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MlCHABL L. DANoa
ATTORNIIY A~ LAW
_ ...,... .... .....n
_1ltU. "-"d.VAJOlA ItOU
4. Defendant, C & A Fields-Mechanicsburg, Inc., (hereinafter referred to as
C & A Fields, Inc.) is a corporation incorporated in the State of Tennessee and
registered to do business in the Commonwealth of Pennsylvania, with its principal
place of business and registered office in Mechanicsburg, Cumberland County,
Pennsylvania, 17055.
5. The purpose of the abov6-stated corporations is to operate restaurants
known as .Shoneys,. hereinafter referred to as .Shoney's-Carlisle., and .Shoney's-
Mechanicsburg. .
6. Plaintiff and Defendant Fields are the owners of all of the outstanding
shares of Fields Quality, Inc., and C & A Fields, Inc., with Plaintiff owning ten
(10%) percent of the stock, and Defendant Fields owning ninety (90%) percent of
the stock.
7. At all times relevant hereto, the acts of the Plaintiff end Defendants
occurred as a result of actions taken or not taken in regard to the corporate affairs
of Shoney's-Carlisle and Shoney's-Mechanicsburg.
8. Since the spring of 1990. Fields Quality, Inc., and C ,. A Fields, Inc..
have been run exclusively by Defendant Fields.
9. In or about the beginning of 1989. Defendant Fields made a proposal to
Plaintiff wherein A.intiff wouldlell his currant restaurant in Wnt Virginia end
2
move to Carlisle and assume management of the restaurant referred to herein as
Shoney's-Carlisle.
10. In exchange for Plaintiff relocating, Defendant Fields represented that
Plaintiff would receive compensation and ten (10%) percent interest in the
corporation formed to own and operate Shoney's-Carlisle, Fields Quality, Inc., and
subsequently receive a ten (10%) percent interest in the corporation being formed
to operate Shoney's-Mechanicsburg, C & A Fields, Inc.
11. In addition to Plaintiff receiving shares in Fields Quality, Inc., and
subsequently C & A Fields, Inc., and profits therefrom, Defendant Fields
represented that Plaintiff would receive, in addition to his yearly compensation,
bonus payments in the amount of ten (10%) percent of the net income of the
respective restaurants: Shoney's-Carlisle and subsequently Shoney's-
Mechanicsburg.
12. Based upon Defendant Fields' representations, Plaintiff relocated to
Carlisle, Cumberland County, Pennsylvania, in or about March, 1990.
13. On May 1, 1990, Defendant Fields caused to be filed Articles of
Incorporation in the Commonwealth of Pennsylvania for Fields Quality, Inc., to be
recognized as a corporation organized and existing pursuant to the laws of this
Cornmonwsalth for the purpose of operating the Shoney'.-Carliate, and which
3
Articles of Incorporation designated Plaintiff as the registered agent of Defendant
Fields Quality Foods, Inc.
14. By Resolution of that same date, May 1, 1990, Plaintiff was identified
as Director of Operations owning ten (10) shares in the corporation: Fields Quality
Foods, Inc. A copy of the Resolution is attached hereto and incorporated herein by
reference as Exhibit A.
15. Plaintiff managed the Shoney's-Carlisle from May, 1990, until the end
of 1 994.
16. In or about January, 1993, C & A Fields, Inc., was incorporated
pursuant to the laws of Tennessee with a registered office and principal place of
business in Mechanicsburg, Pennsylvania; the corporate purpose of C ,. A Fields,
Inc., was to own and operate Shoney's-Mechanicsburg.
17. During the entire time that Plaintiff managed the Shoney's-Carlisle in his
capacity as Director of Operations of Fields Quality Foods, Inc., Plaintiff believes
and therefore avers that he did not receive accurate and correct bonus payments or
accurate profits based upon the correct nat income of Shoney's-Carlisle, or
eccurate or correct profits attributable to his ownership interest in Fields Quelity
Foods, Inc.
la. In or about November, 1993, Defendant Fields issued alettar to Plaintiff
confirming Plaintiff's then current salary arrangement and, in addition, conflnning
4
that Plaintiff would receive a ten (10%) percent interest in the Shoney's-
Mechanicsburg which was to be operated under the authority of C & A Fields, Inc.;
Defendant Fields further confirmed that Plaintiff would receive a bonus payment
based upon the net income of the Shoney's-Carlisle as well as the Shoney's-
Mechanicsburg.
19. Defendant Fields' letter confirming Plaintiff's salary arrangement in
November, 1993, confirmed Plaintiff's ownership interest in both corporations as
well as set forth an option by which Plaintiff could purchase an additional fifteen
(15%) percent of the shares of Fields Quality, Inc., and C & A, Fields, Inc., and
limited Plaintiff's ownership interest potential to twenty-five (25%) percent of each
corporation respectively.
