Dell Computer Corp. v. Rodriguez (390 F.3d 377, 2004)

WIENER, Circuit Judge:

In this diversity action, Dell Computer Corporation (“Dell”) sued Sixto Rodriguez, the former managing director and chief executive officer of Dell’s operations in Spain, asserting various causes of action based on several contracts between the parties. Rodriguez counter-claimed, also seeking damages for breach of the agreements. After a jury returned a verdict in favor of Dell for approximately $3.5 million, the district court entered judgment for Dell in that amount. Rodriguez timely appealed, asserting several points of error. We affirm in part, vacate in part, and reverse and remand in part.

I. FACTS & PROCEEDINGS

A. BACKGROUND

1. The Dell-Rodriguez Relationship and the Underlying Contracts

In 1991, Dell hired Rodriguez as the managing director and chief executive officer of Dell’s operations in Spain. The parties executed an employment contract that entitled Rodriguez to severance benefits if Dell should terminate his employment without cause. During the course of Rodriguez’s employment, Dell issued stock options to him under various stock option agreements (“SOAs”).

In 1992, Dell granted Rodriguez a special restricted SOA, called the “Penny Share Agreement” (“PSA”). Unlike other traditional fair-market-value SOAs that Dell granted to Rodriguez, the PSA entitled Rodriguez to purchase Dell stock for l