<PAGE> 1
REGISTRATION NO. 333-_________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PRIVATE BUSINESS, INC.
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(Exact Name of Registrant as Specified in its Charter)
Tennessee 62-1453841
--------------------------------- ----------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
9010 Overlook Boulevard
Brentwood, Tennessee 37027
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(Address of Principal Executive Offices)
(Zip Code)
Non-Qualified Stock Option Agreements
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(Full Name of Plan)
Jerry L. Cover
9010 Overlook Boulevard, Brentwood, Tennessee 37027
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(Name and Address of Agent for Service)
(615) 221-8400
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(Telephone number, including area code for agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Proposed Proposed Maximum Amount of
Title of Securities Amount to be Maximum Offering Aggregate Offering Registration
to be Registered Registered(1) Price Per Share(2) Price Fee
<S> <C> <C> <C> <C>
Common Stock, $0.01 Par Value 1,748,000 Shares $5.34 $9,334,320 $2,595
</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933 as
amended (the "Securities Act"), this registration statement also covers an
indeterminate number of additional shares that may become issuable pursuant to
the anti-dilution adjustment provisions of the Plan.
(2) Pursuant to Rule 457, the offering price is estimated solely for the purpose
of calculating the registration fee on the basis of the highest price per share
at which the options may be exercised.
The Index to Exhibits appears on sequentially numbered page [7.]
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The documents listed below are incorporated by reference in this
Registration Statement. In addition, all documents subsequently filed by Private
Business, Inc. (the "Company," the "Registrant" or "Private Business") pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934
(the "Exchange Act"), prior to the filing of a post-effective amendment which
indicates that all securities offered have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and to be a part thereof from the date
of filing of such documents. Any statement contained in a document incorporated
or deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
(1) Amendment No. 6 to the Company's Registration Statement on
Form S-1 (File No. 333-75013), filed May 26, 1999.
(2) The description of the Company's shares of Common Stock, no
par value (the "Common Stock"), contained in Amendment No. 3
to the Registration Statement on Form S-1 (File Number
333-75013), including any amendment or report filed for the
purposes of updating such description.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
The audited consolidated financial statements and schedules of the
Company incorporated by reference herein have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority of said firm in
giving said reports.
ITEM 6. INDEMNIFICATION.
Under our charter, and in accordance with Section 48-18-502 of the
Tennessee Business Corporation Act ("TBCA"), Private Business will indemnify any
person who was or is a party, or is threatened to be made a party, to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than a "derivative" action by
or in the
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right of Private Business) by reason of the fact that such person is or was a
director of Private Business, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement in connection with such action,
suit or proceeding if such person acted in good faith and in a manner such
person reasonably believed to be in or not opposed to the best interests of
Private Business, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe was unlawful.
The charter provides that Private Business will pay for the expenses
incurred by an indemnified director in defending the proceedings specified above
in advance of their final disposition, provided that such person agrees to
reimburse Private Business if it is ultimately determined that such person is
not entitled to indemnification. The charter also provides that Private Business
may, in its sole discretion, indemnify any person who is or was one of its
employees and agents or any person who is or was serving at the request of
Private Business as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise to the same
degree as the foregoing indemnification of directors and officers. In addition,
Private Business may purchase and maintain insurance on behalf of any person who
is or was a director, officer, employee or agent of Private Business or another
corporation, partnership, joint venture, trust or other enterprise against any
liability asserted against and incurred by such person in such capacity, or
arising out of the person's status as such whether or not Private Business would
have the power or obligation to indemnify such person against such liability
under the provisions of the TBCA. Private Business maintains insurance for the
benefit of Private Business's officers and directors insuring such persons
against various liabilities, including liabilities under the securities laws.
In addition, Private Business has entered into indemnification
agreements with its executive officers, directors and certain key employees.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS.
The Exhibits to this Registration Statement are listed in the Index to
Exhibits on Page E-1 of this Registration Statement, which Index is incorporated
herein by reference.
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<PAGE> 4
ITEM 9. UNDERTAKINGS.
The Company hereby undertakes:
1. To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high and of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3 and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the Registration Statement.
