-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SScklVY5SaH0blbvlk6DCJdRInxHY9pOBSHpG9q0SOyZzhPPOQJC6vZn4WNvpBKW mDsfYIRkrpDiogJ17AKmMA== 0000930661-97-002025.txt : 19970819 0000930661-97-002025.hdr.sgml : 19970819 ACCESSION NUMBER: 0000930661-97-002025 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970731 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970818 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: DWYER GROUP INC CENTRAL INDEX KEY: 0000797502 STANDARD INDUSTRIAL CLASSIFICATION: PATENT OWNERS & LESSORS [6794] IRS NUMBER: 730941783 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-15227 FILM NUMBER: 97665598 BUSINESS ADDRESS: STREET 1: 1020 N UNIVERSITY PARKS DR CITY: WACO STATE: TX ZIP: 76707 BUSINESS PHONE: 8177562122 MAIL ADDRESS: STREET 1: 1010 N UNIVERSITY PARKS DR STREET 2: P O BOX 3146 CITY: WACO STATE: TX ZIP: 76707 FORMER COMPANY: FORMER CONFORMED NAME: MR ROOTER CORP DATE OF NAME CHANGE: 19920703 8-K 1 FORM 8-K ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 ______________ July 31, 1997 (Date of Report) THE DWYER GROUP, INC. (Exact name of registrant as specified in its charter) Delaware 0 15227 73-0941783 (State or other (Commission (IRS employer jurisdiction of file number) identification no.) incorporation or organization) 1010 N. University Parks Drive Waco, Texas 76707 (Address of principal executive offices) (254) 745-2400 (Registrant's telephone number, including area code) ================================================================================ ITEM 5. OTHER EVENTS As of June 1, 1993, The Dwyer Group, Inc., a Delaware corporation (the "Company"), Rainbow International Carpet Dyeing and Cleaning Co., a Texas corporation ("Rainbow"), Pride Venture Capital, Inc., a Texas corporation doing business under the name General Business Services ("GBS"), and Mr. Donald J. Dwyer, Sr. ("Mr. Dwyer") entered into that certain Agreement and Plan of Reorganization and Share Exchange, dated as of June 1, 1993 (the "Reorganization Agreement"), pursuant to which Mr. Dwyer was issued shares of the Company's common stock, $.20 par value per share, in exchange for all of the outstanding stock of Rainbow and GBS (the "Exchange") and GBS and Rainbow became wholly owned subsidiaries of the Company. Pursuant to the Reorganization Agreement and the Exchange, Mr. Dwyer was issued 8,071,110 shares of Common Stock, of which 680,600 shares were to be placed in escrow pursuant to the Reorganization Agreement until GBS met certain earnings requirements. Subsequent to such issuance, the Company effected a one for two reverse stock split such that Mr. Dwyer's common stock, par value after split of $.10 per share ("Common Stock"), issued in the Exchange became 4,035,555 shares of Common Stock, of which 340,300 shares (the "Escrow Shares") were issued (evidenced by Certificate No. 509 dated June 14, 1993) and were to be placed in escrow until GBS achieved certain earnings targets as contemplated by the Reorganization Agreement. However, the material definitive terms of the escrow were never resolved. Mr. Dwyer is now deceased and his spouse, Theresa Dwyer, and his son, Donald J. Dwyer, Jr., have been duly appointed and qualified and are serving as the personal representatives of Mr. Dwyer's Estate (the "Estate") and the Dwyer Family Trust (the "Trust"). In lieu of the escrow arrangement contemplated by the Reorganization Agreement, and in order to more accurately represent the intent of the parties, the Company and personal representatives of Mr. Dwyer, the Estate and the Trust, have entered into an Agreement relating to the Escrow Shares, to be effective as of June 1, 1993 (the "Agreement"). The Board of Directors of the Company formed the GBS Exchange Committee comprised of its three outside directors to negotiate and approve the terms of the Agreement on behalf of the Company and to determine whether the earnings targets have been met. Upon approval of such committee on July 10, 1997, the Company and such personal representatives signed the Agreement to be effective as of June 1, 1993, the form of which is attached to the 8-K as an exhibit. The Agreement provides for the cancellation of the Escrow Shares and such shares have been returned to the authorized but unissued shares of the Company's Common Stock as of June 1, 1993. Pursuant to the Agreement, 340,300 new shares of Common Stock (the "Contingent Shares") have been reserved by the Company's Board of Directors out of the Company's authorized but unissued Common Stock and may subsequently be issued to the successors and assigns of Mr. Dwyer if certain earnings targets are achieved by GBS or if GBS is sold to a third party in certain transactions as provided in the Agreement. As of June 30, 1997, after giving effect to the cancellation of the Escrow Shares, the Company had 6,775,427 shares of Common Stock issued and outstanding. ITEM 7. FINANCIAL STATEMENTS and EXHIBITS. (a) Not applicable. (b) Not applicable. (c) Exhibits: 4.3 Agreement dated as of June 1, 1993 between the Company under its prior name, Mr. Rooter Corporation, and the personal representatives of Mr. Donald J. Dwyer, Sr., the Estate and The Trust. