From the OAOT prospectus, page 51:
CERTAIN TRANSACTIONS
Pursuant to the terms of a stock purchase agreement dated April 8, 1996 (the "1996 Purchase") among the Company, OAO Corporation, OAO Services, Inc. ("OAO Services") and Safeguard, Safeguard purchased from the Company 5,000,000 shares of the Company's Common Stock for an investment in the Company of $5.0 million plus a payment of an additional $5.0 million to OAO Services, a subsidiary of OAO Corporation, in return for a grant by OAO Services to the Company of an option (the "OAO Services Option") to purchase all of the shares of common stock of OAO Services at an exercise price based on revenues and earnings levels of OAO Services for the 12 months prior to the date of exercise. In addition, Safeguard granted to Cecile D. Barker, the majority owner of OAO Corporation and a director and significant stockholder of the Company, an option exercisable for 1,000,000 shares of Common Stock held by Safeguard for an aggregate exercise price of $2,000 (the "Barker Option"). The Barker Option was granted at the time of Safeguard's investment by Safeguard to Barker, as a shareholder-to-shareholder transaction. This option was to become exercisable upon the achievement of certain milestones and was intended to serve as an earnout feature between these two shareholders. Pursuant to the terms of the 1996 Purchase, Safeguard, William R. Hill and Cecile D. Barker were granted certain registration rights with respect to their shares of Common Stock in the Company. See "Shares Eligible for Future Sale-- Registration Rights."
Pursuant to the terms of a Stock Purchase Agreement dated as of July 11, 1997 between Safeguard and Cecile D. Barker, Safeguard purchased 1,000,000 shares of Common Stock from Mr. Barker for $4.2 million. Contemporaneous with the consummation of this transaction, Mr. Barker exercised the Barker Option. In addition, pursuant to the terms of an Option Cancellation Agreement by and among the Company, Safeguard, Cecile D. Barker, OAO Corporation and OAO Services, the OAO Services Option was canceled in consideration of the right to receive certain future payments in the event of any sale of OAO Corporation or any public offering by OAO Corporation which occurs prior to April 8, 2000. In particular, the Company and Safeguard are each to receive from OAO Corporation one-half of (i) the greater of $1.0 million or an amount equal to the lesser of $3.0 million or three percent of the total sales price from the sale of both OAO Corporation and OAO Services which occurs prior to April 8, 2000, (ii) the greater of $1.0 million or an amount equal to the lesser of $2.0 million or three percent of the total sales price from any sale of OAO Corporation which occurs prior to April 8, 2000 and at such time that OAO Services is not an affiliate of OAO Corporation, (iii) the greater of $1.0 million or an amount equal to the lesser of $3.0 million or three percent of the market capitalization of OAO Corporation if OAO Corporation consummates an initial public offering of its equity securities prior to April 8, 2000 (an "OAO Corporation IPO"), or (iv) the greater of $1.0 million or an amount equal to the lesser of $2.0 million or two percent of the market capitalization of OAO Corporation if OAO Services is no longer affiliated with OAO Corporation at the time of the OAO Corporation IPO. The market capitalization of OAO Corporation would be based on the offering price of the equity securities in the OAO Corporation IPO.
So, I would assume Safeguard will get something from the OAOT acquisition of OAO Services (http://biz.yahoo.com/prnews/980626/ny_oao_ceo_1.html). Also, I wonder why OAOT/Safeguard decided to acquire Services now, when they had the chance before but relinquished it?
Hopefully this will mean good things for OAOT in the not-too-long run.
--John |
