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SECOND DIVISION
May 7, 2002

JUSTICE McBRIDE delivered the opinion of the court:

This appeal arises out of the termination of employee MichaelKlein, plaintiff-appellee and cross-appellant from CaremarkInternational, Inc. (Caremark or the Company), defendant-appellantand cross-appellee. On November 27, 1995, Klein and Caremarkentered into a severance compensation agreement (Agreement). TheAgreement provided Klein, who at the time was regarded as a keyexecutive by Caremark, certain severance benefits in the event ofa termination of Klein's employment. The Agreement also providedthat Klein could be terminated by Caremark in the event the boardof directors of the Company determined that he was no longer a keyexecutive and gave him notice of such determination. On July 12,1996, Klein was terminated at a meeting held by Caremarkmanagement.

Klein filed a complaint alleging that Caremark materiallybreached the Agreement by terminating him while the Agreement wasstill in effect. Klein further alleged that he was entitled to theseverance benefits provided under paragraph 5(A) of the Agreement. Both sides filed cross-motions for summary judgment on severalissues including whether the Agreement had been materially breachedand whether Klein was entitled to severance benefits. Severalmonths before the trial court ruled on the parties' cross-motionsfor summary judgment, the parties stipulated that if liability werefound, Klein's damages would be $756,556. On March 15, 2000, thetrial court found that Klein's termination was a material breach ofthe Agreement and that he was entitled to severance benefits in theamount of $756,556. The court further granted Klein's motion forlegal fees in the amount of $182,474.75 based on paragraph 5(B)(iv)of the Agreement. Klein also made motions for supplementalattorney fees, for prejudgment interest, and for attorney feesincurred in prosecuting an appeal. The trial court denied thesemotions.

Caremark appeals the trial court's summary judgment ruling infavor of Klein. Klein cross-appeals the trial court's denial ofhis motions for supplemental attorney fees, prejudgment interest,and attorney fees in connection with prosecuting an appeal.

Eight issues are raised on review. First, whether the trialcourt properly granted summary judgment in favor of Klein on thebasis that Caremark materially breached the Agreement. Second,whether the trial court correctly ruled the Agreement providedKlein a fixed term of employment. Third, whether Caremark's posttermination actions cured Caremark's material breach of theAgreement. Fourth, whether Klein was entitled to damages equal tothe severance pay scheme set forth in the Agreement. Fifth,whether the trial court abused its discretion by awarding attorneyfees to Klein based on the hourly rates of his attorneys. Sixth,whether the trial court properly denied Klein's motion for prejudgment interest. Seventh, whether the trial court incorrectlydenied Klein's supplemental submission in support of legal fees. Eighth, whether the trial court properly denied Klein's motion forattorney fees incurred in prosecuting an appeal. The fifth, sixth,seventh, and eighth issue are discussed in the non-publishedportion of this opinion. We state the following background facts.

On November 12, 1996, Michael Klein filed a complaint againsthis former employer Caremark. Caremark is a public "spinoff" of adivision of Baxter Laboratories, which conducts business in thehealth care industry. Klein held a management position at BaxterLaboratories and then accepted a position at Caremark upon itscreation by Baxter in 1992.

On July 13, 1992, Klein and Caremark executed an employmentagreement which expressly stated that Klein was an at-willemployee. On November 27, 1995, Klein and Caremark entered intothe Agreement at issue, which was a severance compensationagreement designed to provide incentives and benefits to Klein andother personnel deemed by Caremark to be superior managers. On May1, 1996, certain terms of the Agreement were amended including aprovision concerning a change of control over the Company. Kleinand Caremark executed both the Agreement and the amendment. Due toallegedly poor business performance by Klein, Caremark sought toterminate his employment.

