Compliance December 23, 2005

Options Program Not ERISA Governed

December 23, 2005 (PLANSPONSOR.com) - Because the employer's stock option plan was not an Employee Retirement Income Security Act (ERISA)-governed welfare or benefit program, an employee can't sue under ERISA over the company's refusal to allow him to exercise his options.
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In ruling for the employer, Telecorp Communications Inc, Senior US District Judge Jaime Pieras, Jr., of the US District Court for the District of Puerto Rico said the stock option plan lacked the required ongoing administrative scheme. Both parties agreed the plan did not involve the administration of funds.

During his four years of employment, employee Omar Hoyos participated in the plan and signed various stock option agreements that were subject to the plan, Pieras said.

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The case is Hoyos v. Telecorp Communications Inc., D.P.R., No. 04-2313, 12/20/05.  

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