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. THE DWYER GROUP, INC. Dated: July 31, 1997 By: /s/ THOMAS J. BUCKLEY ------------------------------------- Thomas J. Buckley Chief Financial Officer and Treasurer EX-4.3 2 AGREEMENT EXHIBIT 4.3 AGREEMENT This Agreement (this "Agreement") is dated as of June 1, 1993, by and between Mr. Rooter Corporation, a Delaware corporation now named The Dwyer Group, Inc. (the "Company"), and Donald J. Dwyer, Sr. (together with his heirs, successors and assigns, "Mr. Dwyer"). R E C I T A L S: - - - - - - - - WHEREAS, as of June 1, 1993, the Company, Rainbow International Carpet Dyeing and Cleaning Co., a Texas corporation ("Rainbow"), Pride Venture Capital, Inc., a Texas corporation doing business under the name General Business Services ("GBS"), and Mr. Dwyer entered into that certain Agreement and Plan of Reorganization and Share Exchange, dated as of June 1, 1993 (the "Reorganization Agreement"), pursuant to which Mr. Dwyer was issued shares of the Company's common stock, $.20 par value per share ("Common Stock"), in exchange for all of the outstanding stock of Rainbow and GBS (the "Exchange") and GBS and Rainbow became wholly owned subsidiaries of the Company; and WHEREAS, pursuant to the Reorganization Agreement and the Exchange, Mr. Dwyer was issued 8,071,110 shares of Common Stock, of which 680,600 shares were to be placed in escrow pursuant to the Reorganization Agreement until GBS met certain earnings requirements; and WHEREAS, subsequent to such issuance, the Company effected a one for two reverse stock split such that Mr. Dwyer's Common Stock (par value after split of $.l0 per share) issued in the Exchange became 4,035,555 shares of Common Stock, of which 340,300 shares were issued and were to be placed in escrow as contemplated by the Reorganization Agreement; although material definitive terms of the escrow were unresolved; and WHEREAS, Mr. Dwyer is deceased and his spouse, Theresa Dwyer, and his son, Donald J. Dwyer, Jr., were duly appointed and qualified and are serving as the independent Co-Executors of his Estate; and WHEREAS, in lieu of the escrow arrangement contemplated by the Reorganization Agreement, the Company and Mr. Dwyer, acting by and through his duly authorized and empowered personal representatives, desire to enter into this Agreement relating to 340,300 shares of Common Stock of the Company, to be effective as of June 1, 1993; A G R E E M E N T: - - - - - - - - - NOW, THEREFORE, in consideration of the mutual agreements, representations, and warranties contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Mr. Dwyer, acting by and through his duly authorized and empowered personal representatives, hereby agree as follows: 1. Definitions. ----------- As used in this Agreement, the following terms shall have the following meanings: (a) "Assumed Overhead" means the dollar amount of corporate general and administrative overhead expenses necessary to operate GBS independently of the Company which is initially -1- equal to $138,000 annually for the fiscal years ended December 31, 1994 through and including December 31, 1997, after which time such dollar amount will increase 2.5% per fiscal year. (b) "Earnout" means that the Net Earnings of GBS equal or exceed $750,000 for any twelve consecutive calendar months, up to and including December 31, 2000. (c) "Independent Directors" means the directors of the Company who are neither employees of the Company nor members of Mr. Dwyer's family or heirs. (d) "Net Earnings" means, for any period of twelve consecutive calendar months, the net income of GBS for such period as determined in accordance with generally accepted accounting principles, prior to any deduction for federal, state, local and foreign income taxes and state franchise taxes as adjusted by (a) adding to such net income the allocation to GBS of corporate general and administrative expenses for such period (b) subtracting from such net income the Assumed Overhead with respect to that period (prorated for any partial year), and (c) excluding (i) net pre-tax extraordinary gains or losses (including all fees and expenses relating thereto), and (ii) net pre-tax gains or losses (including all fees and expenses relating thereto) attributable to asset sales not in the ordinary course of business. (e) "Qualified Sale" means a Transfer of GBS to a third party who is not affiliated with the Company which results in consideration to the Company in an amount sufficient to provide a net profit to, the Company before federal income taxes on the date of Transfer of at least $750,000 (which amount shall be increased by 2.5% per year beginning with the fiscal year ending December 31, 1998). For purposes of this calculation, the consideration received shall be determined as follows: (i) in a sale for cash, the cash received by the Company from the acquiror; (ii) if, or to the extent, the consideration received by the Company is in the form of stock in a publicly held company, the closing price of such stock as of the date the agreement to sell GBS is signed; and (iii) if, or to the extent, the consideration received by the Company is in the form of other property or rights (including notes receivable), the fair market value of such property or rights as determined in accordance with Section 4 of this Agreement. (f) "Transfer" with respect to GBS means a sale of all of the outstanding stock of GBS, a sale of substantially all of the assets of GBS, or a sale of GBS by merger, which sale has been approved by the Independent Directors. (g) "Shares" means 340,300 shares of Common Stock of the Company, as constituted on the date of the execution of this Agreement. 