2. That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
3. To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
4. The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Company's annual report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
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<PAGE> 5
5. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to partners, directors, officers and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise, the
Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a partner, director, officer or controlling person of the
Company in the successful defense of any action suit or proceeding) is asserted
by such partner, director, officer or controlling person in connection with the
securities being registered, the Company will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Brentwood, State of Tennessee, on May 20, 1999.
PRIVATE BUSINESS, INC. NON-QUALIFIED STOCK OPTION AGREEMENTS
By: /s/ Jerry L. Cover By: /s/ Fred P. Read
---------------------------------- -----------------------------------
Jerry L. Cover Fred P. Read
Chief Executive Officer Vice President and Chief Financial
Officer
POWER OF ATTORNEY
Each person whose signature to the Registration statement appears below
hereby appoints Jerry L. Cover or Fred P. Read and each of them, any one of whom
may act without the joinder of the others, as his attorney-in-fact to execute in
the name and behalf of any such person, individually and in the capacity stated
below, and to file all amendments and post-effective amendments to this
Registration Statement, which amendment or amendments may make such changes and
additions in this Registration Statement as such attorney-in-fact may deem
necessary or appropriate.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ William B. King Chairman of the Board May 20, 1999
- ------------------------------------
William B. King
/s/ Jerry L. Cover President and Chief Executive Officer May 20, 1999
- ------------------------------------ (Principal Executive Officer)
Jerry L. Cover
/s/ Fred P. Read Vice President, Chief Financial Officer May 20, 1999
- ------------------------------------ (Principal Financial and Accounting Officer)
Fred P. Read
/s/ Thomas L. Black Director May 20, 1999
- ------------------------------------
Thomas L. Black
/s/ Gregory A. Thurman Director May 19, 1999
- ------------------------------------
Gregory A. Thurman
/s/ Brian J. Conway Director May 20, 1999
- ------------------------------------
Brian J. Conway
/s/ Bruce R. Evans Director May 20, 1999
- ------------------------------------
Bruce R. Evans
/s/ Gary W. Cage Director May 20, 1999
- ------------------------------------
Gary W. Cage
</TABLE>
<PAGE> 7
EXHIBIT INDEX
Exhibit No. Description of Exhibit
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4.1 Amended and Restated Charter of Company (incorporated by
reference to Exhibit 3.1 to the Company's Registration
Statement No. 333-75013 on Form S-1)
4.2 Amended and Restated By-Laws of Company (incorporated by
reference to Exhibit 3.2 to the Company's Registration
Statement No. 333-75013 on Form S-1)
4.3 Form of Stock Option Agreements
5 Opinion of Harwell Howard Hyne Gabbert & Manner, P.C.
23.1 Consent of Arthur Andersen LLP, Independent Public
Accountants.
23.2 Consent of Harwell Howard Hyne Gabbert & Manner, P.C.
(contained in Exhibit 5)
24 Power of Attorney (see signature page)
E-1
<PAGE> 1
EXHIBIT 4.3
FORM OF
PRIVATE BUSINESS, INC.
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT is made and entered into by and between
Private Business, Inc., a Tennessee corporation (the "CORPORATION"), and _______
(the "OPTIONEE"), effective _____________________ (the "DATE OF GRANT").
1. Recitals. In consideration of the mutual covenants hereinafter
set forth and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound hereby, have
entered into this Agreement.
2. Grant of Option. The Corporation hereby grants to Optionee the
option (the "OPTION"), exercisable in whole or in part, to
purchase _____________________ (________) shares of the
Corporation's Common Stock (the "STOCK") for an exercise price
of ___________________ ($_____) per share, subject to the
provisions of this Agreement.
3. Non-qualified Option Plan. This Option is granted as a
non-qualified stock option, and is not intended to qualify as
an incentive stock option, as that term is used in Section 422
of the Internal Revenue Code of 1986, as amended.
4. Timing of Exercise. The Optionee may exercise this Option with
respect to the shares above at any time after _______________,
subject to termination provisions of this Agreement and the
change of control provisions in Section 11 below.
