"In the above transaction, ABT guaranteed the recipients of ABT common stock that the amount they would receive upon sale of the ABT shares would equal the agreed-upon value of those shares, provided the shares were sold in accordance with the terms of the lock-up agreements. In addition, ABT is to receive any proceeds that exceed the agreed-upon value of the shares. ABT may satisfy obligations with respect to the guarantees by issuing additional shares of ABT common stock or by making cash payments, at ABT's option. Due to declines in the price of ABT's common stock since these arrangements were agreed to, proceeds of sales of shares have not been sufficient to satisfy the guarantees.
The recipients agreed to suspend sales of ABT common stock from April 1, 1999 through June 30, 1999 and ABT agreed to make cash payments aggregating $1.3 million to certain of these recipients. These payments have been made and credited against the guaranteed proceeds. In addition, ABT granted these recipients options to buy an aggregate of 95,000 shares of ABT common stock at $5.00 per share, which equaled the market price at the time of grant.
ABT agreed with these recipients to issue an additional 1,000,000 shares of ABT common stock to them on June 29, 1999, the proceeds from the sale of which will be credited against the guaranteed proceeds. ABT is now issuing an additional 480,000 shares of common stock to them. If the shares remaining from the previous issuances and the additional shares are sold realizing average net proceeds of $5.00 per share, the total received by these recipients will satisfy all amounts due under the guarantees. If the net proceeds realized from the sale of the shares averages less than $5.00 per share, ABT has the option of paying cash or issuing additional shares of common stock to satisfy the shortfall, in certain circumstances."
Any questions? |
