Appellee Richard L. Burnett is a former stockholder of Saltzman-Guenthner Clinic, Ltd., the appellant corporation. Appellee alleged in his complaint that under the terms of his employment with appellant corporation, the stock he owned should be redeemed at book value. Appellant counterclaimed, alleging that appellee had breached his employment contract by engaging in competition with appellant and that appellee had been overpaid.
The trial court found that the term “book value” as used in the employment contract was not ambiguous, as urged by appellant, and that parol evidence was not admissible to vary the terms of the written agreement; that in the absence of qualification or limitation of the written employment agreement, all assets of the corporation, including accounts receivable, are to be considered in determining book value; that the acts of appellee did not constitute competition with the business of appellant; and that the evidence was insufficient to show that appellee had been overpaid.
We affirm.
Appellant is a professional corporation formed to practice medicine and surgery, and appellee is a medical doctor. On April 1, 1977, the parties entered into an agreement, whereby appellee would devote his entire time to the business of appellant. Appellant has not furnished this court with a legible copy of the employment agreement, but from the legible portions of the agreement and the testimony of the parties it is determined that the agreement provided as follows: Appellee was not to engage in any activity in competition with the business of appellant without the approval of appellant’s Board of Directors; appellee was to be compensated with such salary and other compensation as fixed from time to time by the Board of Directors; either party could terminate the agreement by giving a 30-day written notice, which period could be shortened by agreement; and appellant agreed that in the event of termination of the agreement appellant corporation could make a 100% redemption of any stock owned by appellee “at the then book value of the stock.”
Appellant’s position is that the term “book value” is an ambiguous term, and appellant attempted to introduce evidence that “book value” as used in the agreement was understood by the parties to mean “assets less accounts receivable less liabilities.”
When an ambiguity in a written instrument is alleged as foundation for the admission of parol evidence, the court is charged with the initial factual determination of the existence or nonexistence of ambiguity in the written agreement. Gilstrap v. Jackson, 269 Ark. 876, 601 S.W.2d 270 (Ark. App. 1980). If the court finds that the language used is ambiguous, it may then admit parol evidence to show that the language was intended to have any particular meaning that the words will reasonably bear. Kerr v. Walker, 229 Ark. 1054, 321 S.W.2d 220 (1959). If the court finds the language of the contract not ambiguous then parol evidence may not be admitted to prove that clear and unambiguous words were subjectively intended to have a meaning not fairly attributable to them. Arkansas Rock and Gravel Co. v. Chris-T-Emulsion Co., 259 Ark. 807, 536 S.W.2d 724 (1976).
A trial court’s finding of fact will not be reversed on appeal unless clearly erroneous, clearly against the preponderance of the evidence. Rule 52 (a), Arkansas Rules of Civil Procedure; Winkle v. Grand National Bank, 267 Ark. 123, 601 S.W.2d 559 (1980).
A number of courts in other jurisdictions have found that the term “book value” has acquired an established meaning; it is the value of all the assets of the corporation as shown on its books less all of its liabilities. Hollister v. Fiedler, 86 A. 2d 809 (N.J. 1952); Hagan v.Dundore, 50 A. 2d 570 (Md. 1947); Mills v. Rich, 229 N.W. 462 (Mich. 1930). In Bain and Company v. Deal, 251 Ark. 905, 475 S.W.2d 908 (1972), the Arkansas Supreme Court quoted with apparent approval an excerpt from Schumann v. Samuels, 142 N.W. 2d 777 (Wis. 1966) which declared:
The book value is not an arbitrary value that may be entered upon the books of the company but the value as predicated upon the market value of the assets of the company after deducting its liabilities.
In the instant case three certified public accountants presented evidence that the term “book value” unless qualified or used with modifiers, has a generally accepted meaning of assets minus liabilities, and that the “book value” of one share of stock is assets of the corporation, minus liabilities, divided by the number of outstanding shares. The employment agreement was on a form prepared by appellant, and appellant could have easily qualified or limited the meaning of the term if it so chose. The finding of the trial court that the term “book value” was not ambiguous is not clearly erroneous or clearly against the preponderance of the evidence.
Appellant was not entitled to present parol testimony to show the intent of the parties. The term “book value” used in the written agreement without limitation or qualification was not ambiguous. When the parties entered into the written agreement, all antecedent proposals and negotiations were merged into the written contract which cannot be added to or varied by parol evidence. Hoffman v. Late, 222 Ark. 395, 260 S.W.2d 446 (1953).
The trial court found insufficient evidence to prove that appellee had violated his agreement not to enter into competition with the business of appellant. We agree. There was evidence that appellee had purchased land on January 31, 1980 upon which to build his own clinic, and that appellee’s employment with appellant continued on until April 30, 1980. There is no evidence, however, that appellee treated any patients outside of appellant’s clinic or performed any act in competition with appellant’s business prior to his employment termination. There was evidence that in December of 1979 the doctor members of appellant’s Board of Directors planned to form a partnership for the purpose of building a clinic which was to be leased to appellant corporation. Appellee had been invited to become a partner in the plan, but appellee had refused because of his disapproval of the land proposed to be purchased by the partnership. Neither the plan of the doctors to form a partnership nor appellee’s purchase of land for a clinic had been approved by appellant’s Board of Directors. The finding of the trial court that there was insufficient evidence to find that appellee had engaged in competition with appellant in violation of the agreement is not clearly erroneous.
The compensation of appellee was fixed by the Board of Directors of appellant corporation, as provided for in the parties’ written agreement. If appellee has been overcompensated, which fact the evidence tends to support, it was occasioned by the action of appellant’s Board of Directors. Appellant cannot now complain of the action of its Board.
Affirmed.
Corbin, Glaze and Cracraft, JJ., dissent.