20. Plaintiff was required to enter into a Shareholder's Agreement dated
November 11, 1993, which, inter alia, restricted Plaintiff's rights and remedies as 8
shareholder and set forth restrictions to be imposed upon Plaintiff in the event
Plaintiff elected to sell his shares and set forth a method for determining the
certified value of Plaintiff's shares. A true and correct copy of the Shareholders
Agreemant is attached hereto and incorporated herein by refarence as Exhibit B.
21. Plaintiff believe. and therefore avers that he did not receive accurate
bonut payments or payments based upon the profit of Field. Quality, loe.. and C'
A Fields, Inc_, since the incorporation of the respective corporations.
5
22. Despite Plaintiff's requests, Defendant Fields has never allowed Plaintiff
to inspect the financial books and records of account of Fields Quality, Inc., and C
& A Fields, Inc., as required pursuant to Pa. B.C.L., 15 Pa. C.S.A. Section 1508, et
al.
23. Plaintiff was only provided with year-end tax returns and year-end
financial statements and any bonus compensation or percentage of the profits, if
paid at all to Plaintiff, were based upon financial statements and tax returns
prepared solely by Defendant Fields and Defendant Fields' accountant.
24. Plaintiff made requests to examine, inspect and review the records and
books of account of Fields Quality, Inc., and C & A Fields, Inc., but such requests
have all been denied.
25. Plaintiff requested Defendant Fields to purchase Plaintiff's shares
pursuant to the Shareholder's Agreement; however Defendant Fields maintained
and continued to maintain that the shareholders, Defendant Fields, have no
obligetion to purchase Plaintiff's shares or altematively that Plaintiff's sharH heve
no value.
26. Defendant Fields has engaged in a continuous course of opprnslve
conduct, the result of which has been to freeze Plaintiff out as a minority
shareholder.
6
27. Defendant Fields' action in freezing out Plaintiff as a minority
shareholder forced Plaintiff to resign his position as Director of Operations at
Shoney's-Carlisle and in 1994, Plaintiff resigned and relocated to his present
address,
28. Plaintiff, as a minority shareholder, is unable to sell his shares without
the agreement and action of Defendant Fields pursuant to the Shareholder's
Agreement.
29. Defendant Fields have failed and refused to provide Plaintiff with a
proper accounting of the income and expenditures of the Defendant corporations.
30. Defendant Fields has fraudulently and oppressively failed and refused to
compensate Plaintiff in accordance with the Shareholder's Agreement of November,
1993.
31. The amount of Plaintiff's damages exceeds the mandatory arbitration
limits.
COUNTI.ACCOUNTING
32. The averments of Paragraphs 1 through 31 are incorporated herein by
reference as though more fully set forth herein.
33. Plaintiff believes and therefore avers that F'l8Ids Quelity, Inc.. and C a. A
Fiald., Inc., ecting by and through Defendant Fields, have made preferential
payment to Oefandent Field., and failed and refused to pay Plaintiff in accordInce
7
with the agreement of the parties, the By Laws of the corporation, and the
Shareholder's Agreement of the parties.
34. Defendant has failed and refused to provide regular and accurate
accountings and has refused to permit Plaintiff to inspect the records and books of
accounts of the Defendant corporations.
35. Plaintiff believes and therefore avers that Defendant Fields Quality and
Defendant C & A, by and through Defendant Fields, have misapplied and
miscalculated the records, accounts, receipts and disbursements of Defendant
Fields Quality and Defendant C & A all at the Plaintiff's detriment and loss.
WHEREFORE, Plaintiff requests this Honorable Court to enter an Order in
accordance with the following:
A. Require Defendant Fields to provide Plaintiff with all records
and books of accounts of Defendant Fields Quality Foods, Inc., and C
& A Fields-Mechanicsburg, Inc., from the date of inception to the
present;
B. Pay atl Plaintiff's attorney's fees and costs;
C. Such other relief as deemed appropriate.
COUNT" . D1qOLUTION
36. The avert1*lts of Paragrephs 1 through 35 are incorporeted htrtln by
reference as though more fully set forth herein.
8
37. Defendant Fields have breached their fiduciary duty to Plaintiff.
38. The conduct of Defendant Fields in failing and refusing to provide
regular and accurate accountings to Plaintiff regarding the actual and real profits for
the Defendant corporations and accurately compensate Plaintiff constitutes a legal,
oppressive, fraudulent conduct as follows:
A. Failing and refusing to provide regular and accurate
accounting and provide for inspection the book of accounts of
Defendant corporations;
B. Failing and refusing to accurately compensate Plaintiff based
upon the actual net income of Defendant corporations;
C. Failing and refusing to purchase Plaintiff's shares pursuant
to the terms and requirements of the Shareholder's Agreement and Pa.
