EXHIBIT 10.2
AGREEMENT AND RIGHT OF FIRST REFUSAL
REGARDING PURCHASE OF STOCK
This AGREEMENT AND RIGHT OF FIRST REFUSAL REGARDING PURCHASE OF STOCK (this
"Agreement") is made and entered into as of the 18th day of December, 1997, by
and between PERSONNEL MANAGEMENT, INC., an Indiana corporation (the
"Corporation"), and DON R. TAYLOR ("Taylor").
RECITALS
A. Taylor is employed by the Corporation as its Chief Executive Officer
and is the sole owner of all of the issued and outstanding shares of capital
stock of JBD Real Estate, Inc., an Indiana corporation ("JBD"). JBD owns four
parcels of improved real estate, one parcel located in each of Columbus,
Franklin, Rushville and Shelbyville, Indiana (collectively, the "JBD Real
Estate"), which parcels are currently leased to the Corporation for use as
branch offices of the Corporation.
B. The Corporation and Taylor desire and intend that all shares of the
capital stock of JBD which Taylor now owns or subsequently may acquire (the "JBD
Shares") be purchased by the Corporation upon the occurrence of certain events
and that the Corporation have a right of first refusal to purchase the JBD
Shares in the event Taylor intends to sell the JBD Shares.
C. The Corporation and Taylor have determined that it is in their
mutual best interests to restrict the transfer, and to provide for the purchase
and sale, of the JBD Shares as provided herein.
AGREEMENTS
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises and undertakings contained in this Agreement and for other valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Corporation and Taylor agree as follows:
1. Section Restrictions Relating to JBD Shares. Except as is otherwise
provided in this Agreement, Taylor may not voluntarily or involuntarily sell,
assign, exchange, convey, transfer by gift or otherwise, encumber, pledge,
distribute, appoint or otherwise dispose of in any manner (any and all such
events being collectively sometimes referred to herein as a "transfer") any JBD
Shares, or any interest therein, in whole or in part, and any such transfer or
attempted transfer shall be void ab initio and shall be wholly ineffective for
any purpose. Additionally, Taylor shall not cause or permit any additional
shares of capital stock or other securities of JBD to be issued to anyone other
than himself. In the event of an involuntary transfer of any JBD Shares to any
person pursuant to a judicial order or decree or otherwise by operation of law
notwithstanding the foregoing prohibition against any such transfer, the
provisions of this Agreement shall continue to be applicable to such JBD Shares
in the hands of the transferee thereof and such transferee's successors and
assigns.
Section 2. Permitted Sale of JBD Shares. Subject to the provisions of
this Section, Taylor may sell the JBD Shares in a bona fide sales transaction as
provided in this Section. If at any time during the term of this Agreement
Taylor receives and desires to accept a bona fide written offer (the "Offer") to
purchase all (but not less than all) of the JBD Shares from an offeror that is
an unrelated and unaffiliated party (the "Proposed Transferee"), Taylor shall
comply with the provisions of this Section and the Corporation shall have a
right of first refusal (or option) to purchase such JBD Shares that shall be
exercisable as follows:
(a) Taylor shall give written notice (the "Notice") to the
Corporation of his intent to sell all of the JBD Shares, which Notice
shall be given in the manner provided in Section 10. Taylor shall
include in and/or with the Notice a copy of the Offer, the name and
address of the Proposed Transferee, the proposed sales price, and all
other terms and conditions of such proposed sale of the JBD Shares.
(b) The Corporation shall have the option to purchase all, but
not less than all, of the JBD Shares at a price equal to the proposed
sales price pursuant to the Offer. The Corporation's option shall
expire upon the earlier of (i) sixty (60) days following the
Corporation's receipt of the Notice or (ii) the earlier receipt by
Taylor of written notice from the Corporation that it has decided not
to exercise its option to purchase pursuant to this Section.
(c) For purposes of this Section, an option may be exercised
only by giving written notice of such exercise to Taylor in accordance
with the requirements of Section 10. Such notice to Taylor must be
given within the applicable time provided above for the exercise of
such option. A sale of the JBD Shares pursuant to the exercise of the
Corporation's option under this Section shall be consummated within the
period of time set forth in Section 5, with payment of the purchase
price for such JBD Shares to be made in cash pursuant to Section 6 or,
at the Corporation's option, in the manner provided in the Offer.
