime executive, the former vice chairman claims in court.
Edgar L. Smith, 65, sued Orix USA Corp. and Orix Capital Markets LLC in Dallas County Court.
Smith says he signed an employment agreement in April 1997, taking the job of chief operating officer of Banc One Mortgage Capital Markets LLC, (BOMCM) which was partially owned by Orix USA.
He claims the contract granted him an equity option to buy 2 percent of outstanding shares of BOMCM and that the company's board of managers ratified the option the next year.
Smith says Orix USA later bought and retired Banc One's units in the company, ultimately renaming the company OCM in 2008. Smith had been elected as a vice chairman in 2006.
Smith says his employment agreement was "routinely" amended through the years to reflect the name changes and that changes were made regarding the exercise date and period for the option.
"From 1997 to 2013, Orix experienced significant growth and financial success under the leadership of Smith and other Orix senior executives," the complaint states. "Smith continued to perform his duties as COO, secure in the knowledge that upon his retirement he would be entitled to participate in the tremendous growth and success achieved at Orix under his watch."
Smith says he was set to retire in September 2013 and that he reached out to Orix one month earlier to begin the process of exercising his option that vested in 1997. But "Orix refused to allow Smith to exercise the option and shockingly told Smith - for the first time in sixteen years - that 'no agreement was ever reached to grant you an option to acquire OCM stock,'" the complaint states.
Orix did not immediately respond to a request for comment Thursday evening.
Orix USA is based in Dallas with 1,100 employees. It has approximately $5 billion in assets and manages $30 billion in assets, according to its website.
Smith seeks damages for breach of contract and a declaration that he is entitled to exercise the option. He is represented by Keith Clouse with Clouse Dunn in Dallas.