5. Termination of Option. This Option shall immediately cease on
the sooner of (i) the expiration of ten (10) years from the
Date of Grant with respect to any then unexercised portion
hereof, or (ii) the termination of the Optionee's employment
by the Corporation for any reason, provided that the Option
shall be exercisable after such termination of employment only
to the extent provided in Paragraph 8 below. If the Optionee
is not an employee of the Corporation, but is an employee of a
subsidiary or affiliate of the Corporation, references in this
Agreement to employment with the Corporation shall be deemed
to refer to employment with such subsidiary or affiliate of
the Corporation. Transfers of employment among the Corporation
and its subsidiaries and affiliates shall not be deemed to be
termination of employment.
6. Manner of Exercise. This Option shall be exercised by the
Optionee (or other party entitled to exercise the Option under
Paragraph 8 of this Agreement) by delivering written notice to
the Corporation stating the number of shares
<PAGE> 2
of Stock to be purchased, the person or persons in whose name
the shares are to be registered and each such person's address
and social security number. Such notice shall not be effective
unless the following conditions are satisfied.
(a) Payment in Full. The notice must be accompanied by
the full purchase price for all shares so purchased.
The purchase price shall be payable (i) in cash
(payment in currency or by certified check, cashier's
check or postal money order shall be considered
payment in cash); or (ii) in the form of shares of
Stock already owned by Optionee; or (iii) in the form
of unexercised portions of vested Options which shall
be valued at the difference between the current value
of the Stock as determined by the Corporation's Board
of Directors, and the Option price.
(b) Tax Withholding Requirements. The Corporation shall
have the right to require the Optionee to remit to
the Corporation an amount sufficient to satisfy any
federal, state and local withholding tax requirements
prior to the delivery of any such shares.
(c) Execution of a Stock Redemption Agreement. The
Corporation may require the Optionee to become a
party to a Stock Redemption Agreement substantially
in the form of the Stock Redemption Agreement
attached hereto as Exhibit 1, or to other shareholder
or buy-sell agreements (any such agreement being
referred to herein as a "SHAREHOLDERS AGREEMENT")
upon and as a condition to exercise of the Option.
(d) Execution of Investment Letter. The Corporation may,
as a condition to exercise of this Option, require
the Optionee to execute an agreement in form and
substance satisfactory to the Corporation in which
the Optionee or such other recipient of the shares
represents that he or she is purchasing the shares
for investment purposes, and not with a view to
resale or distribution.
7. Nontransferability. Except as otherwise expressly provided
herein, this Option shall not be transferable by the Optionee
otherwise than by will or by the laws of descent and
distribution, and this Option is exercisable during Optionee's
lifetime only by the Optionee. The terms of the Option shall
be binding on the executors, administrators, heirs and
successors of the Optionee.
8. Termination of Employment.
(a) Termination by Death. If the Optionee's employment by
the Corporation terminates by reason of death, then
notwithstanding the provisions of Paragraph 4 hereof,
this Option shall immediately
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become one hundred percent (100%) vested and may
thereafter be exercised by the legal representative
of the estate or by the legatee of the Optionee under
the will of the Optionee, for a period of one year
from the date of such death or until the expiration
of the stated term of the Option, whichever period is
the shorter.
(b) Termination by Reason of Disability. If the
Optionee's employment by the Corporation terminates
by reason of Disability (as determined by the
Corporation's Board of Directors), then
notwithstanding the provisions of Paragraph 4 hereof,
this Option shall immediately become one hundred
percent (100%) vested and may thereafter be exercised
by the Optionee for a period of one year from the
date of such termination of employment or until the
expiration of the stated term of the Option,
whichever period is the shorter; provided, however,
that, if the Optionee dies within such one-year
period, the Option shall thereafter be exercisable
for a period of twelve months from the date of such
death or until the expiration of the stated term of
the Option, whichever period is shorter.
(c) Termination by Reason of Early or Normal Retirement.
If the Optionee's employment by the Corporation
terminates by reason of Normal or Early Retirement
(defined below), this Option may thereafter be
exercised to the extent the Option was exercisable at
the time of such Retirement, for a period of one year
from the date of such termination of employment or
until the expiration of the stated term of the
Option, whichever period is shorter; provided,
however, that if the Optionee dies within such
one-year period, the Option shall thereafter be
exercisable to the extent to which it was exercisable
at the time of death for a period of twelve months
from the date of such death or until the expiration
of the stated term of the Option, whichever period is
shorter. "EARLY RETIREMENT" means retirement, with
the express consent of the Corporation at or before
the time of such retirement, from active employment
with the Corporation or any subsidiary or affiliate
prior to age 65, in accordance with any applicable
early retirement policy of the Corporation then in
effect. "NORMAL RETIREMENT" means retirement from
active employment with the Corporation or any
subsidiary or affiliate on or after age 65.