Paragraph 1 of the Agreement stated that Caremark wouldcontinue to employ Klein as an executive for a specific term. Paragraph 2 of the Agreement provided that the term "shall be oneyear commencing on December 1, 1995 and ending on November 30, 1996and shall automatically renew for successive one year periods." Paragraph 2 further set forth that the Agreement wouldautomatically end upon the occurrence of any of the followingevents:

"(i) [Klein gave] notice to the Companythat [he] wished to terminate this Agreementnot less than 90 days after [his] notice wasgiven;

(ii) [Klein died] or [received] a Noticeof Termination due to Disability;

(iii) [Klein reached his] RetirementDate; or

(iv) The Board of Directors of theCompany [determined] that [Klein] was nolonger a key executive and [gave Klein] noticeof this determination except that suchdetermination shall not be made, and if made,shall have no effect, after a Change inControl."

A "Change in Control" is defined in the amendment to the Agreementas "the acquisition by any individual, entity or group *** of 20%or more of *** the then outstanding shares of common stock of theCompany."

In paragraph 5(A), the Agreement provided that, in the eventof Klein's termination for any reason except those set forth inParagraph 2 (A)(i)(notice that employee wishes to terminate theAgreement),(ii)(employee dies or receives a notice of terminationdue to disability), or (iii)(employee reaches the date ofretirement), Caremark shall pay Klein his full base salary throughthe date of termination, three times the sum of his annual basesalary, and an amount equal to all awards or units of participationawarded but not paid. Paragraph 5(B)(iv) set forth that, in theevent of Klein's termination, Caremark, "shall pay all legal feesand expenses incurred by [Klein] as a result of [his] Termination(including all such fees and expenses, if any, incurred incontesting or disputing [his] Termination or in seeking to obtainor enforce any right or benefit provided by the Agreement)."

In his deposition, Klein testified that, on July 12, 1996, hewas instructed to attend a meeting with his superior, Diane Munson,and Kent DeLucenay, vice president of human resources at Caremark. Munson and DeLucenay testified that Klein was informed that he wasgoing to be terminated. Klein confirmed in an affidavit that hewas informed at the July 12, 1996, meeting that he was beingterminated effective August 6, 1996. According to Munson, thebasis for Klein's termination was his performance in executing thePacificare contract, which adversely impacted Caremark's medicalclinic in Oklahoma City. Klein stated in an affidavit that afterJuly 12, 1996, except for a brief visit to Caremark's facility toretrieve his personal belongings, he did not return to work for anypurpose. On July 15, 1996, Caremark mailed a "EmploymentTermination and General Release Agreement" to Klein. The letterexplained that his employment would be terminated effective August6, 1996, in consideration for separation pay in the amount of$166,400 in addition to $14,080 for accrued and unused vacationtime. The last paragraph of the letter stated the following: "Ifyou agree to the terms outlined in the agreement, then please signtwo copies and return one of them to me by August 6, 1996. Otherwise, I will assume that you rejected this agreement."

The record indicates that Klein and DeLucenay spoke viatelephone on August 8, 1996. In that conversation, Klein rejectedthe employment termination and release agreement proposed byCaremark. On August 9, 1996, Klein sent a letter to DeLucenay,which, among other things, informed DeLucenay that he would notagree to the severance agreement noted above.

On August 15, 1996, Klein was sent a letter from humanresources at Caremark informing him that, upon termination, hislife insurance coverage would stop. The record reveals that on orabout August 21, 1996, Caremark's board of directors determinedthat Klein was no longer a key executive. On August 22, 1996,Klein's counsel received a letter from Diane Nobles, an attorney and vice president of ethics and integrity at Caremark. The letterstated the following, in pertinent part:

"For performance-related reasons that Ialluded to in our conversation and which Iwill not detail here, the Board of Directorsat Caremark has been asked to determine thatMr. Klein is no longer a 'key executive'within the meaning of his Agreement. Theformal resolution requesting that the Boardtake this step was mailed yesterday.