2. Cancellation of Prior Shares. ---------------------------- To properly reflect the intent of the parties to the Reorganization Agreement, the 340,300 shares of Common Stock (giving effect to the subsequent reverse stock split) issued to Mr. Dwyer pursuant to the Reorganization Agreement, and any stock certificate purporting to evidence the same, shall be and hereby are canceled on the Company's books and records and returned to the status of authorized but unissued shares of Common Stock, all effective as of June 1, 1993. In -2- addition, any stock certificate representing the 680,600 shares of Common Stock of the Company (prior to giving effect to the subsequent reverse stock split) are also hereby cancelled and of no further force and effect. 3. Contingent Issuance of Shares. ----------------------------- (a) Upon the occurrence of all of the following conditions, the Company covenants and agrees to issue the Shares to Mr. Dwyer as additional consideration to him for the Exchange: (i) Earnout has been achieved prior to or on December 31, 2000; (ii) Mr. Dwyer notifies the Company that Earnout has been achieved and requests in writing that the Shares be issued; (iii) The Chief Financial Officer of the Company has certified that Earnout has been achieved; (iv) The Company's independent accounting firm confirms that in its opinion, but without an audit in accordance with generally accepted auditing standards, Earnout has been achieved; and (v) The Independent Directors determine by majority vote that Earnout has been achieved. (b) Prior to the time Earnout has been achieved, upon the occurrence of all of the following conditions, the Company will issue the Shares to Mr. Dwyer as additional consideration for the Exchange: (i) A Qualified Sale has occurred prior to December 31, 2000; (ii) Mr. Dwyer notifies the Company that a Qualified Sale has occurred and requests in writing that the Shares be issued; (iii) The Chief Financial Officer of the Company has certified that a Qualified Sale has occurred; (iv) The Company's independent accounting firm confirms that in its opinion, but without an audit in accordance with generally accepted auditing standards, a Qualified Sale has occurred; and (v) The Independent Directors determine by majority vote that a Qualified Sale has occurred. (c) In making their determination in Sections 3(a)(v) or 3(b)(v) above, the Independent Directors will rely on the most recent audited financial statements of GBS available at the time of such determination. If the Independent Directors in their sole discretion believe the available audited financial statements are not representative of the period for which Earnout is to be determined or of the Qualified Sale, the Independent Directors may in their discretion, but at Mr. Dwyer's sole expense, order an audit by the Company's independent accountants or a review under AICPA -3- Statement on Auditing Standards No.71 (SAS 71) to assist in the determination of whether Earnout has been achieved or a Qualified Sale has occurred. (d) In the event neither Earnout is achieved nor a Qualified Sale has occurred prior to December 31 2000, this Agreement shall terminate and be of no further force and effect and neither Mr. Dwyer nor his personal representatives, heirs, devisees and assigns shall have any claim against the Company or any other person with respect to the Shares. (e) Upon issuance as set forth above, the Shares will be duly authorized, validly issued, fully paid, and nonassessable shares of the Common Stock of the Company. 4. Valuation Procedure: ------------------- To the extent other property or rights are received as consideration for a Transfer of GBS, the fair market value of such property or rights on the date of such Transfer will be determined as follows: (a) One or more independent financial experts will determine the value as follows: (i) by an independent financial expert chosen by the Independent Directors of the Company in their sole discretion (paid for by the Company); (ii) Mr. Dwyer, at his option and sole expense, may hire his own independent financial expert for such valuation; and (iii) to the extent Mr. Dwyer elects to engage a financial expert and the two experts chosen in (a)(i) and (a)(ii) above are unable to agree on the fair market value of such property, the two such experts shall choose a third independent financial expert (paid for by the Company and Mr. Dwyer, on an equal basis), and the fair market value for the property, final and binding on the Company and Mr. Dwyer, shall be the average of the values determined by each of the three financial experts. (b) In determining the fair market value of the consideration received, any deferred consideration or rights to receive money or property after the Transfer, including without limitation, any discounted debt, deferred payments, or other debt, shall be valued at their present value at the time of Transfer. 