John L. Schwieger and Dwayne Vande Stouwe v. Iowa Beef Processors, Inc.

This case involves employment contracts between IBP and two former executives of IBP, John L. Schwieger and Dwayne Vande Stouwe. These contracts provided that, in addition to other compensation, the employees would receive options to purchase IBP stock. Stock options were given to Schwieger and Vande Stouwe under their contracts subject to a provision in the contracts known as a “blockage rule”. This provision reads as follows:

The option granted by this Agreement shall not be exercisable while there is outstanding [within the meaning of Inters nal Revenue Code Section 422(c)(2) ] any…