<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934 for the quarterly period ended September 30, 1999 or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934 for the transition period from _______ to _________
Commission file number 0-27444
F.Y.I. INCORPORATED
(Exact name of registrant as specified in its charter)
DELAWARE 75-2560895
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
3232 MCKINNEY AVENUE, SUITE 900, DALLAS, TEXAS 75204
(Address of principal executive offices) (Zip code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (214) 953-7555
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
As of October 29, 1999, 14,530,399 shares of the registrant's Common Stock,
$.01 par value per share, were outstanding.
<PAGE>
F.Y.I. INCORPORATED AND SUBSIDIARIES
FORM 10-Q FOR THE PERIOD ENDED SEPTEMBER 30, 1999
INDEX
PART I. FINANCIAL INFORMATION
Item 1 Financial Statements
Consolidated Balance Sheets - December 31, 1998 and
September 30, 1999 (unaudited)
Consolidated Statements of Operations - Three months
and nine months ended September 30, 1998 and 1999
(unaudited)
Consolidated Statements of Cash Flows - Nine months
ended September 30, 1998 and 1999 (unaudited)
Notes to Consolidated Financial Statements - September 30, 1999
Item 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations
Item 3 Quantitative and Qualitative Disclosures about Market Risk
PART II. OTHER INFORMATION
Item 5 Other Information
Item 6 Exhibits and Reports on Form 8-K
SIGNATURES
2
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
3
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F.Y.I. INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
(SEE NOTE 1)
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1998 1999
------------ -------------
ASSETS (UNAUDITED)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 14,592 $ 7,829
Accounts receivable and notes receivable, less allowance of
$4,705 and $9,295, respectively 51,683 75,372
Notes receivable, shareholders - short term 479 285
Prepaid expenses and other current assets 5,487 19,631
----------- -----------
Total current assets 72,241 103,117
PROPERTY, PLANT AND EQUIPMENT, NET 29,372 44,393
GOODWILL AND OTHER INTANGIBLES 96,652 186,285
OTHER NONCURRENT ASSETS 8,705 4,240
----------- -----------
Total assets $ 206,970 $ 338,035
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities $ 30,095 $ 58,851
Current maturities of long-term obligations 1,258 1,439
Income taxes payable 2,881 3,471
Current portion of deferred income taxes 214 214
----------- -----------
Total current liabilities 34,448 63,975
LONG-TERM OBLIGATIONS, net of current maturities 31,498 96,494
DEFERRED INCOME TAXES, net of current portion 1,479 1,784
OTHER LONG-TERM OBLIGATIONS 810 8,287
----------- -----------
Total liabilities 68,235 170,540
----------- -----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value, 1,000,000 shares authorized,
0 shares issued and outstanding - -
Common stock, $.01 par value, 26,000,000 shares authorized,
14,046,725 and 14,519,369 shares issued and outstanding at
December 31, 1998 and September 30, 1999, respectively 140 145
Additional paid-in-capital 107,912 119,281
Retained earnings 31,184 48,570
----------- -----------
139,236 167,996
Less - Treasury stock, $.01 par value, 36,670 shares
at December 31, 1998 and September 30, 1999, respectively (501) (501)
----------- -----------
Other comprehensive income - -
Total stockholders' equity 138,735 167,495
----------- -----------
Total liabilities and stockholders' equity $ 206,970 $ 338,035
=========== ===========
</TABLE>
The accompanying notes are an
integral part of these consolidated financial statements.
4
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F.Y.I. INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(SEE NOTE 1)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------- -------------------------
1998 1999 1998 1999
----------- ----------- ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
REVENUE $ 63,264 $ 96,940 $ 180,822 $ 250,139
COST OF SERVICES 38,582 60,270 112,298 154,375
DEPRECIATION 1,478 2,349 4,104 6,136
----------- ----------- ----------- -----------
Gross profit 23,204 34,321 64,420 89,628
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 14,055 21,045 39,435 55,244
AMORTIZATION 828 1,286 2,323 3,233
----------- ----------- ----------- -----------
Operating income 8,321 11,990 22,662 31,151
OTHER (INCOME) EXPENSE:
Interest expense 423 1,421 986 2,678
Interest income 132 58 306 504
----------- ----------- ----------- -----------
Other (income) expense, net 291 1,363 680 2,174
Income before income taxes 8,030 10,627 21,982 28,977
PROVISION FOR INCOME TAXES 2,783 4,251 7,772 11,591
----------- ----------- ----------- -----------
NET INCOME 5,247 6,376 14,210 17,386
=========== =========== =========== ===========
PRO FORMA DATA:
Historical net income 5,247 6,376 14,210 17,386
Pro forma provision for income taxes 429 - 1,019 -
----------- ----------- ----------- -----------
PRO FORMA NET INCOME $ 4,818 $ 6,376 $ 13,191 $ 17,386
=========== =========== =========== ===========
NET INCOME PER COMMON SHARE
BASIC 0.39 0.45 1.06 1.23
DILUTED 0.38 0.42 1.04 1.17
PRO FORMA NET INCOME
PER COMMON SHARE
BASIC 0.36 0.45 0.99 1.23
DILUTED 0.35 0.42 0.96 1.17
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING
BASIC 13,505 14,277 13,360 14,081
DILUTED 13,881 15,190 13,692 14,826
</TABLE>
The accompanying notes are an
integral part of these consolidated financial statements.
5
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F.Y.I. INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
-------------------------------
SEPTEMBER 30, SEPTEMBER 30,
1998 1999
------------- -------------
(UNAUDITED)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 14,210 $ 17,386
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 6,427 9,369
Change in operating assets and liabilities:
Accounts receivable (10,197) (5,563)
Prepaid expenses and other assets (5,947) (7,758)
Accounts payable and other current liabilities 7,787 (2,436)
----------- -----------
Net cash provided by operating activities 12,280 10,998
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment (9,790) (15,308)
Distribution from partnership - -
Cash paid for acquisitions, net of cash received (19,276) (62,684)
----------- -----------
Net cash used in investing activities (29,066) (77,992)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from common stock issuance, net of underwriting
discounts and other costs 979 3,619
Distribution to shareholders of pooled companies (1,810) -
Proceeds from long-term obligations 25,500 72,750
Principal payments on long-term obligations (7,730) (16,138)
----------- -----------
Net cash provided by financing activities 16,939 60,231
NET CHANGE IN CASH AND CASH EQUIVALENTS 153 (6,763)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 10,982 14,592
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 11,135 $ 7,829
=========== ===========
</TABLE>
The accompanying notes are an
integral part of these consolidated financial statements.
6
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F.Y.I. INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION:
The accompanying consolidated financial statements and related notes to
consolidated financial statements include the accounts of F.Y.I. Incorporated
and its subsidiaries (the "Company" or "F.Y.I."), which consist of: (i) the
companies acquired in business combinations accounted for under the purchase
method of accounting from their respective acquisition dates; and (ii) the
companies acquired in business combinations accounted for under the
pooling-of-interests method of accounting either for all periods presented or
from the date of acquisition, based upon their financial materiality.
In the opinion of F.Y.I.'s management, the accompanying consolidated financial
statements include the accounts of the Company and all adjustments necessary to
present fairly the Company's financial position at September 30, 1999, its
results of operations for the three months and nine months ended September 30,
1998 and 1999, and its cash flows for the nine months ended September 30, 1998
and 1999. All significant intercompany transactions have been eliminated.
Although the Company believes that the disclosures are adequate to make the
information presented not misleading, certain information and footnote
disclosures normally included in annual financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to the rules and regulations of the Securities and Exchange
Commission (the "Commission"). These consolidated financial statements should be
read in conjunction with the consolidated financial statements of the Company
and the related notes thereto in F.Y.I.'s Annual Report on Form 10-K filed with
the Commission on March 17, 1999, and the Company's Current Reports on Form 8-K
filed with the Commission on March 2, 1999, and August 20, 1999. The results of
operations for the interim periods ended September 30, 1999 and 1998 may not be
indicative of the results for the full year.
Certain prior period amounts have been reclassified to make their presentation
consistent with the current year.
2. PRO FORMA NET INCOME
The Company acquired Economic Research Services, Inc. in October 1998 in a
transaction that was accounted for as a pooling-of-interests. This company was
managed through its acquisition date as an independent S Corporation. Therefore,
the pro forma data present the incremental provision for income taxes as if this
entity had been subject to federal and state income taxes.
3. WEIGHTED AVERAGE SHARES OUTSTANDING
Basic and diluted net income per common share were computed in accordance with
Statement of Financial Accounting Standards No. 128, "Earnings Per Share." The
differences between basic weighted average common shares and diluted weighted
average common shares and common stock equivalents are as follows (in
thousands):
7
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<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------
1998 1999
---- ----
<S> <C> <C>
Basic weighted average common shares 13,360 14,081
Weighted average options and warrants and other
contingent consideration 332 745
Diluted weighted average common shares 13,692 14,826
</TABLE>
4. BUSINESS COMBINATIONS
During the first nine months of 1999, the Company acquired twelve additional
document management businesses that were accounted for as purchases (the
"Purchased Companies"). These acquisitions were Northern Minnesota Medical
Records Services, Inc., PMI Imaging Systems, Inc., Quality Data Conversions,
Inc., MSI Imaging Solutions, Inc., Information Management Services, Inc.,
Managed Care Professionals, Inc., American Economics Group, Inc., Data Entry and
Informational Services, Inc., Rust Consulting, Inc., Newport Beach Data Entry,
Inc., Copy Right, Inc. and Exigent Computer Group, Inc. The aggregate
consideration paid for the Purchased Companies consisted of $66.8 million in
cash and 255,626 shares of Common Stock. The preliminary allocation of the
purchase price is set forth below (in thousands):
<TABLE>
<S> <C>
Consideration Paid $73,218
Estimated Fair Value of Tangible Assets 35,276
Estimated Fair Value of Liabilities 30,131
Goodwill 68,073
</TABLE>
The weighted average fair market value of the shares of Common Stock used in
calculating the consideration paid was $25.28, which represents a 20% discount
from the average trading price of the Common Stock based on the length and type
of restrictions in the purchase agreements.
The estimated fair market values reflected above are based on preliminary
estimates and assumptions and are subject to revision. In management's opinion,
the preliminary allocations are not expected to be materially different than the
final allocations. Certain acquisitions are subject to adjustments in their
overall consideration based upon performance against specified earning targets
over one to three year periods. Based upon the evaluation of cumulative earnings
through September 30, 1999, against the specified earnings targets, the Company
has accrued aggregate contingent consideration of approximately $18.2 million.
The periods applicable for the earnout targets have not been completed, and the
amounts paid at the conclusion are likely to be different from amounts presently
accrued.
Pro forma financial information after giving effect to the above acquisitions
are summarized below:
8
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<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------
1998 1999
---- ----
<S> <C> <C>
Revenue $240,210 $291,793
Income before income taxes 28,624 37,506
Net income $ 17,176 $ 22,503
Pro forma net income per common share 1.23 1.50
Diluted weighted average common shares outstanding 13,948 14,955
</TABLE>
All intangibles are considered enterprise goodwill. Based on the historical
profitability of the purchased companies and trends in the legal, healthcare and
other industries to outsource document management functions in the foreseeable
future, the enterprise goodwill is being amortized over a period of 30 years.
Management continually evaluates whether events and circumstances indicate that
the remaining estimated useful life of intangible assets might warrant revisions
or that the remaining balance of intangibles or other long-lived assets may not
be recoverable. To make this evaluation, management uses an estimate of
undiscounted net income over the remaining life of the intangibles or other
long-lived assets. The goodwill associated with a majority of the acquisitions
is not deductible for income tax purposes.
5. SEGMENT REPORTING
The Company and its subsidiaries are principally engaged in document and
information outsourcing services. The Company identifies segments based on
management responsibility.
(i) HEALTHCARE SERVICES. Healthcare services include: (i) processing a request
for release of a patient's medical records; (ii) archival records storage and
management; (iii) document and data conversion; (iv) archiving and imaging
services to hospital radiology departments; (v) providing attending physician
statements for life and health insurance underwriting; and (vi) image processing
services for government entities.
(ii) COMMERCIAL SERVICES. This group offers electronic imaging, micrographics
services, data capture, document and media to media conversion, database
management, claims processing services, direct mail and fulfillment services,
statement processing, and full service commercial printing, as well as
integrated solutions to customers in a wide range of industries, including
financial services, retail, insurance and government entities.
(iii) LEGAL SERVICES. Legal services include managing the logistics of high
volume document production, microfilming and/or electronic imaging, document
coding, computer indexing, automated document retrieval, and high speed,
multiple-set reproduction of documents, as well as high level consulting
services ranging from labor discrimination, mortgage discrimination and forensic
analysis to trial support for law firms, corporations and utility companies.
Investor services is an emerging business initiative, presented as part of Legal
services, which offers administration, record keeping and information processing
services for employee and/or investor records.
9
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The Company measures segment profit as earnings before taxes. Information on
segments follows (in thousands):
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30, 1999
HEALTHCARE COMMERCIAL LEGAL
SERVICES SERVICES SERVICES (1) CONSOLIDATED
-------- -------- ------------ ------------
<S> <C> <C> <C> <C>
Revenue $26,403 $49,802 $20,735 $96,940
Earnings before taxes 2,109 6,394 2,124 10,627
THREE MONTHS ENDED SEPTEMBER 30, 1998
HEALTHCARE COMMERCIAL LEGAL
SERVICES SERVICES SERVICES (1) CONSOLIDATED
-------- -------- ------------ ------------
Revenue $23,219 $18,493 $21,552 $63,264
Earnings before taxes 2,403 2,867 2,760 8,030
NINE MONTHS ENDED SEPTEMBER 30, 1999
HEALTHCARE COMMERCIAL LEGAL
SERVICES SERVICES SERVICES (1) CONSOLIDATED
-------- -------- ------------ ------------
Revenue $79,191 $107,435 $63,513 $250,139
Earnings before taxes 8,986 12,841 7,150 28,977
NINE MONTHS ENDED SEPTEMBER 30, 1998
HEALTHCARE COMMERCIAL LEGAL
SERVICES SERVICES SERVICES (1) CONSOLIDATED
-------- -------- ------------ ------------
Revenue $63,975 $55,490 $61,357 $180,822
Earnings before taxes 5,925 7,592 8,465 21,982
</TABLE>
(1) Includes Investor Services.
10
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with the financial
statements of the Company and the related notes thereto appearing elsewhere in
this Report on Form 10-Q. Additional information concerning factors that could
cause results to differ materially from those in the forward-looking statements
is contained under "Part II. Other Information."
INTRODUCTION
The Company's revenue is segregated into the following segments: (i) Healthcare
Services; (ii) Commercial Services; and (iii) Legal Services, which include
Investor Services, an emerging business initiative. Services provided to
customers are described by segment as follows:
HEALTHCARE SERVICES include: (i) processing a request for release of a
patient's medical records from a physician, insurance company, attorney,
healthcare institution or individual; (ii) off-site active storage of a
healthcare institution's medical records; (iii) online delivery of images of
selected medical records for healthcare institutions; (iv) document and data
conversion services for healthcare institutions; (v) image processing for
government entities; (vi) medical staffing services; and (vii) providing
attending physicians' statements for life and health insurance underwriting.
COMMERCIAL SERVICES include: (i) electronic imaging services involving the
conversion of paper or microfilm documents into digitized information, database
management and indexing; (ii) micrographics services involving the conversion of
paper documents into microfilm images, film processing and computer based
indexing and formatting; (iii) data capture, document and media-to-media
conversion and database management services involving data capture, data
consolidation and elimination, storage, maintenance, formatting and report
creation; (iv) direct mail, which includes direct mail and fulfillment services
to customers who need rapid, reliable and cost-effective methods for making
large scale distributions of advertising, literature and other information; (v)
full service commercial printing, including printing and related services such
as electronic prepress services, full-color report production of annual reports,
flyers and catalogs and statement processing; (vi) claims processing services;
and (vii) integrated solutions, that deliver technical services with a focus on
document imaging, work flow, COLD and document information management systems.
LEGAL SERVICES include: (i) automated litigation support, including document
conversion, computer indexing and automated document retrieval; (ii) consulting
services such as discovery assistance, labor discrimination, forensic analysis
and other trial support services; (iii) high-speed, multiple-set reproduction of
documents; and (iv) records acquisition in the form of subpoena of business
documents and service of process.
INVESTOR SERVICES include administration, record keeping and information
processing services to: (i) general partners to service their investors in
limited partnerships, REITs and master limited partnerships; (ii) corporations
to provide turn-key outsourced administration of employee stock
11
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purchase plans and employee stock option plans; and (iii) banks and
broker/dealers to provide complete record keeping and administration services
for additional brokerage and IRA accounts.
Cost of services consists primarily of compensation and benefits to employees
providing goods and services to the Company's customers, occupancy costs,
equipment costs and supplies. The Company's cost of services also includes the
cost of products sold for micrographics, computer hardware and software, and
business imaging supplies and equipment.
Selling, general and administrative expenses ("SG&A") consist primarily of: (i)
compensation and related benefits to the sales and marketing, executive
management, accounting, human resources and other administrative employees of
the Company; (ii) other sales and marketing costs; (iii) communications costs;
(iv) insurance costs; and (v) legal and accounting professional fees and
expenses.
THREE MONTHS ENDED SEPTEMBER 30, 1999, COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 1998
REVENUE
Revenue increased 53.2% from $63.3 million for the three months ended September
30, 1998 to $96.9 million for the three months ended September 30, 1999. This
increase was largely due to: (i) revenue from the acquisitions completed
subsequent to September 30, 1998; and (ii) internal growth of 12.7% in
revenue at the companies acquired prior to September 30, 1998. Internal
revenue growth was driven primarily by increased activity in commercial
services.
GROSS PROFIT
Gross profit increased 47.9% from $23.2 million for the three months ended
September 30, 1998 to $34.3 million for the three months ended September 30,
1999, largely due to the increases in revenue discussed above. Gross profit as a
percentage of revenue decreased from 36.7% for the three months ended September
30, 1998 to 35.4% for the three months ended September 30, 1999, primarily due
to the lower margin mix of revenue associated with the acquisitions subsequent
to September 30, 1998. Gross profit as a percentage of revenue for the quarter
ended September 30, 1998, prior to restatement for a merger accounted for as a
pooling-of-interests, was 35.4%
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
SG&A increased 49.7% from $14.1 million, or 22.2% of revenue, for the three
months ended September 30, 1998 to $21.0 million, or 21.7% of revenue, for the
three months ended September 30, 1999. This increase in SG&A was a result of:
(i) SG&A incurred at companies acquired subsequent to September 30, 1998; and
(ii) increased corporate overhead required to manage the consolidated group.
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OPERATING INCOME
Operating income increased 44.1% from $8.3 million, or 13.2% of revenue, for the
three months ended September 30, 1998 to $12.0 million, or 12.4% of revenue, for
the three months ended September 30, 1999, largely attributable to the factors
discussed above.