(d) Other Termination; Violation of NonCompete. If the
Optionee's employment by the Corporation is
terminated for any reason other than death,
Disability or Normal or Early Retirement, this Option
shall thereupon terminate, except that this Option
may be exercised by the Optionee, to the extent
otherwise then exercisable, for a period of three
months from the date of such termination of
employment or the
3
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expiration of the Option's terms (whichever period is
the shorter) if such termination is other than for
cause as determined by the Board of Directors of the
Corporation. The violation of any applicable
noncompetition or confidentiality agreements with the
Corporation or any of its subsidiaries or affiliates
shall be deemed to result in termination for cause
for purposes of this Agreement and shall result in
the immediate cancellation of any outstanding portion
of this Option, whether or not the Optionee is
employed by the Corporation at the time of such
violation.
9. Restrictive Agreement; Legend. The Optionee understands and
acknowledges that the shares of Stock that may be purchased
under this Option have not been registered under the
Securities Act of 1933, as amended (the "ACT"), or any state
securities law and may not be transferred except pursuant to
an effective registration statement under the Act and any such
state securities law or pursuant to an applicable exemption
therefrom. Any stock certificate or certificates representing
shares may bear a legend approved by the Board of Directors of
the Corporation reflecting such restrictions on transfer and
any other applicable restrictions on transfer, including any
restrictions contained in any applicable Shareholders
Agreement.
10. Adjustment. In the event of any merger, reorganization,
consolidation, recapitalization, extraordinary cash dividend,
stock dividend, stock split or other change in corporate
structure affecting the Stock, the number of shares of Stock
of the Corporation subject to this Option and the exercise
price per share of such shares shall be appropriately adjusted
by the Corporation as may be determined by the Board of
Directors in its sole discretion.
[11. Change of Control. Notwithstanding Section 4 above, this
Option will be fully vested immediately prior to a Change of
Control of the Company. A "Change in Control" shall be deemed
to have occurred if (i) the Company shall enter into an
agreement to be merged or consolidated with another
corporation and as a result of such merger or consolidation
less than 75% of the outstanding voting securities of the
surviving or resulting corporation would be owned in the
aggregate by the former shareholders of the Company, as the
same shall have existed immediately prior to such merger or
consolidation, (ii) the Company shall enter into an agreement
to sell all or substantially all of its assets to another
corporation which is not a wholly-owned subsidiary, or (iii) a
person, within the meaning of Section 3(a)(9) or of Section
13(d)(3) (as in effect on the date hereof) of the Securities
and Exchange Act of 1934 ("EXCHANGE ACT")), shall acquire more
than 60% of the outstanding voting securities of the Company
(whether directly, indirectly, beneficially or of record). For
purposes hereof, ownership of voting securities shall take
into account and shall include ownership as determined by
applying the
4
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provisions of Rule 13d-3(d)(1)(i) (as in effect on the date
hereof) pursuant to the Exchange Act.] [This paragraph may or
may not be in the agreements based upon the decision of the
board]
12. No Rights Until Exercise. The Optionee shall have no rights
hereunder as a shareholder with respect to any shares subject
to this Option until the date of the issuance of a stock
certificate to the Optionee for such shares upon due exercise
of this Option.
13. Amendment. The Board of Directors of the Corporation may amend
the terms of this Option, but no such amendment shall impair
the rights of the Optionee hereunder without the Optionee's
consent.
14. Binding Effect; Successors. This Agreement shall be binding
upon and shall inure to the benefit of the parties and their
respective heirs, successors, personal representatives and
assigns; provided that nothing herein shall be construed as an
authorization or right for any party to assign his rights or
obligations hereunder.
15. Entire Agreement. The entire understanding among the parties
is set forth in this Agreement and this Agreement supersedes
all prior agreements, whether oral or written, among the
parties hereto.
