OPINION AND ORDER
Plаintiff Leroy T. Thayer brings this action against defendants Dial Industrial Sales, Inc. (“Dial”), Charles A. McDonnell, Fergus Fitzgerald and Jerrold B. Spiegel 1 for common law fraud, detrimental reliance, quantum meruit and unjust enrichment. On November 22 and November 24, 2001, this Court conducted a bench trial. Pursuant to an Opinion and Order of this Court dated February 23, 2000, plaintiffs claim for damages is limited to the period of June 1992 through March 1, 1993 for Counts Four through Seven in the Amended Complaint. Familiarity with that opinion is presumed. For the reasons to follow, we enter judgment in favor of plaintiff in the amount of $25,000. Pursuant to Fed.R.Civ.P. 52(a), we set forth below our findings of fact and conclusions of law.
FINDINGS OF FACT
In or about May 1991, McDonnell, a citizen of the State of New York, incorporated Dial in New York. (Trial Tr. at 265.) McDonnell’s plan was for Dial to manufacture and sell an innovative new product he and Fitzgerald hoped to discover. (Id. at 266-67.) McDonnell and Fitzgerald selected the name Dial, an acronym for Fitzgerald’s successful Irish company, Dublin Industrial Auctions Limited. (Id. at 266.) McDonnell is the President, majority shareholder and a Director of Dial. Fitzgerald, during the relevant time period, was a Director, Vice President and shareholder.
Plaintiff, a citizen of the State of New Jersey, has a juris doctor degree and has completed two-thirds of the credits necessary to obtain a masters degree in business administration. (Id. at 3-4.) From 1975 through 1977, plaintiff was employed as a contracts manager at Western Information Systems in Mahwah, New Jersey. (Id.) From 1977 to 1984 he worked for Diagnostic Retrieval Services as Vice President of Contracts, Program Management and Administration and from 1984 to April 5, 1992, plaintiff was employed by TimePlex, Inc., ultimately as an Administrative Vice President for Contracts and Sales Administration. (Id. at 4-5.) While at TimePlex, plaintiff oversaw a department consisting of five or more attorneys and fifty word processing employees. (Id. at 5.) His department was responsible for negotiating and reviewing sales contracts and administration of the sales commission plans. (Id) After falling victim to corporate downsizing, plaintiff was provided, in his departure agreement, with six months of outplacement services at Drake Beam Morin (“Drake”), a company that specializes in finding new employment for recently unemployed executives. (Id. at 5-6.) The agreement further specified that if plaintiff did not find permanent employment within the initial six months, TimePlex would continue to pay for Drake’s services for up to one year. (Id. at 76.) During the relevant time period, McDonnell was also a temporary tenant at Drake after his former employer of 25 years, Technicon Corporation (“Technicon”), decided to downsize in April 1992.
I. The Alleged Oral Agreement
In mid-June 1992, McDonnell was introduced to plaintiff by a former Technicon colleague.
(Id.
at 271-72.) Over the next few days, plaintiff and McDonnell had several conversations during which plaintiff learned about the telescoping ladder project. The specific content of these conversations is hotly disputed. Plaintiff testified that McDonnell offered plaintiff a fifty percent (50%) equity interest in the project and a $10,000 monthly salary.
(Id.
at 10-11.) The initial payment was to. be made in February 1993 for all salary accrued from June 1992.
(Id.
at 11.) Plaintiff was also to receive a performance-based bonus between sixty percent (60%) and one hundred percent (100%) of his salary as well as normal benefits.
(Id.)
Although there was no specific bonus structure, plaintiff claims that there were specific performance goals to be accomplished, such as finalizing a licensing agreement, testing the product and finding a manufacturer.
(Id.
at 147.) Plaintiff testified that this entire agreement was established within two or three days of his initial meeting with McDonnell.
(Id.
at 12.) Plaintiff alleges that McDonnell never told plaintiff of the existence of Dial or
Plaintiff testified that he first learned of the existence of Dial and of Fitzgerald in July 1992 when he was informed that Fitzgerald had a fifteen percent (15%) interest in Dial, and that McDonnell and plaintiff would each own one half of the remaining eighty-five percent (86%) interest. (Id. at 17, 19.) In September 1992, McDonnell informed plaintiff of a further modification of the alleged oral agreement, specifically that McDonnell and Fitzgerald would control the majority of shares in Dial, and that plaintiff would be given a twenty-seven and one-half percent (27.5%) equity interest. (Id. at 25.) Plaintiff acquiesced in both of these alleged modifications and understood that each new agreement replaced the old. (Id. at 98.)