INCOME BEFORE INCOME TAXES AND PRO FORMA NET INCOME
Income before income taxes increased 32.3% from $8.0 million for the three
months ended September 30, 1998 to $10.6 million for the three months ended
September 30, 1999, and pro forma net income adjusted for the pro forma
provision for taxes increased 32.3% from $4.8 million for the three months ended
September 30, 1998 to $6.4 million for the three months ended September 30,
1999, largely attributable to the factors discussed above.
NINE MONTHS ENDED SEPTEMBER 30, 1999, COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 1998
REVENUE
Revenue increased 38.3% from $180.8 million for the nine months ended September
30, 1998 to $250.1 million for the nine months ended September 30, 1999. This
increase was largely due to: (i) revenue from the acquisitions completed
subsequent to September 30, 1998; and (ii) internal growth of 12.1% in revenue
at the companies owned for more than one year, based on the acquisition
anniversary date. This internal growth was primarily attributable to an increase
in government services revenue relating to the State of New York document
imaging contract and an increase in healthcare records release services revenue
due to expansion into additional healthcare institutions throughout the markets
the Company serves.
GROSS PROFIT
Gross profit increased 39.1% from $64.4 million for the nine months ended
September 30, 1998 to $89.6 million for the nine months ended September 30,
1999, largely due to the increases in revenue discussed above. Gross profit as a
percentage of revenue increased from 35.6% for the nine months ended September
30, 1998 to 35.8% for the nine months ended September 30, 1999, primarily due to
the higher margin mix of revenue associated with the acquisitions subsequent to
September 30, 1998.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
SG&A increased 40.1% from $39.4 million, or 21.8% of revenue, for the nine
months ended September 30, 1998 to $55.2 million, or 22.1% of revenue, for the
nine months ended September 30, 1999, primarily due to SG&A associated with the
acquisitions subsequent to September 30, 1998. This increase in SG&A was a
result of: (i) SG&A incurred at companies acquired subsequent to September 30,
1998; and (ii) increased corporate overhead required to manage the consolidated
group.
13
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OPERATING INCOME
Operating income increased 37.5% from $22.7 million, or 12.5% of revenue, for
the nine months ended September 30, 1998, to $31.2 million, also 12.5% of
revenue, for the nine months ended September 30, 1999.
INCOME BEFORE INCOME TAXES AND PRO FORMA NET INCOME
Income before income taxes increased 31.8% from $22.0 million for the nine
months ended September 30, 1998, to $29.0 million for the nine months ended
September 30, 1999, and pro forma net income adjusted for the pro forma
provision for taxes increased 31.8% from $13.2 million for the nine months ended
September 30, 1998, to $17.4 million for the nine months ended September 30,
1999, largely attributable to the factors discussed above.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1999, the Company had $39.1 million of working capital and $7.8
million of cash. Cash flows provided by operating activities for the nine months
ended September 30, 1999 were $11.0 million and were impacted primarily by
increases in accounts receivable and other assets. Net cash used in investing
activities was $78.0 million, as the Company paid $62.7 million for
acquisitions, net of cash acquired. Net cash provided by financing activities
was $60.2 million, primarily due to borrowings on the Company's line of credit
to fund the cash paid for acquisitions.
During the nine months ended September 30, 1998, cash flows provided by
operating activities were $12.3 million. Net cash used in investing activities
was $29.1 million, as the Company paid $19.3 million for acquisitions, net of
cash acquired. Net cash used in financing activities was $16.9 million.
In February 1998, the Company entered into a credit agreement (the "1998 Credit
Agreement") with Banque Paribas and Bank of America Texas, N.A., as co-agents
and lenders named therein. Under the 1998 Credit Agreement, the Company and its
subsidiaries could borrow on a revolving credit basis loans in an aggregate
outstanding principal amount up to $65.0 million, subject to certain customary
borrowing capacity requirements. In April 1999, the 1998 Credit Agreement was
amended to increase the aggregate outstanding principal limit to $100.0 million.
The 1998 Credit Agreement was further amended in August 1999 to increase the
aggregate outstanding principal limit to the $125.0 million. The availability
under the 1998 Credit Agreement as of September 30, 1999, was $24.7 million. In
November, 1999, the Company further amended the 1998 Credit Agreement,
increasing the aggregate principal limit to $150.0 million from $125.0 million
and adding Sun Trust Banks, Inc., as an additional lender. Upon funding of this
amendment, the Company will have availability under the Agreement of
approximately $54 million. The Company may need to seek additional financing
through the public or private sale of equity or debt securities should it
accelerate its acquisition strategy. There can be no assurance that the Company
could secure such financing if and when it is needed or on terms the Company
deems acceptable. The Company has an effective acquisition shelf Registration
Statement on Form S-4 (Registration No. 333-24015) registering 2,500,000
14
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shares of Common Stock for issuance in its acquisition program (the
"Acquisition Shelf"), of which 1,012,217 shares were available at September
30, 1999.
IMPACT OF THE YEAR 2000 ISSUE
The "Year 2000 Issue" describes the use of two digits rather than four digits to
define the applicable year in certain computer programs. In the Year 2000, any
of the Company's computer programs that have two digit date-sensitive software
may interpret a date of "00" as the year 1900 rather than the year 2000. This
could result in a system failure or miscalculations causing disruptions of
operations, including, among other things, a temporary inability to process
transactions, send invoices or engage in similar normal business activities.
The Company has approached the Year 2000 Issue in phases. A Year 2000 project
director, together with a strong support organization revolving around
technology committees organized by each business unit, has designed a Year 2000
work plan that is currently being implemented. The Year 2000 work plan includes:
(i) awareness of the Year 2000 issue; (ii) inventory of all Year 2000 items;
(iii) assessment and prioritization of all Year 2000 issues; (iv) renovation,
including replacing, repairing, or retiring any Year 2000 related problems; (v)
verification, including testing and certifying Year 2000 compliance; (vi)
implementation; and (vii) contingency planning. The work plan includes assessing
the Year 2000 compliance of customers and vendors and related interfaces. The
Company is progressing favorably in its completion of the various tasks and
target dates identified in the Year 2000 work plan. The Company believes it has
identified and prioritized all major Year 2000 related items. The Company
expects to complete all of the currently identified and planned Year 2000 tasks
before the end of 1999. The Company estimates that the total costs of the Year
2000 project will be approximately $4.3 million to $4.6 million, of which about
$3.3 million to $3.6 million represent purchases of hardware, off-the-shelf
software and customized software and approximately $1.0 million represent
internal salaries and external consultant fees. As of September 30, 1999, the
Company had incurred approximately $4.0 million of Year 2000 costs. The costs
are being funded through operating cash flow. Due to the general uncertainty
inherent in the Year 2000 process, resulting in part from the uncertainty
surrounding the Year 2000 readiness of third party vendors and customers, the
Company is unable to determine a reasonable worst case scenario at this time.
Although currently considered unlikely, failure of public utility companies to
provide telephone and electrical services or the inability of the Company's
customers to conduct their operations are some of the areas of concern.
The development of general contingency plans is currently in process and is
scheduled to be completed by the end of 1999. Contingency plans include risk
management assessments, disaster recovery plans and staffing for necessary
support personnel. The costs of the Year 2000 project and the date on which the
Company plans to complete the Year 2000 project tasks are based on management's
best estimates, which were determined utilizing numerous assumptions of future
events, including the continued availability of certain resources, third party
modification factors and other factors. Additionally, the costs of the Year 2000
project are based on the companies owned as of September 30, 1999, and do not
include the impact of any future acquisitions. The Year 2000 costs for any
future acquisitions will be evaluated in the due diligence process. As a result,
there can be no assurance that these forward looking estimates will be achieved,
and the
15
<PAGE>
actual costs and compliance by vendors, customers and other third parties
could differ materially from the Company's current expectations, resulting in
material financial risk.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Pursuant to the General Instructions to Item 305 of Regulation S-K, the
quantitative and qualitative disclosures called for by Item 3 of Form 10-Q and
by Item 305 of Regulation S-K do not require additional disclosure by the
Company at this time.
16
<PAGE>
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
RECENT DEVELOPMENTS
Since July 1, 1999, the Company has acquired the following document and
information outsourcing solutions businesses: (i) American Economics Group,
Inc., a litigation support business specializing in economic analysis located
in Washington, D.C.; (ii) Data Entry and Informational Services, Inc., a data
processing business headquartered in Colorado; (iii) Rust Consulting, Inc., a
claims process administration business located in Minnesota; (iv) Copy Right,
Inc., a medical records release of information business headquartered in New
Jersey; and (v) Newport Beach Data Entry, LLC, a data processing business
headquartered in Mexico and California.
In November 1999, the Company further amended its 1998 Credit Agreement,
increasing the aggregate principal limit to $150.0 million from $125.0 million
and adding Sun Trust Banks, Inc., as an additional lender.
RISKS ASSOCIATED WITH FORWARD-LOOKING STATEMENTS
This filing contains certain forward-looking statements such as the Company's
or management's intentions, hopes, beliefs, expectations, strategies,
predictions or any other variation thereof or comparable phraseology of the
Company's future activities or other future events or conditions within the
meaning of Section 27A of the Securities Act and Section 21E of the
Securities Exchange Act of 1934, as amended, which are intended to be covered
by the safe harbors created thereby. Investors are cautioned that all
forward-looking statements involve risks and uncertainty, including, without
limitation, variations in quarterly results, volatility of the Company's
stock price, development by competitors of new or superior products or
services, entry into the market of new competitors, the sufficiency of the
Company's working capital and the ability of the Company to realize benefits
from consolidating certain general and administrative functions, to
assimilate and integrate acquisitions, to continue its acquisition program,
to attract and retain management, to implement its focused business strategy
to expand its document and information management services geographically, to
attract or retain customers from other businesses, to increase revenue by
cross-selling services, and to successfully defend itself against ongoing and
future litigation, and the uncertainty surrounding the Year 2000 issue.
Although the Company believes that the assumptions underlying the
forward-looking statements contained herein are reasonable, any of the
assumptions could be inaccurate, and, therefore, there can be no assurance
that the forward-looking statements included in this filing will prove to be
accurate. In light of the significant uncertainties inherent in the
forward-looking statements included herein, the inclusion of such information
should not be regarded as a representation by the Company or any other person
that the objectives and plans of the Company will be achieved.
II-1
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
4.3 Warrant issued to Joe A. Rose, dated May 19, 1999
4.4 Warrant issued to Ronald Zazworsky, dated May 19, 1999
4.5 Warrant issued to Timothy J. Barker, dated May 19, 1999
4.6 Warrant issued to Margot T. Lebenberg, dated May 19, 1999
4.7 Warrant issued to Gary Patton, dated May 19, 1999
4.8 Warrant issued to David Lowenstein, dated May 19, 1999
4.9 Warrant issued to Thomas C. Walker, dated May 19, 1999
4.10 Warrant issued to Ed H. Bowman, Jr., dated May 19, 1999
4.11 Special Warrant issued to Joe A. Rose, dated May 19, 1999
4.12 Special Warrant issued to Timothy J. Barker, dated May 19, 1999
10.52 Employment Agreement between F.Y.I. Incorporated and Timothy J.
Barker
10.53 Fourth Amendment, dated as of November 10, 1999, to the Amended
and Restated Credit Agreement by and among F.Y.I. Incorporated,
Paribas, Nations Bank, N.A. d/b/a Bank of America National
Association, and Bank One, Texas, N.A. and the Lenders named
therein.
27.1 Financial Data Schedule
27.2 1998 Restated Financial Data Schedule
(b) Reports on Form 8-K
The Company filed a Current Report on Form 8-K with the Commission on
August 20, 1999, reporting under Item 5 thereto, the amendment to the
Company's 1998 Credit Agreement increasing the aggregate outstanding
principal limit to $125.0 million from $100.0 million and adding Wells
Fargo Bank (Texas), National Association, as an additional lender.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report on Form 10-Q to be signed on its behalf
by the undersigned thereunto duly authorized.
F.Y.I. Incorporated
Date: November 12, 1999 By: /s/ Ed H. Bowman, Jr.
------------------------------------
Ed H. Bowman, Jr.
President and
Chief Executive Officer
Date: November 12, 1999 By: /s/ Timothy J. Barker
-------------------------------------
Timothy J. Barker
Senior Vice President and Chief
Financial Officer (Principal
Accounting Officer)
II-3
<PAGE>
EXHIBITS
4.3 Warrant issued to Joe A. Rose, dated May 19, 1999
4.4 Warrant issued to Ronald Zazworsky, dated May 19, 1999
4.5 Warrant issued to Timothy J. Barker, dated May 19, 1999
4.6 Warrant issued to Margot T. Lebenberg, dated May 19, 1999
4.7 Warrant issued to Gary Patton, dated May 19, 1999
4.8 Warrant issued to David Lowenstein, dated May 19, 1999
4.9 Warrant issued to Thomas C. Walker, dated May 19, 1999
4.10 Warrant issued to Ed H. Bowman, Jr., dated May 19, 1999
4.11 Special Warrant issued to Joe A. Rose, dated May 19, 1999
4.12 Special Warrant issued to Timothy J. Barker, dated May 19, 1999
10.52 Employment Agreement between F.Y.I. Incorporated and Timothy J.
Barker
10.53 Fourth Amendment, dated November 10, 1999, to the Amended and
Restated Credit Agreement by and among F.Y.I. Incorporated,
Paribas, Nations Bank, N.A. d/b/a Bank of America National
Association, and Bank One, Texas, N.A. and the Lenders named
therein.
27.1 Financial Data Schedule
27.2 1998 Restated Financial Data Schedule
<PAGE>
Exhibit 4.3
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF NOR ANY
INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE SOLD, ASSIGNED, PLEDGED,
HYPOTHECATED, ENCUMBERED OR IN ANY OTHER MANNER TRANSFERRED OR DISPOSED OF
EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT OF 1933, AS AMENDED, AND THE TERMS
AND CONDITIONS HEREOF. THE HOLDER OF THIS WARRANT AND THE SECURITIES ISSUABLE
UPON EXERCISE HEREOF ARE SUBJECT TO THE RESTRICTIONS HEREIN SET FORTH.
VOID AFTER 5:00 P.M. NEW YORK CITY TIME, MAY 19, 2009
****************************************
No. 17
WARRANT
to
PURCHASE COMMON STOCK
of
F.Y.I. INCORPORATED
****************************************
This certifies that, for good and valuable consideration, F.Y.I.
Incorporated, a Delaware corporation (the "Company"), grants to Joe A. Rose or
permitted registered assigns (the "Warrantholder" or "Warrantholders"), the
right to subscribe for and purchase from the Company, at $26.75 per share (the
"Exercise Price"), Nineteen Thousand Three Hundred (19,300) shares of the
Company's Common Stock, par value $0.01 per share (the "Common Stock"), subject
to the provisions and upon the terms and conditions herein set forth. The
Exercise Price and the number of Warrant Shares are subject to adjustment from
time to time as provided in Section 5.
<PAGE>
1. DURATION AND EXERCISE OF WARRANT; LIMITATION EXERCISE PAYMENT
OF TAXES.
a. DURATION AND EXERCISE OF WARRANT.
(a) This Warrant may be exercised as to 100% of the underlying
shares at any time following the date of receipt by the Compensation
Committee of the Board of Directors of the Corporation's audited financial
statements showing the Corporation's actual earnings per share for the year
ended December 31, 2000 ("fiscal 2000"), provided that such earnings are not
less than $1.93 per share. The Company shall use its best efforts to deliver
to the Compensation Committee the audited financial statements showing the
Corporation's actual fiscal 2000 earnings per share by March 5, 2001. If the
Corporation's actual 2000 fiscal earnings is less than $1.93 per share, then
this Warrant shall be exercisable as to 100% of the underlying shares at any
time following the date of receipt by the Compensation Committee of the Board
of Directors of the Corporation's audited statements showing the
Corporation's actual earnings per share for the year ended December 31, 2001
("fiscal 2001"), provided that such earnings are not less than $2.39 per
share. The Company shall use its best efforts to deliver to the Compensation
Committee the audited financial statements showing the Corporation's the
actual fiscal 2001 earnings by March 5, 2002. However, in any case, this
Warrant shall vest as to 100% of the underlying shares on March 5, 2008. The
date this Warrant is first exercisable is hereinafter referred to as the
"Exercise Date". The Company shall give prompt notice to the Warrantholder
of the Exercise Date in accordance with Section 7.6. This Warrant expires at
5:00 P.M., New York City time on May 19, 2009 (the "Expiration Date"). In
addition, in the event of a Change in Control of the Company, the right to
exercise 100% of the underlying shares shall immediately vest. A "Change in
Control" shall be deemed to have occurred if:
(i) any person, other than the Company or an employee benefit plan of
the Company, acquires directly or indirectly the Beneficial Ownership (as
defined in Section 13(d) of the Securities and Exchange Act of 1934, as
amended (the" Exchange Act")) of any voting security of the Company and
immediately after such acquisition such Person is, directly or indirectly,
the Beneficial Owner of voting securities representing 50% or more of the
total voting power of all of the then-outstanding voting securities of the
Company;
(ii) the individuals (A) who, as of the closing date of the Initial
Public Offering, constitute the Board (the "Original Directors") or (B) who
thereafter are elected to the Board and whose election, or nomination for
election, to the Board was approved by a vote of at least two-thirds (2/3)
of the Original Directors then still in office (such directors becoming
"Additional Original Directors" immediately following their election) or
(C) who are elected to the Board and whose election, or nomination for
election, to the Board was approved by a vote of at least two-thirds (2/3)
of the Original Directors and Additional Original Directors then still in
office (such directors also
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<PAGE>
becoming "Additional Original Directors" immediately following their
election) (such individuals being the "Continuing Directors"), cease
for any reason to constitute a majority of the members of the Board;
(iii) the stockholders of the Company shall approve a merger,
consolidation, recapitalization, or reorganization of the Company, a
reverse stock split of the outstanding voting securities of the Company, or
consummation of any such transaction if stockholder approval is not sought
or obtained, other than any such transaction which would result in at least
75% of the total voting power represented by the voting securities of the
surviving entity outstanding immediately after such transaction being
Beneficially Owned by at least 75% of the holders of the outstanding voting
securities of the Company immediately prior to the transaction, with the
voting power of each such continuing holder relative to other such
continuing holders not substantially altered in the transaction; or
(iv) the stockholders of the Company shall approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by
the Company of all or a substantial portion of the Company's assets (i.e.,
50% or more of the total assets of the Company).
