He had started his company right out of college and spent thirty-years building it into one of the top computer parts manufacturers in the country. Then he started designing and manufacturing custom computer chips for work stations and file servers, then released his own line of computer chips for the mass market. That’s when his business boomed.
You couldn’t tell it by looking at him because he wore jeans and a black polo shirt to work every day, but he was one of the richest men the country had. He was also fiercely loyal to his family, friends, partners, and employees. He had helped put me through law school and refused repayment. I would be forever in his debt.
“Well, the contract is pretty detailed, but there is nothing out of the ordinary jumping out at me,” I said, shuffling the papers. “It’s a standard purchase in entirety.”
“Purchase in entirety? What the hell does that mean?”
“That means they are buying the whole shebang: physical assets, intellectual property, real estate, customer lists, fixtures and furniture, equipment, employment contracts, debt, etcetera, etcetera, etcetera. Everything that is owned by Benson Digital is being acquired by them if you accept this deal.”
He gave me a thoughtful nod and scratched his chin. “So, no red flags? No ‘oh shits’ or ‘gotchas’?”
“None that I can see,” I said. “The only thing that might be of concern is what happens after the fact that’s not covered by this agreement.”
“Meaning?”
I smiled and gave him a look. Uncle Allen was exponentially smarter than I was, and probably knew more about contract law. I sometimes thought he asked me for further explanations just to see how smart I was.
I said, “Meaning, what do they plan to do with the company once they’re in control? What changes might they make? Have you had that conversation with them?”
His eyebrows knitted in the middle. “They’re not going to be in control after the acquisition,” he said. “Part of this deal is that I would remain as CEO after the acquisition for a period of three years, minimum. I will still be the one making the major decisions and controlling the board.”
“You may still be CEO and running things,” I said, scanning the clause in the document that detailed his employment contract after the fact. “However, you will still be at the mercy of the board of directors. At the end of the day, you still work for them.”
“The board will support me,” he said confidently. “They always have.” I made a sour face that he picked up on. “What’s with that face? You look your mother when you do that with your nose.”
“Boards come and go, Uncle Allen,” I said, rubbing the tip of my nose with a knuckle. I loved hearing that I reminded him of my mom. “And boards change.” I held up the page I had been scanning. “According to this, Price Bean & Whitlock has the right to add three new board seats and appoint members to fill those seats. That would give them control of a third of the board’s votes. And given their reputation, it would not be beneath them to buy the votes of the others.”
He narrowed his blue eyes at me and lowered his voice to an angry growl. “You think Price Bean & Whitlock would try to bribe board members behind my back to vote me out?”
“Not necessarily. I’m just saying that after the dust settles, even with a three-year employment contract, you’re only going to be in charge as long as they allow you to be.” I gathered up the pages into a neat stack. It bothered me that I was causing my favorite uncle such heartburn.
“Shit,” he said, rubbing his eyes. “That’s what I was afraid of.”
“Look, Uncle Allen, on the surface it looks like a great deal for you and the shareholders. At the end of the day, you will personally profit over a hundred-million-dollars. That’s an enormous am
ount of money. Why are you letting this bug you so? Why not retire and enjoy it?”
“I’m too young to retire, Katie,” he said with a smile that I thought looked tired despite his best efforts to prove otherwise. “I have a lot of years left in these old bones. I’m only fifty-nine, you know. I’m not one to sit on a beach and sip fruity drinks or chase a little ball around a golf course. If I tried to retire I’d drive myself and everyone around me nuts. Besides, it’s not about the money. I already have plenty of money.”
“Then, why not take the proceeds from the sale, and do something humanitarian with them? Invest in small businesses. Start a business incubator. Fund school programs or scholarships? Give it away?”
“Yeah, I suppose I could just cash out and walk away,” he said, rubbing the bridge of his nose as if a headache was coming on. “That’s not what I’m worried about.”
“Okay, then just spell it out for me, Uncle Allen. Obviously, there’s something here that I’m missing. What are you worried about?”
He took a deep breath and blew it out slowly. “Benson Digital employs three thousand people. Those people have families who rely on their weekly paychecks. I just want to make sure that those jobs do not go away.”
“So, you’re worried that Price Bean & Whitlock may want to move manufacturing out of the country?” I asked. “To China or Mexico, maybe?”
He gave me a slow nod. “Yes, that is a concern.”
“And what did your in-house counsel say?” I asked. I looked around the conference room as if I’d just noticed we were alone. “I assume he negotiated this contract. In fact, why isn’t he here?”
“Jeff has been pushing this deal hard,” he said, referring to Jeff Chase, his in-house attorney and oldest friend. “A little too hard for my taste. That’s why you’re here to offer a second set of eyes.”
“What exactly does that mean?” I asked. “He’s been pushing the deal hard?”
“He’s a shareholder, and the shareholders want to sell,” Uncle Allen said with a shrug. “And I don’t blame them. Especially Jeff. He’s been with me since day one and worked for peanuts a lot of those years. He owns a lot of stock. He’ll profit handsomely if we sell.”