B.C.L.
39. Plaintiff, as a minority shareholder, is unable to receive any of tha
required accounting information, compensation or purchase price for his shares
without tha approval of Defendants Fields.
40. Plaintiff's investment in Defendant F'teIds Quality and Defendant C .. A
is substantially at risk and will only be protected by fOl'Cing a dissolution of the
corporations and preserving and distributing the Huts in IICcordll'lCe with the
Shareholder's Agreement between P1llintiff and Defendant FieIda.
9
which would include a ten (10%1 percent bonus calculated on the net income
generated at that operation, and additionally would be compensated as a ten (10%)
percent shareholder in the corporation Fields Quality Foods, Inc., and C & A Fields-
Mechanicsburg, Inc., in accordance with his respective ownership interest.
43. Defendants individually and collectively breached these agreements in
the following respects:
A. Failure to fully compensate Plaintiff as director of operations
in its failure to pay him his ten 110%) percent bonuses due and owing
for his work for Fields Quality Foods, Inc.;
B. Failure to provide Plaintiff with accurate accountings of the
gross and net profits of Fields Quality Foods, Inc., and C & A Fields-
Mechanicsburg, Inc.. so that Plaintiff could make a true and correct
escenatlon of the amounts due and owing him under the various
agreements;
C. Feiling and refusing to provide regular and accurate
accountings of the expenses of Fields Quality Foods, Inc., and C ,. A
FleIds-Mechanicsburg, Inc.; and
D. Feiling and refusing to abide by and act in eccordance with
the agreement of the ptlrtiet to compensate Plaintiff .. . diractor of
C)IMntions and .. . minonty thareholder.
11
the corporation are authorized and directed
to iuue a certificate or certificates
representing the subscribed number of ehares
of the common stock of the corporationl
(11) RESOLVED, that upon receipt of the
cone1deration, as described above, for the
shares eubscribed under the aforesaid
Subscription Agreements, the officers of the
corporation shall be authorized to commence
the businese of the corporationl
(12) RESOLVED, that the said sharee,
when issued in accordance .with the
Subscription Agreements and the resolutione
adopted hereby, shall be fully paid and
nonasseSlable 1
(13) RESOLVED, that the president ie
authorized to open one or more bank accounts
as depository or depositoriee for the
corporation, and to execute the resolutions
establishing such account(s) on behalf of the
corporation, a copY-Of said resolutions being
attached hereto, incorporated herein by this
reference, and adopted and approved as
resolutions of the board of directors;
(14) RESOLVED, that the president and
the secretary/treasurer are hereby authorized
to take all steps necessary to qualify the
corpotation to do businees in such other
states as the president sha!l deem necessary,
including, but not limited to, the
appointment of statutory agents in such
states upon whom all legal processes ehall ~
served;
(15) RESOLVED, that the officer. of the
corporation be, and they are hereby
authorhed and directed to pay all fee. and
expense. inCident to or required in the
organization of the corporation;
(16) RlSOLVEO, that the corporation
eleets to be taxsd as a s.al1 buslnes.
corporation under Subcharter 5 of the
Internal Revenue Code of 1986, .. ..ndad,
and the president is authorized and dinc::tad
to e.eeute .uch fOI1l. as ..y be prescrlbed by
the Internal Revenue Service for the ..1I:1n9
of luch eleetlon;
-1-
~IILD8 QUlLITY rOOD8, IBC.
8HARIBOLD!R8 AGRIIMEN'l'
This Shareholders Agreement ("Aqreement") is by and 8IDonq
Fields Quality Foods, Inc., a pe,nnsylvania corporation ("Company"),
and the stockholders of company whose names appear on the execution
paqes hereof and any other persone who subsequently become subject
to this Agreement in accordance with the provisions hereof
("Stockholder[s)"), who agree as follows:
1. Introduction. Each Stockholder owns or holds, leqallyor
beneficially, directly or indirectly, of record or otherwise, the
number of issued and outstanding shares of common .tock, no par
value, of company specified beside his or her reepective name on
the execution paqes hereof. The stockholders and company desire to
impose certain restrictions or obliqations upon, and to grant
certain riqhts to, themselves with respect to transferability of
the stock. Nothinq in this Agreement shall be construed as
requirinq the Stockholders to purchase any Stock or to contribute
additional capital to company.