(b) The rights represented by this Warrant may be exercised by the
Warrantholder of record, in whole, or from time to time in part, by (a)
surrender of this Warrant, accompanied by either the Exercise Form annexed
hereto, or if the Warrantholder decides to exercise the Warrant pursuant to
the broker-assisted cashless exercise program instituted by the Company, an
applicable exercise form provided by the Company (the "Exercise Form") duly
executed by the Warrantholder of record and specifying the number of Warrant
Shares to be purchased, to the Company at the office of the Company located
at 3232 McKinney Avenue, Suite 900, Dallas, Texas 75204 (or such other office
or agency of the Company as it may designate by notice to the Warrantholder
at the address of such Warrantholder appearing on the books of the Company)
during normal business hours on any day (a "Business Day") other than a
Saturday, Sunday or a day on which the New York Stock Exchange is authorized
to close or on which the Company is otherwise closed for business (a
"Nonbusiness Day") on or after 9:00 A.M. New York City time on the Exercise
Date but not later than 5:00 P.M., New York City time, on the Expiration Date
(or 5:00 P.M., New York City time, on the next succeeding Business Day, if
the Expiration Date is a Nonbusiness Day), (b) delivery of payment to the
Company in cash or by certified or official bank check in New York Clearing
House Funds, of the Exercise Price for the number of Warrant Shares specified
in the Exercise Form (such payment may be made by the Warrantholder directly
or by a designated broker pursuant to the broker-assisted cashless exercise
program instituted by the Company) and (c) such documentation as to the
identity and authority of the Warrantholder as the Company may reasonably
request. Such Warrant Shares shall be deemed by the Company to be issued to
the Warrantholder as the record holder of such Warrant Shares as of the close
of business on the date on which this Warrant shall have been surrendered and
payment made
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<PAGE>
for the Warrant Shares as aforesaid. Certificates for the Warrant Shares
specified in the Exercise Form shall be delivered to the Warrantholder (or
designated broker, as the case may be) as promptly as practicable, and in any
event within 10 business days, thereafter. The stock certificates so
delivered shall be in denominations of at least 1,000 shares each or such
other denomination as may be specified by the Warrantholder and agreed upon
by the Company, and shall be issued in the name of the Warrantholder or such
other name as shall be designated in the Exercise Form. If this Warrant shall
have been exercised only in part, the Company shall, at the time of delivery
of the certificates for the Warrant Shares, deliver to the Warrantholder (or
designated broker, as the case may be) a new Warrant evidencing the rights to
purchase the remaining Warrant Shares, which new Warrant shall in all other
respects be identical with this Warrant. No adjustments or payments shall be
made on or in respect of Warrant Shares issuable on the exercise of this
Warrant for any cash dividends paid or payable to holders of record of Common
Stock prior to the date as of which the Warrantholder shall be deemed to be
the record holder of such Warrant Shares.
(c) With the consent of the Compensation Committee, and subject at
all times to, and only to the extent, if any, permitted under and in
accordance with, laws and regulations and other binding obligations or
provisions applicable to the Company, the Company may make a loan to the
Warrantholder with respect to the exercise of the Warrant, including the
payment by the Warrantholder of any or all federal, state and local income or
other taxes due in connection with any exercise. The interest on such loan
shall be the Company's cost of money plus an additional 0.5% at the time the
loan is made and such loan shall be made with recourse against the
Warrantholder. The Compensation Committee shall have the full authority to
determine any other terms and provisions of such a loan.
1.2 VESTING AND EXERCISE. This Warrant may be vested and, once
vested, may be exercised whether or not, at the time of such vesting or
exercise, as the case may be, Mr. Rose is an Employee of the Company. If
this Warrant is not exercised prior to 5:00 P.M. on the Expiration Date (or
the next succeeding Business Day, if the Expiration Date is a Nonbusiness
Day), this Warrant, or any new Warrant issued pursuant to Section 1.1, shall
cease to be exercisable and shall become void and all rights of the
Warrantholder hereunder shall cease. This Warrant shall not be exercisable,
and no Warrant Shares shall be issued hereunder, prior to 9:00 A.M., New York
City time, on the Exercise Date.
1.3 PAYMENT OF TAXES. The issuance of certificates for Warrant
Shares shall be made without charge to the Warrantholder for any stock
transfer or other issuance tax in respect thereto; PROVIDED, HOWEVER, that
the Warrantholder shall be required to pay any and all taxes which may be
payable in respect to any transfer involved in the issuance and delivery of
any certificates for Warrant Shares in a name other than that of the then
Warrantholder as reflected upon the books of the Company.
4
<PAGE>
1.4 DIVISIBILITY OF WARRANT. This Warrant may be divided into
warrants representing one Warrant Share or multiples thereof, upon surrender
at the principal office of the Company on any Business Day, without charge to
any Warrantholder, except as provided below. The Warrantholder will be
charged for reasonable out-of-pocket costs incurred by the Company in
connection with the division of this Warrant into Warrants representing fewer
than one thousand (1,000) Warrant Shares. Upon any such division, the
Warrants may be transferred of record to a name other than that of the
Warrantholder of record; PROVIDED, HOWEVER, that the Warrantholder shall be
required to pay any and all transfer taxes with respect thereto.
2. RESERVATION AND LISTING OF SHARES, ETC.
All Warrant Shares which are issued upon the exercise of the rights
represented by this Warrant shall, upon issuance and payment of the Exercise
Price, be validly issued, fully paid and nonassessable and free from all
taxes, liens, security interests, charges and other encumbrances with respect
to the issue thereof other than taxes in respect of any transfer occurring
contemporaneously with such issue. During the period within which this
Warrant may be exercised, the Company shall at all times have authorized and
reserved, and keep available free from preemptive rights, a sufficient number
of shares of Common Stock to provide for the exercise of this Warrant, and
shall at its expense use its best efforts to procure such listing thereof
(subject to official notice of issuance) as then may be required on all stock
exchanges on which the Common Stock is then listed or on the Nasdaq National
Market. The Company shall, from time to time, take all such action as may be
required to assure that the par value per share of the Warrant Shares is at
all times equal to or less than the then effective Exercise Price.
3. EXCHANGE, LOSS OR DESTRUCTION OF WARRANT.
If permitted by Section 1.4 and in accordance with the provisions
thereof, upon surrender of this Warrant to the Company with a duly executed
instrument of assignment and funds sufficient to pay any transfer tax, the
Company shall, without charge, execute and deliver a new Warrant of like
tenor in the name of the assignee named in such instrument of assignment and
this Warrant shall promptly be canceled. Upon receipt by the Company of
evidence satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant, and, in the case of loss, theft or destruction, of such bond or
indemnification as the Company may reasonably require, and, in the case of
such mutilation, upon surrender and cancellation of this Warrant, the Company
will execute and deliver a new Warrant of like tenor. The term "Warrant" as
used herein includes any Warrants issued in substitution or exchange of this
Warrant.
5
<PAGE>
4. OWNERSHIP OF WARRANT.
The Company may deem and treat the person in whose name this
Warrant is registered as the holder and owner hereof (notwithstanding any
notations of ownership or writing hereon made by anyone other than the
Company) for all purposes and shall not be affected by any notice to the
contrary, until presentation of this Warrant for registration of transfer as
provided in Section 1.1 or in Section 3.
5. CERTAIN ADJUSTMENTS.
The Exercise Price at which Warrant Shares may be purchased
hereunder, and the number of Warrant Shares to be purchased upon exercise
hereof, are subject to change or adjustment as follows:
5.1 The number of Warrant Shares purchasable upon the exercise of
this Warrant and the Exercise Price shall be subject to adjustment as follows:
(a) In case the Company shall (i) pay a dividend in shares of
Common Stock or make a distribution in shares of Common Stock (ii) subdivide
its outstanding shares of Common Stock into a greater number of shares of
Common Stock, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock or (iv) issue by reclassification of
its shares of Common Stock other securities of the Company (including any
such reclassification in connection with a consolidation or merger in which
the Company is the surviving corporation), the number of Warrant Shares
purchasable upon exercise of this Warrant shall be adjusted so that the
Warrantholder shall be entitled to receive the kind and number of Warrant
Shares or other securities of the Company which he would have owned or have
been entitled to receive after the happening of any of the events described
above, had this Warrant been exercised immediately prior to the happening of
such event or any record date with respect thereto. An adjustment made
pursuant to this paragraph (a) shall become effective immediately after the
effective date of such event retroactive to the record date, if any, for such
event.
(b) In case the Company shall:
(i) issue rights, options or warrants to all holders of its
outstanding Common Stock, without any charge to such holders,
entitling them to subscribe for or purchase shares of Common
Stock at a price per share which is lower at the record date for
the determination of stockholders entitled to receive such
rights, options or warrants than the then current market price
per share of Common Stock, or
6
<PAGE>
(ii) distribute to all holders of its shares of Common Stock
evidences of its indebtedness or assets (excluding cash dividends
or distributions payable out of consolidated earnings or earned
surplus and dividends or distributions referred to in paragraph
(a) of this Section 5.1) or rights, options or warrants, or
convertible or exchangeable securities, containing the right to
subscribe for or purchase shares of Common Stock,
appropriate adjustments shall be made to the number of Warrant Shares
purchasable upon the exercise of the Warrant and/or the Exercise Price in order
to preserve the relative rights and interests of the Warrantholders, such
adjustments to be made by the good faith determination of the Board of Directors
of the Company.
5.2 VOLUNTARY ADJUSTMENT BY THE COMPANY. The Company may, at its
option, at any time during the term of the Warrants, reduce the then current
Exercise Price to any amount, consistent with applicable law, deemed
appropriate by the Board of Directors of the Company.
5.3 NOTICE OF ADJUSTMENT. Whenever the number of Warrant Shares
or the Exercise Price of such Warrant Shares is adjusted, as herein provided,
the Company shall promptly mail first class, postage prepaid, to all
Warrantholders, notice of such adjustment.
5.4 NO ADJUSTMENT FOR CASH DIVIDENDS. No adjustment in respect of
any cash dividends shall be made during the term of this Warrant or upon the
exercise of this Warrant.
5.5 PRESERVATION OF PURCHASE RIGHTS UPON MERGER, CONSOLIDATION,
ETC. In case of any consolidation of the Company with or merger of the
Company into another corporation or in case of any sale, transfer or lease to
another corporation of all or substantially all of the property of the
Company, the Company or such successor or purchasing corporation, as the case
may be, shall execute with the Warrantholders an agreement that the
Warrantholders shall have the right thereafter upon payment of the Exercise
Price in effect immediately prior to such action to purchase upon exercise of
this Warrant the kind and amount of shares and other securities and property
which such holder would have owned or have been entitled to receive after the
happening of such consolidation, merger, sale, transfer or lease had this
Warrant been exercised immediately prior to such action; PROVIDED, HOWEVER,
that no adjustment in respect of cash dividends, interest or other income on
or from such shares or other securities and property shall be made during the
term of this Warrant or upon the exercise of this Warrant. Such agreement
shall provide for adjustments, which shall be as nearly equivalent as
practicable to the adjustments provided for in this Section 5. The
provisions of this Section 5.5 shall apply similarly to successive
consolidations, mergers, sales, transfers or leases.
7
<PAGE>
6. REGISTRATION RIGHTS OF WARRANT SHARES ON FORM S-8
On or prior to September 30, 1999, the Company shall file a
registration statement covering the Warrant Shares on a Form S-8, which
registration statement shall be effective upon the filing thereof. The
Company shall use its best efforts to keep such Form S-8 current and
effective until the earlier of the Expiration Date or the date this Warrant
has been exercised in full. The Company shall use its best efforts to list
the Warrant Shares on any securities exchange (or on the Nasdaq National
Market) on which other shares of Common Stock are listed.
7. MISCELLANEOUS.
7.1 ENTIRE AGREEMENT. This Warrant constitutes the entire
agreement between the Company and the Warrantholder with respect to this
Warrant and the Warrant Shares.
7.2 BINDING EFFECTS; BENEFITS. This Warrant shall inure to the
benefit of and shall be binding upon the Company, the Warrantholder and
holders of Warrant Shares and their respective heirs, legal representatives,
successors and assigns. Nothing in this Warrant, expressed or implied, is
intended to or shall confer on any person other than the Company, the
Warrantholders and holders of Warrant Shares, or their respective heirs,
legal representatives, successors or assigns, any rights, remedies,
obligations or liabilities under or by reason of this Warrant or the Warrant
Shares.
7.3 AMENDMENTS AND WAIVERS. This Warrant may not be modified or
amended except by an instrument in writing signed by the Company and
Warrantholders that hold Warrants entitling them to purchase at least 50% of
the Warrant Shares. The Company, any Warrantholder or holder of Warrant
Shares may, by an instrument in writing, waive compliance by the other party
with any term or provision of this Warrant on the part of such other party
hereto to be performed or complied with. The waiver by any such party of a
breach of any term or provision of this Warrant shall not be construed as a
waiver of any subsequent breach.
7.4 SECTION AND OTHER HEADINGS. The section and other headings
contained in this Warrant are for reference purposes only and shall not be
deemed to be a part of this Warrant or to affect the meaning or
interpretation of this Warrant.
7.5 FURTHER ASSURANCES. Each of the Company, the Warrantholders
and holders of Warrant Shares shall do and perform all such further acts and
things and execute and deliver all such other certificates, instruments
and/or documents (including without limitation, such proxies and/or powers of
attorney as may be necessary or appropriate) as any party hereto may, at any
time and from time to time, reasonably request in connection with the
performance of any of the provisions of this Warrant.
8
<PAGE>
7.6 NOTICES. All demands, requests, notices and other communications
required or permitted to be given under this Warrant shall be in writing and
shall be deemed to have been duly given if delivered personally or sent by
United States certified or registered first class mail, postage prepaid, to the
parties hereto at the following addresses or at such other address as any party
hereto shall hereafter specify by notice to the other party hereto:
(a) if to the Company, addressed to:
F.Y.I. Incorporated
3232 McKinney Avenue
Suite 900
Dallas, Texas 75204
Attention: Ed H. Bowman, Jr.
(b) if to any Warrantholder or holder of Warrant Shares, addressed to
the address of such person appearing on the books of the Company.
Except as otherwise provided herein, all such demands, requests,
notices and other communications shall be deemed to have been received on the
date of personal delivery thereof or on the third Business Day after the mailing
thereof.
7.7 SEPARABILITY. Any term or provision of this Warrant which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable any other term or provision of this
Warrant or affecting the validity or enforceability of any of the terms or
provisions of this Warrant in any other jurisdiction.
7.8 FRACTIONAL SHARES. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. With
respect to any fraction of a share called for upon any exercise hereof, the
Company shall pay to the Warrantholder an amount in cash equal to such
fraction multiplied by the current market price (as determined as of the date
of exercise, and with reference to the applicable trading market, in
accordance with paragraph (d) of Section 5.1) of a share of such stock as of
the date of such exercise.
7.9 RIGHTS OF THE HOLDER. The Warrantholder shall not, solely by
virtue of this Warrant, be entitled to any rights of a stockholder of the
Company, either at law or in equity.
7.10 GOVERNING LAW. This Warrant shall be deemed to be a contract
made under the laws of the State of Delaware and for all purposes shall be
governed by and construed in accordance with the laws of such State
applicable to contracts made and performed in Delaware.
9
<PAGE>
7.11 EFFECT OF STOCK SPLITS, ETC. Whenever any rights under this
Agreement are available only when at least a specified minimum number of
Warrant Shares is involved, such number shall be appropriately adjusted to
reflect any stock split, stock dividend, combination of securities into a
smaller number of securities or reclassification of stock.
10
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
by its duly authorized officer.
F.Y.I. INCORPORATED
By:
---------------------------------
Name: Ed H. Bowman, Jr.
Title: President and
Chief Executive Officer
Dated: May 19, 1999
11
<PAGE>
EXERCISE FORM
(To be executed upon exercise of this Warrant)
The undersigned, the record holder of this Warrant, hereby
irrevocably elects to exercise the right, represented by this Warrant, to
purchase __________ of the Warrant Shares and herewith tenders payment for
such Warrant Shares to the order of F.Y.I. INCORPORATED, in the amount of
$_______ in accordance with the terms of this Warrant. The undersigned
requests that a certificate for such Warrant Shares be registered in the name
of _________________________________ and that such certificate be delivered
to _________________________ whose address is
______________________________________________.
Date _________________ Signature _________________________
12
<PAGE>
Exhibit 4.4
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF NOR ANY
INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE SOLD, ASSIGNED, PLEDGED,
HYPOTHECATED, ENCUMBERED OR IN ANY OTHER MANNER TRANSFERRED OR DISPOSED OF
EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT OF 1933, AS AMENDED, AND THE TERMS
AND CONDITIONS HEREOF. THE HOLDER OF THIS WARRANT AND THE SECURITIES ISSUABLE
UPON EXERCISE HEREOF ARE SUBJECT TO THE RESTRICTIONS HEREIN SET FORTH.
VOID AFTER 5:00 P.M. NEW YORK CITY TIME, MAY 19, 2009
****************************************
No. 16
WARRANT
to
PURCHASE COMMON STOCK
of
F.Y.I. INCORPORATED
****************************************
This certifies that, for good and valuable consideration, F.Y.I.
Incorporated, a Delaware corporation (the "Company"), grants to Ronald Zazworsky
or permitted registered assigns (the "Warrantholder" or "Warrantholders"), the
right to subscribe for and purchase from the Company, at $26.75 per share (the
"Exercise Price"), Fifteen Thousand Seven Hundred (15,700) shares of the
Company's Common Stock, par value $0.01 per share (the "Common Stock"), subject
to the provisions and upon the terms and conditions herein set forth. The
Exercise Price and the number of Warrant Shares are subject to adjustment from
time to time as provided in Section 5.
<PAGE>
1. DURATION AND EXERCISE OF WARRANT; LIMITATION EXERCISE PAYMENT
OF TAXES.
a. DURATION AND EXERCISE OF WARRANT.
(a) This Warrant may be exercised as to 100% of the underlying shares
at any time following the date of receipt by the Compensation Committee of the
Board of Directors of the Corporation's audited financial statements showing the
Corporation's actual earnings per share for the year ended December 31, 2000
("fiscal 2000"), provided that such earnings are not less than $1.93 per share.
