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1-01-2803

Following the grant of summary judgment in favor of defendant Valve & PrimerCorporation (Valve & Primer) and the denial of summary judgment in favor of Ralph DiLorenzoin the underlying chancery action seeking specific performance, DiLorenzo filed the instantappeal. We issued an opinion dated September 6, 2002, which we subsequently vacated pursuantto a supervisory order of the Illinois Supreme Court. The supervisory order, dated April 24,2003, directed us as follows:

"The appellate court is directed to consider whether the recordraises any genuine issues of fact regarding whether there wasadequate consideration for the purported stock option agreementitself, wholly apart from the issue of the adequacy of considerationin the subsequent attempted purchase of the stock. In light of thisdetermination, the appellate court is directed to reconsider whetherany factual issue regarding the authenticity of the corporateminutes is material, thereby precluding the entry of summaryjudgment." DiLorenzo v. Valve & Primer Corp., 203 Ill. 2d 544(2003).

For the reasons that follow, we now affirm in part, reverse in part and remand the case to the trialcourt.

DiLorenzo was an officer, director and shareholder of 100 shares of stock of Valve &Primer. M. Chris Dickson was the chief executive officer and majority shareholder of Valve &Primer. DiLorenzo was employed by Valve & Primer for approximately 40 years prior to theevents that led to this lawsuit.

According to DiLorenzo, on or about May 12, 1987, he informed Valve & Primer that hewanted incentives in any future employment agreements. DiLorenzo claims that, throughDickson, Valve & Primer offered him a 10-year stock option that would allow DiLorenzo topurchase an additional 300 shares at the fixed price of $250 per share. Dickson and the board ofdirectors allegedly favorably voted on the agreement at a meeting held on June 8, 1987. DiLorenzo claims he received a copy of the minutes of that meeting. DiLorenzo also claims thatin reliance on the minutes of the special board meeting, which were never altered or revoked bythe board of directors during the time he remained employed by Valve & Primer, he stayed in hisjob for over nine additional years. According to DiLorenzo, while he was working for Valve &Primer in reliance upon the minutes of the special board meeting, he was approached by othercompanies with employment opportunities. DiLorenzo did not follow up on any of theserecruitment offers.

Valve & Primer claims the 1987 employment agreement between it and DiLorenzo didnot contain a stock purchase agreement. The only purported proof of the agreement is anunsigned copy of board meeting minutes of which DiLorenzo had the only copy. Valve &Primer claimed the purported minutes were inconsistent in subject matter and format from othercorporate minutes it produces in the ordinary course of business.

In January 1996, DiLorenzo entered into a semi-retirement agreement with Valve &Primer. Valve & Primer claims he attempted to tender his remaining 100 shares pursuant to astock redemption agreement. According to Valve & Primer, DiLorenzo demanded $4,000 pershare for the remaining 100 shares. It claims DiLorenzo admitted he came up with the proposedshare value himself and that no one of any expertise valued the stock. DiLorenzo responded that he had corporate accountants review financial statements before valuing the company's shares. Valve & Primer declined to purchase the shares at DiLorenzo's price. This resulted in a disputebetween DiLorenzo and Valve & Primer through Dickson. Shortly thereafter, Valve & Primerfired DiLorenzo. After the termination, DiLorenzo claims he attempted to exercise the purportedstock purchase agreement.

In addition to DiLorenzo, George Christofidis, another long-time employee, attempted toexercise the stock option. DiLorenzo claims that Christofidis sent a copy of the minutessupporting the claimed stock purchase agreement to Valve & Primer's corporate attorney. Christofidis allegedly indicated that the purported stock purchase agreement supportedDiLorenzo's claim in that the agreement was included as part of the overall employmentagreements both DiLorenzo and he signed. DiLorenzo claims that, in 1997, a subsequentemployment agreement between Valve & Primer and Christofidis required him to waive anyexercising of the stock option agreement referred to in the June 1987 corporate minutes. In thealternative, DiLorenzo argued before the trial court that, even if the purported agreement was notfound to be valid, it should be enforced along promissory estoppel grounds.

Cross-motions for summary judgment were filed during the litigation below. The trialcourt granted summary judgment in favor of Valve & Primer while denying DiLorenzo's cross-motion. The trial court found that, even assuming the corporate minutes were valid, thepurported agreement did not require that DiLorenzo perform any affirmative act. The trial courtalso found there was insufficient consideration to support the stock option. The trial court furtherfound there was insufficient reliance on DiLorenzo's part to support a claim for promissoryestoppel.