2. General Restrictions. The restrictions, riqhts and
obliqations contained in this Agreement shall apply to all common
stock of Company now owned by all StOCkholders, as specified on the
execution paqes hereof, and to such additional common stock as any
Stockholder may hereafter acquire from Company, from third parties
or an existinq Stockholder, or by stock split, stock dividend,
reorqanization or by any other means, all of which shall be
referred to herein as "Stock". No Stockholder shall transfer,
convey, qive or dispose of any Stock in any manner, nor shall such
Stock be transterable except as provided in this Agreement.
3. Permitted Transfers. Only the tOllowinq transters ot
title to shares of Stock shall be permitted without compliance with
the provisions of Paraqraph 4 hereof:
(i) transfers of Stock by any Stockholder directly to
the corporation;
(11) trans ten by a qitt fro. Charles D. Fields or Anita
H. Fields to each other or to a trustee ot a trust tor the pri..ry
benetit of such named stockholders;
(iii) transfer of title to a quardian ot the estate ot
a Stockholder or to an executor or a~inistrator ot the estate of
a deceased Stockholder incident to quardianship or probete
proceedinqs involvinq the estate of the stockholder;
(lv) transtera of title to the survlvinq spouse troll the
e.tate of Charle. D. Fields or Anita K. Fields fro. an executor or
a~in1atrator of the estate of sucb naaed decea.ed stockholder,
(v) a transfer by assignment or pledge entered into for
the benefit of Company;
provided, however, that any person or entity (other than company)
so acquiring any of such stock shall be required to execute a
counterpart hereof sUbjecting,the stock acquired by such person,
entity or estate to this Agreement.
4. Non Permitted Transfers. other than the transfer. as
authorized herein, no stockholder shall have any right or power
under any circumstances to sell, pledge, assign, hypothecate,
transfer, alienate, or in any way encumber his or her interest, or
otherwise dispose of his or her shares in Company without
compliance with the provisions hereof. MY -attempt -at "assignment,
alienation, transfer, or encumbrance, whether voluntary or through
attachmente, levies, executions, bankruptcy, divorce or any other
proceeding involved in the change of ownership of the stock, shall
be deemed a violation of this Agreement and company shall have the
right to purchase the shares of the stockholder ("Defaulting
stockholder") at the price and on the terms provided in paragraph
9 and 9.1 herein. If company elects to not purchase the stock from
the Defaulting stockholder, then, if the Defaulting stockholder is
Mita H. Fields or Charles D. Fields, then the .pouse of the
Defaulting Stockholder shall have the right to purchase the shares
of the Defaulting stockholder at the price and on the terme
provided in paragraph 9 and 9.1 herein. The right of such spouse
to purchase such stoc~shall be exclusive. If such spouse electe
to not purchase the stock from such Defaulting stockholder or, if
the Defaulting stockholder is D2t Anita H. Fields or Charlee D.
Fields, then the non-defaulting stockholders, including the spouse
of Anita H. Fields or Charles D. Fields referenced above, shall
have the right to purchase the ehares of the DefaUlting Stockholder
at the price and on the t.rm. provided in Paragraph 9 and 9.1
herein. The non-defaUlting stockholders shall have the right to
purchase the D.faulting stOCkholder'. Stock in accordanc. with the
provieions of Paragraph 6 hereof.
5. Third partv Offers. If a stockhold.r ("Sellinq
stockholder") shall at any time or times receive a bona fide non.-
collusive off.r froll any person or entity not a party to this
Agr....nt ("Third Party") to purchas. any stock own.d by S.lling
stockholder, the S.lling stockhold.r .hall fir.t obtain the
, ~rmi..ion of the Co.pany to .ell .uch .tock. Such p.rmi.sion may
Le withheld tor any reason de..ed prop.r by the Company. It
p.rmi..ion ie not grant.d, then the Selling Stockhold.r shall not
have the right to transf.r hi. or her .tock to the Third Party who
mad. the otf.r. If permi..ion i. gr.nted, the S.lling stockhold.r
.hall off.r in writing to ..11 .uch stock to Company at the ....
pric. and on the .... t.rm. and condition. a. are contained in the
Third Party'. ott.r. It Coap.ny .l.ct. to not purcha.. the 'tock
tro. the S.111ng stockhold.r, the S.11ing Stockhold.r .hall th.n
-2.
offer in writing to sell such stock to the other stockholders who
are parties to this Agreement at the same price and on the same
terms and conditions as are contained in the Third Party's offer.
The Company and the non-selling stockholders shall have the right
to purchase the Selling Stockholder's stock in accordance with the
provisions of Paragraph 6 hereof.
6. Riaht of Refusal. It any Selling stockholder (or
Defaulting stockholder) desires or is obligated to sell stock, in
compliance with Paragraph's 4 and 5 hereof, and company and, in the
case of Paragraph 4, the spouse of Anita H. Fields or Charles D.
