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Court Case

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Submitted By amynguyen
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Amy Nguyen
June 10, 2012
Court Case Brief

Donald R and Joyce D. Schroerlucke, v. United States, 2011 WL 4440599 (Fed.Cl.), cert.
Granted, No. 09-772T (9/21/2011)

Facts

Plaintiffs, Donald and Joyce Schroerlucke, filed a complaint in the United States Court of Federal Claims alleging they were due a tax refund for unreimbursed losses for the 1997, 1998, 1999, and 2002 tax years. Plaintiffs are husband and wife who filed joint federal income tax returns during all years relevant to this action. In each of those years, the plaintiffs were residents of the State of Georgia. Plaintiff Donald Schroerlucke is a former employee of WorldCom, Inc. In 1989, Mr. Schroerlucke was employed as Vice President of Operations at Long Distance Discounts Services, Inc., the predecessor corporation to WorldCom. Pursuant to stock option agreements with Long Distance Discount Services, Inc., and then with WorldCom, Mr. Schroerlucke accumulated employee stock option grants between July 1991 and January 1998.

Mr. Schroerlucke’s employment with WorldCom ended on January 4, 1999, at which time his stock options became fully and immediately vested according to the terms of the stock option agreements and an April 7, 1998 memorandum titled, “WorldCom Employee Stock Option Program,” once his employment ended, Mr. Schroerlucke was required to immediately exercise all of his employee stock options. The April 7, 1998 memorandum stated in part: “Please note that under WorldCom Inc. 1997 Stock Option Plan, all vested options must be exercised prior to termination with the Company.” After a final stock option grant award on January 2, 1998, Mr. Schroerlucke had accumulated 172,492 WorldCom stock options. Mr. Schroerlucke exercised all of his existing stock options on February 12, 1999, at which time the market value of his 172,492 WorldCom shares was 13,702,333.25, based on the

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