16. Governing Law. This is a Tennessee contract and its terms and
provisions shall be governed by and construed in accordance
with the laws of the State of Tennessee.
17. Severability. If any term, covenant, condition or provision of
this Agreement or the application hereto to any person or
circumstance shall be determined to be invalid or
unenforceable, the remainder of this Agreement, or the
application of such term, covenant, condition or provision to
persons or circumstances other than those to which it is held
invalid or unenforceable, shall not be affected thereby; and
each term, covenant, condition and provision of this Agreement
shall be valid and be enforced to the fullest extent permitted
by law.
18. Notices. Any notices required to be given hereunder shall be
in writing and shall be either delivered personally or mailed
by U.S. certified mail, return receipt requested, to the
parties at their respective last known addresses. Notices
delivered personally shall be deemed to be given upon delivery
and notices delivered by mail shall be deemed to be given
three (3) days after the mailing thereof.
19. Headings. The marginal notes used as headings for the various
paragraphs of this Agreement are used only as a matter of
convenience for reference,
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and are not to be construed as part of this Agreement or to be
used in determining the intent of the parties hereto.
IN WITNESS WHEREOF, the parties have caused this Stock Option Agreement
to be duly executed on the dates indicated below, effective as of the Date of
Grant.
PRIVATE BUSINESS, INC.
By: ________________________________
Title: _____________________________
Date: ___________________, _________
OPTIONEE:
____________________________________
Date: ___________________, _________
6
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EXHIBIT 1
STOCK REDEMPTION AGREEMENT
THIS STOCK REDEMPTION AGREEMENT (the "Agreement") is made and entered
into on this _____ day of _____________, 199__, by and between _______________
______________________ ("Shareholder") and Private Business, Inc., a Tennessee
corporation (the "Corporation").
1. Recitals. The Shareholder is the owner of a portion of the
issued and outstanding stock of the Corporation, and it is
anticipated that the Shareholder may acquire additional shares
of the Corporation's stock in the future. The Shareholder and
the Corporation feel that it is in their best interests to
impose certain restrictions upon the transfer of the
Corporation's stock by the Shareholder (including the stock
now owned by the Shareholder and all additional stock acquired
by the Shareholder in the future) and to provide for the
orderly disposition of the Corporation's stock upon certain
contingencies, and they have therefore entered into this
Agreement in consideration of the mutual covenants contained
herein.
2. General Restrictions on the Transfer of Stock. Except as
otherwise permitted by the terms of paragraphs 3 and 4 of this
Agreement, the Shareholder may not sell, offer to sell,
pledge, hypothecate, or otherwise transfer or encumber any
shares of stock of the Corporation now or hereafter owned by
such Shareholder without the prior written consent of the
Corporation.
3. Restrictions on Transfers During Life. The Shareholder may not
transfer or encumber by any method whatsoever any or all of
the Shareholder's stock in the Corporation without first
offering the same in writing to the Corporation at a price
computed in accordance with paragraph 5 of this Agreement,
which price shall be determined as if the Shareholder's
employment with the Corporation had terminated on the date of
the Shareholder's written offer. If the Corporation accepts
such an offer to purchase stock, payment for such stock shall
be made in accordance with the provisions of paragraph 6 of
this Agreement. If this offer is not accepted by the
Corporation within sixty (60) days after the receipt of the
written offer, the Shareholder may transfer the Shareholder's
stock to whomever the Shareholder wishes, provided that such
transfer must be at a price and on terms which are not more
favorable to the transferee than the price and terms upon
which the stock was offered to the Corporation. If the
Shareholder does not dispose of the offered shares within
ninety (90) days after the expiration of the Shareholder's
offer to the Corporation, then the Shareholder shall not
thereafter transfer or encumber such shares unless the
Shareholder first recomplies with the terms of this paragraph.
<PAGE> 8
4. Option to Redeem Stock Upon Shareholder's Termination of
Employment. At such time as the Shareholder ceases to be an
employee of the Corporation, the Corporation shall have a
period of thirteen months following the termination of
employment of the Shareholder in which to elect to purchase
all or any portion of the stock of the Corporation owned by
the Shareholder. Should the Corporation elect to exercise said
option, the closing of the transaction shall take place as
soon after the Shareholder's termination of employment as is
reasonably possible, and the purchase will be at the same
price and upon the same terms as are provided for in
paragraphs 5 and 6 of this Agreement.