*** Regardless of whether a contract infact exists, it is our position that the Boardof Directors of Caremark retains theunfettered right to determine that an employeeis no longer a key executive at any time priorto Change of Control of the Company. Notwithstanding this argument, we have decidedto remedy what should be perceived by anyreasonable person as a mere 'technicality' ora simple administrative foul-up. Accordingly,we are reinstating Mr. Klein and he willremain employed by Caremark until August 31,1996, which will now become the effective dateof the termination of his at-will employment.

In our discussions, you have implied thatyour client somehow is entitled to three (3)years of compensation under his Agreement. Since there has not been a Change of Controlof the Company as defined by the Agreement,you are on notice that under no circumstanceswill Caremark pay your client any moniespursuant to that provision in his Agreement."

On August 28, 1996, Nobles sent Klein a letter. The letter informed Klein that Caremark had recently advised his counsel ofits intent to revise Klein's termination date to August 31, 1996. Further, a check to Klein in the amount of $8,320 was enclosed, which represented his full gross salary from August 7, 1996, toAugust 23, 1996. The letter also indicted that a check for the payperiod between August 26, 1996, and August 31, 1996, wasforthcoming in addition to a check for all unused and accruedvacation time.

On August 30, 1996, Klein's counsel responded to this letterby stating that, "[n]either Mr. Klein nor I ever solicited oragreed to such reinstatement, and we reject your apparentcontention that Caremark can rehire or reinstate a former employeeunilaterally and against his will." On the same day, Klein sent aletter to Nobles which stated that he rejected reinstatement by theCompany and that he was returning the retroactive paycheck that hadbeen sent to him by Caremark. The record reveals that Kleinreturned the check for $8,320, and subsequent checks sent to him byCaremark on September 9, 1996, and October 6, 1996.

In his complaint, Klein claimed that Caremark materiallybreached the Agreement by terminating him while the Agreement wasstill in effect. The complaint further alleged that on September5, 1996, Caremark merged with the subsidiary ofMedParters/Mulliken, Inc. This merger constituted a "Change inControl" under the agreement according to Klein. Thus, Kleinclaimed that he was entitled to certain benefits under theparagraph 5(A) Agreement which amounted to $835,000 plus payment ofhis legal fees and expenses.

In its brief, Caremark alleges that it decided to terminateKlein based on his lack of business judgment in connection with amanaged care contract Klein had executed on Caremark's behalf withPacificare. Caremark further claims that, in an effort to spareKlein the embarrassment of a "for cause" termination, the Companyoffered Klein the option of executing a mutual agreement whichwould terminate his employment in exchange for a payment of$166,400 which amounted to his annual salary, other benefits, anda release of all claims. Caremark contends that Klein was advisedto consult with an attorney and respond to the proposal by August6, 1996. Caremark further claims that the Company prepared Klein'stermination papers in advance and marked them with a note whichstated, "SEV SET UP BUT HOLD," "KEY MONDAY 8/5 EFF 8/6." AssumingKlein accepted the offer, Caremark asserts that these terminationpapers were set to be processed.

As noted above, the record reveals that Klein rejected thisoffer in a telephone conversation with DeLucenay on August 8, 1996. Caremark claims that because Klein's rejection was not communicatedto the Company prior to August 5, 1996, the human resourcescoordinator made an inadvertent "clerical error" and processed thetermination paperwork.

Attorneys for Klein then notified the Company that he wasdemanding benefits under the Agreement because he had beenterminated on August 6, 1996, prior to a finding by the Board thathe was no longer a key executive. As we observed above, theAgreement provided that it would automatically terminate in theevent that the board of directors determined that Klein was nolonger a key executive and gave him notice of that determination. The term of Klein's employment extended to November 30, 1996, underthe Agreement. The record also indicates that a "Change ofControl" occurred on September 5, 1996, when Caremark merged withMedPartners/Mullikan, Inc. Thus, Klein claims that he wasterminated prior to any determination by the Caremark board that hewas no longer a key executive and notice thereof. According toKlein, such action was a material breach of the Agreement.