Fields, does not purchase all or any of such stock, each of the
non-selling (or non-defaulting) stockholders, including the spouse
of Anita H. Fields or Charles D. Fields referenced in Paragraph 4,
shall have the right to purchase his or her pro rata portion of the
stock offered for sale in the same proportion as the number of
shares of Stock owned by him or her and subject to this Agreement
at the date of the offer shall bear to the total number of shares
owned by all other stockholders and subject to this Agreement,
excluding the shares of such stock owned by the Selling stockholder
(or Defaulting stockholder).
6.1 Method of AcceDtance. The right to purchase stock
under Paragraphs 4 or 5 hereof shall be exercieed by company or any
stockholder by giving notice in writing to the selling stockholder
(or Defaulting stockholder) of the intention to exercise such right
under this Agreement within ninety (90) days after the receipt of
the written notice of the offer to .ell or notice of any prohibited
transfer. Failure by the Company or any Stockholder to give .uch
notice shall be deemed to be a decline of the offer.
6.2 Subseauent otters and Purchases. If company or any
Stockholder declines to exercise the right to purchase its entire
share or his prcportionate share, respectively, of the stock
offered for sale, the party offering the Stock for sale, shall,
within thirty (30) days after the expiration of the ninety (90) day
acceptance periOd, as provided for in Paragraph 6.1, offer in
writing to sell all stock which remains unpurchased first to the
spouse of Anita H. Fields or Charles D. Fields in accordance with
Paragraph 6.1, if Paragraph 4 is applicable and company fails to
purchase all shares, then to Stockholders in accordance with
Paragraph 6.1 if company and, if applicable, the spouse of Anita H.
FieldS or Charles D. Fields tail to purchase all shares and,
tinally to the other stockholders who elected to purchase under
Paregraph 6.1 hereot it allot the non-selling (or non-defaulting)
Stockholders tailed to purcha.e allot their pro rate shares when
first offered. Such purchasing Stockholders shall be entitled, for
an additional thirty (30) day period atter receipt of such notice,
to purchase such unsold Stock. If the demand for such Stock aaon9
the r..ainlnq stockholders exceeds the supply, such Stock ahall be
allocated a.ong the Stockholders who desire to purchase additional
.).
stock pro rata, in the same proportion which the number ot shares
then owned by each of such stockholders bears to the number of
shares then owned by the group of such purchasing stockholders.
6.3 Assianabil1tv. Any stockholder may assign his right
to purchase his or her propGrtionate share of stock offered for
sale, but only to Company or to another stockholder.
7. Freedom from Restriction. If Company and the
stockholders decline to purchase all the stock offered to them
pursuant to Paragraphs 5 and 6.2, the Selling stockholder shall be
free, for a period of thirty (30) daye, to transfer such
unpurchased Stock to the Third Party who made the otter, upon the
eame terms and conditions contained in the offer, but he may not
transfer such stock to such Third Party upon different terms and
conditions or to a different third party without again complying
with the requirements of Paragraph 5. In any event, Stock
transferred under the provisions of this Agreement to any person or
entity other than Company, including stock transferred pursuant to
Paragraph 3, shall remain subject to. the provisions of this
Agreement and any transferee shall be required to execute a
counterpart of this Agreement. If any stock remains unpurchased by
the Company or other Stockholders after an attempted transfer
prohibited by Paragraph 4 hereof, then the transferee or aesignee,
as the caee may be, may accept such Stock, but only after executing
a counterpart of this Agreement binding himself, his successors,
heirs and assigns to all the terms and conditions hereof.
8. Purchase of stock on Death. Except as otherwise provided
in Paraqraph 3(iv) herein, upon the death of a Stockholder who is
subject to the terms of this Agreement, Company shall purchase and
the estate ot the deceased Stockholder shall sell all of the Stock
in company now owned or hereafter acquired by such Stockholder.
The purchase price and the payment thereof shall be determined in
accordance with the provisions of Paraqraph 9, 9.1 and 9.2 of this
Agreement.
9. Price. The purcha.. price tor any shares purchased
pursuant to paraqraphs 4, 8 or 12 hereot shall be the price per
ehare as set forth on the most recent "Certificate Value" aqreed
upon by the Stockholders. The te11ll Certificate Value
("Certificate") shall .ean the value of a share of the company..
set forth in the latest Certificate executed by the Stockholders
and tiled with the Company. The stockholders shall file with the
company such Certificate on or before the last business day of
January in each year, with the initial Certiticate being filed on
November 11, 1993 to be ettective for years 1993 and 1994. Failure
to file any Certiticate ehall not, except as hereinafter provided,
invalidate the value .et forth in the la.t Certiticate so filed
except that it the Stockholders tail to tile or natUra a
Certificate for a period in exces. of three (3) year., then the
-4.
stockholders and the company shall agree on the purchase price of
such stock. If the stockholders and the company cannot aqree on
such price, then each stockholder and the company shall select an
appraiser, and the appraisers shall select one appraiser who shall
determine the fair market value of such stock, and such value will
be the purchase price of suoh stock. The stockholders may, at
their option, file with the company a similar certificate or
certificates on other dates.