The Company shall use its best efforts to deliver to the Compensation Committee
the audited financial statements showing the Corporation's actual fiscal 2000
earnings per share by March 5, 2001. If the Corporation's actual 2000 fiscal
earnings is less than $1.93 per share, then this Warrant shall be exercisable as
to 100% of the underlying shares at any time following the date of receipt by
the Compensation Committee of the Board of Directors of the Corporation's
audited statements showing the Corporation's actual earnings per share for the
year ended December 31, 2001 ("fiscal 2001"), provided that such earnings are
not less than $2.39 per share. The Company shall use its best efforts to
deliver to the Compensation Committee the audited financial statements showing
the Corporation's the actual fiscal 2001 earnings by March 5, 2002. However, in
any case, this Warrant shall vest as to 100% of the underlying shares on March
5, 2008. The date this Warrant is first exercisable is hereinafter referred to
as the "Exercise Date". The Company shall give prompt notice to the
Warrantholder of the Exercise Date in accordance with Section 7.6. This Warrant
expires at 5:00 P.M., New York City time on May 19, 2009 (the "Expiration
Date"). In addition, in the event of a Change in Control of the Company, the
right to exercise 100% of the underlying shares shall immediately vest. A
"Change in Control" shall be deemed to have occurred if:
(i) any person, other than the Company or an employee benefit plan of
the Company, acquires directly or indirectly the Beneficial Ownership (as
defined in Section 13(d) of the Securities and Exchange Act of 1934, as
amended (the" Exchange Act")) of any voting security of the Company and
immediately after such acquisition such Person is, directly or indirectly,
the Beneficial Owner of voting securities representing 50% or more of the
total voting power of all of the then-outstanding voting securities of the
Company;
(ii) the individuals (A) who, as of the closing date of the Initial
Public Offering, constitute the Board (the "Original Directors") or (B) who
thereafter are elected to the Board and whose election, or nomination for
election, to the Board was approved by a vote of at least two-thirds (2/3)
of the Original Directors then still in office (such directors becoming
"Additional Original Directors" immediately following their election) or
(C) who are elected to the Board and whose election, or nomination for
election, to the Board was approved by a vote of at least two-thirds (2/3)
of the Original Directors and Additional Original Directors then still in
office (such directors also
2
<PAGE>
becoming "Additional Original Directors" immediately following their
election) (such individuals being the "Continuing Directors"), cease
for any reason to constitute a majority of the members of the Board;
(iii) the stockholders of the Company shall approve a merger,
consolidation, recapitalization, or reorganization of the Company, a
reverse stock split of the outstanding voting securities of the Company, or
consummation of any such transaction if stockholder approval is not sought
or obtained, other than any such transaction which would result in at least
75% of the total voting power represented by the voting securities of the
surviving entity outstanding immediately after such transaction being
Beneficially Owned by at least 75% of the holders of the outstanding voting
securities of the Company immediately prior to the transaction, with the
voting power of each such continuing holder relative to other such
continuing holders not substantially altered in the transaction; or
(iv) the stockholders of the Company shall approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by
the Company of all or a substantial portion of the Company's assets (i.e.,
50% or more of the total assets of the Company).
(b) The rights represented by this Warrant may be exercised by the
Warrantholder of record, in whole, or from time to time in part, by (a)
surrender of this Warrant, accompanied by either the Exercise Form annexed
hereto, or if the Warrantholder decides to exercise the Warrant pursuant to
the broker-assisted cashless exercise program instituted by the Company, an
applicable exercise form provided by the Company (the "Exercise Form") duly
executed by the Warrantholder of record and specifying the number of Warrant
Shares to be purchased, to the Company at the office of the Company located
at 3232 McKinney Avenue, Suite 900, Dallas, Texas 75204 (or such other office
or agency of the Company as it may designate by notice to the Warrantholder
at the address of such Warrantholder appearing on the books of the Company)
during normal business hours on any day (a "Business Day") other than a
Saturday, Sunday or a day on which the New York Stock Exchange is authorized
to close or on which the Company is otherwise closed for business (a
"Nonbusiness Day") on or after 9:00 A.M. New York City time on the Exercise
Date but not later than 5:00 P.M., New York City time, on the Expiration Date
(or 5:00 P.M., New York City time, on the next succeeding Business Day, if
the Expiration Date is a Nonbusiness Day), (b) delivery of payment to the
Company in cash or by certified or official bank check in New York Clearing
House Funds, of the Exercise Price for the number of Warrant Shares specified
in the Exercise Form (such payment may be made by the Warrantholder directly
or by a designated broker pursuant to the broker-assisted cashless exercise
program instituted by the Company) and (c) such documentation as to the
identity and authority of the Warrantholder as the Company may reasonably
request. Such Warrant Shares shall be deemed by the Company to be issued to
the Warrantholder as the record holder of such Warrant Shares as of the close
of business on the date on which this Warrant shall have been surrendered and
payment made
3
<PAGE>
for the Warrant Shares as aforesaid. Certificates for the Warrant Shares
specified in the Exercise Form shall be delivered to the Warrantholder (or
designated broker, as the case may be) as promptly as practicable, and in any
event within 10 business days, thereafter. The stock certificates so
delivered shall be in denominations of at least 1,000 shares each or such
other denomination as may be specified by the Warrantholder and agreed upon
by the Company, and shall be issued in the name of the Warrantholder or such
other name as shall be designated in the Exercise Form. If this Warrant shall
have been exercised only in part, the Company shall, at the time of delivery
of the certificates for the Warrant Shares, deliver to the Warrantholder (or
designated broker, as the case may be) a new Warrant evidencing the rights to
purchase the remaining Warrant Shares, which new Warrant shall in all other
respects be identical with this Warrant. No adjustments or payments shall be
made on or in respect of Warrant Shares issuable on the exercise of this
Warrant for any cash dividends paid or payable to holders of record of Common
Stock prior to the date as of which the Warrantholder shall be deemed to be
the record holder of such Warrant Shares.
(c) With the consent of the Compensation Committee, and subject at
all times to, and only to the extent, if any, permitted under and in
accordance with, laws and regulations and other binding obligations or
provisions applicable to the Company, the Company may make a loan to the
Warrantholder with respect to the exercise of the Warrant, including the
payment by the Warrantholder of any or all federal, state and local income or
other taxes due in connection with any exercise. The interest on such loan
shall be the Company's cost of money plus an additional 0.5% at the time the
loan is made and such loan shall be made with recourse against the
Warrantholder. The Compensation Committee shall have the full authority to
determine any other terms and provisions of such a loan.
1.2 VESTING AND EXERCISE. This Warrant may be vested and, once
vested, may be exercised whether or not, at the time of such vesting or
exercise, as the case may be, Mr. Zazworsky is an Employee of the Company.
If this Warrant is not exercised prior to 5:00 P.M. on the Expiration Date
(or the next succeeding Business Day, if the Expiration Date is a Nonbusiness
Day), this Warrant, or any new Warrant issued pursuant to Section 1.1, shall
cease to be exercisable and shall become void and all rights of the
Warrantholder hereunder shall cease. This Warrant shall not be exercisable,
and no Warrant Shares shall be issued hereunder, prior to 9:00 A.M., New York
City time, on the Exercise Date.
1.3 PAYMENT OF TAXES. The issuance of certificates for Warrant
Shares shall be made without charge to the Warrantholder for any stock
transfer or other issuance tax in respect thereto; PROVIDED, HOWEVER, that
the Warrantholder shall be required to pay any and all taxes which may be
payable in respect to any transfer involved in the issuance and delivery of
any certificates for Warrant Shares in a name other than that of the then
Warrantholder as reflected upon the books of the Company.
4
<PAGE>
1.4 DIVISIBILITY OF WARRANT. This Warrant may be divided into
warrants representing one Warrant Share or multiples thereof, upon surrender
at the principal office of the Company on any Business Day, without charge to
any Warrantholder, except as provided below. The Warrantholder will be
charged for reasonable out-of-pocket costs incurred by the Company in
connection with the division of this Warrant into Warrants representing fewer
than one thousand (1,000) Warrant Shares. Upon any such division, the
Warrants may be transferred of record to a name other than that of the
Warrantholder of record; PROVIDED, HOWEVER, that the Warrantholder shall be
required to pay any and all transfer taxes with respect thereto.
2. RESERVATION AND LISTING OF SHARES, ETC.
All Warrant Shares which are issued upon the exercise of the rights
represented by this Warrant shall, upon issuance and payment of the Exercise
Price, be validly issued, fully paid and nonassessable and free from all
taxes, liens, security interests, charges and other encumbrances with respect
to the issue thereof other than taxes in respect of any transfer occurring
contemporaneously with such issue. During the period within which this
Warrant may be exercised, the Company shall at all times have authorized and
reserved, and keep available free from preemptive rights, a sufficient number
of shares of Common Stock to provide for the exercise of this Warrant, and
shall at its expense use its best efforts to procure such listing thereof
(subject to official notice of issuance) as then may be required on all stock
exchanges on which the Common Stock is then listed or on the Nasdaq National
Market. The Company shall, from time to time, take all such action as may be
required to assure that the par value per share of the Warrant Shares is at
all times equal to or less than the then effective Exercise Price.
3. EXCHANGE, LOSS OR DESTRUCTION OF WARRANT.
If permitted by Section 1.4 and in accordance with the provisions
thereof, upon surrender of this Warrant to the Company with a duly executed
instrument of assignment and funds sufficient to pay any transfer tax, the
Company shall, without charge, execute and deliver a new Warrant of like
tenor in the name of the assignee named in such instrument of assignment and
this Warrant shall promptly be canceled. Upon receipt by the Company of
evidence satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant, and, in the case of loss, theft or destruction, of such bond or
indemnification as the Company may reasonably require, and, in the case of
such mutilation, upon surrender and cancellation of this Warrant, the Company
will execute and deliver a new Warrant of like tenor. The term "Warrant" as
used herein includes any Warrants issued in substitution or exchange of this
Warrant.
5
<PAGE>
4. OWNERSHIP OF WARRANT.
The Company may deem and treat the person in whose name this
Warrant is registered as the holder and owner hereof (notwithstanding any
notations of ownership or writing hereon made by anyone other than the
Company) for all purposes and shall not be affected by any notice to the
contrary, until presentation of this Warrant for registration of transfer as
provided in Section 1.1 or in Section 3.
5. CERTAIN ADJUSTMENTS.
The Exercise Price at which Warrant Shares may be purchased
hereunder, and the number of Warrant Shares to be purchased upon exercise
hereof, are subject to change or adjustment as follows:
5.1 The number of Warrant Shares purchasable upon the exercise of
this Warrant and the Exercise Price shall be subject to adjustment as follows:
(a) In case the Company shall (i) pay a dividend in shares of
Common Stock or make a distribution in shares of Common Stock (ii) subdivide
its outstanding shares of Common Stock into a greater number of shares of
Common Stock, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock or (iv) issue by reclassification of
its shares of Common Stock other securities of the Company (including any
such reclassification in connection with a consolidation or merger in which
the Company is the surviving corporation), the number of Warrant Shares
purchasable upon exercise of this Warrant shall be adjusted so that the
Warrantholder shall be entitled to receive the kind and number of Warrant
Shares or other securities of the Company which he would have owned or have
been entitled to receive after the happening of any of the events described
above, had this Warrant been exercised immediately prior to the happening of
such event or any record date with respect thereto. An adjustment made
pursuant to this paragraph (a) shall become effective immediately after the
effective date of such event retroactive to the record date, if any, for such
event.
(b) In case the Company shall:
(i) issue rights, options or warrants to all holders of its
outstanding Common Stock, without any charge to such holders,
entitling them to subscribe for or purchase shares of Common
Stock at a price per share which is lower at the record date for
the determination of stockholders entitled to receive such
rights, options or warrants than the then current market price
per share of Common Stock, or
6
<PAGE>
(ii) distribute to all holders of its shares of Common Stock
evidences of its indebtedness or assets (excluding cash dividends
or distributions payable out of consolidated earnings or earned
surplus and dividends or distributions referred to in paragraph
(a) of this Section 5.1) or rights, options or warrants, or
convertible or exchangeable securities, containing the right to
subscribe for or purchase shares of Common Stock,
appropriate adjustments shall be made to the number of Warrant Shares
purchasable upon the exercise of the Warrant and/or the Exercise Price in order
to preserve the relative rights and interests of the Warrantholders, such
adjustments to be made by the good faith determination of the Board of Directors
of the Company.
5.2 VOLUNTARY ADJUSTMENT BY THE COMPANY. The Company may, at its
option, at any time during the term of the Warrants, reduce the then current
Exercise Price to any amount, consistent with applicable law, deemed appropriate
by the Board of Directors of the Company.
5.3 NOTICE OF ADJUSTMENT. Whenever the number of Warrant Shares or
the Exercise Price of such Warrant Shares is adjusted, as herein provided, the
Company shall promptly mail first class, postage prepaid, to all Warrantholders,
notice of such adjustment.
5.4 NO ADJUSTMENT FOR CASH DIVIDENDS. No adjustment in respect of
any cash dividends shall be made during the term of this Warrant or upon the
exercise of this Warrant.
5.5 PRESERVATION OF PURCHASE RIGHTS UPON MERGER, CONSOLIDATION,
ETC. In case of any consolidation of the Company with or merger of the
Company into another corporation or in case of any sale, transfer or lease to
another corporation of all or substantially all of the property of the
Company, the Company or such successor or purchasing corporation, as the case
may be, shall execute with the Warrantholders an agreement that the
Warrantholders shall have the right thereafter upon payment of the Exercise
Price in effect immediately prior to such action to purchase upon exercise of
this Warrant the kind and amount of shares and other securities and property
which such holder would have owned or have been entitled to receive after the
happening of such consolidation, merger, sale, transfer or lease had this
Warrant been exercised immediately prior to such action; PROVIDED, HOWEVER,
that no adjustment in respect of cash dividends, interest or other income on
or from such shares or other securities and property shall be made during the
term of this Warrant or upon the exercise of this Warrant. Such agreement
shall provide for adjustments, which shall be as nearly equivalent as
practicable to the adjustments provided for in this Section 5. The
provisions of this Section 5.5 shall apply similarly to successive
consolidations, mergers, sales, transfers or leases.
7
<PAGE>
6. REGISTRATION RIGHTS OF WARRANT SHARES ON FORM S-8
On or prior to September 30, 1999, the Company shall file a
registration statement covering the Warrant Shares on a Form S-8, which
registration statement shall be effective upon the filing thereof. The
Company shall use its best efforts to keep such Form S-8 current and
effective until the earlier of the Expiration Date or the date this Warrant
has been exercised in full. The Company shall use its best efforts to list
the Warrant Shares on any securities exchange (or on the Nasdaq National
Market) on which other shares of Common Stock are listed.
7. MISCELLANEOUS.
7.1 ENTIRE AGREEMENT. This Warrant constitutes the entire
agreement between the Company and the Warrantholder with respect to this
Warrant and the Warrant Shares.
7.2 BINDING EFFECTS; BENEFITS. This Warrant shall inure to the
benefit of and shall be binding upon the Company, the Warrantholder and
holders of Warrant Shares and their respective heirs, legal representatives,
successors and assigns. Nothing in this Warrant, expressed or implied, is
intended to or shall confer on any person other than the Company, the
Warrantholders and holders of Warrant Shares, or their respective heirs,
legal representatives, successors or assigns, any rights, remedies,
obligations or liabilities under or by reason of this Warrant or the Warrant
Shares.
7.3 AMENDMENTS AND WAIVERS. This Warrant may not be modified or
amended except by an instrument in writing signed by the Company and
Warrantholders that hold Warrants entitling them to purchase at least 50% of
the Warrant Shares. The Company, any Warrantholder or holder of Warrant
Shares may, by an instrument in writing, waive compliance by the other party
with any term or provision of this Warrant on the part of such other party
hereto to be performed or complied with. The waiver by any such party of a
breach of any term or provision of this Warrant shall not be construed as a
waiver of any subsequent breach.
7.4 SECTION AND OTHER HEADINGS. The section and other headings
contained in this Warrant are for reference purposes only and shall not be
deemed to be a part of this Warrant or to affect the meaning or
interpretation of this Warrant.
7.5 FURTHER ASSURANCES. Each of the Company, the Warrantholders
and holders of Warrant Shares shall do and perform all such further acts and
things and execute and deliver all such other certificates, instruments
and/or documents (including without limitation, such proxies and/or powers of
attorney as may be necessary or appropriate) as any party hereto may, at any
time and from time to time, reasonably request in connection with the
performance of any of the provisions of this Warrant.
8
<PAGE>
7.6 NOTICES. All demands, requests, notices and other
communications required or permitted to be given under this Warrant shall be
in writing and shall be deemed to have been duly given if delivered
personally or sent by United States certified or registered first class mail,
postage prepaid, to the parties hereto at the following addresses or at such
other address as any party hereto shall hereafter specify by notice to the
other party hereto:
(a) if to the Company, addressed to:
F.Y.I. Incorporated
3232 McKinney Avenue
Suite 900
Dallas, Texas 75204
Attention: Ed H. Bowman, Jr.
(b) if to any Warrantholder or holder of Warrant Shares, addressed to
the address of such person appearing on the books of the Company.
Except as otherwise provided herein, all such demands, requests,
notices and other communications shall be deemed to have been received on the
date of personal delivery thereof or on the third Business Day after the mailing
thereof.
7.7 SEPARABILITY. Any term or provision of this Warrant which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable any other term or provision of this
Warrant or affecting the validity or enforceability of any of the terms or
provisions of this Warrant in any other jurisdiction.
7.8 FRACTIONAL SHARES. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. With
respect to any fraction of a share called for upon any exercise hereof, the
Company shall pay to the Warrantholder an amount in cash equal to such
fraction multiplied by the current market price (as determined as of the date
of exercise, and with reference to the applicable trading market, in
accordance with paragraph (d) of Section 5.1) of a share of such stock as of
the date of such exercise.
7.9 RIGHTS OF THE HOLDER. The Warrantholder shall not, solely by
virtue of this Warrant, be entitled to any rights of a stockholder of the
Company, either at law or in equity.
7.10 GOVERNING LAW. This Warrant shall be deemed to be a contract
made under the laws of the State of Delaware and for all purposes shall be
governed by and construed in accordance with the laws of such State
applicable to contracts made and performed in Delaware.
9
<PAGE>
7.11 EFFECT OF STOCK SPLITS, ETC. Whenever any rights under this
Agreement are available only when at least a specified minimum number of Warrant
Shares is involved, such number shall be appropriately adjusted to reflect any
stock split, stock dividend, combination of securities into a smaller number of
securities or reclassification of stock.
10
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
by its duly authorized officer.
F.Y.I. INCORPORATED
By:
----------------------------------
Name: Ed H. Bowman, Jr.
Title: President and
Chief Executive Officer
Dated: May 19, 1999
11
<PAGE>
EXERCISE FORM
(To be executed upon exercise of this Warrant)
The undersigned, the record holder of this Warrant, hereby
irrevocably elects to exercise the right, represented by this Warrant, to
purchase __________ of the Warrant Shares and herewith tenders payment for
such Warrant Shares to the order of F.Y.I. INCORPORATED, in the amount of
$_______ in accordance with the terms of this Warrant. The undersigned
requests that a certificate for such Warrant Shares be registered in the name
of _________________________________ and that such certificate be delivered
to _________________________ whose address is
______________________________________________.
Date _________________ Signature _________________________
12
<PAGE>
Exhibit 4.5
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF NOR ANY
INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE SOLD, ASSIGNED, PLEDGED,
HYPOTHECATED, ENCUMBERED OR IN ANY OTHER MANNER TRANSFERRED OR DISPOSED OF
EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT OF 1933, AS AMENDED, AND THE TERMS
AND CONDITIONS HEREOF. THE HOLDER OF THIS WARRANT AND THE SECURITIES ISSUABLE
UPON EXERCISE HEREOF ARE SUBJECT TO THE RESTRICTIONS HEREIN SET FORTH.
