This section contains the nature of the case and procedural background.

P served as the vice-president of D's Operator Services Division from 1994 until mid-1997. P was an exemplary employee. In 1995, D granted him an option to purchase 9,000 shares of D stock. In 1996, it granted him an option to purchase an additional 2,000 shares. These options were to vest and become exercisable over a period of several years. When this dispute arose, the number of unvested options he held had grown to 10,000 due to stock splits. D's Stock Option Plan provided that 'subject to earlier termination as provided herein, any outstanding option and all unexercised rights thereunder shall expire and terminate automatically upon … the cessation of the employment or engagement of the Optionee by the Company for any reason other than retirement, death, or disability.' P's contracts contained such an 'early termination' exception, providing that his options would immediately vest if D terminated him 'without cause.' The language reads: the Options shall vest and, subject and pursuant to the provisions of the Plan and this Agreement, shall be exercisable with respect to all of the Option Shares immediately upon … any termination by the Company of the Employee's employment with the company by reason of the Employee's disability or without cause. The contracts and options did not define the phrase 'without cause,' nor did they explain what would constitute termination 'with cause.' A Stock Option Committee appointed by D's Board of Directors had broad discretion to interpret the terms of the Plan and contracts made under it. Part of this discretion is the authority to determine whether or not terminations are 'with cause' or 'without cause.' The Committee's determinations were to be 'conclusive and binding on all Optionees.' The Plan further instructs the Committee to exercise its authority in a manner consistent with the best interests of D. However, the Committee cannot amend existing option contracts without the consent of the option holders. D negotiated the sale of P's division to another company, ILD. ILD needed P and other essential employees who ran the division to come work for ILD. D therefore promised ILD that it would terminate P and all other key Operator Service employees upon closing and that it would not rehire any of those employees to fill other positions at D. The employees were told they would be terminated from D and given an option to work for ILD. P's termination was not caused by any inadequacy of performance. D eventually told these employees that their terminations would be considered 'with cause' for stock options purposes. D informed the employees they could purchase seven-twelfths of the shares that had been scheduled to vest on January 1, 1998, if they agreed to go to work for ILD. To do so, they had to release D from all liability arising from their termination and their option contracts. D had treated these unvested stock options in the same manner in two previous transactions in which D divisions had been sold. P claimed that his termination was' without cause,' and refused to sign the release. D refused his tender for the options. P sued D. The court granted D summary judgment. P appealed.

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