9.1 PaYment. The purchase price may be paid in up to
eighty-four (84) equal monthly installments bearing interest at one
percentage point under the prime lending rate charged by Firat
American National Bank, N.A., Nashville, Tennessee, or any
successor to said bank, as of the date of ~urchase, with the first
installment due thirty (30) day. after the purchue date. The
unpaid principal balance may be prepaid at any time without
penalty. The indebtedness shall be evidenced by a promissory note
executed by the purchasing party. In the event the entire purchase
price is not paid at the date of purchase, the stock to be
purchased shall be delivered to an escrow agent. The shares shall
be duly endorsed in blank for transfer and shall be accompanied by
all other dOCUlllents necessary for an effective transfer. The
Selling stockholder shall retain a .ecurity interest in the stock
so transferred. As principal payments are made by Company or the
stockholders, as the case lIIay be, the .scrow ag.nt shall release
the proportionate number of sharee to the purChasing party. In the
event of a d.fault which is not cur.d within ten (10) daya written
notice given to the purchaser, the Selling stockholder may exercise
against the ehares held by the escrow agent such rights as are
available to a secured party under the Uniform co_erchl Code. So
long as any Stock is held by the escrow agent, any dividend. paid
on the Stock shall be applied to reduce the outstanding
ind.bt.dn.... So long as the purchaser i. not in default, the
purchaser .hall be entitled to vote any .hares purchased but held
by the e.crow ag.nt.
9.2 Insurance. Notwith.tanding the for.going, if the
Company is in receipt of life/dieability insuranc. proceeds as a
result of the Selling stockholder's d.ath or total disability, the
net life/disability insurance proce.ds, not exceeding the purchase
price coaputed in Paraqraph 9 above, shall be paid to the Selling
Stockhold.r or his or her r.pr...ntative in cash on the purchase
dat.. Any alllount of the purch... price in excess of any .uch
in.urance proceeds shall be paid in the discretion of the Coapany,
in cash at clo.ing or by d.livery of a proaissory not. having the
s..e payment terms as described abov.. Any exce.s of insurance
proceedS over the purch..e price shall be the property of the
coapany.
10. Sale of control. If any stockholder shall receive a bona
tide otter (-otter-) frOB any thIrd party (-Offeror-) tor the
os.
.
purchase for cash or deferred payment ob1iqations, or an exchanqe
of securities not requir1nq the approval of all the stockholders of
Company in accordance with the Charter or Bylaws of the Company, or
a combination thereof, and such Offer is made for all of the stock
of Company then subject to this Aqreement and at the same price per
share and on the eame terms and conditions per share, then such
stockholder shall call a meetinq of all other stockholders to
consider said Offer. If at such meetinq, sixty percent (60t) or
more of the combined votinq power of all stockholders approves of
a sale or exchanqe to the Offeror, then all stockholders, inc1udinq
those who did not approve the Offer (Hinority stockholders) shall
be obliqated to sell or exchanqe all stock subject to this
Aqreement to the Offeror, pursuant to the terms of the Offer,or, in
the alternative, the Minority stockholders shli1.l eItbllr (1)
purchase all of the stock held by the stockholders who approved the
sale transaction, on the same terms and conditions ae contained in
the Offer, or (ii), in the event such Minority stockholders do not
elect to so purchase, subject the shares of Stock owned or held by
said Minority stockholders to a votinq aqreement, or other control
device acceptable to the Offeror. '
11. TSr1Ilination or Acrresmsnt. This Aqreement shall terminate
by written agreement of stockholders representinq in the aqqreqate
not less than sixty percent (60t) of the total combined votinq
power of the stockholders.
12. Call provisions on Termination ot E1llnlovment or
DIsabilitv.
Ca) Comnanv'8 Riaht to Purchase Stock of stockholder.
