Tricat Industries3/10/2000
REPORTED
Paul E. Harper, appellee, filed suit in the Circuit Court for Baltimore City against Tricat Industries, Inc. (Tricat) and KataLeuna GmbH (KataLeuna), appellants, for breach of an employment agreement. Appellants appeal from a jury verdict and resulting judgment in favor of appellee and contend that the circuit court committed several legal errors. Appellee has filed a cross-appeal, contending that he was entitled to pre-judgment interest. For the reasons that follow, we shall reverse and remand for a new trial.
Facts
Tricat is an Oklahoma corporation with its principal place of business in Baltimore County. KataLeuna is a German corporation with its principal place of business in Leuna, Germany. KataLeuna is a partially owned subsidiary of Tricat Management GmbH (Tricat Management), which is a wholly owned subsidiary of Tricat Europe S.A., which is a wholly owned subsidiary of Tricat.
In January, 1996, Dr. P. Kenerick Maher, President of Tricat, contacted appellee to see if he would be interested in serving as chief financial officer of Tricat and its affiliated companies. On February 9, 1996, as "President" of Tricat and "Chairman" of KataLeuna, Dr. Maher extended a written offer to appellee for the position of senior vice president and chief financial officer of Tricat and executive vice president and supervising financial officer of KataLeuna. Appellee was to be compensated at the rate of $120,000 per year, with adjustments "if circumstances justify." Appellee accepted the offer the same day.
The agreement dated February 9, 1996, also provided (1) that appellee would be provided with housing and a car in Germany, (2) the standard family medical insurance and 401-K plan presently in effect or being installed in the United States, (3) four weeks vacation per year, (4) a stock option for 3,000 shares of Tricat's Class B non-voting stock at $16 per share as a "signing bonus," (5) participation in any annual company stock and cash bonus plans, (6) that with respect to severance, "if terminated for reasons other than `cause' six months salary. Ongoing termination will be developed," and (7) that Tricat was to provide limited personal legal assistance, personal tax return assistance, and pay medical and other coverages during the COBRA period.
According to appellants, in March, 1996, the Board of Directors of Tricat, at a meeting attended by Dr. Maher and appellee, approved appellee's employment at a salary of $120,000 per year for a trial period of six months. Between then and late July, 1996, several written documents were generated between Dr. Maher and appellee, which took the form of new employment agreements, " ddenda to employment agreement," "clarification of employment agreement," a memo, and a "side letter." The documents addressed the terms of appellee's employment, and while most were undated, they purported to be effective as of March 1, 1996. Some of the agreements recited that appellee's salary had been increased to $160,000 and provided for a 3-year term of employment.
According to appellants, in June, 1996, at a board of directors meeting attended by Dr. Maher and appellee, the board refused to approve a salary for appellee in excess of $120,000. Subsequent to that meeting, appellee retained an attorney, with Dr. Maher's consent, who drafted an employment agreement between appellee, on the one hand, and Tricat and Tricat Management on behalf of its subsidiaries, on the other hand. This agreement (hereinafter Agreement) did not bear a date of execution, but the circuit court determined, based on uncontradicted evidence, that it had been executed on July 31, 1996. The Agreement expressly indicated that i
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