(d) If the Corporation fails to exercise its option to
purchase the JBD Shares, then Taylor may sell the JBD Shares to the
Proposed Transferee referred to in the Notice, subject to the following
conditions and limitations:
(i) such sale may be made only to the Proposed Transferee
and at the price and upon the terms and conditions included in
and/or with the Offer and the Notice; and
(ii) such sale may be made only within ninety (90) days
following the expiration of the Corporation's option to purchase
under this Section.
Section 3. Sale Upon Triggering Events. Upon the occurrence of a
Triggering Event as defined in this Section, Taylor (or his involuntary
transferee) shall sell and the Corporation shall purchase all of the JBD Shares
at the purchase price (as hereinafter defined) determined in accordance with
Section 4 of, and upon the other terms and conditions as provided in, this
Agreement. For purposes of this Agreement, each of the following is a
"Triggering Event":
(a) Taylor's employment by the Corporation terminates for
any reason including, but not limited to, Taylor's disability or
death.
(b) Following a "Change of Control of the Corporation" as
defined hereinbelow, the Corporation ceases leasing or occupying
one or more parcels of the JBD Real Estate. For purposes of this
Agreement, a "Change of Control of the Corporation" shall be
deemed to have occurred if, after the date of this Agreement,
either:
(i) there shall have been consummated (1) any
reorganization, consolidation or merger of the Corporation
in which the Corporation is not the continuing or surviving
corporation or pursuant to which shares of the Corporation's
common stock shall have been converted into cash, securities
or other property, or (2) any sale, lease, exchange or other
transfer, directly or indirectly, in one transaction or a
series of related transactions, of all, or substantially
all, of the assets of the Corporation and its consolidated
subsidiaries unless, following such reorganization, merger,
consolidation, or transfer of assets:
(A) more than 60 percent of the then outstanding shares
of common stock of the Corporation resulting from such
reorganization, merger or consolidation (or of the
corporation receiving the transferred assets) (the
"Continuing Corporation") and of the then outstanding voting
securities of the Continuing Corporation entitled to vote
generally in the election of Directors are then beneficially
owned, directly or indirectly, by all or substantially all
of the individuals and entities who were the beneficial
owners, respectively, of the outstanding shares of common
stock of the Corporation and of the outstanding voting
securities of the Corporation entitled to vote generally in
the election of Directors immediately prior to such
reorganization, merger, consolidation or transfer of assets
in substantially the same proportions as their ownership,
immediately prior to such reorganization, merger,
consolidation or transfer of assets, of the outstanding
shares of common stock of the Corporation and of the
outstanding voting securities of the Corporation,
(B) no "person" (as that term is used in Sections 13(d)
and 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) (excluding (1) the
Corporation, (2) any employee benefit plan (or related
trust) sponsored or maintained by the Corporation or any
entity controlled, directly or indirectly, by the
Corporation or the Continuing Corporation and (3) any
"person" beneficially owning, immediately prior to such
reorganization, merger, consolidation or transfer of assets,
directly or indirectly, 20 percent or more of the
outstanding shares of common stock of the Corporation or the
outstanding voting securities of the Corporation)
beneficially owns, directly or indirectly, 20 percent or
more of, respectively, the then outstanding shares of common
stock of the Continuing Corporation or of the combined
voting power of the then outstanding voting securities of
the Continuing Corporation entitled to vote generally in the
election of Directors, and
(C) at least a majority of the members of the Board of
Directors of the Continuing Corporation were members of the
Board of Directors of the Corporation at the time of the
execution of the initial agreement providing for such
reorganization, merger, consolidation or transfer of assets;
(ii) any "person" or "group" of persons (as those terms
are used in Sections 13(d) and 14(d)(2) of the Exchange Act,
and Regulations 13D-G and 14D thereunder) shall have become
the "beneficial owner" (within the meaning of Rule 13d-3
under the Exchange Act), directly or indirectly, of
securities of the Corporation representing 20 percent or
more of the combined voting power of the Corporation's then
outstanding voting securities entitled to vote generally in
the election of Directors (excluding (i) the Corporation,
(ii) any employee benefit plan (or related trust) sponsored
or maintained by the Corporation or any entity controlled,
directly or indirectly, by the Corporation, (iii) any
"person" who, on the date of this Agreement, is the
"beneficial owner", directly or indirectly, of 20 percent or
more of the Corporation's outstanding common stock, and (iv)
any "group" of persons that includes Taylor); or
(iii) during any period of two consecutive years,
individuals who constitute the Board of Directors of the
Corporation at the beginning of such period cease for any
reason to constitute at least a majority thereof, excluding
individuals whose election, or nomination for election by
the Corporation's shareholders was approved by a vote of at
least two-thirds of the Directors then still in office who
were Directors at the beginning of such period, unless, for
this purpose, any such new Director's initial assumption of
office occurs as a result of either an actual or threatened
election contest (as such terms are used in Rule 14a-11 or
Regulation 14A promulgated under the Exchange Act) or other
actual or threatened solicitation of proxies or consents by
or on behalf of a person other than the Board of Directors
of the Corporation.
