In this consolidated action, John E. Schoffman's Estate ("Schoffman") and Michael Keckeisen appeal the district courts' decisions to grant summary judgment in favor of the defendants below--Central States Diversified, Incorporated ("Central States"); J. Russell Flowers; Ronald S. Prince; and Charles F. Aebel.1 In their suits, Schoffman and Keckeisen primarily argued that a letter, written by Aebel on October 6, 1988, entitled them to a portion of the equity appreciation realized by West Pac, a division of Central States. The district courts granted the defendants' motions for summary judgment after concluding that the October 6 letter was too vague to constitute an enforceable contract. For the reasons given below, we affirm the decisions of the district courts.

This dispute arose from negotiations which were conducted regarding the creation of the West Pac division of Central States. Central States, a manufacturer of specialty packaging and medical products, entered into these negotiations with Richard J. Wesley, who eventually became West Pac's first president. Wesley had formerly owned and operated the Color-Ad Packaging Company ("Color-Ad"), which produced the same type of specialty packaging materials that West Pac would later manufacture.

Schoffman and Keckeisen's relationship with Wesley stems from Wesley's employment of them at Color-Ad. Although they had continued to work for Color-Ad after Wesley sold the company to American National Can,2 Schoffman and Keckeisen were interested in following Wesley to West Pac. Accordingly, Wesley's negotiations with Central States touched upon the possible roles of Schoffman and Keckeisen in that venture. Schoffman and Keckeisen did not, however, directly participate in these negotiations.3

On October 6, 1988, Charles F. Aebel, the Executive Vice President and Chief Financial Officer of Central States, wrote a letter to Wesley addressing the current status of their negotiations. This letter reads:

This letter will confirm our agreement with regard to the development of a new company, as we have discussed, to expand [Central States]. While the exact organizational structure and many other aspects of this venture have not been specified, we do have agreement on the following:

1. The new venture will employ you on January 1, 1989. It will be your responsibility as President of the new venture to hire a management team, select and procure a plant location, equip it and bring the venture to profitable operation. You will report to Mr. Ron S. Prince, the President of [Central States], and, as you have seen to date, Mr. Flowers4 and others in the [Central States] management team will work closely with you to accomplish our mutual objectives.

2. We have discussed your compensation as well as that of the management team you will attempt to assemble. Those compensation levels are set forth in Exhibit I to this letter.5

3. We have discussed various fringe benefits. In general, we would like to keep these in line with the items currently offered by [Central States].... Specific establishment of benefits shall be subject to Mr. Prince's approval.

4. The capital necessary to start this new venture will come from Mr. Flowers and/or [Central States]. Accordingly, Mr. Flowers will own 100% of the venture directly or indirectly. We have agreed, however, to set aside 33 1/3% of the equity appreciation in the new venture as an incentive compensation program for 6 key executives of the new venture, plus Mr. Prince (7 people in total). We envision this to take the form of a phantom stock plan. While a formal plan must be adopted, we have agreement on the following points:

a. Each of the seven people will share equally in the equity appreciation pool.

b. The vesting period will be 4 years, or 25% per year.

c. An equity pool will not be available for distribution to participants unless and until Mr. Flowers first receives a return of his investment, either through earnings of the venture or through gain on its sale.

d. Certain events could trigger the distribution of equity to participants. These include a public offering, a sale of the company, the termination of an employee who has a vested equity appreciation or death or total disability of the participant.

e. The plan will include a clause which denies a participant his vested equity appreciation if he leaves the new venture to work for a competitor.

If you accept this new challenge and you agree with items set forth herein, please so indicate in the space provided below.6

Even though there is much more to be discussed and agreed, we look forward to a long and mutually rewarding association.

Wesley's negotiations with Central States continued, and he was eventually hired as the president of West Pac in April, 1989--four months later, and at a salary of $31,000 less, than was detailed in the October 6, 1988 letter.

On July 21, 1989, Aebel sent another letter to Wesley which "identif[ied] the seven employees referred to in my letter to you of October 6, 1988." Schoffman and Keckeisen were among those employees identified. Schoffman was then hired by West Pac to serve as its Chief Financial Officer on July 26, 1989,7 and Keckeisen was hired in August, 1989, to serve as its Technical Director. Due to an alleged personality problem, Keckeisen was subsequently fired by West Pac in August, 1991. Citing deficiencies in his performance, Central States fired Schoffman one month later.