In cases involving motions for summary judgment, we conduct a de novo review of theevidence in the record. Happel v. Wal-Mart Stores, Inc., 199 Ill. 2d 179, 185-86 (2002), citingEspinoza v. Elgin, Joliet & Eastern Ry. Co., 165 Ill. 2d 107, 113 (1995). The purpose of asummary judgment proceeding is not to try an issue of fact, but to determine whether anygenuine issue of material fact exists. Happel, 199 Ill. 2d at 186, citing Frye v. Medicare-GlaserCorp., 153 Ill. 2d 26, 31 (1992); Housh v. Swanson, 203 Ill. App. 3d 377, 381 (1990). It is a"'drastic means of disposing of litigation'" and therefore should be granted only when "'thepleadings, depositions, and admissions on file, together with the affidavits, if any, show that thereis no genuine issue as to any material fact and that the moving party is entitled to a judgment as amatter of law.'" Happel, 199 Ill. 2d at 186, quoting Espinoza, 165 Ill. 2d at 113, and 735 ILCS5/2-1005(c) (West 2000). For purposes of summary judgment, we construe the facts strictlyagainst the moving party and in the light most favorable to the nonmoving party. Happel, 199 Ill.2d at 186, citing Espinoza, 165 Ill. 2d at 113, and Frye, 153 Ill. 2d at 31.

DiLorenzo argues on appeal that the trial court misapplied the law in finding there wasinsufficient consideration to support the stock option agreement. He argues that substantialcontinued employment is sufficient consideration for agreements entered into in the employmentsetting. DiLorenzo argues that he has provided consideration for the stock option. It was as anincentive for continued employment. He also argues that, even if there was an initial lack ofconsideration, performance may ameliorate an initial lack of consideration, if the performancewas clearly invited. He claims his continued employment for nine years in reliance on theagreement satisfied the condition of the performance being invited. Here he claims Valve &Primer benefitted both from the pre-1987 employment and the post-1987 work. DiLorenzoargues that he was not promising to do something he was already obligated to do, which heconcedes would not be valid consideration.

Valve & Primer responds that the trial court correctly granted it summary judgmentbecause DiLorenzo failed to show any consideration to support the alleged stock option. Valve& Primer, without admitting that the board meeting minutes are genuine, argues that theyindicate that the alleged stock option was given to "reward" DiLorenzo for his long service to thecompany. Valve & Primer's position is that, if the alleged consideration for a promise has beenconferred prior to the promise upon which the alleged agreement is based, then no contract isformed. Valve & Primer also argues that the argument that the option was based, at least in part,on DiLorenzo's claimed continued employment must fail because it relies on somethingDiLorenzo was already obligated to do. According to Valve & Primer, because DiLorenzocontends that the stock option vested immediately, only past performance could serve asconsideration. As the trial court noted, that is insufficient consideration. Additionally, if thealleged option did not vest, DiLorenzo could not bring his claim. Either way, Valve & Primerargues, there is no way DiLorenzo could have prevailed at the trial court level.

In reply, DiLorenzo contends that there is sufficient consideration to support the stockoption. He argues that whether the 1987 corporate minutes are authentic is not an issue onappeal. Since the trial court took the minutes as true, the appellate court should do likewise. DiLorenzo argues that any suggestion or innuendo by Valve & Primer that the minutes are notvalid should be disregarded by this court.

The purported minutes of the June 8, 1987, special meeting contain the following relevantlanguage:

"That in order to retain and reward such dedication GeorgeChristofidis be given an option to purchase additional shares not toexceed 300; and that Ralph DiLorenzo be given an option topurchase additional shares not to exceed 300. Said option to beexercised within 10 years from below date at the price of $250.00per share. Each share was to be restricted wherein the share mustfirst be offered to Valve and Primer Corporation to be paid byValve and Primer Corporation and held as Treasury Stock. Valveand Primer Corporation would be given 45 days to consummate thepurchase. In the event that Valve and Primer Corporation did notchoose to purchase, said stock would be offered to the existingshareholders on a pro rata basis also to be purchased within 45days. And in the event the shareholders did not purchase saidshares, the shares could be sold to any interested person or persons. Purchase price of shares would be based upon the bookvalue pursuant to a certified audit of the worth of the Corporationat the time of sale." (Emphasis added.)

We must assume, for purposes of our discussion, that DiLorenzo's corporate minutes arevalid. As we interpret the language used in the corporate minutes, in the context of therelationship between DiLorenzo and Valve & Primer, the option to purchase stock was in thenature of a gift. As such, the gift was made to "retain and reward" DiLorenzo for his service tothe corporation. It is an employee bonus, not unlike the situation wherein a business rewards itsemployees during the holiday season. "Black's law dictionary defines a 'bonus' as'[a]consideration or premium paid in addition to what is strictly due. A gratuity to which therecipient has no right to make a demand.' " Camillo v. Wal-Mart Stores, Inc., 221 Ill. App. 3d614, 623 (1991), quoting Black's Law Dictionary 182 (6th ed. 1990). "Moreover, Webster statesthat 'bonus refers to anything given over and above the wages, salary, remuneration, etc. * * *.'(Emphasis added.) " Schwarze v. Solo Cup Co., 112 Ill. App. 3d 632, 640 (1983), quotingWebster's New World Dictionary (1966). A bonus promised to induce an employee to continuehis employment is supported by adequate consideration if the employee is not already bound bycontract to continue. Gustafson v. Lindquist, 40 Ill. App. 3d 152, 157 (1976), citing 1A Corbinon Contracts