Barton

In September 1994, defendant Elexsys International, Inc., a manufacturer of integrated circuit boards, was in the midst of a financial crisis. Its stock had plummeted in value, to $1.31 per share, and its cash reserves were almost depleted. To save the company, Elexsys’s major shareholder engineered a restructuring of the company, which eliminated the senior vice-president position held by plaintiff James B. Barton. Elexsys continued Barton’s $200,000 salary and benefits, however, for 12 months pursuant to its “Executive Salary Continuance Plan.”

A year later, the company’s fortunes had turned around. When Elexsys’s stock had risen to $15.31 per share, Barton attempted to exercise stock options he had been granted to purchase stock at $1.25 and $3.50 per share. Elexsys refused his tender, explaining to Barton that his options had lapsed and were no longer exercisable.

Barton sued for breach of contract and fraud. After conducting discovery, Elexsys moved for summary judgment, supporting its motion with the three written stock option agreements upon which Barton was relying. All provided that the options would no longer vest once Barton’s employment was terminated. The…