On September 17, 1992, Schoffman filed suit against Central States, Flowers, Prince, and Aebel in state court. Primarily basing his suit on the October 6, 1988 letter, Schoffman alleged that Central States was obliged to grant him a share of West Pac's equity appreciation. Schoffman died less than a week thereafter, and his estate was substituted as the plaintiff. Central States subsequently removed the action to federal court. Keckeisen filed a substantially similar suit8 against Central States and Flowers--before a different district court judge9--on August 2, 1993.

The parties to Schoffman's action then filed competing motions for summary judgment, and a hearing was held. On March 18, 1994, the district court granted the defendants' motion for summary judgment, and denied Schoffman's motion, after concluding that the October 6, 1988 letter was too vague to constitute a valid contract. Estate of John Schoffman v. Central States Diversified, Inc., Civ. No. 4-92-939, 1994 WL 869832 (D.Minn. Mar. 18, 1994). Central States consequently filed a motion for summary judgment in Keckeisen's action. The district court granted this motion after conducting an independent review and likewise concluding that the October 6, 1988 letter was not an enforceable contract. Keckeisen v. Central States Diversified, Inc., Civ. No. 4-93-727, 1994 WL 869838 (D.Minn. Aug. 16, 1994).

Schoffman and Keckeisen now appeal their respective judgments. In light of their common issues of law and fact, the appeals have been consolidated by agreement of the parties.

We review a grant of summary judgment by considering all factual issues in the light most favorable to the nonmoving party (herein Schoffman and Keckeisen) and determining de novo whether there exists any genuine issue of material fact requiring submission of the case to the finder of fact or whether judgment as a matter of law was appropriate. Fed.R.Civ.P. 56(c); Layton v. United States, 984 F.2d 1496, 1499 (8th Cir.) (citations omitted), cert. denied, --- U.S. ----, 114 S. Ct. 213, 126 L. Ed. 2d 170 (1993).

The primary question before us is whether the October 6, 1988 letter requires Central States to grant a share of West Pac's equity appreciation to Schoffman and Keckeisen.10 Having examined the language of this letter, we find that the legal conclusions of the district courts below should be upheld; the equity appreciation provisions of the October 6 letter are too vague to be enforceable.

The October 6, 1988 letter states that the equity pool will not be available for distribution to the venture's key executives until after Flowers "receives a return of his investment ... through earnings of the venture."11 We first find that this language is unclear concerning the commencement of deposits into the equity pool. The language may mean that Flowers must completely recoup his investment before a share of the venture's equity appreciation begins to accrue in the equity pool; alternatively, it may mean that the pool's share of the equity appreciation accrues immediately and is simply not available for distribution until after Flowers has recouped his entire investment.

More worrisome, the letter fails to define the phrase "earnings of the venture."12 The appellants are simply incorrect when they argue that this indefiniteness is analogous to an indefinite price term. It is true that a sales contract's failure to list a price is not a fatal omission as it is implied that the parties intended the price to be a reasonable one. Minn.Stat. Sec. 336.2-305(1) (1995). However, there is no objectively preferable method of calculating West Pac's earnings, and a quick review of the various methods reveals that they may impact the computation of the venture's equity appreciation in very different ways. These methods would therefore prove more or less advantageous to the key executives participating in the equity appreciation program. The choice among these methods is particularly ill-suited to an objective determination because it hinges entirely upon the bargaining process. We believe that, as of the drafting of the October 6, 1988 letter, this process had not yet seriously begun.

Indeed, the letter itself acknowledges its limited role in the formation of an equity appreciation program. The letter states that "a formal plan must be adopted" (emphasis added).13 Furthermore, the letter merely "envision[s]" the formation of an equity appreciation plan, one taking "the form of a phantom stock plan." The last sentence of the letter, in fact, is quite clear: "[T]here is much more to be discussed and agreed...." The contractual language at issue in the Wilson and Hartung cases, relied upon so heavily by the appellants, lacks such telling disclaimers. Wilson v. Duluth Filter Co., 311 Minn. 475, 250 N.W.2d 832 (1977); Hartung v. Billmeier, 243 Minn. 148, 66 N.W.2d 784 (1954).

