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EXHIBIT 10.3
STOCK RESTRICTION AGREEMENT
This STOCK RESTRICTION AGREEMENT (the "Agreement"), is dated as of
August 27, 1998, by and between SCB Computer Technology, Inc., a Tennessee
corporation ("SCB"), and Xxxxx X. Xxxxx ("White").
WHEREAS, White, previously employed by SCB in varying capacities
including as an executive officer, has voluntarily resigned, subject to this
Agreement becoming effective and White receiving good funds hereunder, from all
positions as an officer or director of SCB and its subsidiaries;
WHEREAS, the Board of Directors of SCB has determined that because
White owns a large number of shares of Common Stock, par value $.01 per share,
of SCB ("SCB Common Stock") and because an immediate and disorderly sale of such
shares could have a material adverse effect on the market for SCB Common Stock,
it desires to enter into this Agreement to restrict White's ability to transfer
shares of SCB Common Stock in exchange for the consideration set forth herein;
and
WHEREAS, SCB and White acknowledge that the restrictions set forth
herein are reasonable;
NOW, THEREFORE, in consideration of the premises hereof and of the
mutual promises and agreements contained herein, the parties hereto, intending
to be legally bound hereby, agree as follows:
1. Except as expressly set forth herein, unless otherwise agreed to in
writing in advance by SCB, neither White, nor any of his "Permitted Transferees"
(as such term is defined below), may sell, pledge, or otherwise transfer any
shares of SCB Common Stock owned by any of them from the date hereof until
August 26, 1999. In addition, during the period beginning August 27, 1999 until
August 26, 2000, except as expressly set forth herein, unless otherwise agreed
to in writing in advance by SCB, neither White nor any of his Permitted
Transferees may, during any 30-day period, sell, pledge, or otherwise transfer
in the aggregate more than 100,000 shares of SCB Common Stock. Anything herein
to the contrary notwithstanding, White may transfer shares of SCB Common Stock
to (i) charitable organizations qualified under Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended, (ii) members of White's immediate
family, or (iii) trusts for the benefit of White or members of his immediate
family (collectively, "Permitted Transferees"); provided that the restrictions
of this Section 1 shall apply to such shares in the hands of the Permitted
Transferees; and provided, further that nothing herein shall prohibit White from
pledging any shares owned by him directly or indirectly to secure a bona fide
loan transaction with a financial institution. White understands and agrees that
this Section 1 may be
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enforced by the delivery of "stop transfer" instructions by SCB to the transfer
agent for the SCB Common Stock.
2. SCB shall pay to White, on the "Effective Date" as defined in the
Mutual Release between SCB and White, $250,000 in the form of an SCB check
payable to the order of White, provided that prior to that date White has
delivered to SCB or its transfer agent stock certificates representing all
shares of SCB Common Stock owned, of record or beneficially, by White. SCB shall
cause its transfer agent to reissue and deliver the certificates to White or his
Permitted Transferees, as applicable, which certificates will bear the following
restrictive legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
STOCK RESTRICTION AGREEMENT DATED AUGUST 27, 1998. THE COMPANY
WILL FURNISH THE HOLDER HEREOF INFORMATION REGARDING THE
RESTRICTIONS SET FORTH THEREIN UPON REQUEST IN WRITING AND
WITHOUT CHARGE.
3. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, successors, and assigns.
4. SCB may withhold from any amounts payable under this Agreement all
federal, state, city, and other taxes as shall be required pursuant to any law
or government regulation or ruling.
5. If any provision of this Agreement is found to be illegal,
unenforceable, or void, in whole or in part, then the party against whom
enforcement is being sought shall be relieved of all obligations arising under
such provision, but only to the extent such provision is illegal, unenforceable,
or void, it being the intent and agreement of the parties that this Agreement
shall be deemed amended by modifying such provision to the extent necessary to
make it legal and enforceable while preserving its intent or, if such is not
possible, by substituting therefor another provision that is legal and
enforceable and achieves the same objectives.
6. It is understood and agreed that no failure or delay by SCB in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any right, power or privilege
hereunder. It is further understood and agreed that money damages would not be
sufficient remedy for any breach of this Agreement by White or his Permitted
Transferees, and that SCB shall be entitled to an injunction and/or specific
performance as a remedy for any such breach. Such remedy shall not be deemed to
be the exclusive remedy for a breach of this Agreement, but shall be in addition
to all other remedies available at law or in equity.
7. This Agreement may be executed in multiple counterparts, all of
which taken together shall constitute but a single document.
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8. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Tennessee, without giving effect to the choice of
law principles thereof.
9. In the event any action shall be instituted to enforce any of the
terms hereof, reasonable attorney's fees, costs and expenses shall be paid to
the prevailing party by the other party.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first set forth above.
SCB COMPUTER TECHNOLOGY, INC.
By: /s/ Xxx X. Xxxxxx
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Title: President
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/s/ Xxxxx X. Xxxxx
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XXXXX X. XXXXX
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