United States District Court, N.D. Illinois, Eastern Division
WILLIAM O. LEE, Plaintiff,
HOLDEN INDUSTRIES, INC., a Delaware Corporation, Defendant.
MEMORANDUM OPINION AND ORDER
Robert Blakey United States District Judge.
William O. Lee is a former participant in Defendant Holden
Industries, Inc.'s Employee Stock Ownership Plan
(“ESOP”). Plaintiff alleges that Defendant, as
the administrator of the ESOP, violated its fiduciary duties
to him and owes him certain benefits pursuant to the Employee
Retirement Income Security Act of 1974 (“ERISA”).
Defendant has moved for summary judgment on both
claims.  at 1-4. As explained below,
Defendant's motion is granted.
is a former employee of Nosco, Inc., which authorized him to
participate in the ESOP.  ¶ 1. Plaintiff enrolled in
the ESOP on December 14, 2007. Id. ¶ 15.
Plaintiff terminated his employment with Nosco, Inc. on
August 3, 2012. Id. ¶ 16. At the time of his
termination, 3, 770.7267 stock shares were allocated to
Plaintiff's ESOP account.  ¶ 18.
October of 2013, Defendant exchanged those shares allocated
to Plaintiff's ESOP account for cash, at a value
determined pursuant to the company's most recent stock
valuation in 2012. Id. ¶ 19. Defendant then
offered an optional special distribution to Inactive
Participants like Plaintiff whose stock had been exchanged
for cash.  ¶¶ 21, 22. Plaintiff elected to
accept a one-time payment of this entire balance, and he
received a check for $146, 832.10.  ¶ 23. Plaintiff
admits that he chose to receive the cash distribution, but
insists that he “only accepted the lump sum
distribution of the cash proceeds because Defendants wrongly
segregated out his Holden stock and threatened to keep the
funds in a low-risk/return fund for an undetermined length of
time.”  ¶ 23.
December of 2013, Plaintiff's counsel wrote to Defendant
regarding the disposition of Plaintiff's account. 
¶ 27. Plaintiff's counsel specifically argued that:
(1) he “anticipate[d]” that the 2013 Stock
Valuation would be higher than the 2012 Stock Valuation; and
(2) Plaintiff's shares should have been purchased at this
higher rate.  ¶ 27. After a lengthy exchange of
correspondence, Defendant denied Plaintiff's claim for
additional benefits.  ¶ 31.
parties' dispute turns upon which documents constitute
the operative ERISA plan (and thereby control their
respective rights and obligations). Relevant language from
the disputed documents is set forth below.
Stock Ownership Plan
parties acknowledge that, prior to July 31, 2013, their
relationship was governed, at least in part, by the Stock
Ownership Plan dated January 1, 2007. Id. ¶ 15.
The Stock Ownership Plan provided, inter alia:
• Defendant was the ESOP's administrator, which
granted it authority to control and manage operation of the
ESOP, [32-2] at 42;
• Defendant had “all authority and discretion . .
. to interpret and construe the provisions of the Plan”
and “determine all questions relating to the
eligibility, benefits, and other rights of Employees,
Participants, and beneficiaries under the Plan, ”
• Defendant was entitled to purchase stock allocated to
accounts held by Inactive Participants (i.e., any participant
“who has terminated service with a Sponsoring Employer
for any reason other than on a Normal Retirement Date”)
at “any time prior to the distribution of the balance
credited to his or her [account], ” id. at 28;
• Should Defendant exercise its right to purchase stock
allocated to accounts held by Inactive Participants,
“the price shall be equal to the fair market value of
the Company Stock as of the date of the purchase and sale,
” id.; and
• Distributions were to be made “not later than .
. . the last day of the sixth full Fiscal Year following the
Fiscal Year in which the Participant terminates employment
with a Sponsoring Employer for any reason other than death,
disability, or retirement, ” though distributions could
be accomplished earlier with “the consent of the
Company's lenders.” Id. at 29.
suggests that on July 31, 2013, its Board of Directors
enacted a fifth amendment (“Amendment 5”) to the
Stock Ownership Plan.  at 3. Plaintiff conversely insists
that Amendment 5 was adopted improperly and is therefore
inapplicable here.  ¶¶ 8, 9.
5 altered the distribution process and specified that the
exchange rate to be used when purchasing stock allocated to
Inactive Participants would be “based on the value