Wesley's reply to the October 6 letter casts further doubt on the definiteness and finality of that letter's terms: Wesley's October 17, 1988 response expressly "condition[s]" his acceptance upon future negotiations regarding, inter alia, the length of the vesting period, the provision of one-year employment contracts for key people, and the drafting of "the final document" between the parties.

Although it may be true that " 'any offer or agreement is indefinite and uncertain in some degree since words are but imperfect symbols of what each party understands and intends,' " we conclude that this putative contract's vagueness is more than " 'subtle.' " Wilson, 311 Minn. at 479, 250 N.W.2d at 835 (quoting Hartung, 243 Minn. at 150-51, 66 N.W.2d at 787-88 (footnote omitted)). By this decision, we do not " 'destroy the intent of the parties' " since we are unable to " 'reasonably find that intent by applying the words used, with all their reasonable implications, to the subject matter as the parties themselves, under all the surrounding circumstances, must have applied, used, and understood them.' " Id. at 479-80, 250 N.W.2d at 835 (quoting Hartung, 243 Minn. at 151, 66 N.W.2d at 788). The vagueness of the letter on the subject of the equity appreciation program is pervasive--we cannot satisfactorily determine what the parties intended the operative language of the October 6 letter to mean; we cannot even be certain that the parties intended for the October 6 letter to be binding at all on this subject.

Although the courts of Minnesota generally disfavor this result, e.g., Hill v. Okay Constr. Co., 312 Minn. 324, 333, 252 N.W.2d 107, 114 (1977) (citations omitted), we are compelled here to affirm the district courts' findings that the October 6 letter is too vague to constitute an enforceable contract. We believe that the letter represents, at best, no more than a summary of the course of negotiations, and an expression of willingness to later enter into a binding agreement regarding the sharing of the venture's equity appreciation. See Hansen v. Phillips Beverage Co., 487 N.W.2d 925, 927 (Minn.Ct.App.1992) ("This letter creates merely an agreement to negotiate in good faith. Under Minnesota law, such an agreement is unenforceable where the agreement evidences nothing more than an intention to negotiate in the future.") (citing Consolidated Grain & Barge Co. v. Madgett, 928 F.2d 816, 817-18 (8th Cir.1991) (citation omitted)).

Assuming arguendo that the October 6, 1988 letter is not too vague to be enforceable, we nonetheless conclude that the grants of summary judgment were properly entered below. In order to obtain a monetary recovery, the appellants were compelled by West Pac's initial poor performance to argue that the terms of the October 6 letter awarded them a perpetual right to share in West Pac's equity appreciation--regardless of their future employment status. This interpretation, however, flies in the face of the letter's language, and is contrary to common sense.

First, the letter plainly states: "Certain events could trigger the distribution of equity to participants. These include ... the termination of an employee who has a vested equity appreciation...." Both Schoffman and Keckeisen worked for West Pac for approximately two years before their respective terminations. Thus, under the letter's 25% per year vesting schedule, they were each entitled to roughly 50% of one seventh14 of the value of West Pac's (enigmatically calculated) equity appreciation pool at that particular point in time. As it is undisputed that the value of West Pac's equity appreciation was zero at the time of Schoffman and Keckeisen's terminations, they were not entitled to receive anything.

To reach any other conclusion here would be unjustified. The letter mentions nothing about future or ongoing distributions--the letter references only "the distribution" to which each participant is entitled. Therefore, in order for a terminated employee to share in all future equity appreciations, Central States would have to estimate the total equity appreciation that West Pac would realize over the entire course of its existence; we decline to reach such an infeasible interpretation.

Second, Central States's argument comparing a perpetual share of equity appreciation to a property interest is well-taken. The right to share in the earnings of a venture--when such a right is segregated from an incentive compensation scheme--is a classic attribute of ownership. E.g., Harry G. Henn & John R. Alexander, Laws of Corporations 396 (1983). The terms of the October 6 letter, however, expressly disclaim an apportionment of ownership: "The capital necessary to start this new venture will come from Mr. Flowers and/or [Central States]. Accordingly, Mr. Flowers will own 100% of the venture directly or indirectly."

In sum, even if we were to reject the rationale employed by the district courts below, we would be constrained to uphold their results. In light of this conclusion, we need not address the other arguments raised by Central States. We have also considered the appellants' other arguments and found them to be without merit.

For the reasons set forth above, we AFFIRM the district courts' grant of Central States's motions for summary judgment.

AFFIRMED.