Defendants, not surprisingly, recount a vastly different agreement with plaintiff. Defendants contend that plaintiff learned of the existence of Dial and the telescoping ladder over the course of several weeks. McDonnell testified that he told plaintiff at their first meеting about the creation of Dial and of his partnership with Fitzgerald. (Id. at 272.) McDonnell also told plaintiff that the ladder could not meet applicable ANSI standards and that it would be some time, at least eighteen months, before they would be able to generate any revenue from sales. (Id.) Defendants dispute that plaintiff was ever offered a fifty percent (50%) interest in Dial or that any specific compensation terms were established. (Id. at 273.) McDonnell testified, in particular, that plaintiff was never promised $90,000 payable on February 1993. (Id.) Nonetheless, plaintiff believed that the ladder was a quality product and that the venture had promise and therefore agreed to begin wоrk on behalf of Dial with the hope and anticipation of being compensated in the future.
We find defendants’ version of the facts to be more credible than plaintiffs. Plaintiffs claim that he was offered full partnership in Dial within the first two or three days of meeting McDonnell is implausible. It is unlikely that McDonnell would proffer such a generous offer without consulting his business partner of several years and without a thorough evaluation of plaintiffs work. Furthermore, we found McDonnell to be an articulate and credible witness. Plaintiff has offered no tenable explanation why McDonnell would conceal the existence of Dial and Fitzgerald. We also find it dubious that plaintiff, a non-practicing lаwyer well versed in contract terms, would never reduce his oral agreement with McDonnell to writing, especially in light of his allegations that his equity position was so drastically reduced. Nonetheless, no such writing, however informal, exists and plaintiff has little support for his claims other than his own word.
Spiegel’s testimony further corroborates defendants’ rendition of the facts. Spiegel has a
juri doctor
degree from New York University School of Law and is now a partner at the law firm of Frankfurt, Gar-vis.
(Id.
at 214-15.) Like plaintiff, Spie-gel learned of the existence of Dial when he met McDonnell in or about June 1992.
(Id.
at 215.) However, Spiegel’s testimony as to the content of his conversations with McDonnell differs greatly from plaintiffs version of his interactions with McDonnell. McDonnell informed Spiegel of the existence of Dial, that it had no formal shareholders and that Fitzgerald was his partner.
(Id.
at 218.) Spiegel met plaintiff shortly thereafter and disputes plaintiffs contention that plaintiff was introduced to him as McDonnell’s partner.
(Id.
at 219.) Spiegel was not informed of any salary or
II. June 1992 Through February 30, 1993
Plaintiff began working for Dial in June 1992. (Id. at 14.) It is undisputed that at this early stage a number of tasks necessarily had to be completed before Dial would be able to generate revenue. Most importantly, a final license agreement had to be negotiated with the European patent owners. (Id. at 277.) The other important tasks included, inter alia, obtaining affordable products liability insurance, meeting United States safety standards for ladders under ANSI, developing a business and marketing plan and finding manufacturing and testing facilities. (Id. at 14, 18, 277.) Throughout June, plaintiff dedicated approximately fifty percent of his time to Dial. (Id. at 15.) He assisted in numerous tasks, most notably developing the marketing plan and assisting McDonnell in finding a manufacturer for the ladders. (Id. at 14.)
Beginning in July 1992, plaintiff devoted his time almost exclusively to Dial. 2 (Id. at 17-18.) His tasks included meeting with Spiegel at his New York City office, daily meetings with McDonnell, searching for products liability insurance, negotiating with marketing research firms and investigating potential manufacturing firms. (Id. at 18-20.) Plaintiff performed similar work throughout the month of August. (Id. at 20-21.) In September 1992, plaintiff worked extensively with Spiegel to negotiate the licensing agreement with the European patent holders. (Id. at 24, 242-45.) Spiegel’s billing records indicate extensive contact with plaintiff throughout the month of September. (Id.) Dial successfully executed the exclusive North and South American license agreement for the ladder (the “Licensing Agreement”) on September 25, 1992. (Defs. Trial Ex. A.) The balance of plaintiffs time in September was expended formulating a business strategy with McDonnell and entertaining the patent owners when they visited the United States. (Trial Tr. at 24.)
