In a recent decision, the North Carolina Court of Appeals found, in affirming the denial of a preliminary injunction and dissolution of a TRO, that the award of restricted stock to a long time employee of the company was not valuable consideration to support a non-compete agreement.  In affirming the lower court, the Court of Appeals in MSC Industrial Direct Co. , Inc. v. Steele, 2009 WL 2501762 (N.C.App. Aug. 18, 2009) summarized the state of law in North Carolina regarding the requirement that a non-compete provision be supported by valuable consideration.  Here, one of the interesting parts of the opinion is that the employee, who had been employed by the company for about twelve years, signed the non-compete agreement and the restricted stock award on the same day.  Even though both agreements were entered into the same day, and even though the Court of Appeals noted that uncertified shares of stock can be valuable consideration, here, the Court of Appeals concluded that “the stock at issue was not.”  The Court of Appeals based its decision on the fact that by the terms of the Award, the earliest that any portion of the stock would have vested would be almost three years after the employee entered into the non-compete.  Until vesting, the employee had no rights to the stock, it conferred no right to continued employment and was not to be considered part of his salary.  Finally, the Court of Appeals noted that the grant and award of the stock actually predated the signing of the non-compete agreement by approximately 30 days.  The Court of Appeals found the consideration illusory.  Moral of the story:  timing matters.