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Pedigo, seconded his nomination, but David Pedigo was not elected
to the board.
During 1997, the Knight family owned 56 percent and the
Pedigo family owned 42 percent of the total outstanding stock.
At the March 25, 1997, annual stockholders meeting to elect a new
board, David Pedigo did not nominate himself but had the minutes
reflect that both he and his wife opposed the nominated list.
David Pedigo requested clarification of his standing with the
company, and Sam Knight explained that David Pedigo’s performance
would be the determining factor and that, as of that time, there
was no action pending that would change his status with the
company. David Pedigo had not requested redemption of his stock
as of the time of trial in June 2000.
Stockholders were forbidden, by corporate bylaws, from
selling their stock to unrelated third parties, without the
unanimous consent of all of the stockholders. Petitioner’s
corporate bylaws, as amended May 25, 1989, provide the following
guidelines for the sale of stock by stockholders:
Stock is first offered to stockholders - then to
the Corporation. The Corporation can redeem the stock
only to the extent it has funds available.
If no funds [are] available, the Corporation will
pay the seller 10 percent of the sales price and give a
ten year note, secured by the stock, for the balance
upon which he will be paid interest. The interest will
be figured annually on the anniversary date of the sale
and will be based on the latest six month T-Bill
interest quotes.
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