5. Additional Investment. --------------------- Until this Agreement is terminated as provided in Section 6 of this Agreement, any further investment by the Company in GBS will be in the form of a loan bearing interest at rates no lower that the prime rate as shown in the Money Rates section of the Wall Street Journal. 6. Termination. ----------- This Agreement shall be terminated upon the earlier of (a) issuance of the Shares pursuant to Sections 3(a) or (b) of this Agreement, or (c) December 31, 2000. -4- 7. Miscellaneous provisions: ------------------------ (a) This Agreement shall be subject to and governed by the laws of the State of Texas, excluding any conflicts-of-law rule or principle that might refer the construction or interpretation of this Agreement to the laws of another state. (b) In the event of a dispute regarding the interpretation of this Agreement, the decision of a majority of the Independent Directors shall be final and binding on all parties. (c) Any notice required to be given pursuant to this Agreement shall be in writing, which shall include, without limitation, telex, telecopy or other electronic transmission reduced to written form. Notice given by telex, telecopy or other electronic transmission shall be deemed to have been given and received when sent. Notice by mail shall be deemed to have been given and received three (3) calendar days after the day first deposited in the United States mail, certified mail, first class postage prepaid, return receipt requested, and as addressed as shown below. Notice by overnight service shall be deemed to have been given and received the day after they are sent. All notices shall be to the following addresses, unless changed in writing by the respective addressee: If to the Company: The Dwyer Group, Inc. 1010 N. University Parks Drive Waco, Texas 76707 Attn: President Telecopy No: (254) 745-2590 If to Mr. Dwyer or his personal representatives, heirs or assigns: In care of Theresa Dwyer and Donald Dwyer, Jr 1224 Joy Drive ----------------------------------------- Waco, TX 76708 ----------------------------------------- Telecopy No.: (245) 245-2590 ---------------------------- (d) This Agreement constitutes the entire agreement of the parties hereto relating to the matters contained herein, superseding all prior and contemporaneous contracts or agreements, whether oral or written, including any agreements with respect to the escrow of the Shares. (e) This Agreement may be amended or modified from time to time only in writing signed by all parties hereto. Each such instrument shall be reduced to writing and shall be designated on its face an "Amendment" or an "Addendum" to this Agreement. (f) This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective personal representatives, heirs, successors, and assigns. (g) This Agreement may be executed in any number of counterparts with the same effect as if all signatory parties had signed the same document. All counterparts shall be construed together and shall constitute one and the same instrument. -5- (h) If any provision of this Agreement or the application thereof to any person, entity or circumstance shall be held invalid or unenforceable to any extent, the remainder of this Agreement and the application of such provision to such or other persons, entities or circumstances shall not be effected thereby and shall be enforced to the greatest extent permitted by law. Furthermore, in lieu of such void or unenforceable clause(s), there shall be added automatically as a part of this Agreement a clause as similar in terms to such void or unenforceable clause(s) as may be possible, valid and enforceable. (i) The headings in this Agreement are inserted for convenience and identification only, and are not intended to describe, interpret, define, or limit the scope, or intent of this Agreement or any clause hereof. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized officer or representatives on this 10 day of July, 1997, but as of and effective as of June 1, 1993. MR. ROOTER CORPORATION (now named The Dwyer Group, Inc.) By: /s/ Robert Tunmire -------------------------------------------- Robert Tunmire, President DONALD J. DWYER, SR. By: /s/ Theresa Dwyer -------------------------------------------- Theresa Dwyer, individually as Independent Executor of the Estate of Donald J. Dwyer, Sr., Deceased, and as Trustee of the Dwyer Family Trust By: /s/ Donald J. Dwyer, Jr -------------------------------------------- Donald J. Dwyer, Jr., individually and as Independent Executor of the Estate of Donald J. Dwyer, Sr., Deceased, and as Trustee of the Dwyer Family Trust -6- -----END PRIVACY-ENHANCED MESSAGE-----