5. Purchase Price. The purchase price per share of any shares of
stock of the Corporation purchased under the terms of this
Agreement shall be determined as follows:
a. Termination of Employment for Reasons Other Than
Cause. If the Shareholder's employment with the
Corporation terminates for reasons other than cause
(as hereinafter defined), then the purchase price per
share of the stock purchased shall be the greater of
(i) the Shareholder's cost of such shares, or (ii)
the following applicable percentage of the per share
value of the Corporation's stock as valued from time
to time by the Corporation's Board of Directors:
<TABLE>
<CAPTION>
Shareholder's Years
of Employment Applicable Percentage
------------- ---------------------
<S> <C>
Less than 10 70%
More than 10, less than 11 75%
More than 11, less than 12 80%
More than 12, less than 13 85%
More than 13, less than 14 90%
More than 14, less than 15 95%
More than 15 100%
</TABLE>
b. Termination of Employment for Cause. If the
Shareholder's employment with the Corporation
terminates for cause (as hereinafter defined), then
the purchase price of the stock purchased shall be
_____________ percent (_____%) of the amount that
would otherwise be payable under subparagraph 5(a)
above.
c. Definition of Cause. For the purposes of this
Agreement "cause" shall mean conduct determined by
the Board of Directors of the Corporation to be
detrimental to the best interests of the Corporation.
The violation of any applicable noncompetition or
confidentiality
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<PAGE> 9
agreements with the Corporation or any of its
subsidiaries or affiliates shall be deemed to result
in termination for cause for purposes of this
Agreement, whether or not the Shareholder is employed
by the Corporation at the time of such violation.
6. Matter of Payment. When the Corporation purchases stock in
accordance with the terms of this Agreement, payment for such
stock shall be made as follows:
a. Downpayment. ________________ percent (_____%) of the
purchase price of the shares being purchased shall be
paid in cash at the closing.
b. Payment of Remaining Balance. The remaining balance
of the purchase price shall be payable in sixty
equal, consecutive monthly installments of principal
and interest, with the first payment being due on the
first day of the month following the month in which
the closing occurs, and subsequent payments being due
on the same day of each succeeding month thereafter
until the note is paid in full. The payments shall be
equal in amount and shall contain both principal and
interest computed on the unpaid balance at the annual
rate in effect under section 7520 of the Internal
Revenue Code of 1986, as amended, during the month in
which the closing occurs; provided, however, that in
no event shall such rate exceed the maximum contract
rate of interest permitted under applicable law. The
obligation to make such deferred payments shall be
evidenced by an unsecured promissory note executed by
the Corporation's duly authorized officer
substantially in the form of the note attached hereto
as Exhibit A. The Corporation shall have the right to
prepay such note in whole or in part at any time
without penalty.
7. Method of Transfer. At the time of the closing of any sale
pursuant to the terms of this Agreement, the Shareholder (or
the Shareholder's estate) shall surrender to the Corporation
for cancellation certificates representing the Shareholder's
shares, duly endorsed in blank, or accompanied by a duly
executed stock power, in each case in proper form for
transfer. The Shareholder (or the Shareholder's estate) shall
also deliver a representation dated as of the date of the sale
to the effect that the delivery of such shares
of common stock will transfer good title to such shares, free
and clear of all liens, charges, security interests, pledges
or other encumbrances.
8. Endorsement of Stock Certificates. Upon the execution of this
Agreement, all certificates of stock owned by the Shareholder
shall be surrendered to the Corporation and endorsed as
follows:
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<PAGE> 10
"THIS CERTIFICATE IS TRANSFERABLE ONLY UPON
COMPLIANCE WITH THE PROVISIONS OF A CERTAIN AGREEMENT
DATED THE ______ DAY OF ______________________,
199__, BETWEEN THE CORPORATION AND
__________________, A COPY OF WHICH IS ON FILE WITH
THE SECRETARY OF THE CORPORATION."
