- 5 - Option Closing The 1990 stock purchase agreement provided an option for Burien Nissan to purchase Mr. Johnston’s remaining 61,200 shares for $215,000.6 Under the terms of the agreement, Burien Nissan was required to pay Mr. Johnston the full $215,000 in monthly installments over a 30-month period beginning in June of 1990. The agreement also provided for an option closing. This was defined as the moment when Mr. Johnston transferred his remaining 61,200 shares to Burien Nissan. The option closing date was to occur within 3 days of Burien Nissan’s full payment for the purchase of Mr. Johnston’s 61,200 shares. However, Burien Nissan breached its obligation to pay for the 61,200 shares, and the option closing never occurred.7 1990 Noncompetion Agreement Pursuant to the terms of the 1990 stock purchase agreement, Mr. Johnston was required to execute and deliver to Burien Nissan a noncompetition agreement (1990 noncompetition agreement) at the option closing.8 The 1990 noncompetition agreement prohibited 6These shares amounted to 51 percent of the outstanding Burien Nissan shares. 7Mr. Johnston received $53,500 from Burien Nissan in 1990 and 1991. Mr. Johnston never reported receiving the remaining $161,500 ($161,500 + $53,500 = $215,000) from Burien Nissan pursuant to the 1990 stock purchase agreement option. 8Exhibit B of the 1990 stock purchase agreement contained the 1990 noncompetition agreement between Burien Nissan and Mr. (continued...)Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011