Corbett v. Noel

• Decision Date: 03 December 1964
• Parties: Donald P. CORBETT et al. v. Paul NOEL et al.
• Court: Maine Supreme Court

Page 165

205 A.2d 165

160 Me. 407

Donald P. CORBETT et al. v. Paul NOEL et al.

Supreme Judicial Court of Maine.

Dec. 3, 1964.

Weeks, Hutchins & Frye, by Miles P. Frye, Waterville, for the plaintiff.

Bryan, Cave, McPheeters & McRoberts, by William M. Van Cleve, St. Louis, Mo., Lester T. Jolovitz, Waterville, for defendant.

Before WILLIAMSON, C. J., WEBBER, TAPLEY, SULLIVAN, SIDDALL, and MARDEN, JJ.

WILLIAMSON, Chief Justice.

This case is before us on report upon an agreed statement of facts. Five former employees seek an interpretation of the provisions of the Salary Bonus Plan Trust (the 'Trust') of the Fort Halifax Packing Company to determine the extent of their vested rights and the amounts to which they are entitled under the Trust.

The amount in controversy as of July 31, 1964, was $7,492.52. The decision will determine whether this amount belongs to the five plaintiffs who ceased to be employees in 1961 and 1962, or to the fourteen defendant salaried employees with the Company on the termination of the Trust on December 31, 1963. Neither the Company nor the Trustees have any pecuniary interest in the outcome of the case.

What is the meaning of the words 'five (5) full years of continuous participation' in Article XIV, Section 1(a) of the Trust?

'The Trust was established on October 20, 1953, and the 'Anniversary Date' of the Trust is defined as:

'The twentieth day of October, in each year, including the twentieth day of October, 1953 which date is herein sometimes referred to as the first anniversary date, during which this Plan and Trust shall be in force.' (Article II, Section 1. (m)

'The terms of the Trust determining the eligibility and date of participation of qualifying employees provide as follows, in pertinent part:

"Article IV

"Section 1.

"Employees of the Company eligible to become Participants under this Plan shall be all those present and future salaried employees of the Company who as of an anniversary date are employed and actively engaged in the conduct of the business of the Company and not on a leave of absence or in the Armed Forces of the United States.'

* * *

* * *

"Section 3.

"Subject to the provisions of this Agreement, the participation of present employees eligible as above specified who meet the above requirements, as of the first anniversary date, shall commence as of the first anniversary date hereof, and the participation of other employees, present and future, who meet the above requirements on any subsequent anniversary date concerned shall commence as of such anniversary date.'

'The terms of the Trust determining the vested interest of a Participant in his account upon 'termination of employment' provide as follows, in pertinent part:

"Article XIV

"TERMINATION OF EMPLOYMENT

"Section 1.

"In the event of termination of employment, either voluntary or involuntary, for any reason other than disability, retirement at normal or an earlier retirement date, or because of death, the vested interest of the Participant in his account shall be determined as follows, the periods stated being computed from the date when last he became a Participant.

"(a) If, at the date of termination of employment, the Participant has completed less than five (5) full years of continuous participation, his interest in his account and in this Trust shall be forfeited.

"(b) If, at the time of termination of employment, he has completed five (5) full years of continuous participation, he will be entitled to ten per cent (10%) of the value of his account.

"(c) For each additional full year of continuous participation in excess of five (5) full years, he will be entitled to ten per cent (10%) of the value of his account.

"(d) If, at the time of termination of employment, he has completed fourteen (14) or more years of continuous participation, he will be entitled to one hundred per cent (100%) of the value of his account.'

'The terms of the trust provide that the portion of an account which is not vested in a Participant, in the event of 'termination of employment,' shall be allocated, as of the next valuation date, among the remaining Participants as though it were a profit to the Trust for that year.

"Article VI

"DETERMINATION OF SHARE OF PARTICIPANT IN CONTRIBUTIONS

"Section 1.

"Each contribution by the Company to the Plan shall be allocated as follows:

"(a) Each person who is a Participant in the Plan on the anniversary date as of which a contribution to the Trust is made by the Company shall, subject to the other provisions of this Agreement, be allocated a share in the Distributable Profit Share as follows:

"(1) Each Participant shall be credited with one profit sharing point for each $100 of his regular salary for the year, to the nearest $100 of such salary.

"(2) Each Participant shall be credited with one profit sharing point for each completed full year of past service, except that each Participant as of the first anniversary date shall be deemed to have completed one full year of service, for the purpose of the fiscal year ended October 31, 1953 and for all subsequent fiscal years.'

Of the four plaintiffs who were employed prior to October 20, 1953 and became participants in the Trust on the first Anniversary Date of October 20, 1953, three terminated their employment on October 30, 1961 and one in January 1962. The fifth plaintiff was employed in February 1955, became a participant in the Trust on the Anniversary Date of October 20, 1955, and terminated his employment in January 1962.

The plaintiffs contend that the Anniversary Date on which a salaried employee becomes a participant marks the completion of one 'full year of continuous participation' within the meaning of Article XIV. The defendants' position is that a 'full year of continuous participation' means a twelve month period from Anniversary Date of the Trust to Anniversary Date in which the employee was at all times a participant in...