Caremark contends that, "in an abundance of caution," Caremarkreinstated Klein until August 31, 1996, to remedy what was "atmost" an administrative foul-up that led to the prematureprocessing of Klein's termination. Caremark further contends thatthe determination that Klein was no longer a key executive wasfully executed on or before August 30, 1996, and that Klein'semployment termination and cancellation of the Agreement occurredprior to the change of control over the Company on September 5,1996.

The parties filed cross-motions for summary judgment which,among other things, sought a finding that Klein either was or wasnot entitled to benefits under Paragraph 5 of the Agreement. In apreliminary order on October 15, 1999, the trial court ruled infavor of Klein on the grounds that the Agreement, "created a fixed-term of employment of one year, and that Caremark's "termination of[Klein] constitute[d] a material breach of Paragraph 2 of the ***Agreement."

On March 15, 2000, the trial court entered a final order thataffirmed Klein's entitlement to severance benefits under theAgreement in the amount of $756,556. The court further grantedKlein's motion for legal fees and expenses pursuant to paragraph5(B)(iv) of the agreement. Specifically, the court awarded Kleinattorney fees "(at 100% of the standard hourly rates throughOctober 15, 1999) and expenses in the total amount of $182,474.75."

On December 6, 1999, plaintiff filed a supplemental motion forattorney fees in the amount of $12,368 incurred by Klein for hiscounsel's "preparation of the extensive and detailed fee petition." The trial court denied Klein's supplemental motion for attorneyfees in its order of March 15, 2000. The trial court also deniedKlein's motion for statutory prejudgment interest and motion forprejudgment interest under the Agreement. Finally, the trial courtdenied Klein's request for attorney fees and expenses incurred inprosecuting an appeal. Caremark appeals the summary judgmentruling and Klein cross-appeals the trial court's denial of hismotions for prejudgment interest, supplemental motion for attorneyfees, and motion for attorney fees incurred in prosecuting anappeal.

We first consider whether the trial court properly grantedsummary judgment in favor of Klein on the basis that Caremarkmaterially breached the Agreement. On reviewing a motion forsummary judgment, our standard of review is de novo. Ragan v.Columbia Mutual Insurance Co., 183 Ill. 2d 342, 349, 701 N.E.2d 493(1998). Summary judgment is proper where the pleadings,depositions, and admissions on file, together with the affidavits,if any, "show that there is no genuine issue as to any materialfact and that the moving party is entitled to judgment as a matterof law." Jones v. Chicago HMO Ltd. of Illinois, 191 Ill. 2d 278,291, 730 N.E.2d 1119 (2000).

In its reply brief, Caremark raises four genuine issues ofmaterial fact in support of its position that summary judgmentshould not have been granted in Klein's favor: (1) Klein's"catastrophic" performance in negotiating the Pacificare contract;(2) whether Klein's termination on August 6, 1996, was the resultof a clerical error; (3) whether Caremark materially breached theAgreement; and (4) whether the breach, if any, was cured byCaremark.

We find the first question is not relevant to whether Caremarkbreached the Agreement because Caremark's reasons for terminatingKlein have nothing to do with the question of whether he wasterminated pursuant to the provisions in the Agreement. Likewise,the fact that Klein was terminated on August 6, 1996, due to analleged clerical error by Caremark is not relevant to whether hewas properly terminated under the Agreement. Our primary functionin reviewing the summary judgment question is whether there is anygenuine issue of material fact that Caremark materially breachedthe Agreement. We will also fully address the question of whetherCaremark cured the breach in our discussion of the third questionon appeal.