Defendants argue that compensation was not discussed, and that therefore plaintiff did not reasonably expect to be paid, until the Licensing Agreement was finalized. (Defs. Post-Trial Mem. at 20-21.) We find this argument implausible. Without concrete evidence suggesting otherwise, we are loath to assume that plaintiff knowingly provided his services without an expectation of compensation. Rather, it is more likely plaintiff expected to be paid, but to defer payment until Dial was able to generate revenue — after thе Licensing Agreement was finalized. We find that expectation both probable and reasonable.
Plaintiff continued to devote substantial amounts of time to Dial through February 1993. Beginning in January, plaintiff was
By March 1, 1993, plaintiff had received no compensation from Dial, and no written employment agreement was in effect. Dial had not made a sale and had no outside investors. (Id. at 157-69.) The telescoping ladder failed to meet ANSI standards and was undergoing design modifications. 3 Dial had not yet obtained a United States patent and no agreement had been reached with a manufacturing company. 4 (PL Trial Ex. P-4 at 12.)
III. April 2,1993 Meeting
On Friday, -April 2, 1993, plaintiff met with Leonard Silverman, Spiegel and McDonnell at Spiеgel’s law office in New York City for the purpose of signing the employment contract (“Employment Agreement”), Shareholders’ Agreement and Subscription Agreement. (Id. at 289.) The Employment Agreement dated March 1,1993 entitles plaintiff to an annual salary of $120,000 commencing August 1, 1993, a bonus in the discretion of Dial’s Board of Directors (the “Board”), and fringe benefits. (PI. Trial Ex. P-2 at 1.) Additionally, the contract provides plaintiff with three months’ salary as severance payment if he was terminated prior to the second anniversary of the contract. (Id. at 3.) The Employment Agreement contains a merger clause stating that “[tjhis Agreement represents the entire agreement between the parties with respect to Employee’s employment with the Corporation. This Agreement may not be modified or terminated unless in writing signed by both parties hereto.” (Id. at 4.) The Employment Agreement contains no mention of any prior oral or written agreements for payment of $90,000 for the period of June 1992 to March 1993 or for an equity share in Dial.
After carefully reviewing the document, plaintiff signed the Employment Agreement on April 2, 1993. (Trial Tr. at 105-06.) As a former contracts manager, plaintiff fully understood the meaning and
At the same meeting, plaintiff reviewed and signed an acknowledgment of the Shareholders’ Agreement. (Id. at 114; Defs. Trial Ex. H.) Plaintiff similarly reviewed the Subscription Agreement that would later be distributed to potential investors. (Id. at 115-17.) Pursuant to the Subsсription Agreement, McDonnell and Fitzgerald entered into a written consent, in lieu of taking action at a special meeting of the Board, to issue plaintiff 7,500 shares of common stock for a purchase price of $10,000 (the “Stock Purchase Agreement”). (PI. Trial Ex. P-20.) At the April 2, 1993 meeting, plaintiff agreed and accepted the terms of the offer when he signed a letter dated “As of July 15, 1992” that outlined the Stock Purchase Agreement. (Id.) Plaintiff has no recollection of the document, suggesting that it either was buried in a pile of documents that he signed without reading or that his signature was forged. (Trial Tr. at 167-68.) We find that neither of these explanations is credible. It is unlikely that plaintiff, a lawyer and an experiеnced corporate executive, would sign a one-page document without first reading it. Even if he did, he did so at his own peril. Furthermore, other than an unverified and irrelevant allegation that Spiegel signed Mrs. McDonnell’s name, there is no evidence suggesting that plaintiffs signature is anything but authentic. Plaintiffs story is further undermined by the fact that after considering the Stock Purchase Agreement over the weekend, plaintiff gave Dial a check for $10,000 dated April 5, 1993. (Id. at 136-37.)
Considering the evidence presented, we conclude that the Stock Purchase Agreement contemplated a credit for sweat equity to plaintiff from Dial in the amount of $110,000 covering the period of September 1992 though July 1993. Outside investors were given the opportunity to invest in Dial at $20 per share. (PI. Trial Ex. P-4 at 6.) After consulting with plaintiff, McDonnell concluded that a purchase price of $16 per share was adequate to compensate plaintiff for past work rendered. (Trial Tr. at 283.) Plaintiff was therefore credited with $10,000 per month of sweat equity for the eleven months from September 1992 through July 1993; for subsequent periods plaintiff was to receive a salary pursuant to the terms of the Employment Agreement. (Id.) The credit began in September, the month Dial obtained the Licensing Agreement, because that was the point at which Dial became a viable business entity. (Id. at 281.) After being credited with $110,000 in equity and contributing $10,000 of his own funds, plaintiff reсeived 7,500 shares with a total value of $120,000, or $16 per share.