VOID AFTER 5:00 P.M. NEW YORK CITY TIME, MAY 19, 2009
****************************************
No. 15
WARRANT
to
PURCHASE COMMON STOCK
of
F.Y.I. INCORPORATED
****************************************
This certifies that, for good and valuable consideration, F.Y.I.
Incorporated, a Delaware corporation (the "Company"), grants to Timothy J.
Barker or permitted registered assigns (the "Warrantholder" or
"Warrantholders"), the right to subscribe for and purchase from the Company, at
$26.75 per share (the "Exercise Price"), Sixteen Thousand One Hundred (16,100)
shares of the Company's Common Stock, par value $0.01 per share (the "Common
Stock"), subject to the provisions and upon the terms and conditions herein set
forth. The Exercise Price and the number of Warrant Shares are subject to
adjustment from time to time as provided in Section 5.
<PAGE>
1. DURATION AND EXERCISE OF WARRANT; LIMITATION EXERCISE PAYMENT
OF TAXES.
a. DURATION AND EXERCISE OF WARRANT.
(a) This Warrant may be exercised as to 100% of the underlying
shares at any time following the date of receipt by the Compensation
Committee of the Board of Directors of the Corporation's audited financial
statements showing the Corporation's actual earnings per share for the year
ended December 31, 2000 ("fiscal 2000"), provided that such earnings are not
less than $1.93 per share. The Company shall use its best efforts to deliver
to the Compensation Committee the audited financial statements showing the
Corporation's actual fiscal 2000 earnings per share by March 5, 2001. If the
Corporation's actual 2000 fiscal earnings is less than $1.93 per share, then
this Warrant shall be exercisable as to 100% of the underlying shares at any
time following the date of receipt by the Compensation Committee of the Board
of Directors of the Corporation's audited statements showing the
Corporation's actual earnings per share for the year ended December 31, 2001
("fiscal 2001"), provided that such earnings are not less than $2.39 per
share. The Company shall use its best efforts to deliver to the Compensation
Committee the audited financial statements showing the Corporation's the
actual fiscal 2001 earnings by March 5, 2002. However, in any case, this
Warrant shall vest as to 100% of the underlying shares on March 5, 2008. The
date this Warrant is first exercisable is hereinafter referred to as the
"Exercise Date". The Company shall give prompt notice to the Warrantholder
of the Exercise Date in accordance with Section 7.6. This Warrant expires at
5:00 P.M., New York City time on May 19, 2009 (the "Expiration Date"). In
addition, in the event of a Change in Control of the Company, the right to
exercise 100% of the underlying shares shall immediately vest. A "Change in
Control" shall be deemed to have occurred if:
(i) any person, other than the Company or an employee benefit plan of
the Company, acquires directly or indirectly the Beneficial Ownership (as
defined in Section 13(d) of the Securities and Exchange Act of 1934, as
amended (the" Exchange Act")) of any voting security of the Company and
immediately after such acquisition such Person is, directly or indirectly,
the Beneficial Owner of voting securities representing 50% or more of the
total voting power of all of the then-outstanding voting securities of the
Company;
(ii) the individuals (A) who, as of the closing date of the Initial
Public Offering, constitute the Board (the "Original Directors") or (B) who
thereafter are elected to the Board and whose election, or nomination for
election, to the Board was approved by a vote of at least two-thirds (2/3)
of the Original Directors then still in office (such directors becoming
"Additional Original Directors" immediately following their election) or
(C) who are elected to the Board and whose election, or nomination for
election, to the Board was approved by a vote of at least two-thirds (2/3)
of the Original Directors and Additional Original Directors then still in
office (such directors also
2
<PAGE>
becoming "Additional Original Directors" immediately following their
election) (such individuals being the "Continuing Directors"), cease
for any reason to constitute a majority of the members of the Board;
(iii) the stockholders of the Company shall approve a merger,
consolidation, recapitalization, or reorganization of the Company, a
reverse stock split of the outstanding voting securities of the Company, or
consummation of any such transaction if stockholder approval is not sought
or obtained, other than any such transaction which would result in at least
75% of the total voting power represented by the voting securities of the
surviving entity outstanding immediately after such transaction being
Beneficially Owned by at least 75% of the holders of the outstanding voting
securities of the Company immediately prior to the transaction, with the
voting power of each such continuing holder relative to other such
continuing holders not substantially altered in the transaction; or
(iv) the stockholders of the Company shall approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by
the Company of all or a substantial portion of the Company's assets (i.e.,
50% or more of the total assets of the Company).
(b) The rights represented by this Warrant may be exercised by the
Warrantholder of record, in whole, or from time to time in part, by (a)
surrender of this Warrant, accompanied by either the Exercise Form annexed
hereto, or if the Warrantholder decides to exercise the Warrant pursuant to
the broker-assisted cashless exercise program instituted by the Company, an
applicable exercise form provided by the Company (the "Exercise Form") duly
executed by the Warrantholder of record and specifying the number of Warrant
Shares to be purchased, to the Company at the office of the Company located
at 3232 McKinney Avenue, Suite 900, Dallas, Texas 75204 (or such other office
or agency of the Company as it may designate by notice to the Warrantholder
at the address of such Warrantholder appearing on the books of the Company)
during normal business hours on any day (a "Business Day") other than a
Saturday, Sunday or a day on which the New York Stock Exchange is authorized
to close or on which the Company is otherwise closed for business (a
"Nonbusiness Day") on or after 9:00 A.M. New York City time on the Exercise
Date but not later than 5:00 P.M., New York City time, on the Expiration Date
(or 5:00 P.M., New York City time, on the next succeeding Business Day, if
the Expiration Date is a Nonbusiness Day), (b) delivery of payment to the
Company in cash or by certified or official bank check in New York Clearing
House Funds, of the Exercise Price for the number of Warrant Shares specified
in the Exercise Form (such payment may be made by the Warrantholder directly
or by a designated broker pursuant to the broker-assisted cashless exercise
program instituted by the Company) and (c) such documentation as to the
identity and authority of the Warrantholder as the Company may reasonably
request. Such Warrant Shares shall be deemed by the Company to be issued to
the Warrantholder as the record holder of such Warrant Shares as of the close
of business on the date on which this Warrant shall have been surrendered and
payment made
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for the Warrant Shares as aforesaid. Certificates for the Warrant Shares
specified in the Exercise Form shall be delivered to the Warrantholder (or
designated broker, as the case may be) as promptly as practicable, and in any
event within 10 business days, thereafter. The stock certificates so
delivered shall be in denominations of at least 1,000 shares each or such
other denomination as may be specified by the Warrantholder and agreed upon
by the Company, and shall be issued in the name of the Warrantholder or such
other name as shall be designated in the Exercise Form. If this Warrant shall
have been exercised only in part, the Company shall, at the time of delivery
of the certificates for the Warrant Shares, deliver to the Warrantholder (or
designated broker, as the case may be) a new Warrant evidencing the rights to
purchase the remaining Warrant Shares, which new Warrant shall in all other
respects be identical with this Warrant. No adjustments or payments shall be
made on or in respect of Warrant Shares issuable on the exercise of this
Warrant for any cash dividends paid or payable to holders of record of Common
Stock prior to the date as of which the Warrantholder shall be deemed to be
the record holder of such Warrant Shares.
(c) With the consent of the Compensation Committee, and subject at
all times to, and only to the extent, if any, permitted under and in
accordance with, laws and regulations and other binding obligations or
provisions applicable to the Company, the Company may make a loan to the
Warrantholder with respect to the exercise of the Warrant, including the
payment by the Warrantholder of any or all federal, state and local income or
other taxes due in connection with any exercise. The interest on such loan
shall be the Company's cost of money plus an additional 0.5% at the time the
loan is made and such loan shall be made with recourse against the
Warrantholder. The Compensation Committee shall have the full authority to
determine any other terms and provisions of such a loan.
1.2 VESTING AND EXERCISE. This Warrant may be vested and, once
vested, may be exercised whether or not, at the time of such vesting or
exercise, as the case may be, Mr. Barker is an Employee of the Company. If
this Warrant is not exercised prior to 5:00 P.M. on the Expiration Date (or
the next succeeding Business Day, if the Expiration Date is a Nonbusiness
Day), this Warrant, or any new Warrant issued pursuant to Section 1.1, shall
cease to be exercisable and shall become void and all rights of the
Warrantholder hereunder shall cease. This Warrant shall not be exercisable,
and no Warrant Shares shall be issued hereunder, prior to 9:00 A.M., New York
City time, on the Exercise Date.
1.3 PAYMENT OF TAXES. The issuance of certificates for Warrant
Shares shall be made without charge to the Warrantholder for any stock
transfer or other issuance tax in respect thereto; PROVIDED, HOWEVER, that
the Warrantholder shall be required to pay any and all taxes which may be
payable in respect to any transfer involved in the issuance and delivery of
any certificates for Warrant Shares in a name other than that of the then
Warrantholder as reflected upon the books of the Company.
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1.4 DIVISIBILITY OF WARRANT. This Warrant may be divided into
warrants representing one Warrant Share or multiples thereof, upon surrender
at the principal office of the Company on any Business Day, without charge to
any Warrantholder, except as provided below. The Warrantholder will be
charged for reasonable out-of-pocket costs incurred by the Company in
connection with the division of this Warrant into Warrants representing fewer
than one thousand (1,000) Warrant Shares. Upon any such division, the
Warrants may be transferred of record to a name other than that of the
Warrantholder of record; PROVIDED, HOWEVER, that the Warrantholder shall be
required to pay any and all transfer taxes with respect thereto.
2. RESERVATION AND LISTING OF SHARES, ETC.
All Warrant Shares which are issued upon the exercise of the rights
represented by this Warrant shall, upon issuance and payment of the Exercise
Price, be validly issued, fully paid and nonassessable and free from all
taxes, liens, security interests, charges and other encumbrances with respect
to the issue thereof other than taxes in respect of any transfer occurring
contemporaneously with such issue. During the period within which this
Warrant may be exercised, the Company shall at all times have authorized and
reserved, and keep available free from preemptive rights, a sufficient number
of shares of Common Stock to provide for the exercise of this Warrant, and
shall at its expense use its best efforts to procure such listing thereof
(subject to official notice of issuance) as then may be required on all stock
exchanges on which the Common Stock is then listed or on the Nasdaq National
Market. The Company shall, from time to time, take all such action as may be
required to assure that the par value per share of the Warrant Shares is at
all times equal to or less than the then effective Exercise Price.
3. EXCHANGE, LOSS OR DESTRUCTION OF WARRANT.
If permitted by Section 1.4 and in accordance with the provisions
thereof, upon surrender of this Warrant to the Company with a duly executed
instrument of assignment and funds sufficient to pay any transfer tax, the
Company shall, without charge, execute and deliver a new Warrant of like
tenor in the name of the assignee named in such instrument of assignment and
this Warrant shall promptly be canceled. Upon receipt by the Company of
evidence satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant, and, in the case of loss, theft or destruction, of such bond or
indemnification as the Company may reasonably require, and, in the case of
such mutilation, upon surrender and cancellation of this Warrant, the Company
will execute and deliver a new Warrant of like tenor. The term "Warrant" as
used herein includes any Warrants issued in substitution or exchange of this
Warrant.
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4. OWNERSHIP OF WARRANT.
The Company may deem and treat the person in whose name this
Warrant is registered as the holder and owner hereof (notwithstanding any
notations of ownership or writing hereon made by anyone other than the
Company) for all purposes and shall not be affected by any notice to the
contrary, until presentation of this Warrant for registration of transfer as
provided in Section 1.1 or in Section 3.
5. CERTAIN ADJUSTMENTS.
The Exercise Price at which Warrant Shares may be purchased
hereunder, and the number of Warrant Shares to be purchased upon exercise
hereof, are subject to change or adjustment as follows:
5.1 The number of Warrant Shares purchasable upon the exercise of
this Warrant and the Exercise Price shall be subject to adjustment as follows:
(a) In case the Company shall (i) pay a dividend in shares of
Common Stock or make a distribution in shares of Common Stock (ii) subdivide
its outstanding shares of Common Stock into a greater number of shares of
Common Stock, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock or (iv) issue by reclassification of
its shares of Common Stock other securities of the Company (including any
such reclassification in connection with a consolidation or merger in which
the Company is the surviving corporation), the number of Warrant Shares
purchasable upon exercise of this Warrant shall be adjusted so that the
Warrantholder shall be entitled to receive the kind and number of Warrant
Shares or other securities of the Company which he would have owned or have
been entitled to receive after the happening of any of the events described
above, had this Warrant been exercised immediately prior to the happening of
such event or any record date with respect thereto. An adjustment made
pursuant to this paragraph (a) shall become effective immediately after the
effective date of such event retroactive to the record date, if any, for such
event.
(b) In case the Company shall:
(i) issue rights, options or warrants to all holders of its
outstanding Common Stock, without any charge to such holders,
entitling them to subscribe for or purchase shares of Common
Stock at a price per share which is lower at the record date for
the determination of stockholders entitled to receive such
rights, options or warrants than the then current market price
per share of Common Stock, or
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(ii) distribute to all holders of its shares of Common Stock
evidences of its indebtedness or assets (excluding cash dividends
or distributions payable out of consolidated earnings or earned
surplus and dividends or distributions referred to in paragraph
(a) of this Section 5.1) or rights, options or warrants, or
convertible or exchangeable securities, containing the right to
subscribe for or purchase shares of Common Stock,
appropriate adjustments shall be made to the number of Warrant Shares
purchasable upon the exercise of the Warrant and/or the Exercise Price in
order to preserve the relative rights and interests of the Warrantholders,
such adjustments to be made by the good faith determination of the Board of
Directors of the Company.
5.2 VOLUNTARY ADJUSTMENT BY THE COMPANY. The Company may, at its
option, at any time during the term of the Warrants, reduce the then current
Exercise Price to any amount, consistent with applicable law, deemed
appropriate by the Board of Directors of the Company.
5.3 NOTICE OF ADJUSTMENT. Whenever the number of Warrant Shares
or the Exercise Price of such Warrant Shares is adjusted, as herein provided,
the Company shall promptly mail first class, postage prepaid, to all
Warrantholders, notice of such adjustment.
5.4 NO ADJUSTMENT FOR CASH DIVIDENDS. No adjustment in respect of
any cash dividends shall be made during the term of this Warrant or upon the
exercise of this Warrant.
5.5 PRESERVATION OF PURCHASE RIGHTS UPON MERGER, CONSOLIDATION,
ETC. In case of any consolidation of the Company with or merger of the
Company into another corporation or in case of any sale, transfer or lease to
another corporation of all or substantially all of the property of the
Company, the Company or such successor or purchasing corporation, as the case
may be, shall execute with the Warrantholders an agreement that the
Warrantholders shall have the right thereafter upon payment of the Exercise
Price in effect immediately prior to such action to purchase upon exercise of
this Warrant the kind and amount of shares and other securities and property
which such holder would have owned or have been entitled to receive after the
happening of such consolidation, merger, sale, transfer or lease had this
Warrant been exercised immediately prior to such action; PROVIDED, HOWEVER,
that no adjustment in respect of cash dividends, interest or other income on
or from such shares or other securities and property shall be made during the
term of this Warrant or upon the exercise of this Warrant. Such agreement
shall provide for adjustments, which shall be as nearly equivalent as
practicable to the adjustments provided for in this Section 5. The
provisions of this Section 5.5 shall apply similarly to successive
consolidations, mergers, sales, transfers or leases.
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6. REGISTRATION RIGHTS OF WARRANT SHARES ON FORM S-8
On or prior to September 30, 1999, the Company shall file a
registration statement covering the Warrant Shares on a Form S-8, which
registration statement shall be effective upon the filing thereof. The
Company shall use its best efforts to keep such Form S-8 current and
effective until the earlier of the Expiration Date or the date this Warrant
has been exercised in full. The Company shall use its best efforts to list
the Warrant Shares on any securities exchange (or on the Nasdaq National
Market) on which other shares of Common Stock are listed.
7. MISCELLANEOUS.
7.1 ENTIRE AGREEMENT. This Warrant constitutes the entire
agreement between the Company and the Warrantholder with respect to this
Warrant and the Warrant Shares.
7.2 BINDING EFFECTS; BENEFITS. This Warrant shall inure to the
benefit of and shall be binding upon the Company, the Warrantholder and
holders of Warrant Shares and their respective heirs, legal representatives,
successors and assigns. Nothing in this Warrant, expressed or implied, is
intended to or shall confer on any person other than the Company, the
Warrantholders and holders of Warrant Shares, or their respective heirs,
legal representatives, successors or assigns, any rights, remedies,
obligations or liabilities under or by reason of this Warrant or the Warrant
Shares.
7.3 AMENDMENTS AND WAIVERS. This Warrant may not be modified or
amended except by an instrument in writing signed by the Company and
Warrantholders that hold Warrants entitling them to purchase at least 50% of
the Warrant Shares. The Company, any Warrantholder or holder of Warrant
Shares may, by an instrument in writing, waive compliance by the other party
with any term or provision of this Warrant on the part of such other party
hereto to be performed or complied with. The waiver by any such party of a
breach of any term or provision of this Warrant shall not be construed as a
waiver of any subsequent breach.
7.4 SECTION AND OTHER HEADINGS. The section and other headings
contained in this Warrant are for reference purposes only and shall not be
deemed to be a part of this Warrant or to affect the meaning or
interpretation of this Warrant.
7.5 FURTHER ASSURANCES. Each of the Company, the Warrantholders
and holders of Warrant Shares shall do and perform all such further acts and
things and execute and deliver all such other certificates, instruments
and/or documents (including without limitation, such proxies and/or powers of
attorney as may be necessary or appropriate) as any party hereto may, at any
time and from time to time, reasonably request in connection with the
performance of any of the provisions of this Warrant.
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7.6 NOTICES. All demands, requests, notices and other
communications required or permitted to be given under this Warrant shall be
in writing and shall be deemed to have been duly given if delivered
personally or sent by United States certified or registered first class mail,
postage prepaid, to the parties hereto at the following addresses or at such
other address as any party hereto shall hereafter specify by notice to the
other party hereto:
(a) if to the Company, addressed to:
F.Y.I. Incorporated
3232 McKinney Avenue
Suite 900
Dallas, Texas 75204
Attention: Ed H. Bowman, Jr.
(b) if to any Warrantholder or holder of Warrant Shares, addressed to
the address of such person appearing on the books of the Company.
Except as otherwise provided herein, all such demands, requests,
notices and other communications shall be deemed to have been received on the
date of personal delivery thereof or on the third Business Day after the
mailing thereof.
7.7 SEPARABILITY. Any term or provision of this Warrant which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable any other term or provision of this
Warrant or affecting the validity or enforceability of any of the terms or
provisions of this Warrant in any other jurisdiction.
7.8 FRACTIONAL SHARES. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. With
respect to any fraction of a share called for upon any exercise hereof, the
Company shall pay to the Warrantholder an amount in cash equal to such
fraction multiplied by the current market price (as determined as of the date
of exercise, and with reference to the applicable trading market, in
accordance with paragraph (d) of Section 5.1) of a share of such stock as of
the date of such exercise.