9. Effect of Noncompliance. Any attempt to transfer or encumber
shares of stock in the Corporation without complying with the
terms of this Agreement shall be void and of no force or
effect whatsoever. In the event that any party to this
Agreement defaults in the performance of their obligations
hereunder, then in any such event the non-defaulting party
shall have the right to enforce this Agreement through a suit
for specific performance or otherwise (including the right to
obtain an injunction against the defaulting party). Nothing
herein contained, however, shall be construed as prohibiting
the non-defaulting party from pursuing any other remedies
available at law or in equity for such breach or threatened
breach. In the event it becomes necessary for any party to
employ an attorney to enforce the provisions of this
Agreement, the defaulting party shall be liable for reasonable
attorneys' fees, court costs and expenses so incurred by the
non-defaulting party.
10. Covenants by Shareholder Regarding Corporation's Status as S
Corporation. The Shareholder agrees that so long as the
Corporation has not voluntarily revoked its election to be an
S corporation for federal income tax purposes, the Shareholder
will not take any actions that would cause a termination of
the Corporation's election to be an S corporation. Any actions
by the Shareholder in violation of this covenant shall be null
and void.
11. Binding Effect; Successors. This Agreement shall be binding
upon and shall inure to the benefit of the parties and their
respective heirs, successors, personal representatives and
assigns; provided that nothing herein shall be construed as an
authorization or right for any party to assign his rights or
obligations hereunder.
12. Entire Agreement. The entire understanding among the parties
is set forth in this Agreement and this Agreement supersedes
all prior agreements, whether oral or written, among the
parties hereto.
13. Governing Law. This is a Tennessee contract and its terms and
provisions shall be governed by and construed in accordance
with the laws of the State of Tennessee.
14. Severability. If any term, covenant, condition or provision of
this Agreement or the application thereto to any person or
circumstance shall be determined
4
<PAGE> 11
to be invalid or unenforceable, the remainder of this
Agreement, or the application of such term, covenant,
condition or provision to persons or circumstances other than
those to which it is held invalid or unenforceable, shall not
be affected thereby; and each term, covenant, condition and
provision of this Agreement shall be valid and be enforced to
the fullest extent permitted by law.
15. Notices. Any notices required to be given hereunder shall be
in writing and shall be either delivered personally or mailed
by U.S. certified mail, return receipt requested, to the
parties at their respective last known addresses. Notices
delivered personally shall be deemed to be given upon delivery
and notices delivered by mail shall be deemed to be given
three (3) days after the mailing thereof.
16. Amendments. This Agreement may be amended at any time only by
the written consent of all of the parties who are then bound
by the terms hereof.
17. Headings. The marginal notes used as headings for the various
paragraphs of this Agreement are used only as a matter of
convenience for reference, and are not to be construed as part
of this Agreement or to be used in determining the intent of
the parties hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first written above.
PRIVATE BUSINESS, INC.
By: _________________________________
Its: ________________________________
SHAREHOLDER
_____________________________________
5
<PAGE> 12
STATE OF TENNESSEE )
COUNTY OF _______________ )
Personally appeared before me, ________________________, a Notary
Public, _______________________, with whom I am personally acquainted, and who
acknowledged that __he executed the within instrument for the purposes therein
contained.
WITNESS my hand, at office, this _____ day of ______________, 199__.
__________________________________
Notary Public
My Commission Expires:
_____________________
STATE OF TENNESSEE )
COUNTY OF _______________ )
Personally appeared before me, ________________________, a Notary
Public, _______________________, with whom I am personally acquainted, and who
acknowledged that __he executed the within instrument for the purposes therein
contained, and who further acknowledged that __he is the
___________________________ of Private Business, Inc., a Tennessee corporation,
and is authorized by the corporation to execute this instrument on behalf of the
corporation.
WITNESS my hand, at office, this _____ day of ______________, 199__.