Plaintiff alleges that he was unaware of the sweat equity arrangement, and contends that we should disregard defendants’ argument for want of documentary support. However, defendants’ description of the Stock Purchase Agreement is consistent with the Subscription Agreement and a similar deal with Silverman. The Subscription Agreement lists plaintiffs purchase price as $1.33 per share, or 7,500 shares for a total of $10,000. (Defs. Trial
Plaintiff argues that at the April 2, 1993 meeting he signed the Employment Agreement under duress. He argues that he was not given enough time to review the pile of documents before him, was not permitted to consult with an attorney and was given an ultimatum to sign the documents or face immediate termination. (PI. Post-Trial Mem. at 9.) Defendants paint a vastly different picture of the meeting. Spiegel testified that he advised plaintiff, along with all present at the meeting, to consult with an attorney. (Trial Tr. at 256.) Furthermore, both McDonnell and Spiegel testified that the mood at the meeting was jovial. {Id. at 231, 289.) During cross-examination, plaintiff admitted that he was not motivated by fear or threat of physical violence to sign the documents, but instead opted to sign because that was more advantageous than any of the alternatives. {Id. at 102.) Plaintiff was aware of his option to bring suit rather than sign the documents. {Id. at 104.)
IV. The Current Action
For reasons largely irrelevant here, plaintiff was terminated by Dial on February 1, 1995 pursuant to paragraph six of the Employment Agreement. Upon his termination, defendants paid plaintiff $9,333.33 in severance for three months accrued salary subject to the cash flow provision in the Employment Agreement 5 . (Trial Tr. at 173.) Plaintiff now requests that this Court award: (1) an equity interest in Dial not less than 27.5%; (2) $90,000 plus punitive damages and interest for services rendered from June 1992 through February 1993; (3) $50,000 for services rendered from March 1993 through July 1993; (4) $27,500 in accrued vacation; (5) $30,000 of unpaid severance; (6) $72,000 of unpaid bonus; and (7) $160,000 in accrued salary from the date of plaintiffs termination in February 1995. Prior to his termination, plaintiff never made a written demand to Dial for any of the relief now sought.
Plaintiff was terminated prior to the second anniversary of the Employment Agreement. (Trial Tr. at 175.) In refer
After the first annivеrsary of the date hereof, ... the Corporation shall be obligated to pay and Employee shall be entitled to receive the following severance payments:
(a) In the event that such termination occurs prior to the second anniversary to this Agreement, the Corporation shall pay and Employee shall be entitled to receive three (3) months’ salary as severance payment; and
(b) In the event that such termination occurs after the second anniversary of this Agreement or if at any time thereafter, the term hereof is not renewed or extended by the Corporation, the Corporation shall pay and Employee shall be entitled to receive six (6) months’ salary.
ijí % 5f{ #
(d) Except for the amounts set forth in this Paragraph 6, the Corporation shall have no further liability or obligation to Employee.
(PL Trial Ex. P-2 at 3.)
The Employment Agreement makes no reference to vacation pay, but states only that “[e]mployee shall be entitled to fringe benefits provided to other executive officers of the Corporation.” (Id. at 2.) Plaintiff testified at trial that he was personally aware that McDonnell received vacation time, although he testified otherwise in his pre-trial deposition. (Trial Tr. at 176-78.) Plaintiff produced no other evidence of any vacation time the other executives received.
CONCLUSIONS OF LAW
I. Detrimental Reliance
Plaintiff brings a claim for detrimental rеliance alleging that defendants made representations regarding plaintiffs salary and prospective ownership interest in Dial. Plaintiff argues that he commenced working for Dial in reliance on these representations, expending considerable time and effort.
A claim for detrimental reliance is analyzed as a claim of promissory estoppel where the claim has its basis in an unenforceable oral agreement.
See Bergner & Co. v. Martinez,
A. Salary From June 1992 Through February 1993
We hold that plaintiff has not met his burden of demonstrating a claim for detrimental reliance with respect to the alleged promise that he would be paid a salary of $10,000 per month beginning in June 1992. Plaintiff has failed to demonstrate a clear and unambiguous promise made by defendants. Plaintiff testified that McDonnell falsely represented to plaintiff that he would be paid a $10,000 monthly salary beginning in June 1992. However, defendants dispute any such representations, and there is no documentary evidence to support plaintiffs аllegations.