If a stockholder, who is employed by company resiqns or is
termInated by the company for any reason, except for a. leave of
absence approved by the Board of Directors, or becomes totally
disabled, company shall, for a period of six (6) months beqinninq
on the date such stockholder terminates employment or beqinninq on
the first day of the thirteenth (13th) month after such Stockholder
is determined to be totally disabled, have the riqht to require the
stockholder or stockholder's leqal representative to sell to
Company all the stock held by him at that time in accordance with
the provisions of paraqraph 9, 9.1 and 9.2 of this Agreement,
except that any such payments thereunder shall be without interest
for a stoek purchase made upon tsrmination of employment by the
Company, This riqht may only be exercised by Company: prodded it
company exercises the riqht to purchase the stoek of stockholder as
qranted herein, Company ehall be requir.d to purchas. fro.
Stoekholder all of the stoek then owned by the Stockhold.r.
(b) Total Dis.bIlity. For purpos.s of this Aqr....nt.
the t.ra "total disability" shall ..an the .... as us.d in any
applicabl. (Usability insuranc. policy uud to fund this Aqr....nt;
or. if non.. sueh physiCal or .ental condition which. 1n the
-6-
opinion of two independent, state board certified and qualified
physicians as selected by company and stockholder, render this
stockholder incapable of performing obligations and functions of
his or her position with the company. It the two physicians cannot
agree on their tinding for such determination, then the two
physicians shall select an independent, state board certified and
qualified physician, for the purpose of determining whether the
stockholder is totally disabled. The decision of the majority of
the Physicians shall be binding and controlling for purposes of
this paraqraph.
(c) Sale of Life Insurance policies. The Stockholder
who sells his or her stock to the company as a result of his or her
resiqnation or total disability shall have the riqht. to purchase
any and all life insurance policies insuring such Stockholder's
life from the Company. This right must be exercised no later than
ninety (90) days after the purchase date. The purchase price shall
be equal to the cash value of such policies including dividends if
any on the date of purchase by such Stockholder. The value shall
be as determined by the insurance companyissuinq the policies less
any indebtedness secured by the cash value.
(d) Control of Business oraanization Durina Oisabilitv.
In the event Charles D. Fields or Anita M. Fields 18 totally
disabled, he or she shall retain complete control over the
operation of the Company in accordance with his or her ownership
interest. In the event a Stockholder other than the above named
Stockholders is totally disabled, he or ehe shall relinquish all
control over the operation of the Company to the remaining
Stockholders. Such remaining Stockholders shall then exercise
complete control of the Company in accordance with their percentage
of ownership as it the ownership interest ot the disabled
stockholder did not exist. Exercise of euch control shall continue
until such time as the disabled owner recovers as determined by the
same procedure used to determine an owner's total disability or
prior to the right to purchase date referenced in Paragraph l2(a).
(e) Frinae Benetits of Totallv Disabled stockholder. In
the event Charles D. Fields or Anita M. Fields is totally disabled,
then all fringe benefits (inClUding salary continuation) due such
totally di.abled Stockholder a. an employee of the Company shall
continue in force during the continuance of his or her disability
under the teras outlined in the reepective fringe benefit plan..
13. Le<lend on Certificate.. The face of each certificate
representing Stock shall bear the following leqend:
511 RESTRICTIONS ON REVERSE SIDE
'the beck of each cnUt1cate shall be 1898nded .. fOl1OVSI
.7.
The riqht to transter, sell, exchanqe, qive,
pledqe, encumber or otherwise dispose ot the
shares ot stock represented by this
certiticate is restricted in accordance with
an Agreement dated November 11, 1993 lUIIonq the
corporation :nd all' ot its shareholders on
that date. The corporation will mail to any
shareholder a copy ot such Agreement without
charqe within tive (5) days atter receipt ot
written request thereot.
14. void Transfers. It any stock subject to this Agreement
shall be sold, transterred, or disposed ot other than in accordance
with the terms and conditions ot this Agreement, company shall have
the riqht to treat such transter as it it were void. In entorcinq
such riqhts, company may hold and reruse to transter any stock or
any certiticate there tor presented to it tor transter, in addition
to and without prejudice to any and all other riqhts which may be
available to it. In the .vent company receives notice ot any
attempted transter which would be in violation ot the terms ot this
Agreement, it shall notity the nontransrerrinq stockholders, who
shall have the riqht to purchase the Stock in accordance with the
provisions ot this Agr.ement. .
15. Miscellaneous.
15.1 Bindina Effect. This Agreement shall sup.rcede all
prior Buy/sell Agreements between the parties and shall be bindinq
upon and inure to the ben.tit ot:
(i) the Stockholders and th.ir respective heir.,
executor., administrators, l.qal representativ.., or a..iqns; and,
(ii) company and its successors or assiqns.
15.2 Entire Aareement and Amendment.. Thi. Agr....nt
contains the entire agreement among the parties with respect to the
subject matter hereunder and no waiver, alteration or modification
ot any or the provisions h.r.or shall be bindinq unl.ss it i. in
writing and siqn.d by the stockholders and Company.
