The former president and CEO of South Bend-based AM General LLC was due the full benefit of a long-term incentive plan in cash when he retired, the Indiana Supreme Court ruled Wednesday.
James A. Armour prevailed in a nearly four-year-long fight over the benefits that AM General sought to satisfy with a promissory note and quarterly payments after he retired in early 2012. The amount of the benefit AM General owes Armour is redacted in the court record. AM General is best known as maker of the Humvee military vehicle.
Armour won summary judgment on his complaint at the trial court, but a Court of Appeals panel reversed the trial court in a split decision, ruling that Armour would have to go to court to prove his case.
Justices unanimously reaffirmed the trial court.
“Today this Court holds that the promissory note in the present case does not satisfy the requirement of “payment” under the disputed employment contract,” Justice Steven David wrote in AM General LLC v. James A. Armour, 71S03-1507-PL-407.
“AM General failed to satisfy its obligation under the Employment Agreement LTIP (long-term incentive plan) provision when it offered Armour a subordinate promissory note as payment. As a matter of law, payment under the contract required the LTIP to be paid in cash or a cash equivalent,” David wrote. “We affirm the trial court’s grant of summary judgment in favor of Armour, awarding him the remaining portion of his LTIP payments. We also affirm the trial court’s order awarding Armour pre-judgment interest calculated from January 20, 2012, the time at which the LTIP payment was due under the Employment Agreement.”