Even assuming,
arguendo,
that plaintiff could meet his burden of demonstrating a clear and unambiguous promise that was reasonably relied on, plaintiff cannot prove
B. Bonus
Plaintiff has similarly failed to demonstrate that defendants made a сlear and unambiguous promise regarding a performance bonus. Plaintiff alleges that he was promised a bonus of sixty percent (60%) to one hundred percent (100%) of his salary to be paid in February 1993. Although no specific performance levels were ever established, plaintiff argues that certain specific performance tasks were implicit in the deal, such as obtaining product liability insurance, finalizing the hcense agreement, obtaining a United States patent and finding a manufacturing company. We do not find that these “implicit” tasks are sufficiently specific to support a promissory estoppel • claim. Furthermore, we find it dubious that McDonnell would promise plaintiff such a substantial bonus by February 1993 when no sales were anticipated until the Spring of 1993. In fact, during the relevant period, only one of the “implicit” tasks, entering into a license agreement, had been completed. Because plaintiff has failed to demonstrate that a sufficiently specific promise was made, we find for defendants on plaintiffs bonus claim.
C. Equity
Plaintiff alleges that he reasonably and detrimentally relied on promises made by McDonnell regarding an equity position in Dial. Because plaintiff adduces no evidence other than his testimony to rebut defendants’ credible denial of any alleged promises made, we conclude that plaintiff has failed to demonstrate by a preponderance of the credible evidence the existence of a clear and unambiguous promise. Furthermore, even assuming defendants promised plaintiff a progressively declining ownership interest, plaintiff admits that each time his alleged ownership interest was reduced, he understood and acquiesced in the new agreement as a substitute for the old. In spite of these prior dealings, plaintiff argues that when he purchased 7,500 shares of Dial for $10,000, he believed that this agreement was supplemental to the previous oral promises and that, unlike the prior arrangements, this agreement did not supersede any prior agreement. Apart frоm plaintiffs testimony, however, there is no evidence to support his interpretation of the Stock Purchase Agreement. In light of the prior dealings between plaintiff and defendants as well as the credibility of the defense witnesses, we find in favor of defendants. Accordingly, we dismiss plaintiffs detrimental reliance claims.
II. Common Law Fraud
Plaintiff asserts a claim for common law fraud against McDonnell, acting on his own behalf and on behalf of Dial. To prevail on a claim for fraud under New York common law, a plaintiff must demonstrate by clear and convincing evidence that the defendant: “(1) made an omission, misrepresentation, or false statement of material fact; (2) with knowledge of its falsity; (3) with the intent to defraud; (4) upon which the plaintiff reasonably relied; and (5) which caused damage to the plaintiff due to the plaintiffs reliance thereon.”
Lomaglio Assocs. Inc. v. LBK Mktg. Corp.,
Based on the same oral representations underlying the detrimental reliance claims, see supra Part I., plaintiff argues that McDonnell intentionally and knowingly made materially false representations to plaintiff with the intent to defraud him with respect to his salary and prospective ownership interest in Dial. We disagree. Plaintiff has failed to demonstrate by clear and convincing evidence, or even by a preponderance of the credible evidence, that McDonnell made an intentional misrepresentation or omission tо plaintiff. Plaintiff testified that McDonnell falsely represented that plaintiff would receive a fifty percent (50%), later revised to twenty-seven and one-half percent (27.5%), interest in Dial and that he would be paid a monthly salary of $10,000 beginning in June 1992 and payable in February 1993 plus bonus. For reasons already outlined, see supra Part I., we hold that plaintiff has failed to meet his burden and dismiss all claims for common law fraud.