Having reviewed the record de novo, we conclude that Caremarkbreached the Agreement by terminating Klein prior to adetermination by the Company's board of directors that he was nolonger a key executive. Further, there is no question that thebreach was material because Caremark deprived him of the severancebenefits he was entitled to in the event that he was terminatedoutside of the terms of the Agreement. Here, Klein was notterminated in accordance with the procedure established inparagraph 2(A)(iv) of the Agreement. In an attempt to correct theerror, the record demonstrates that Caremark unilaterallyreinstated Klein until the board of directors could determine thathe was no longer a key executive under paragraph 2(A)(iv). Klein,however, rejected such reinstatement. The Agreement was effectiveuntil November 30, 1996, under paragraph 2(A). Thus, the Agreementbetween Klein and the Company was enforceable until November 30,1996. Until that term expired, and prior to a change in control,Caremark could, within the terms of the Agreement, only terminateKlein by having its board of directors determine that he was nolonger a key executive and by providing him notice thereof. Caremark failed to follow the Agreement and by doing so materiallybreached its terms.

The evidence proffered by Caremark does not raise a questionof fact that Caremark materially breached the Agreement. Inessence, Caremark claims that Klein's termination by the Caremarkmanagement on August 6, 1996, was inadvertent or the result of anadministrative error. In the alternative, Caremark attempts todemonstrate that it complied with the terms of the Agreement bysecuring Klein's termination by the board of directors on August21, 1996.

One stated purpose of the Agreement was to confer specialseverance benefits to Caremark's "vital management group." Oneother purpose of the Agreement was to give Klein certain benefitsin the event of a termination. In our view, Klein's terminationby Caremark management was a material breach of the Agreementbecause the termination occurred before the board of directorsdecided that he was no longer a key executive.

Further, paragraph 2(A)(iv)required that Klein be notified ofthe board's determination that he was no longer a key executive. Although disputed by Caremark, the record reveals that Klein wasnever actually notified by the Caremark board that he was no longera key executive. The record demonstrates that Klein was firstnotified of Caremark's formal request to the Caremark board seekinga determination that he was no longer a key executive in Nobles'letter dated August 22, 1996. We note that at time the letter wasdated, it was uncertain whether the Caremark board had even made adetermination that Klein was no longer a key executive. The letterindicates that Caremark was requesting that the board of directorstake this step. Further, this notice, which did not even originatefrom the Caremark board, was dated 16 days after Klein wasterminated by Caremark management. Caremark's failure to provideKlein with notice from the board of directors indicating adetermination that he was no longer a key executive amounted to amaterial breach of paragraph 2(A)(iv) of the Agreement. Even ifKlein received notice from the board, there is no question thatKlein's termination occurred before the board's decision waseffectuated. From our review of the entire record, we concludethat Caremark materially breached the Agreement and that the trialcourt did not err in granting summary judgment in favor of Klein.

We next address whether the trial court correctly ruled thatthe Agreement provided Klein with a fixed term of employment. Construction of a contract is a question of law that is reviewed de novo. Amalgamated Bank of Chicago v. Kalmus & Associates, Inc.,318 Ill. App. 3d 648, 655, 741 N.E.2d 1078 (2000)

Caremark argues that Klein has failed to prove a materialbreach of paragraph 2 of the Agreement as a matter of law on theground that Klein was not employed for a fixed term under theAgreement. Caremark suggests that the Agreement's term is notfixed because the board of directors could terminate him at anytime under paragraph 2(A)(iv). We note, however, that theAgreement expressly provides a term of December 1, 1995, toNovember 30, 1996. While we agree that Klein could have beenterminated during that period, the salient question in this case iswhether Caremark followed the procedure set forth in paragraph2(A)(iv) for doing so. We are not persuaded by Caremark's claimthat because the Agreement was subject to termination at any time,the termination here was not a material breach.

