Garriott: NCsoft fired me, cost me millions
In lawsuit, game entrepreneur claims company forced him to exercise stock options too soon
Online game pioneer Richard Garriott testified Tuesday that he was fired and did not voluntarily resign from his job as a high-level game producer for South Korea’s NCsoft Corp. in November 2008.
But when it came time to determine how his millions of dollars in stock options would be treated, he said, he was told his departure would be considered a voluntary resignation.
That difference, Garriott maintains, cost him $47 million in lost profits when he was forced to exercise his NCsoft stock options at the bottom of a weak stock market.
That is at the heart of Garriott’s lawsuit against NCsoft, which is being tried this week in U.S. District Court in Austin. Being fired would mean that he had up to 10 years to exercise his options for more than 400,000 shares of company stock. But leaving voluntarily gave him just weeks to act before losing the options.
Garriott said he learned he no longer had a job with NCsoft on Nov. 6, 2008, when he was in Russia recovering from his trip to the International Space Station. Garriott had borrowed money against his NCsoft options for his $20 million ride in space.
He said Chris Chung, the head of the company’s North American subsidiary, called him in Russia to tell him “that my time at NCsoft was over.”
Garriott acknowledged that Chung did not use the words “fired” or “terminated.”
“I did not quit,” Garriott said. He later was told by a company human resources director that he was part of an involuntary reduc-
tion in force — a layoff, in other words. Garriott said he pressed NCsoft for a written clarification on the treatment of his stock options. Instead, Garriott was told by letter in December 2008 that his departure was being treated as a voluntary resignation.
Garriott borrowed more than $9 million to exercise the options. He sold the stock for $20.7 million in February 2009. He maintains that he would have made much more if the company had not limited the time in which he could exercise his options.
Garriott’s brother Robert, who also was an executive at NCsoft and a former board member, also testified Tuesday. He said he talked with Chung and his brother in November 2008. Although neither used the word “fired,” Robert Garriott said, his knowledge of the company told him immediately that his brother had be e n terminated.
“ I t wa s obvious,” Robert Garriott said. He said he advised his brother and NCsoft to pay careful attention to the handling of the options.
Richard Garriott testifies that he was in Russia recovering from space flight in 200 when executives called to tell him that his ‘time at NCsoft was over.’