Opinion ID: 2995222
Heading Depth: 2
Heading Rank: 3

Heading: The Supplemental Bonus

Text: Dr. Bowles argues that his damages award should have included an additional $28,163.70 that he earned under Hanson’s supplemental bonus program. An employee eligible for benefits under Quantum’s severance plan also would receive an annual incentive bonus award, the amount of which was determined by the amount of the target bonus that the employee received under the SMPP. Dr. Bowles admits that he received his target bonus under the SMPP for 1994. However, he believes that he also was entitled to receive the supplemental bonus he earned in 1994 because his ability to earn that bonus was dependent upon his participation in the SMPP. Dr. Bowles also relies on the deposition testimony of Carmean, the severance plan’s drafter, to support his argument. Specifically, Dr. Bowles contends that Carmean testified that the provision of the severance plan at issue here was designed to protect any bonus the employee earned prior to the change in control. Quantum responds to Dr. Bowles’ argument by pointing out that the severance plan only mentions the annual incentive bonus award, not the supplemental bonus. [A]s a general rule, an unambiguous contract should be construed without reference to extrinsic evidence . . . . Grun, 163 F.3d at 420. [I]f the language of the contract provides an answer, then the inquiry is over; parol evidence is neither necessary nor admissible. Id. The district court concluded that, as a matter of law, the proper interpretation of the severance plan is that it does not provide for payment of a supplemental bonus. R.129 at 2-3. We agree with the district court’s conclusion. The operative documents do not suggest a connection between the supplemental bonus and the annual incentive bonus award provided in the severance plan. The bonus available under the severance plan is defined in terms of the target bonus available under the SMPP; the severance plan makes no mention of the supplemental bonus. Dr. Bowles correctly asserts that he was only eligible for the supplemental bonus because he was a participant in the SMPP; however, the fact that eligibility for both the target bonus and the supple mental bonus was defined by reference to the SMPP does not, in itself, establish that the two bonuses were part of the same overall bonus program. Without such a connection between the two bonuses, we are unable to conclude as a matter of law that Dr. Bowles is entitled to the supplemental bonus under the severance plan. Even if we were to find ambiguity in this provision of the severance plan and therefore looked to extrinsic evidence to determine its meaning, we would have to conclude that Dr. Bowles did not meet his burden of proving that the supplemental bonus was part of the annual incentive bonus award. Every indication in the record is that the two programs were entirely separate. The supplemental bonus program did not exist at the time the severance plan was drafted. Instead, Hanson implemented the supplemental bonuses after it had acquired Quantum. The literature describing the target bonuses available under the SMPP does not mention supplemental bonuses. Moreover, it appears that employees only could receive a supplemental bonus after they had earned all of the bonus money that was available under the SMPP. In addition, the target and supplemental bonuses are itemized and labeled separately on Dr. Bowles’ bonus summary for 1994. Indeed, the only evidence Dr. Bowles can offer to connect the two bonus programs is Carmean’s testimony that the severance plan was designed to protect a bonus that the employee earned prior to the change in control. However, that testimony is not directly supportive of Dr. Bowles’ argument because, when Carmean made the statement, he was referring specifically to the target bonus program as discussed in the provision of the severance plan concerning the annual incentive bonus award. As we already have indicated, that provision of the severance plan makes no mention of the supplemental bonus. In sum, we do not believe that Dr. Bowles has demonstrated that the provision of the severance plan that grants eligible employees an annual incentive bonus award encompasses the supplemental bonus. Therefore, the district court did not err in refusing to include the supplemental bonus in its calculation of Dr. Bowles’ damages.