Caremark also claims that Klein's contract was not for a fixedterm because he could be terminated at-will under his originalemployment agreement. The fact that Klein's original employmentagreement was an at-will employment contact does not impact thevalidity of the Agreement in this case. In effect, the Agreementtrumps Klein's at-will employment status because the Agreement'sterms are sufficiently definite. "Employment contracts in Illinoisare presumed to be at-will and are terminable by either party; thisrule, of course, is one of construction which may be overcome byshowing that the parties agreed otherwise." McInerney v. CharterGolf, Inc., 176 Ill. 2d 482, 485, 680 N.E.2d 1347 (1997). Here,the Agreement was a contract because there was an offer,acceptance, and sufficiently definite terms between the parties. Academy Chicago Publishers v. Cheever, 144 Ill. 2d 24, 29, 578N.E.2d 981 (1991); Hirsch v. Feuer, 299 Ill. App. 3d. 1076, 1081-82, 702 N.E.2d 265 (1998). The language in paragraph 1 of theAgreement provided, "[e]xcept as specifically changed by thisAgreement all terms and conditions of your current EmploymentAgreement with the Company shall remain in full force and effect."Immediately following this language in paragraph 2, the Agreementprovided that the term of employment "shall be the one year periodcommencing on December 1, 1995 and ending on November 30, 1996." Therefore, contrary to Caremark's claim, the Agreement was for afixed term.

Caremark relies upon Ridgeview Construction Co. v. AmericanNational Bank & Co. of Chicago, 205 Ill. App. 3d 1045, 1051, 563N.E.2d 986 (1990), and In re Estate of Szorek, 194 Ill. App. 3d750, 756, 551 N.E.2d 697 (1990), for the proposition that theAgreement incorporated the terms of Klein's employment agreementincluding the at-will provision. Thus, according to Caremark, theat-will provision was part of the Agreement and Klein could beterminated at Caremark's will. These cases, however, do notsupport Caremark's claim because they do not involve employmentcontracts or at-will employment.

Caremark also relies upon Bishop v. Lakeland Animal Hospital,P.C., 268 Ill. App. 3d 114, 117, 644 N.E.2d 33 (1994). In Bishop,the appellate court held that the trial court did not err indismissing count II of Bishop's complaint on the basis that heremployment contract as a doctor of veterinary medicine withLakeland Hospital was not a fixed term contract. The employmentcontract stated that Bishop would be employed on July 1, 1992, fora term of one year, "or until employment was terminated underParagraph 7." (Emphasis added). Bishop, 268 Ill. App. 3d at 117. Paragraph 7 allowed either party to terminate the contract with orwithout cause. The appellate court found that the plain languageof the contract demonstrated that both parties anticipated thepossibility of early termination without cause. Since Bishop wasgiven the requisite 60 days notice, the appellate court found thatthe trial court did not err in dismissing this count from hercomplaint. Bishop, 268 Ill. App. 3d at 117.

Bishop is distinguishable from this case because the termprovision expressly anticipated an early termination as set forthin paragraph 7 of that agreement. While we agree that the CaremarkBoard could have terminated Klein at any time upon a determinationthat he was not a key executive, the board failed to do so prior toKlein's termination by Caremark management. Therefore, thecontract in Bishop is distinguishable from the Agreement in theinstant case.

Based on the above discussion and the language of theAgreement quoted above, we conclude that the trial court correctlyruled that the Agreement provided Klein a fixed term of employment.

We next consider whether Caremark's post termination actionscured Caremark's material breach of the Agreement. Caremark claimsthat the breach was de minimis and not material because the Companytook corrective action by reinstating Klein prior to the change ofcontrol on September 5, 1996. Thus, according to Caremark, timeexisted for the board of directors to make the requisitedetermination prior to the change in control, and the breach, ifany, was immaterial. In support of its position, Caremark reliesupon Pacini v. Regopoulos, 281 Ill. App. 3d 274, 279, 665 N.E.2d493 (1996), Rogers v. Balsley, 240 Ill. App. 3d 1005, 1011, 608N.E.2d 1288 (1993), Intervisual Communications, Inc. v. Volkert,975 F. Supp. 1092 (N.D. Ill. 1997), and the Restatement ofContracts (Second)