15.3 Notic.s. Anr notice, reply or other co_unication
r.quired or permitted by th s Agr....nt .ust be given in writing
and may be s.rved by depositing sa.. in the United Stat.. Hail,
c.rtitied, postage prepaid, addr...ed to the party or partie. to be
notified, or by delivering the notice in p.rson to such party or
partie.. Such notice shall be deUled receiv.d when depodted in
the maUs or wh.n ectually received, it p.reonally delivered. Por
purpose. ot notic.., the addre.. or company shall bel
.s.
Fields Quality Foods, Inc.
c/o Charles D. Fields
1016 wilson Pike
Brentwood, Tennessee 37027
The addresses of the stockholders shall be the addresses shown
alongside their names on the execution pages hereof, unless the
stockholders give notice otherwise to the other stockholders and
Associates pursuant to this paragraph. company and stockholders
shall have the right to change its or their addresses by giving at
least five (5) days prior written notice of its or their n.w
addresses to the other party or partiee.
15.4 Severabilitv. If any provisions of this Agre.ment
are rendered or declared illegal by reason of any exbtinq or
subsequently enacted legiSlation or by decree of a court ot last
resort, company and stockholders will promptly me.t and n.gotiat.
substitute provisions for those declared or rendered ill.gal, but
all the remaining provisions of the Agreement shall remain in full
torce and effect.
,
15.5 Number. Any rererence in this Agreement to the
singular includes the plural and vice versa.
15.6
masculine gender
versa.
Cender. Any rerer.nce in thia Agr.ement to the
includ.. the reminine and neut.r gender. and vice
15.7 CaDtions. The heading. or captiona of the
Paragraphs or thie Agreement are inserted for conveni.nc. and
reference only and shall not be de.llled a part hereor or used in the
construction or interpr.tation hereof.
15.8 Countemarts. Thi. Agre.ment lIIay be .x.cuted in
multiple count.rparts, .ach of which ahall be an original but all
of which together .hall constitute one and the .... instrum.nt.
15.9 Attorn.vs Fees and F.1menle.. In the .v.nt that any
party h.r.to is requir.d to bring auit ag.inst a d.f.ulting party
to entorce, his, her or its right hereund.r, h., ah. or it .hall be
.ntitled to r.ceive rrom the defaulting party all .xp.na.. and
attorneya' f.es incurred in any auch auit. Thi. right sh.ll be in
addition to all other righta of the part i.. her.to.
15.10 Soac1tic Perforlllanc.. Th. p.rti.a hereto declar.
that it i. i.poaaibl. to ....ur. in .onsy the 4...gea which viii
accru. to a party her.to or to ths peraon.l r.pr...ntaUv.a thereof
by reaaon of a failure ot any party or ths paraonal rapre:::ntatlvea
th.r.ot to partorlll any or his, h.r or it. obligation. undar thia
Agre..ent. Th.rerore, it any p.rty or the peraonal r.preaentative.
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^ I'ROFEss1ONAL CORI'oRATlON
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HAalISIIURO.l'INNSYLVANlA 11101-1101
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EXHIBI1: 1\
UlHJsI:nl M:rl11,AN'IQ.'UlsKI4
JOSEPH P. BRUNETII. )
PlaintilT )
)
vs. )
)
CHARLES and ANITA FIELDS. )
FIELDS QUALITY FOODS, INC.. and )
C &. A FIELDS-MECHANICSBURG, )
INC.. )
Defendants )
IN THE COURT OF COMMON PLEAS
OF CUMBERLAND COUNTY,
PENNSYLVANIA
CIVIL ACTION - EQUITY
NO. 97-4\71 EQUITY
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PETITION TO SUBSTITUTE PLAINTIFF
AND NOW. comes Sondra Brunetti. Executrix ofthe Estate of Joseph P. Brunetti.
PlaintilT herein, by and through her attomey, Michael L. Bangs. Esquire, who files this Petition
to Substitute PlaintilT, and in support thereof avers the following:
I. Joseph P. Brunetti was the PlaintilT in the above-captioned matter which was
commenced by Complaint on August 4. 1997.
2. Judgment for PlaintilTwas entered on January 30,1998. against Fields Quality Foods.
Inc.. and C It. A Fields-Mechanicsburg, Inc.
3. Trial on the issue of damages has not yet been scheduled.
4. PlaintilT died on October II. 1998.
5. Plaintiff named Sandra Brunetti as E.1[ccutrix of his estate.
6. Sandra Brunetti should be substituted as PlaintilT in this ktion and the caption of the
action tbanaed to md. "Sandra Brunetti. Executrix of the EstaIc of Joseph P. Bnmctti.
Deceased."
I