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anticipated the potential problems posed by the Hursts’ eventual
retirement so, before joining the firm, he negotiated an
employment contract that included a stock option. His attorney
also negotiated stock option agreements for Tuori and Todd Hurst
at about the same time. These options aimed to protect Dixon and
the others if HMI were sold.
In late 1996, Richard Hurst was contacted by Group
Maintenance American Corporation (GMAC). GMAC was an HVAC
consolidator--a company whose business plan was to buy small HVAC
businesses and try to achieve economies of scale--and it offered
to buy HMI for $2.5 million. Mr. Hurst told Tuori, Dixon, and
Todd about GMAC’s offer, and they themselves confirmed it--only
to learn that GMAC had no interest in keeping them on after a
takeover. Convinced they were ready to run the business, they
approached Mr. Hurst in May 1997 with their own bid to buy his
HMI stock, matching the $2.5 million offered by GMAC. Mr. Hurst
accepted the offer, confident that the young management team he
had put together would provide a secure future for the
corporation he had built up over nearly twenty years.
Everyone involved sought professional advice from lawyers
and accountants who held themselves out as having expertise in
the purchase and sale of family businesses. The general outline
of the deal was soon clear to all. The Hursts would relinquish
control of HMI and RHI to Tuori, Dixon, and Todd Hurst, and
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