RALEIGH – Former Red Hat leaders are claiming they’ve lost out on “thousands of dollars-worth” incentives after the Raleigh-based open source software company failed to vest their IBM stock on schedule.
As first reported in the Triangle Business Journal, plaintiffs Brandon Fargis and Victoria Kumar, both let go last September, have sued Red Hat over claims that they’ve failed to reap the full terms of their incentives plan.
In a seven-page lawsuit, both said they participated in Red Hat’s long-term incentive plan and had obtained restricted IBM stock units after the $34 billion IBM-Red Hat merger in 2019. Fargis was listed as Red Hat’s former head of strategic IT planning, while Kumar served as a former principal program manager.
Fargis worked at Red Hat for three years and is now employed at MUFG in Cary, according to his LinkedIn profile.
Kumar was a Red Hat employee for two years and now is a Program Manager for the State of North Carolina, her LinkedIn profile notes.
After their terminations – a month after the merger – both claim they saw those stock units canceled immediately. They demanded, through counsel, that their stocks units be restored but it came with a delay, one that proved costly, they argue.
IBM’s stock had dipped to $133.74 when Red Hat did restore plaintiffs’ restricted stock units on Oct. 31, down from more than $141.00 in September when Fargis and Kumar claim the shares should have vested.
“As a result of the Defendant’s unlawful delay in vesting Plaintiffs’ Restricted Stock Units and converting them to shares of IBM common stock, Plaintiffs suffered a loss in value of their Restricted Stock Units,” the lawsuit reads, TBJ reported.
The lawsuit was initially filed in Wake County in March, but was transferred to the North Carolina Business Court last week.
Red Hat, in its answer to the suit, denied wrongdoing. The firm claims it “promptly initiated the process” of converting the shares following the plaintiffs’ termination, “and that the transaction was completed on October 31, 2019.”