__________________________________
Notary Public
My Commission Expires:
_____________________
6
<PAGE> 13
EXHIBIT A
PROMISSORY NOTE
$____________ Nashville, Tennessee ___________ ,____
FOR VALUE RECEIVED, Private Business, Inc., a Tennessee corporation
("Maker"), promises to pay to the order of ______________________________
("Payee") the principal sum of _____________________________________________
($____________), together with interest on the unpaid balance at the rate of
_______ percent (_____%) per annum. Interest and principal shall be payable in
sixty (60) equal, successive monthly installments of ___________________________
($____________), with the first such installment being due on _________________,
and subsequent installments being due on the same day of each succeeding month
thereafter until the indebtedness evidenced by this note is paid in full.
It is agreed that if any installment is not paid when due, this note
may be declared due and payable in full unless payment of such installment is
made within ten (10) days after notice of such failure to pay has been given to
the Maker by the Payee. The Payee may waive any default before or after the same
has been declared and may restore this note to full force and effect without
impairing the right to declare this note due for a subsequent default, this
right being a continuing one.
This note may be prepaid in whole or in part at any time without
penalty, and if prepaid in part, then the remaining installments shall be
reduced appropriately so that the remaining unpaid balance will be paid in equal
quarterly payments containing both principal and interest.
Demand, notice, presentment and protest are waived.
In the event this note is placed in the hands of an attorney for
collection, the Maker and any endorsers hereof agree to pay a reasonable
attorney's fee and all court and other costs.
PRIVATE BUSINESS, INC.
By: ___________________________________
Its: __________________________________
7
<PAGE> 1
Exhibit 5
[HARWELL HOWARD HYNE GABBERT & MANNER, P.C. LOGO]
[HARWELL HOWARD HYNE GABBERT & MANNER, P.C. LETTERHEAD]
May 26, 1999
Private Business, Inc.
9010 Overlook Boulevard
Brentwood, Tennessee 37027
Ladies and Gentlemen:
We have acted as special counsel to Private Business, Inc. (the
"Company") in connection with the registration of the Company's Non-Qualified
Stock Option Agreements pursuant to a registration statement on Form S-8, as
filed with the Securities and Exchange Commission (the "Registration
Statement"). This firm hereby consents to the filing of this opinion as an
exhibit to the Registration Statement and with agencies of such states and other
jurisdictions as may be necessary in the course of complying with the laws of
such states and jurisdictions regarding the offering and sale of the stock in
accordance with the Registration Statement.
We have examined originals, or certified or photostatic copies of such
statutes, records, regulations, certificates of the officers of the Company and
of public officials, and such other information as we have deemed necessary for
purposes of rendering this opinion.
In stating our opinion, we have assumed: (i) that all signatures are
genuine, all documents submitted to us as originals are authentic, and all
documents submitted to us as copies conform to authentic original documents; and
(ii) that the parties to such documents have the legal right and power under all
applicable laws, regulations and agreements to enter into, execute, deliver and
perform their respective obligations thereunder.
On the basis of such review, but subject to the limitations expressed
herein, we are of the opinion, as of the date hereof, that the securities being
registered by the Registration Statement will, when sold as contemplated under
the Registration Statement, be legally issued, fully paid and non-assessable.
Our opinion herein is limited solely to the laws of the United States
of America and the corporate law of the State of Tennessee. In rendering the
opinion set forth herein, we have relied upon the documents referenced above and
have made no independent verification or investigation of factual matters
pertaining thereto or to the Company. The opinion expressed herein is subject to
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance and other similar laws now or hereafter in effect relating to or
affecting the rights of creditors generally, judicial discretion, and equitable
principles whether applied pursuant to a proceeding at law or in equity; and no
opinion is expressed with respect to the availability of equitable remedies.
Very truly yours,
HARWELL HOWARD HYNE
GABBERT & MANNER, P.C.
/s/ Harwell Howard Hyne
Gabbert & Manner, P.C.
- --------------------------------------------------------------------------------
1800 FIRST AMERICAN CENTER 315 DEADERICK STREET NASHVILLE, TENNESSEE 37238-1800
615-256-0500 FAX 615-251-1059
<PAGE> 1
Exhibit 23.1
ARTHUR
ANDERSEN
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated March 17, 1999,
except for Note 15, as to which the date is May 14, 1999, included in or made a
part of Amendment No. 6 to the Private Business, Inc. registration statement
(File No. 333-75013), and to all references made to our Firm.
/s/ Arthur Andersen LLP
Nashville, Tennessee
May 25, 1999
