Submitted: March 1, 2017
Below-Family Court of the State of Delaware File No:
CN13-06206 Petition No: 14-00708
appeal from the Family Court: REVERSED and REMANDED.
Patrick J. Boyer, Esquire and Marie I. Crossley, Esquire,
MacElree Harvey, Ltd., Centreville, Delaware for Respondent
Below, Appellant Brad King.
M. Jones, Esquire, Parkowski, Guerke & Swayze, P.A.,
Wilmington, Delaware for Petitioner Below, Appellee Karen L.
VALIHURA, VAUGHN, and SEITZ, Justices.
Delaware law, property acquired after marriage but before
divorce is marital property subject to equitable division in
ancillary proceedings. In this appeal we review the Family
Court's determination that only one-third of a
substantial bonus paid to Wife after separation but before
divorce qualified as marital property. According to the
Family Court, because two-thirds of the bonus payment was
subject to forfeiture after the couple's divorce, only
one-third of the bonus was actually earned during the
marriage and qualified as marital property.
reverse the Family Court's decision because the entire
bonus was earned during the marriage and qualifies as marital
property. Under Wife's Transaction Bonus Agreement
("TBA"), the company agreed to pay Wife a bonus at
closing for her efforts to sell the company. Her efforts bore
fruit, the company was sold, and Wife earned the transaction
bonus which was paid before divorce. Although Wife's
bonus might have been subject to forfeiture post-divorce, it
was nonetheless earned under the TBA during the marriage.
Thus, we remand to the Family Court to determine how to
equitably divide the full bonus amount.
and Wife married on September 22, 2002. They had four
children together. Wife started working for a local company
during the first year of the marriage, eventually working her
way up the corporate ranks to president. In September 2013,
while the parties were married and together, Wife signed the
TBA with the company.
to the terms of the TBA, if an "Exit Event"
occurred, and Wife satisfied the conditions set forth in
Section 3 of the TBA, Wife was "entitled to receive a
bonus" upon closing of the Exit Event in an amount
dependent on the purchase price of the company. An Exit Event has
a precise definition in the TBA, but can be described
generally as a sale of the company within one year of signing
the TBA. Section 3 of the TBA required Wife to "exercise
all reasonable efforts" and to "cooperate with the
Company to consummate the Exit Event." It also required
that she remain continuously employed by the company through
the closing of the Exit Event or if her employment terminated
sooner, her termination be without Cause or due to death or
disability. Wife was entitled to the bonus payment
"at the closing of the Exit Event."
Section 6 of the TBA, entitled "Forfeiture for Certain
Early Terminations, " Wife and the company agreed that
if the company terminated Wife for "Cause" or if
Wife terminated her employment without "Good
Reason" then the bonus would be subject to
reduction or repayment depending on when the termination
occurred, summarized as follows:
After closing but prior to payment - amount payable reduced
by two-thirds and further payment forfeited.
After receiving payment but within six months following
closing - Wife must repay two-thirds of amounts already paid
(including two-thirds of all amounts withheld for taxes) and
further payments forfeited.
After receiving payment but more than six months after
closing but before first anniversary of closing - Wife must
repay one-third of amounts already paid (including one-third
of all amounts withheld ...