Section 4. Determination of Purchase Price.
(a) The purchase price for the JBD Shares purchased by the
Corporation from Taylor upon the happening of a Triggering Event shall
be the net book value of the JBD Shares as of the date of the
Triggering Event (as determined in accordance with generally accepted
accounting principles consistently applied), adjusted to reflect the
fair market value (rather than the book value) of the JBD Real Estate
on the date of the Triggering Event assuming, for purposes of
determining such fair market value, the existence of a remaining
five-year lease period by the Corporation at the then-current rental
amount and terms (irrespective of the actual remaining lease period of
the lease that may then be in effect) with respect to each parcel of
the JBD Real Estate.
(b) The fair market value of the JBD Real Estate as of the
date of a Triggering Event shall be an amount as mutually agreed by the
Corporation and Taylor, or if they are unable to so agree such fair
market value shall be determined by the appraisal process described in
Sections 4(c) and 4(d).
(c) If the Corporation and Taylor are unable to reach
agreement regarding the fair market value of the JBD Real Estate within
twenty (20) days following the occurrence of the Triggering Event, they
may select, by mutual agreement, a qualified appraiser or appraisers to
determine such fair market value. If they have not agreed on the
selection of such appraiser or appraisers within thirty (30) days
following the occurrence of the Triggering Event, then at any time
following the expiration of such thirty (30) day period the independent
auditor of the Corporation may be requested by either the Corporation
or Taylor to select, and shall promptly select and engage on behalf of
the Corporation, one or more independent appraisers which, in such
auditor's professional judgment, possesses suitable qualifications and
expertise to appraise the fair market value of the JBD Real Estate.
(d) An appraiser or appraisers selected as provided herein
shall be requested to complete such appraisal as promptly as is
practicable and to provide a report of such appraisal to both the
Corporation and Taylor. The fair market value of the JBD Real Estate,
as determined, as the case may be, by the mutual agreement of the
Corporation and Taylor, by the appraiser or appraisers selected by the
Corporation and Taylor, or by the appraiser or appraisers selected by
the Corporation's independent auditors, shall be binding on all
parties. All fees and costs associated with the appraisal of the JBD
Real Estate shall be paid by the Corporation.
Section 5. Closing. Except as otherwise agreed in writing, the
consummation of a purchase and sale of the JBD Shares pursuant to this Agreement
(the "Closing") shall occur (i) not later that thirty (30) days following the
Corporation's exercise of its option to purchase with respect to a sale under
Section 2, and (ii) not later than ninety (90) days following the occurrence of
the Triggering Event (or as soon thereafter as the purchase price has been
determined if a delay in the Closing is necessary in order to obtain an
appraisal of the JBD Real Estate) with respect to a sale under Section 3. The
Closing shall be held at the principal office of the Corporation in Greenwood,
Indiana, or at such other place as may be agreed by the Corporation and Taylor.