7.9 RIGHTS OF THE HOLDER. The Warrantholder shall not, solely by
virtue of this Warrant, be entitled to any rights of a stockholder of the
Company, either at law or in equity.
7.10 GOVERNING LAW. This Warrant shall be deemed to be a contract
made under the laws of the State of Delaware and for all purposes shall be
governed by and construed in accordance with the laws of such State
applicable to contracts made and performed in Delaware.
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7.11 EFFECT OF STOCK SPLITS, ETC. Whenever any rights under this
Agreement are available only when at least a specified minimum number of Warrant
Shares is involved, such number shall be appropriately adjusted to reflect any
stock split, stock dividend, combination of securities into a smaller number of
securities or reclassification of stock.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be
signed by its duly authorized officer.
F.Y.I. INCORPORATED
By:
--------------------------------
Name: Ed H. Bowman, Jr.
Title: President and
Chief Executive Officer
Dated: May 19, 1999
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EXERCISE FORM
(To be executed upon exercise of this Warrant)
The undersigned, the record holder of this Warrant, hereby
irrevocably elects to exercise the right, represented by this Warrant, to
purchase __________ of the Warrant Shares and herewith tenders payment for
such Warrant Shares to the order of F.Y.I. INCORPORATED, in the amount of
$_______ in accordance with the terms of this Warrant. The undersigned
requests that a certificate for such Warrant Shares be registered in the name
of _________________________________ and that such certificate be delivered
to _________________________ whose address is
______________________________________________.
Date _________________ Signature _________________________
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Exhibit 4.6
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF NOR ANY
INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE SOLD, ASSIGNED, PLEDGED,
HYPOTHECATED, ENCUMBERED OR IN ANY OTHER MANNER TRANSFERRED OR DISPOSED OF
EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT OF 1933, AS AMENDED, AND THE TERMS
AND CONDITIONS HEREOF. THE HOLDER OF THIS WARRANT AND THE SECURITIES ISSUABLE
UPON EXERCISE HEREOF ARE SUBJECT TO THE RESTRICTIONS HEREIN SET FORTH.
VOID AFTER 5:00 P.M. NEW YORK CITY TIME, MAY 19, 2009
****************************************
No. 18
WARRANT
to
PURCHASE COMMON STOCK
of
F.Y.I. INCORPORATED
****************************************
This certifies that, for good and valuable consideration, F.Y.I.
Incorporated, a Delaware corporation (the "Company"), grants to Margot T.
Lebenberg or permitted registered assigns (the "Warrantholder" or
"Warrantholders"), the right to subscribe for and purchase from the Company,
at $26.75 per share (the "Exercise Price"), Thirteen Thousand Two Hundred
(13,200) shares of the Company's Common Stock, par value $0.01 per share (the
"Common Stock"), subject to the provisions and upon the terms and conditions
herein set forth. The Exercise Price and the number of Warrant Shares are
subject to adjustment from time to time as provided in Section 5.
<PAGE>
1. DURATION AND EXERCISE OF WARRANT; LIMITATION EXERCISE PAYMENT
OF TAXES.
a. DURATION AND EXERCISE OF WARRANT.
(a) This Warrant may be exercised as to 100% of the underlying
shares at any time following the date of receipt by the Compensation
Committee of the Board of Directors of the Corporation's audited financial
statements showing the Corporation's actual earnings per share for the year
ended December 31, 2000 ("fiscal 2000"), provided that such earnings are not
less than $1.93 per share. The Company shall use its best efforts to deliver
to the Compensation Committee the audited financial statements showing the
Corporation's actual fiscal 2000 earnings per share by March 5, 2001. If the
Corporation's actual 2000 fiscal earnings is less than $1.93 per share, then
this Warrant shall be exercisable as to 100% of the underlying shares at any
time following the date of receipt by the Compensation Committee of the Board
of Directors of the Corporation's audited statements showing the
Corporation's actual earnings per share for the year ended December 31, 2001
("fiscal 2001"), provided that such earnings are not less than $2.39 per
share. The Company shall use its best efforts to deliver to the Compensation
Committee the audited financial statements showing the Corporation's the
actual fiscal 2001 earnings by March 5, 2002. However, in any case, this
Warrant shall vest as to 100% of the underlying shares on March 5, 2008. The
date this Warrant is first exercisable is hereinafter referred to as the
"Exercise Date". The Company shall give prompt notice to the Warrantholder
of the Exercise Date in accordance with Section 7.6. This Warrant expires at
5:00 P.M., New York City time on May 19, 2009 (the "Expiration Date"). In
addition, in the event of a Change in Control of the Company, the right to
exercise 100% of the underlying shares shall immediately vest. A "Change in
Control" shall be deemed to have occurred if:
(i) any person, other than the Company or an employee benefit plan of
the Company, acquires directly or indirectly the Beneficial Ownership (as
defined in Section 13(d) of the Securities and Exchange Act of 1934, as
amended (the" Exchange Act")) of any voting security of the Company and
immediately after such acquisition such Person is, directly or indirectly,
the Beneficial Owner of voting securities representing 50% or more of the
total voting power of all of the then-outstanding voting securities of the
Company;
(ii) the individuals (A) who, as of the closing date of the Initial
Public Offering, constitute the Board (the "Original Directors") or (B) who
thereafter are elected to the Board and whose election, or nomination for
election, to the Board was approved by a vote of at least two-thirds (2/3)
of the Original Directors then still in office (such directors becoming
"Additional Original Directors" immediately following their election) or
(C) who are elected to the Board and whose election, or nomination for
election, to the Board was approved by a vote of at least two-thirds (2/3)
of the Original Directors and Additional Original Directors then still in
office (such directors also
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becoming "Additional Original Directors" immediately following their
election) (such individuals being the "Continuing Directors"), cease
for any reason to constitute a majority of the members of the Board;
(iii) the stockholders of the Company shall approve a merger,
consolidation, recapitalization, or reorganization of the Company, a
reverse stock split of the outstanding voting securities of the Company, or
consummation of any such transaction if stockholder approval is not sought
or obtained, other than any such transaction which would result in at least
75% of the total voting power represented by the voting securities of the
surviving entity outstanding immediately after such transaction being
Beneficially Owned by at least 75% of the holders of the outstanding voting
securities of the Company immediately prior to the transaction, with the
voting power of each such continuing holder relative to other such
continuing holders not substantially altered in the transaction; or
(iv) the stockholders of the Company shall approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by
the Company of all or a substantial portion of the Company's assets (i.e.,
50% or more of the total assets of the Company).
(b) The rights represented by this Warrant may be exercised by the
Warrantholder of record, in whole, or from time to time in part, by (a)
surrender of this Warrant, accompanied by either the Exercise Form annexed
hereto, or if the Warrantholder decides to exercise the Warrant pursuant to
the broker-assisted cashless exercise program instituted by the Company, an
applicable exercise form provided by the Company (the "Exercise Form") duly
executed by the Warrantholder of record and specifying the number of Warrant
Shares to be purchased, to the Company at the office of the Company located
at 3232 McKinney Avenue, Suite 900, Dallas, Texas 75204 (or such other office
or agency of the Company as it may designate by notice to the Warrantholder
at the address of such Warrantholder appearing on the books of the Company)
during normal business hours on any day (a "Business Day") other than a
Saturday, Sunday or a day on which the New York Stock Exchange is authorized
to close or on which the Company is otherwise closed for business (a
"Nonbusiness Day") on or after 9:00 A.M. New York City time on the Exercise
Date but not later than 5:00 P.M., New York City time, on the Expiration Date
(or 5:00 P.M., New York City time, on the next succeeding Business Day, if
the Expiration Date is a Nonbusiness Day), (b) delivery of payment to the
Company in cash or by certified or official bank check in New York Clearing
House Funds, of the Exercise Price for the number of Warrant Shares specified
in the Exercise Form (such payment may be made by the Warrantholder directly
or by a designated broker pursuant to the broker-assisted cashless exercise
program instituted by the Company) and (c) such documentation as to the
identity and authority of the Warrantholder as the Company may reasonably
request. Such Warrant Shares shall be deemed by the Company to be issued to
the Warrantholder as the record holder of such Warrant Shares as of the close
of business on the date on which this Warrant shall have been surrendered and
payment made
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for the Warrant Shares as aforesaid. Certificates for the Warrant Shares
specified in the Exercise Form shall be delivered to the Warrantholder (or
designated broker, as the case may be) as promptly as practicable, and in any
event within 10 business days, thereafter. The stock certificates so
delivered shall be in denominations of at least 1,000 shares each or such
other denomination as may be specified by the Warrantholder and agreed upon
by the Company, and shall be issued in the name of the Warrantholder or such
other name as shall be designated in the Exercise Form. If this Warrant shall
have been exercised only in part, the Company shall, at the time of delivery
of the certificates for the Warrant Shares, deliver to the Warrantholder (or
designated broker, as the case may be) a new Warrant evidencing the rights to
purchase the remaining Warrant Shares, which new Warrant shall in all other
respects be identical with this Warrant. No adjustments or payments shall be
made on or in respect of Warrant Shares issuable on the exercise of this
Warrant for any cash dividends paid or payable to holders of record of Common
Stock prior to the date as of which the Warrantholder shall be deemed to be
the record holder of such Warrant Shares.
(c) With the consent of the Compensation Committee, and subject at
all times to, and only to the extent, if any, permitted under and in
accordance with, laws and regulations and other binding obligations or
provisions applicable to the Company, the Company may make a loan to the
Warrantholder with respect to the exercise of the Warrant, including the
payment by the Warrantholder of any or all federal, state and local income or
other taxes due in connection with any exercise. The interest on such loan
shall be the Company's cost of money plus an additional 0.5% at the time the
loan is made and such loan shall be made with recourse against the
Warrantholder. The Compensation Committee shall have the full authority to
determine any other terms and provisions of such a loan.
1.2 VESTING AND EXERCISE. This Warrant may be vested and, once
vested, may be exercised whether or not, at the time of such vesting or
exercise, as the case may be, Ms. Lebenberg is an Employee of the Company.
If this Warrant is not exercised prior to 5:00 P.M. on the Expiration Date
(or the next succeeding Business Day, if the Expiration Date is a Nonbusiness
Day), this Warrant, or any new Warrant issued pursuant to Section 1.1, shall
cease to be exercisable and shall become void and all rights of the
Warrantholder hereunder shall cease. This Warrant shall not be exercisable,
and no Warrant Shares shall be issued hereunder, prior to 9:00 A.M., New York
City time, on the Exercise Date.
1.3 PAYMENT OF TAXES. The issuance of certificates for Warrant
Shares shall be made without charge to the Warrantholder for any stock
transfer or other issuance tax in respect thereto; PROVIDED, HOWEVER, that
the Warrantholder shall be required to pay any and all taxes which may be
payable in respect to any transfer involved in the issuance and delivery of
any certificates for Warrant Shares in a name other than that of the then
Warrantholder as reflected upon the books of the Company.
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<PAGE>
1.4 DIVISIBILITY OF WARRANT. This Warrant may be divided into
warrants representing one Warrant Share or multiples thereof, upon surrender
at the principal office of the Company on any Business Day, without charge to
any Warrantholder, except as provided below. The Warrantholder will be
charged for reasonable out-of-pocket costs incurred by the Company in
connection with the division of this Warrant into Warrants representing fewer
than one thousand (1,000) Warrant Shares. Upon any such division, the
Warrants may be transferred of record to a name other than that of the
Warrantholder of record; PROVIDED, HOWEVER, that the Warrantholder shall be
required to pay any and all transfer taxes with respect thereto.
2. RESERVATION AND LISTING OF SHARES, ETC.
All Warrant Shares which are issued upon the exercise of the rights
represented by this Warrant shall, upon issuance and payment of the Exercise
Price, be validly issued, fully paid and nonassessable and free from all
taxes, liens, security interests, charges and other encumbrances with respect
to the issue thereof other than taxes in respect of any transfer occurring
contemporaneously with such issue. During the period within which this
Warrant may be exercised, the Company shall at all times have authorized and
reserved, and keep available free from preemptive rights, a sufficient number
of shares of Common Stock to provide for the exercise of this Warrant, and
shall at its expense use its best efforts to procure such listing thereof
(subject to official notice of issuance) as then may be required on all stock
exchanges on which the Common Stock is then listed or on the Nasdaq National
Market. The Company shall, from time to time, take all such action as may be
required to assure that the par value per share of the Warrant Shares is at
all times equal to or less than the then effective Exercise Price.
3. EXCHANGE, LOSS OR DESTRUCTION OF WARRANT.
If permitted by Section 1.4 and in accordance with the provisions
thereof, upon surrender of this Warrant to the Company with a duly executed
instrument of assignment and funds sufficient to pay any transfer tax, the
Company shall, without charge, execute and deliver a new Warrant of like
tenor in the name of the assignee named in such instrument of assignment and
this Warrant shall promptly be canceled. Upon receipt by the Company of
evidence satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant, and, in the case of loss, theft or destruction, of such bond or
indemnification as the Company may reasonably require, and, in the case of
such mutilation, upon surrender and cancellation of this Warrant, the Company
will execute and deliver a new Warrant of like tenor. The term "Warrant" as
used herein includes any Warrants issued in substitution or exchange of this
Warrant.
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4. OWNERSHIP OF WARRANT.
The Company may deem and treat the person in whose name this
Warrant is registered as the holder and owner hereof (notwithstanding any
notations of ownership or writing hereon made by anyone other than the
Company) for all purposes and shall not be affected by any notice to the
contrary, until presentation of this Warrant for registration of transfer as
provided in Section 1.1 or in Section 3.
5. CERTAIN ADJUSTMENTS.
The Exercise Price at which Warrant Shares may be purchased
hereunder, and the number of Warrant Shares to be purchased upon exercise
hereof, are subject to change or adjustment as follows:
5.1 The number of Warrant Shares purchasable upon the exercise of
this Warrant and the Exercise Price shall be subject to adjustment as follows:
(a) In case the Company shall (i) pay a dividend in shares of
Common Stock or make a distribution in shares of Common Stock (ii) subdivide
its outstanding shares of Common Stock into a greater number of shares of
Common Stock, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock or (iv) issue by reclassification of
its shares of Common Stock other securities of the Company (including any
such reclassification in connection with a consolidation or merger in which
the Company is the surviving corporation), the number of Warrant Shares
purchasable upon exercise of this Warrant shall be adjusted so that the
Warrantholder shall be entitled to receive the kind and number of Warrant
Shares or other securities of the Company which he would have owned or have
been entitled to receive after the happening of any of the events described
above, had this Warrant been exercised immediately prior to the happening of
such event or any record date with respect thereto. An adjustment made
pursuant to this paragraph (a) shall become effective immediately after the
effective date of such event retroactive to the record date, if any, for such
event.
(b) In case the Company shall:
(i) issue rights, options or warrants to all holders of its
outstanding Common Stock, without any charge to such holders,
entitling them to subscribe for or purchase shares of Common
Stock at a price per share which is lower at the record date for
the determination of stockholders entitled to receive such
rights, options or warrants than the then current market price
per share of Common Stock, or
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<PAGE>
(ii) distribute to all holders of its shares of Common Stock
evidences of its indebtedness or assets (excluding cash dividends
or distributions payable out of consolidated earnings or earned
surplus and dividends or distributions referred to in paragraph
(a) of this Section 5.1) or rights, options or warrants, or
convertible or exchangeable securities, containing the right to
subscribe for or purchase shares of Common Stock,
appropriate adjustments shall be made to the number of Warrant Shares
purchasable upon the exercise of the Warrant and/or the Exercise Price in
order to preserve the relative rights and interests of the Warrantholders,
such adjustments to be made by the good faith determination of the Board of
Directors of the Company.
5.2 VOLUNTARY ADJUSTMENT BY THE COMPANY. The Company may, at its
option, at any time during the term of the Warrants, reduce the then current
Exercise Price to any amount, consistent with applicable law, deemed
appropriate by the Board of Directors of the Company.
5.3 NOTICE OF ADJUSTMENT. Whenever the number of Warrant Shares
or the Exercise Price of such Warrant Shares is adjusted, as herein provided,
the Company shall promptly mail first class, postage prepaid, to all
Warrantholders, notice of such adjustment.
5.4 NO ADJUSTMENT FOR CASH DIVIDENDS. No adjustment in respect of
any cash dividends shall be made during the term of this Warrant or upon the
exercise of this Warrant.
5.5 PRESERVATION OF PURCHASE RIGHTS UPON MERGER, CONSOLIDATION,
ETC. In case of any consolidation of the Company with or merger of the
Company into another corporation or in case of any sale, transfer or lease to
another corporation of all or substantially all of the property of the
Company, the Company or such successor or purchasing corporation, as the case
may be, shall execute with the Warrantholders an agreement that the
Warrantholders shall have the right thereafter upon payment of the Exercise
Price in effect immediately prior to such action to purchase upon exercise of
this Warrant the kind and amount of shares and other securities and property
which such holder would have owned or have been entitled to receive after the
happening of such consolidation, merger, sale, transfer or lease had this
Warrant been exercised immediately prior to such action; PROVIDED, HOWEVER,
that no adjustment in respect of cash dividends, interest or other income on
or from such shares or other securities and property shall be made during the
term of this Warrant or upon the exercise of this Warrant. Such agreement
shall provide for adjustments, which shall be as nearly equivalent as
practicable to the adjustments provided for in this Section 5. The
provisions of this Section 5.5 shall apply similarly to successive
consolidations, mergers, sales, transfers or leases.
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6. REGISTRATION RIGHTS OF WARRANT SHARES ON FORM S-8
On or prior to September 30, 1999, the Company shall file a
registration statement covering the Warrant Shares on a Form S-8, which
registration statement shall be effective upon the filing thereof. The
Company shall use its best efforts to keep such Form S-8 current and
effective until the earlier of the Expiration Date or the date this Warrant
has been exercised in full. The Company shall use its best efforts to list
the Warrant Shares on any securities exchange (or on the Nasdaq National
Market) on which other shares of Common Stock are listed.
7. MISCELLANEOUS.
7.1 ENTIRE AGREEMENT. This Warrant constitutes the entire
agreement between the Company and the Warrantholder with respect to this
Warrant and the Warrant Shares.
7.2 BINDING EFFECTS; BENEFITS. This Warrant shall inure to the
benefit of and shall be binding upon the Company, the Warrantholder and
holders of Warrant Shares and their respective heirs, legal representatives,
successors and assigns. Nothing in this Warrant, expressed or implied, is
intended to or shall confer on any person other than the Company, the
Warrantholders and holders of Warrant Shares, or their respective heirs,
legal representatives, successors or assigns, any rights, remedies,
obligations or liabilities under or by reason of this Warrant or the Warrant
Shares.
