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329 shares, the balance of the shares were released from the
option; (d) upon the exercise of the option, Mike and Peter Brown
were required to either deliver up to $3 million in cash to an
escrow agent plus a promissory note for the balance of any amount
due, with interest at 9 percent, or to offset any cash payments
with any other amounts which Sawyer may then owe Mike and Peter
Brown; (e) the 329 shares (represented by voting trust
certificates) were to be deposited with an escrow agent; and (f)
Mike and Peter Brown could transfer and assign the option,
whether by sale, gift or devise.
Unlike the 1980 option, the 1983 option did not provide for
revaluing the stock. Mike and Peter Brown paid Sawyer $1.00 for
the option.
The total amount due from March 1, 1993, to February 28,
1996, from Mike and Peter Brown upon the exercise of the option
for 329 shares of Bengals stock would be $8,225,000 (329 shares x
$25,000 per share). If the Browns exercised the option, Sawyer
would get $8,225,000 from the stock sale to the Browns and would
owe $6,669,000 on his note to Paul Brown ($3.51 million of
principal and $3,159,000 in interest). Thus, Sawyer would
receive a net of $1,556,000.
Sawyer hoped that Mike and Peter Brown would not exercise
the option to buy the 329 shares. Sawyer did not want to sell,
and did not offer to sell, his Bengals stock to Paul Brown.
Sawyer wanted to continue to be the Bengals' president and
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