Section 6. Actions at Closing. At the Closing:
(a) The Corporation shall pay to Taylor the purchase price for
the JBD Shares as determined pursuant to the applicable provisions of
this Agreement.
(b) Taylor shall transfer the JBD Shares to the Corporation
free and clear of all liens, security interests or other outstanding
interests of any kind whatsoever, and shall deliver properly endorsed
stock certificates and all other documents that the Corporation may
reasonably require for the purpose of establishing Taylor's title to
the JBD Shares and effecting the transfer of the JBD Shares to the
Corporation.
(c) Both the Corporation and Taylor shall take or cause to be
taken such other actions, and shall execute and deliver or shall cause
to be executed and delivered such other documents, instruments and
agreements, as shall be reasonably requested by the other party to
effect compliance with the provisions of this Agreement and to complete
the purchase and sale of the JBD Shares as provided herein.
Section 7. Representations and Warranties of the Corporation. In order
to induce Taylor to enter into this Agreement and to consummate the transactions
contemplated hereby, the Corporation makes the following representations and
warranties:
(a) The Corporation is duly organized and validly existing as
a corporation under the laws of the State of Indiana and has full
corporate power and authority to enter into and perform this Agreement.
(b) The execution of this Agreement and consummation of the
transactions contemplated hereby have been duly and validly authorized
by all necessary corporate action on the part of the Corporation.
(c) The Corporation has the power and authority to execute
this Agreement, and this Agreement constitutes a legal, valid and
binding obligation of the Corporation enforceable against the
Corporation in accordance with its terms. The Corporation is not a
party to or subject to any agreement or other instrument or any law,
rule or regulation which could prevent or hinder it from, or require
any consent to, the execution of this Agreement or prevent or hinder
its performance hereunder, except that the consent of KeyBank National
Association is required under the Corporation's credit agreement with
such bank.
Section 8. Representations, Warranties and Covenants of Taylor. In
order to induce the Corporation to enter into this Agreement and to consummate
the transactions contemplated hereby, Taylor makes the following representations
and warranties to, and covenants with, the Corporation as follows:
(a) JBD is a corporation duly organized and validly existing
under the laws of the State of Indiana.
(b) The authorized capital stock of JBD consists of 10,000
shares of common stock, no par value per share, all of which are issued
and outstanding. There are no preemptive, preferential or other rights
to subscribe for shares of common stock of JBD and there are no
outstanding options, warrants or any other rights of any description,
contractual or otherwise, entitling any person or entity to be issued
any class of security of JBD.
(c) Taylor is the President and sole shareholder of JBD and
does and will continue to own 100 percent of the outstanding capital
stock of JBD free and clear of all liens, security interests and
encumbrances of any kind whatsoever, and Taylor has and shall continue
to have an unrestricted right to sell and transfer the JBD Shares
pursuant to this Agreement.
(d) Except for liens on the JBD Real Estate securing a loan or
loans reflected on the books of JBD, JBD owns and will continue to own
each parcel of the JBD Real Estate free and clear of all title defects
or objections, mortgages, pledges, liens, claims, charges, security
interests, conditional sales agreements, easements (other than utility
easements) and other encumbrances of any nature whatsoever except for
liens for current taxes which have not yet become due and such
imperfections of title and non-monetary encumbrances, if any, as are
not substantial in character, amount or extent and do not and will not
materially hinder or detract from the use or value of the JBD Real
Estate.
(e) JBD does not presently engage in any business activity or
hold any assets, and Taylor shall cause JBD not to engage in any
business activity or acquire any assets, other than in connection with
the ownership and leasing of the JBD Real Estate in the ordinary course
of business.
(f) Taylor shall cause JBD to maintain complete and accurate
books and records in accordance with generally accepted accounting
principles consistently applied.
(g) Neither the execution, performance or delivery of this
Agreement nor the consummation of the transactions contemplated hereby
will violate, conflict with, or constitute a default under any other
agreement to which JBD or Taylor is a party or by which either is
bound.
(h) The JBD Shares have been and are duly authorized, validly
issued, fully paid and nonassessable.