7.3 AMENDMENTS AND WAIVERS. This Warrant may not be modified or
amended except by an instrument in writing signed by the Company and
Warrantholders that hold Warrants entitling them to purchase at least 50% of
the Warrant Shares. The Company, any Warrantholder or holder of Warrant
Shares may, by an instrument in writing, waive compliance by the other party
with any term or provision of this Warrant on the part of such other party
hereto to be performed or complied with. The waiver by any such party of a
breach of any term or provision of this Warrant shall not be construed as a
waiver of any subsequent breach.
7.4 SECTION AND OTHER HEADINGS. The section and other headings
contained in this Warrant are for reference purposes only and shall not be
deemed to be a part of this Warrant or to affect the meaning or
interpretation of this Warrant.
7.5 FURTHER ASSURANCES. Each of the Company, the Warrantholders
and holders of Warrant Shares shall do and perform all such further acts and
things and execute and deliver all such other certificates, instruments
and/or documents (including without limitation, such proxies and/or powers of
attorney as may be necessary or appropriate) as any party hereto may, at any
time and from time to time, reasonably request in connection with the
performance of any of the provisions of this Warrant.
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<PAGE>
7.6 NOTICES. All demands, requests, notices and other
communications required or permitted to be given under this Warrant shall be
in writing and shall be deemed to have been duly given if delivered
personally or sent by United States certified or registered first class mail,
postage prepaid, to the parties hereto at the following addresses or at such
other address as any party hereto shall hereafter specify by notice to the
other party hereto:
(a) if to the Company, addressed to:
F.Y.I. Incorporated
3232 McKinney Avenue
Suite 900
Dallas, Texas 75204
Attention: Ed H. Bowman, Jr.
(b) if to any Warrantholder or holder of Warrant Shares, addressed to
the address of such person appearing on the books of the Company.
Except as otherwise provided herein, all such demands, requests,
notices and other communications shall be deemed to have been received on the
date of personal delivery thereof or on the third Business Day after the
mailing thereof.
7.7 SEPARABILITY. Any term or provision of this Warrant which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable any other term or provision of this
Warrant or affecting the validity or enforceability of any of the terms or
provisions of this Warrant in any other jurisdiction.
7.8 FRACTIONAL SHARES. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. With
respect to any fraction of a share called for upon any exercise hereof, the
Company shall pay to the Warrantholder an amount in cash equal to such
fraction multiplied by the current market price (as determined as of the date
of exercise, and with reference to the applicable trading market, in
accordance with paragraph (d) of Section 5.1) of a share of such stock as of
the date of such exercise.
7.9 RIGHTS OF THE HOLDER. The Warrantholder shall not, solely by
virtue of this Warrant, be entitled to any rights of a stockholder of the
Company, either at law or in equity.
7.10 GOVERNING LAW. This Warrant shall be deemed to be a contract
made under the laws of the State of Delaware and for all purposes shall be
governed by and construed in accordance with the laws of such State
applicable to contracts made and performed in Delaware.
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7.11 EFFECT OF STOCK SPLITS, ETC. Whenever any rights under this
Agreement are available only when at least a specified minimum number of
Warrant Shares is involved, such number shall be appropriately adjusted to
reflect any stock split, stock dividend, combination of securities into a
smaller number of securities or reclassification of stock.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be
signed by its duly authorized officer.
F.Y.I. INCORPORATED
By:
---------------------------------
Name: Ed H. Bowman, Jr.
Title: President and
Chief Executive Officer
Dated: May 19, 1999
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EXERCISE FORM
(To be executed upon exercise of this Warrant)
The undersigned, the record holder of this Warrant, hereby
irrevocably elects to exercise the right, represented by this Warrant, to
purchase __________ of the Warrant Shares and herewith tenders payment for
such Warrant Shares to the order of F.Y.I. INCORPORATED, in the amount of
$_______ in accordance with the terms of this Warrant. The undersigned
requests that a certificate for such Warrant Shares be registered in the name
of _________________________________ and that such certificate be delivered
to _________________________ whose address is
______________________________________________.
Date _________________ Signature _________________________
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Exhibit 4.7
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF NOR ANY
INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE SOLD, ASSIGNED, PLEDGED,
HYPOTHECATED, ENCUMBERED OR IN ANY OTHER MANNER TRANSFERRED OR DISPOSED OF
EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT OF 1933, AS AMENDED, AND THE
TERMS AND CONDITIONS HEREOF. THE HOLDER OF THIS WARRANT AND THE SECURITIES
ISSUABLE UPON EXERCISE HEREOF ARE SUBJECT TO THE RESTRICTIONS HEREIN SET
FORTH.
VOID AFTER 5:00 P.M. NEW YORK CITY TIME, MAY 19, 2009
****************************************
No. 19
WARRANT
to
PURCHASE COMMON STOCK
of
F.Y.I. INCORPORATED
****************************************
This certifies that, for good and valuable consideration, F.Y.I.
Incorporated, a Delaware corporation (the "Company"), grants to Gary Patton or
permitted registered assigns (the "Warrantholder" or "Warrantholders"), the
right to subscribe for and purchase from the Company, at $26.75 per share (the
"Exercise Price"), Five Thousand (5,000) shares of the Company's Common Stock,
par value $0.01 per share (the "Common Stock"), subject to the provisions and
upon the terms and conditions herein set forth. The Exercise Price and the
number of Warrant Shares are subject to adjustment from time to time as provided
in Section 5.
<PAGE>
1. DURATION AND EXERCISE OF WARRANT; LIMITATION EXERCISE PAYMENT
OF TAXES.
a. DURATION AND EXERCISE OF WARRANT.
(a) This Warrant may be exercised as to 100% of the underlying
shares at any time following the date of receipt by the Compensation
Committee of the Board of Directors of the Corporation's audited financial
statements showing the Corporation's actual earnings per share for the year
ended December 31, 2000 ("fiscal 2000"), provided that such earnings are not
less than $1.93 per share. The Company shall use its best efforts to deliver
to the Compensation Committee the audited financial statements showing the
Corporation's actual fiscal 2000 earnings per share by March 5, 2001. If the
Corporation's actual 2000 fiscal earnings is less than $1.93 per share, then
this Warrant shall be exercisable as to 100% of the underlying shares at any
time following the date of receipt by the Compensation Committee of the Board
of Directors of the Corporation's audited statements showing the
Corporation's actual earnings per share for the year ended December 31, 2001
("fiscal 2001"), provided that such earnings are not less than $2.39 per
share. The Company shall use its best efforts to deliver to the Compensation
Committee the audited financial statements showing the Corporation's the
actual fiscal 2001 earnings by March 5, 2002. However, in any case, this
Warrant shall vest as to 100% of the underlying shares on March 5, 2008. The
date this Warrant is first exercisable is hereinafter referred to as the
"Exercise Date". The Company shall give prompt notice to the Warrantholder
of the Exercise Date in accordance with Section 7.6. This Warrant expires at
5:00 P.M., New York City time on May 19, 2009 (the "Expiration Date"). In
addition, in the event of a Change in Control of the Company, the right to
exercise 100% of the underlying shares shall immediately vest. A "Change in
Control" shall be deemed to have occurred if:
(i) any person, other than the Company or an employee benefit plan of
the Company, acquires directly or indirectly the Beneficial Ownership (as
defined in Section 13(d) of the Securities and Exchange Act of 1934, as
amended (the" Exchange Act")) of any voting security of the Company and
immediately after such acquisition such Person is, directly or indirectly,
the Beneficial Owner of voting securities representing 50% or more of the
total voting power of all of the then-outstanding voting securities of the
Company;
(ii) the individuals (A) who, as of the closing date of the Initial
Public Offering, constitute the Board (the "Original Directors") or (B) who
thereafter are elected to the Board and whose election, or nomination for
election, to the Board was approved by a vote of at least two-thirds (2/3)
of the Original Directors then still in office (such directors becoming
"Additional Original Directors" immediately following their election) or
(C) who are elected to the Board and whose election, or nomination for
election, to the Board was approved by a vote of at least two-thirds (2/3)
of the Original Directors and Additional Original Directors then still in
office (such directors also
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<PAGE>
becoming "Additional Original Directors" immediately following their
election) (such individuals being the "Continuing Directors"), cease
for any reason to constitute a majority of the members of the Board;
(iii) the stockholders of the Company shall approve a merger,
consolidation, recapitalization, or reorganization of the Company, a
reverse stock split of the outstanding voting securities of the Company, or
consummation of any such transaction if stockholder approval is not sought
or obtained, other than any such transaction which would result in at least
75% of the total voting power represented by the voting securities of the
surviving entity outstanding immediately after such transaction being
Beneficially Owned by at least 75% of the holders of the outstanding voting
securities of the Company immediately prior to the transaction, with the
voting power of each such continuing holder relative to other such
continuing holders not substantially altered in the transaction; or
(iv) the stockholders of the Company shall approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by
the Company of all or a substantial portion of the Company's assets (i.e.,
50% or more of the total assets of the Company).
(b) The rights represented by this Warrant may be exercised by the
Warrantholder of record, in whole, or from time to time in part, by (a)
surrender of this Warrant, accompanied by either the Exercise Form annexed
hereto, or if the Warrantholder decides to exercise the Warrant pursuant to
the broker-assisted cashless exercise program instituted by the Company, an
applicable exercise form provided by the Company (the "Exercise Form") duly
executed by the Warrantholder of record and specifying the number of Warrant
Shares to be purchased, to the Company at the office of the Company located
at 3232 McKinney Avenue, Suite 900, Dallas, Texas 75204 (or such other office
or agency of the Company as it may designate by notice to the Warrantholder
at the address of such Warrantholder appearing on the books of the Company)
during normal business hours on any day (a "Business Day") other than a
Saturday, Sunday or a day on which the New York Stock Exchange is authorized
to close or on which the Company is otherwise closed for business (a
"Nonbusiness Day") on or after 9:00 A.M. New York City time on the Exercise
Date but not later than 5:00 P.M., New York City time, on the Expiration Date
(or 5:00 P.M., New York City time, on the next succeeding Business Day, if
the Expiration Date is a Nonbusiness Day), (b) delivery of payment to the
Company in cash or by certified or official bank check in New York Clearing
House Funds, of the Exercise Price for the number of Warrant Shares specified
in the Exercise Form (such payment may be made by the Warrantholder directly
or by a designated broker pursuant to the broker-assisted cashless exercise
program instituted by the Company) and (c) such documentation as to the
identity and authority of the Warrantholder as the Company may reasonably
request. Such Warrant Shares shall be deemed by the Company to be issued to
the Warrantholder as the record holder of such Warrant Shares as of the close
of business on the date on which this Warrant shall have been surrendered and
payment made
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<PAGE>
for the Warrant Shares as aforesaid. Certificates for the Warrant Shares
specified in the Exercise Form shall be delivered to the Warrantholder (or
designated broker, as the case may be) as promptly as practicable, and in any
event within 10 business days, thereafter. The stock certificates so
delivered shall be in denominations of at least 1,000 shares each or such
other denomination as may be specified by the Warrantholder and agreed upon
by the Company, and shall be issued in the name of the Warrantholder or such
other name as shall be designated in the Exercise Form. If this Warrant shall
have been exercised only in part, the Company shall, at the time of delivery
of the certificates for the Warrant Shares, deliver to the Warrantholder (or
designated broker, as the case may be) a new Warrant evidencing the rights to
purchase the remaining Warrant Shares, which new Warrant shall in all other
respects be identical with this Warrant. No adjustments or payments shall be
made on or in respect of Warrant Shares issuable on the exercise of this
Warrant for any cash dividends paid or payable to holders of record of Common
Stock prior to the date as of which the Warrantholder shall be deemed to be
the record holder of such Warrant Shares.
(c) With the consent of the Compensation Committee, and subject at
all times to, and only to the extent, if any, permitted under and in
accordance with, laws and regulations and other binding obligations or
provisions applicable to the Company, the Company may make a loan to the
Warrantholder with respect to the exercise of the Warrant, including the
payment by the Warrantholder of any or all federal, state and local income or
other taxes due in connection with any exercise. The interest on such loan
shall be the Company's cost of money plus an additional 0.5% at the time the
loan is made and such loan shall be made with recourse against the
Warrantholder. The Compensation Committee shall have the full authority to
determine any other terms and provisions of such a loan.
1.2 VESTING AND EXERCISE. This Warrant may be vested and, once
vested, may be exercised whether or not, at the time of such vesting or
exercise, as the case may be, Mr. Patton is an Employee of the Company. If
this Warrant is not exercised prior to 5:00 P.M. on the Expiration Date (or
the next succeeding Business Day, if the Expiration Date is a Nonbusiness
Day), this Warrant, or any new Warrant issued pursuant to Section 1.1, shall
cease to be exercisable and shall become void and all rights of the
Warrantholder hereunder shall cease. This Warrant shall not be exercisable,
and no Warrant Shares shall be issued hereunder, prior to 9:00 A.M., New York
City time, on the Exercise Date.
1.3 PAYMENT OF TAXES. The issuance of certificates for Warrant
Shares shall be made without charge to the Warrantholder for any stock
transfer or other issuance tax in respect thereto; PROVIDED, HOWEVER, that
the Warrantholder shall be required to pay any and all taxes which may be
payable in respect to any transfer involved in the issuance and delivery of
any certificates for Warrant Shares in a name other than that of the then
Warrantholder as reflected upon the books of the Company.
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<PAGE>
1.4 DIVISIBILITY OF WARRANT. This Warrant may be divided into
warrants representing one Warrant Share or multiples thereof, upon surrender
at the principal office of the Company on any Business Day, without charge to
any Warrantholder, except as provided below. The Warrantholder will be
charged for reasonable out-of-pocket costs incurred by the Company in
connection with the division of this Warrant into Warrants representing fewer
than one thousand (1,000) Warrant Shares. Upon any such division, the
Warrants may be transferred of record to a name other than that of the
Warrantholder of record; PROVIDED, HOWEVER, that the Warrantholder shall be
required to pay any and all transfer taxes with respect thereto.
2. RESERVATION AND LISTING OF SHARES, ETC.
All Warrant Shares which are issued upon the exercise of the rights
represented by this Warrant shall, upon issuance and payment of the Exercise
Price, be validly issued, fully paid and nonassessable and free from all
taxes, liens, security interests, charges and other encumbrances with respect
to the issue thereof other than taxes in respect of any transfer occurring
contemporaneously with such issue. During the period within which this
Warrant may be exercised, the Company shall at all times have authorized and
reserved, and keep available free from preemptive rights, a sufficient number
of shares of Common Stock to provide for the exercise of this Warrant, and
shall at its expense use its best efforts to procure such listing thereof
(subject to official notice of issuance) as then may be required on all stock
exchanges on which the Common Stock is then listed or on the Nasdaq National
Market. The Company shall, from time to time, take all such action as may be
required to assure that the par value per share of the Warrant Shares is at
all times equal to or less than the then effective Exercise Price.
3. EXCHANGE, LOSS OR DESTRUCTION OF WARRANT.
If permitted by Section 1.4 and in accordance with the provisions
thereof, upon surrender of this Warrant to the Company with a duly executed
instrument of assignment and funds sufficient to pay any transfer tax, the
Company shall, without charge, execute and deliver a new Warrant of like
tenor in the name of the assignee named in such instrument of assignment and
this Warrant shall promptly be canceled. Upon receipt by the Company of
evidence satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant, and, in the case of loss, theft or destruction, of such bond or
indemnification as the Company may reasonably require, and, in the case of
such mutilation, upon surrender and cancellation of this Warrant, the Company
will execute and deliver a new Warrant of like tenor. The term "Warrant" as
used herein includes any Warrants issued in substitution or exchange of this
Warrant.
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<PAGE>
4. OWNERSHIP OF WARRANT.
The Company may deem and treat the person in whose name this
Warrant is registered as the holder and owner hereof (notwithstanding any
notations of ownership or writing hereon made by anyone other than the
Company) for all purposes and shall not be affected by any notice to the
contrary, until presentation of this Warrant for registration of transfer as
provided in Section 1.1 or in Section 3.
5. CERTAIN ADJUSTMENTS.
The Exercise Price at which Warrant Shares may be purchased
hereunder, and the number of Warrant Shares to be purchased upon exercise
hereof, are subject to change or adjustment as follows:
5.1 The number of Warrant Shares purchasable upon the exercise of
this Warrant and the Exercise Price shall be subject to adjustment as follows:
(a) In case the Company shall (i) pay a dividend in shares of
Common Stock or make a distribution in shares of Common Stock (ii) subdivide
its outstanding shares of Common Stock into a greater number of shares of
Common Stock, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock or (iv) issue by reclassification of
its shares of Common Stock other securities of the Company (including any
such reclassification in connection with a consolidation or merger in which
the Company is the surviving corporation), the number of Warrant Shares
purchasable upon exercise of this Warrant shall be adjusted so that the
Warrantholder shall be entitled to receive the kind and number of Warrant
Shares or other securities of the Company which he would have owned or have
been entitled to receive after the happening of any of the events described
above, had this Warrant been exercised immediately prior to the happening of
such event or any record date with respect thereto. An adjustment made
pursuant to this paragraph (a) shall become effective immediately after the
effective date of such event retroactive to the record date, if any, for such
event.
(b) In case the Company shall:
(i) issue rights, options or warrants to all holders of its
outstanding Common Stock, without any charge to such holders,
entitling them to subscribe for or purchase shares of Common
Stock at a price per share which is lower at the record date for
the determination of stockholders entitled to receive such
rights, options or warrants than the then current market price
per share of Common Stock, or
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<PAGE>
(ii) distribute to all holders of its shares of Common Stock
evidences of its indebtedness or assets (excluding cash dividends
or distributions payable out of consolidated earnings or earned
surplus and dividends or distributions referred to in paragraph
(a) of this Section 5.1) or rights, options or warrants, or
convertible or exchangeable securities, containing the right to
subscribe for or purchase shares of Common Stock,
appropriate adjustments shall be made to the number of Warrant Shares
purchasable upon the exercise of the Warrant and/or the Exercise Price in
order to preserve the relative rights and interests of the Warrantholders,
such adjustments to be made by the good faith determination of the Board of
Directors of the Company.
5.2 VOLUNTARY ADJUSTMENT BY THE COMPANY. The Company may, at its
option, at any time during the term of the Warrants, reduce the then current
Exercise Price to any amount, consistent with applicable law, deemed
appropriate by the Board of Directors of the Company.
5.3 NOTICE OF ADJUSTMENT. Whenever the number of Warrant Shares
or the Exercise Price of such Warrant Shares is adjusted, as herein provided,
the Company shall promptly mail first class, postage prepaid, to all
Warrantholders, notice of such adjustment.
5.4 NO ADJUSTMENT FOR CASH DIVIDENDS. No adjustment in respect of
any cash dividends shall be made during the term of this Warrant or upon the
exercise of this Warrant.