III. Quantum Meruit and Unjust Enrichment
In the absence of a formal contract, “the court may nonetheless allow recovery in
quantum meruit
‘to assure a just and equitable result’ where ‘the defendant received a benefit from the plaintiffs services under circumstances which, injustice, preclude him from denying an obligation to pay for them.’ ”
Rule v. Brine, Inc.,
Plaintiff brings a claim for
quantum meruit
and unjust enrichment, arguing that he “performed services in good faith for Dial at defendants’ request with the expectation that he would be compensated at a rate of ten thousand ($10,000) dollars per month_” (Am.Complt.1ffl 52-53.) Though presented here as separate claims,
“quantum meruit
and unjust enrichment are not separate causes of action. Rather, unjust enrichment is a required element for an implied-in-law, or quasi contract, and
quantum meruit,
meaning ‘as much as he deserves,’ is one measure of liability,”
Seiden Assocs., Inc. v. ANC Holdings, Inc.,
We conclude that plaintiff sufficiently demonstrated his right to
quantum meruit
recovery fоr services rendered to Dial during the period of June 1992 through August 1993. Although “a contract cannot be implied in fact when there is an express contract covering the subject matter involved,”
GSGSB, Inc. v. New York Yankees,
We find that the reasonable value for plaintiffs services is properly measured at ten thousand dollars ($10,000) per month. Plaintiff does not contest this amount and it is consistent with the subsequent Employment Agreement that valued plaintiffs services at $120,000 annually. However, because plaintiff was compensated in sweat equity for six of the relevant nine months, see supra Part I.A., we now limit his recovery for services rendered to the months of June, July and August 1992. Furthermore, plaintiff testified that he devoted approximately half of his time to Dial during June. Accordingly, we conclude that plaintiff is entitled to recover $25,000 in damages under quantum meruit, $5,000 for June and a total of $20,000 for July and August.
IY. Contract Claims
Plaintiff asserts five separate claims for damages under the Employment Agreement for: (1) $50,000 for services rendered from March 1993 through July 1993; (2) $27,500 in accrued vacation; (3) $30,000 of unpaid severance; (4) $72,000 of unpaid bonus; and (5) $160,000 in accrued salary as of the date of plaintiffs termination. As an initial matter, this Court has determined that plaintiff was compensated in sweat equity for the March 1993 to July 1993 period. See supra FINDINGS OF FACT, Part III. Furthermore, under the unambiguous terms of the Employment Agreement, while it appears plaintiff has a claim for the unpaid portion of his severance of three months salary, he is not entitled to six months of severance because he was admittedly terminated prior to the second anniversary of the Employment Agreement. (Trial TV. at 174-75.) Nonetheless, we reach no finаl conclusions as to plaintiffs contract claims because they are beyond the scope of the instant dispute. As made clear in our prior Opinion and Order, the instant action is limited to plaintiffs claims for detrimental reliance, fraud, quantum meruit and unjust enrichment for the June 1992 through March 1, 1993 period. See Opinion and Order dated February 23, 2000 at 19. Plaintiffs Amended Complaint was never subsequently amended to allege additional breach of contract claims. Accordingly, we shall not consider plaintiffs request for contract damages. Should plaintiff wish to recover damages under the Employment Agreement, he must file suit properly alleging his breach of contract claims.
CONCLUSION
For the reasons statеd above, we find in favor of plaintiff with respect to plaintiffs quantum meruit and unjust enrichment claim. Accordingly, the Clerk of the Court is directed to enter judgment on behalf of plaintiff in the amount of $25,000. All other claims are dismissed with prejudice.
SO ORDERED
Notes
. At the conclusion of plaintiffs case, this Court granted Spiegel's motion to dismiss all claims for want of any showing of a promise or misrepresentation made by Spiegel to plaintiff. Plaintiff’s claims against Fitzgerald were dismissed pursuant to this Court's Opinion and Order dated February 23, 2000.
. Defendants argue that plaintiff is estopped from arguing that he was ever "employed” by Dial because he continued to receive unemployment benefits from the State of New Jersey and to rеceive free office space at Drake during the relevant period. This argument is without merit. Although plaintiff’s actions and representations may properly be considered as some evidence of his credibility, that plaintiff represented to the State of New Jersey that he was unemployed does not preclude this Court from finding, and we do so find, that he was an employee of Dial.
. The Subscription Agreement dated April 4, 1993 states:
[a] sample of the Ladder as manufactured by the Licensor has been subjected to testing in accordance with ANSI standards and has failed to pass certain of the tests. Thus, certain design modifications will have to be made.... If the Ladder does not comply with the ANSI requirements, it would be considerably more difficult for the Company to market and distribute the Ladder.... There can be no assurance that design modifications can be effected which will enable the Ladder to meed ANSI standards.
(PI. Trial Ex. P-4 at 12.)
. The Subscription Agreement states:
[Dial] is currently in negotiations with a third party to manufacture the Ladder. There is no guaranty that the company will be able to conclude negotiations with a manufacturer to manufacture the Ladder on commercially acceptable terms and if the Company cannot, the investors may lose all their investment.
(PI Trial Ex. P-4 at 11-12.)
. The Employee Agreement states that an "Employee's salary shall accrue, but not be payable, until the Corporations' Board of Directors determines that the Corporation has adequate cash flow to pay salaries to its executive officers.” (Defs. Trial Ex. B ¶ 3(a).)