(i) Taylor shall provide to the Corporation, within twenty
(20) days after the occurrence of a Triggering Event, a balance sheet
with respect to JBD as of the date of the occurrence of the Triggering
Event, and Taylor hereby covenants, represents and warrants that such
balance sheet, when furnished, will have been prepared in accordance
with generally accepted accounting principles consistently applied and
will present fairly the financial condition of JBD as of the date
thereof.
Section 9. Survival of Representations, Warranties and Covenants. Each
of the representations, warrants and covenants contained herein shall survive
the execution and delivery of this Agreement and the Closing and shall remain in
full force and effect indefinitely, regardless of any investigation made by or
on behalf of any party hereto.
Section 10. Notices. Any notice or other communication required or
permitted under this Agreement shall be in writing and shall be personally
delivered or sent by pre-paid same day or overnight courier or registered or
certified mail, return receipt requested, postage prepaid, addressed as follows
(or addressed to such other address as may be given in writing by any party to
the other):
To the Corporation: Personnel Management, Inc.
1499 Windhorst Way, Suite 100
Greenwood, Indiana 46143
To Taylor: 11123 Sloop Court
Indianapolis, Indiana 46236
Notice that is mailed or sent by overnight courier shall be deemed to have been
given (but not received) when deposited in the U.S. Mail or delivered to such
overnight courier, as the case may be, as provided herein.
Section 11. Restrictive Legend. Taylor shall cause an executed copy of
this Agreement to be kept on file by JBD at its principal office located at
11123 Sloop Court, Indianapolis, Indiana 46236. As long as this Agreement is in
effect, Taylor agrees that he shall cause any certificates evidencing ownership
of JBD Shares, whether existing at the date of this Agreement or issued or
reissued subsequent thereto, to bear a legend substantially in the following
form:
The sale, assignment, exchange, conveyance, transfer by gift or
otherwise, encumbrance, pledge, distribution, appointment or other
disposition of the shares of stock represented by this certificate is
subject to the terms and restrictions contained in an Agreement and
Right of First Refusal Regarding Purchase of Stock (the "Agreement")
dated December 18, 1997, by and between Personnel Management, Inc. and
Don R. Taylor. A copy of the Agreement, including any amendments
thereto, is on file and available for inspection at the principal
offices of JBD Real Estate, Inc. Any attempted transfer or other
disposition of the shares represented hereby in violation of the
Agreement will be void and of no effect whatsoever.
Section 12. Modification and Waiver. This Agreement may be modified or
amended only by an instrument in writing executed by the Corporation and Taylor.
No waiver of any of the provisions hereof shall be effective as against the
party purportedly making such waiver unless such waiver is evidenced by a
writing signed by such party.
Section 13. Severability. The invalidity or unenforceability of any
provision of this Agreement shall not effect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect to the fullest extent permitted by law.
Section 14. Headings; Pronouns. The titles to Sections in this
Agreement are intended solely for convenience and no provision of this Agreement
is to be construed by reference to the title of any Section. All pronouns in
this Agreement and any variations thereof shall be deemed to refer to the
masculine, feminine, neuter, singular or plural as the identity of the person or
persons may require.
Section 15. Governing Law. The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the State of
Indiana, notwithstanding the fact that one or more of the parties hereto may
become a resident or citizen of a different state.
Section 16. Binding Effect. This Agreement shall be binding upon an
inure to the benefit of the parties hereto and their respective successors,
assigns, heirs, beneficiaries, devisees and legal representatives. For purposes
of this Agreement, a successor of the Corporation shall include, without
limitation, any corporation or corporations acquiring directly or indirectly all
or substantially all of the assets of the Corporation whether by merger,
consolidation, sale or otherwise (and such successor shall thereafter be deemed
the "Corporation" for purposes of this Agreement).
IN WITNESS WHEREOF, the Corporation and Taylor have executed this
Agreement as of the date and year first above written.
PERSONNEL MANAGEMENT, INC.
By /s/ Gary F. Hentschel
Gary F. Hentschel
President and Chief Operating Officer
ATTEST:
/s/ Robert R. Millard
Robert R. Millard
Vice President of Finance and
Administration, Chief Financial and
Accounting Officer, Treasurer and
Secretary
/s/ Don R. Taylor
Don R. Taylor