5.5 PRESERVATION OF PURCHASE RIGHTS UPON MERGER, CONSOLIDATION,
ETC. In case of any consolidation of the Company with or merger of the
Company into another corporation or in case of any sale, transfer or lease to
another corporation of all or substantially all of the property of the
Company, the Company or such successor or purchasing corporation, as the case
may be, shall execute with the Warrantholders an agreement that the
Warrantholders shall have the right thereafter upon payment of the Exercise
Price in effect immediately prior to such action to purchase upon exercise of
this Warrant the kind and amount of shares and other securities and property
which such holder would have owned or have been entitled to receive after the
happening of such consolidation, merger, sale, transfer or lease had this
Warrant been exercised immediately prior to such action; PROVIDED, HOWEVER,
that no adjustment in respect of cash dividends, interest or other income on
or from such shares or other securities and property shall be made during the
term of this Warrant or upon the exercise of this Warrant. Such agreement
shall provide for adjustments, which shall be as nearly equivalent as
practicable to the adjustments provided for in this Section 5. The
provisions of this Section 5.5 shall apply similarly to successive
consolidations, mergers, sales, transfers or leases.
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<PAGE>
6. REGISTRATION RIGHTS OF WARRANT SHARES ON FORM S-8
On or prior to September 30, 1999, the Company shall file a
registration statement covering the Warrant Shares on a Form S-8, which
registration statement shall be effective upon the filing thereof. The
Company shall use its best efforts to keep such Form S-8 current and
effective until the earlier of the Expiration Date or the date this Warrant
has been exercised in full. The Company shall use its best efforts to list
the Warrant Shares on any securities exchange (or on the Nasdaq National
Market) on which other shares of Common Stock are listed.
7. MISCELLANEOUS.
7.1 ENTIRE AGREEMENT. This Warrant constitutes the entire
agreement between the Company and the Warrantholder with respect to this
Warrant and the Warrant Shares.
7.2 BINDING EFFECTS; BENEFITS. This Warrant shall inure to the
benefit of and shall be binding upon the Company, the Warrantholder and
holders of Warrant Shares and their respective heirs, legal representatives,
successors and assigns. Nothing in this Warrant, expressed or implied, is
intended to or shall confer on any person other than the Company, the
Warrantholders and holders of Warrant Shares, or their respective heirs,
legal representatives, successors or assigns, any rights, remedies,
obligations or liabilities under or by reason of this Warrant or the Warrant
Shares.
7.3 AMENDMENTS AND WAIVERS. This Warrant may not be modified or
amended except by an instrument in writing signed by the Company and
Warrantholders that hold Warrants entitling them to purchase at least 50% of
the Warrant Shares. The Company, any Warrantholder or holder of Warrant
Shares may, by an instrument in writing, waive compliance by the other party
with any term or provision of this Warrant on the part of such other party
hereto to be performed or complied with. The waiver by any such party of a
breach of any term or provision of this Warrant shall not be construed as a
waiver of any subsequent breach.
7.4 SECTION AND OTHER HEADINGS. The section and other headings
contained in this Warrant are for reference purposes only and shall not be
deemed to be a part of this Warrant or to affect the meaning or
interpretation of this Warrant.
7.5 FURTHER ASSURANCES. Each of the Company, the Warrantholders
and holders of Warrant Shares shall do and perform all such further acts and
things and execute and deliver all such other certificates, instruments
and/or documents (including without limitation, such proxies and/or powers of
attorney as may be necessary or appropriate) as any party hereto may, at any
time and from time to time, reasonably request in connection with the
performance of any of the provisions of this Warrant.
8
<PAGE>
7.6 NOTICES. All demands, requests, notices and other
communications required or permitted to be given under this Warrant shall be
in writing and shall be deemed to have been duly given if delivered
personally or sent by United States certified or registered first class mail,
postage prepaid, to the parties hereto at the following addresses or at such
other address as any party hereto shall hereafter specify by notice to the
other party hereto:
(a) if to the Company, addressed to:
F.Y.I. Incorporated
3232 McKinney Avenue
Suite 900
Dallas, Texas 75204
Attention: Ed H. Bowman, Jr.
(b) if to any Warrantholder or holder of Warrant Shares, addressed to
the address of such person appearing on the books of the Company.
Except as otherwise provided herein, all such demands, requests,
notices and other communications shall be deemed to have been received on the
date of personal delivery thereof or on the third Business Day after the
mailing thereof.
7.7 SEPARABILITY. Any term or provision of this Warrant which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable any other term or provision of this
Warrant or affecting the validity or enforceability of any of the terms or
provisions of this Warrant in any other jurisdiction.
7.8 FRACTIONAL SHARES. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. With
respect to any fraction of a share called for upon any exercise hereof, the
Company shall pay to the Warrantholder an amount in cash equal to such
fraction multiplied by the current market price (as determined as of the date
of exercise, and with reference to the applicable trading market, in
accordance with paragraph (d) of Section 5.1) of a share of such stock as of
the date of such exercise.
7.9 RIGHTS OF THE HOLDER. The Warrantholder shall not, solely by
virtue of this Warrant, be entitled to any rights of a stockholder of the
Company, either at law or in equity.
7.10 GOVERNING LAW. This Warrant shall be deemed to be a contract
made under the laws of the State of Delaware and for all purposes shall be
governed by and construed in accordance with the laws of such State
applicable to contracts made and performed in Delaware.
9
<PAGE>
7.11 EFFECT OF STOCK SPLITS, ETC. Whenever any rights under this
Agreement are available only when at least a specified minimum number of
Warrant Shares is involved, such number shall be appropriately adjusted to
reflect any stock split, stock dividend, combination of securities into a
smaller number of securities or reclassification of stock.
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<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
by its duly authorized officer.
F.Y.I. INCORPORATED
By:
------------------------------------
Name: Ed H. Bowman, Jr.
Title: President and
Chief Executive Officer
Dated: May 19, 1999
11
<PAGE>
EXERCISE FORM
(To be executed upon exercise of this Warrant)
The undersigned, the record holder of this Warrant, hereby
irrevocably elects to exercise the right, represented by this Warrant, to
purchase __________ of the Warrant Shares and herewith tenders payment for
such Warrant Shares to the order of F.Y.I. INCORPORATED, in the amount of
$_______ in accordance with the terms of this Warrant. The undersigned
requests that a certificate for such Warrant Shares be registered in the name
of _________________________________ and that such certificate be delivered
to _________________________ whose address is
______________________________________________.
Date _________________ Signature _________________________
12
<PAGE>
Exhibit 4.8
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF NOR ANY
INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE SOLD, ASSIGNED, PLEDGED,
HYPOTHECATED, ENCUMBERED OR IN ANY OTHER MANNER TRANSFERRED OR DISPOSED OF
EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT OF 1933, AS AMENDED, AND THE
TERMS AND CONDITIONS HEREOF. THE HOLDER OF THIS WARRANT AND THE SECURITIES
ISSUABLE UPON EXERCISE HEREOF ARE SUBJECT TO THE RESTRICTIONS HEREIN SET
FORTH.
VOID AFTER 5:00 P.M. NEW YORK CITY TIME, MAY 19, 2009
****************************************
No. 20
WARRANT
to
PURCHASE COMMON STOCK
of
F.Y.I. INCORPORATED
****************************************
This certifies that, for good and valuable consideration, F.Y.I.
Incorporated, a Delaware corporation (the "Company"), grants to David Lowenstein
or permitted registered assigns (the "Warrantholder" or "Warrantholders"), the
right to subscribe for and purchase from the Company, at $26.75 per share (the
"Exercise Price"), Twenty Thousand (20,000) shares of the Company's Common
Stock, par value $0.01 per share (the "Common Stock"), subject to the provisions
and upon the terms and conditions herein set forth. The Exercise Price and the
number of Warrant Shares are subject to adjustment from time to time as provided
in Section 5.
<PAGE>
1. DURATION AND EXERCISE OF WARRANT; LIMITATION EXERCISE PAYMENT
OF TAXES.
a. DURATION AND EXERCISE OF WARRANT.
(a) This Warrant may be exercised as to 100% of the underlying
shares at any time following the date of receipt by the Compensation
Committee of the Board of Directors of the Corporation's audited financial
statements showing the Corporation's actual earnings per share for the year
ended December 31, 2000 ("fiscal 2000"), provided that such earnings are not
less than $1.93 per share. The Company shall use its best efforts to deliver
to the Compensation Committee the audited financial statements showing the
Corporation's actual fiscal 2000 earnings per share by March 5, 2001. If the
Corporation's actual 2000 fiscal earnings is less than $1.93 per share, then
this Warrant shall be exercisable as to 100% of the underlying shares at any
time following the date of receipt by the Compensation Committee of the Board
of Directors of the Corporation's audited statements showing the
Corporation's actual earnings per share for the year ended December 31, 2001
("fiscal 2001"), provided that such earnings are not less than $2.39 per
share. The Company shall use its best efforts to deliver to the Compensation
Committee the audited financial statements showing the Corporation's the
actual fiscal 2001 earnings by March 5, 2002. However, in any case, this
Warrant shall vest as to 100% of the underlying shares on March 5, 2008. The
date this Warrant is first exercisable is hereinafter referred to as the
"Exercise Date". The Company shall give prompt notice to the Warrantholder
of the Exercise Date in accordance with Section 7.6. This Warrant expires at
5:00 P.M., New York City time on May 19, 2009 (the "Expiration Date"). In
addition, in the event of a Change in Control of the Company, the right to
exercise 100% of the underlying shares shall immediately vest. A "Change in
Control" shall be deemed to have occurred if:
(i) any person, other than the Company or an employee benefit plan of
the Company, acquires directly or indirectly the Beneficial Ownership (as
defined in Section 13(d) of the Securities and Exchange Act of 1934, as
amended (the" Exchange Act")) of any voting security of the Company and
immediately after such acquisition such Person is, directly or indirectly,
the Beneficial Owner of voting securities representing 50% or more of the
total voting power of all of the then-outstanding voting securities of the
Company;
(ii) the individuals (A) who, as of the closing date of the Initial
Public Offering, constitute the Board (the "Original Directors") or (B) who
thereafter are elected to the Board and whose election, or nomination for
election, to the Board was approved by a vote of at least two-thirds (2/3)
of the Original Directors then still in office (such directors becoming
"Additional Original Directors" immediately following their election) or
(C) who are elected to the Board and whose election, or nomination for
election, to the Board was approved by a vote of at least two-thirds (2/3)
of the Original Directors and Additional Original Directors then still in
office (such directors also
2
<PAGE>
becoming "Additional Original Directors" immediately following their
election) (such individuals being the "Continuing Directors"), cease
for any reason to constitute a majority of the members of the Board;
(iii) the stockholders of the Company shall approve a merger,
consolidation, recapitalization, or reorganization of the Company, a
reverse stock split of the outstanding voting securities of the Company, or
consummation of any such transaction if stockholder approval is not sought
or obtained, other than any such transaction which would result in at least
75% of the total voting power represented by the voting securities of the
surviving entity outstanding immediately after such transaction being
Beneficially Owned by at least 75% of the holders of the outstanding voting
securities of the Company immediately prior to the transaction, with the
voting power of each such continuing holder relative to other such
continuing holders not substantially altered in the transaction; or
(iv) the stockholders of the Company shall approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by
the Company of all or a substantial portion of the Company's assets (i.e.,
50% or more of the total assets of the Company).
(b) The rights represented by this Warrant may be exercised by the
Warrantholder of record, in whole, or from time to time in part, by (a)
surrender of this Warrant, accompanied by either the Exercise Form annexed
hereto, or if the Warrantholder decides to exercise the Warrant pursuant to
the broker-assisted cashless exercise program instituted by the Company, an
applicable exercise form provided by the Company (the "Exercise Form") duly
executed by the Warrantholder of record and specifying the number of Warrant
Shares to be purchased, to the Company at the office of the Company located
at 3232 McKinney Avenue, Suite 900, Dallas, Texas 75204 (or such other office
or agency of the Company as it may designate by notice to the Warrantholder
at the address of such Warrantholder appearing on the books of the Company)
during normal business hours on any day (a "Business Day") other than a
Saturday, Sunday or a day on which the New York Stock Exchange is authorized
to close or on which the Company is otherwise closed for business (a
"Nonbusiness Day") on or after 9:00 A.M. New York City time on the Exercise
Date but not later than 5:00 P.M., New York City time, on the Expiration Date
(or 5:00 P.M., New York City time, on the next succeeding Business Day, if
the Expiration Date is a Nonbusiness Day), (b) delivery of payment to the
Company in cash or by certified or official bank check in New York Clearing
House Funds, of the Exercise Price for the number of Warrant Shares specified
in the Exercise Form (such payment may be made by the Warrantholder directly
or by a designated broker pursuant to the broker-assisted cashless exercise
program instituted by the Company) and (c) such documentation as to the
identity and authority of the Warrantholder as the Company may reasonably
request. Such Warrant Shares shall be deemed by the Company to be issued to
the Warrantholder as the record holder of such Warrant Shares as of the close
of business on the date on which this Warrant shall have been surrendered and
payment made
3
<PAGE>
for the Warrant Shares as aforesaid. Certificates for the Warrant Shares
specified in the Exercise Form shall be delivered to the Warrantholder (or
designated broker, as the case may be) as promptly as practicable, and in any
event within 10 business days, thereafter. The stock certificates so
delivered shall be in denominations of at least 1,000 shares each or such
other denomination as may be specified by the Warrantholder and agreed upon
by the Company, and shall be issued in the name of the Warrantholder or such
other name as shall be designated in the Exercise Form. If this Warrant shall
have been exercised only in part, the Company shall, at the time of delivery
of the certificates for the Warrant Shares, deliver to the Warrantholder (or
designated broker, as the case may be) a new Warrant evidencing the rights to
purchase the remaining Warrant Shares, which new Warrant shall in all other
respects be identical with this Warrant. No adjustments or payments shall be
made on or in respect of Warrant Shares issuable on the exercise of this
Warrant for any cash dividends paid or payable to holders of record of Common
Stock prior to the date as of which the Warrantholder shall be deemed to be
the record holder of such Warrant Shares.
(c) With the consent of the Compensation Committee, and subject at
all times to, and only to the extent, if any, permitted under and in
accordance with, laws and regulations and other binding obligations or
provisions applicable to the Company, the Company may make a loan to the
Warrantholder with respect to the exercise of the Warrant, including the
payment by the Warrantholder of any or all federal, state and local income or
other taxes due in connection with any exercise. The interest on such loan
shall be the Company's cost of money plus an additional 0.5% at the time the
loan is made and such loan shall be made with recourse against the
Warrantholder. The Compensation Committee shall have the full authority to
determine any other terms and provisions of such a loan.
1.2 VESTING AND EXERCISE. This Warrant may be vested and, once
vested, may be exercised whether or not, at the time of such vesting or
exercise, as the case may be, Mr. Lowenstein is an Employee of the Company.
If this Warrant is not exercised prior to 5:00 P.M. on the Expiration Date
(or the next succeeding Business Day, if the Expiration Date is a Nonbusiness
Day), this Warrant, or any new Warrant issued pursuant to Section 1.1, shall
cease to be exercisable and shall become void and all rights of the
Warrantholder hereunder shall cease. This Warrant shall not be exercisable,
and no Warrant Shares shall be issued hereunder, prior to 9:00 A.M., New York
City time, on the Exercise Date.
1.3 PAYMENT OF TAXES. The issuance of certificates for Warrant
Shares shall be made without charge to the Warrantholder for any stock
transfer or other issuance tax in respect thereto; PROVIDED, HOWEVER, that
the Warrantholder shall be required to pay any and all taxes which may be
payable in respect to any transfer involved in the issuance and delivery of
any certificates for Warrant Shares in a name other than that of the then
Warrantholder as reflected upon the books of the Company.
4
<PAGE>
1.4 DIVISIBILITY OF WARRANT. This Warrant may be divided into
warrants representing one Warrant Share or multiples thereof, upon surrender
at the principal office of the Company on any Business Day, without charge to
any Warrantholder, except as provided below. The Warrantholder will be
charged for reasonable out-of-pocket costs incurred by the Company in
connection with the division of this Warrant into Warrants representing fewer
than one thousand (1,000) Warrant Shares. Upon any such division, the
Warrants may be transferred of record to a name other than that of the
Warrantholder of record; PROVIDED, HOWEVER, that the Warrantholder shall be
required to pay any and all transfer taxes with respect thereto.
2. RESERVATION AND LISTING OF SHARES, ETC.
All Warrant Shares which are issued upon the exercise of the rights
represented by this Warrant shall, upon issuance and payment of the Exercise
Price, be validly issued, fully paid and nonassessable and free from all
taxes, liens, security interests, charges and other encumbrances with respect
to the issue thereof other than taxes in respect of any transfer occurring
contemporaneously with such issue. During the period within which this
Warrant may be exercised, the Company shall at all times have authorized and
reserved, and keep available free from preemptive rights, a sufficient number
of shares of Common Stock to provide for the exercise of this Warrant, and
shall at its expense use its best efforts to procure such listing thereof
(subject to official notice of issuance) as then may be required on all stock
exchanges on which the Common Stock is then listed or on the Nasdaq National
Market. The Company shall, from time to time, take all such action as may be
required to assure that the par value per share of the Warrant Shares is at
all times equal to or less than the then effective Exercise Price.
3. EXCHANGE, LOSS OR DESTRUCTION OF WARRANT.
If permitted by Section 1.4 and in accordance with the provisions
thereof, upon surrender of this Warrant to the Company with a duly executed
instrument of assignment and funds sufficient to pay any transfer tax, the
Company shall, without charge, execute and deliver a new Warrant of like
tenor in the name of the assignee named in such instrument of assignment and
this Warrant shall promptly be canceled. Upon receipt by the Company of
evidence satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant, and, in the case of loss, theft or destruction, of such bond or
indemnification as the Company may reasonably require, and, in the case of
such mutilation, upon surrender and cancellation of this Warrant, the Company
will execute and deliver a new Warrant of like tenor. The term "Warrant" as
used herein includes any Warrants issued in substitution or exchange of this
Warrant.
5
<PAGE>
4. OWNERSHIP OF WARRANT.
The Company may deem and treat the person in whose name this
Warrant is registered as the holder and owner hereof (notwithstanding any
notations of ownership or writing hereon made by anyone other than the
Company) for all purposes and shall not be affected by any notice to the
contrary, until presentation of this Warrant for registration of transfer as
provided in Section 1.1 or in Section 3.
5. CERTAIN ADJUSTMENTS.
The Exercise Price at which Warrant Shares may be purchased
hereunder, and the number of Warrant Shares to be purchased upon exercise
hereof, are subject to change or adjustment as follows:
5.1 The number of Warrant Shares purchasable upon the exercise of
this Warrant and the Exercise Price shall be subject to adjustment as follows:
(a) In case the Company shall (i) pay a dividend in shares of
Common Stock or make a distribution in shares of Common Stock (ii) subdivide
its outstanding shares of Common Stock into a greater number of shares of
Common Stock, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock or (iv) issue by reclassification of
its shares of Common Stock other securities of the Company (including any
such reclassification in connection with a consolidation or merger in which
the Company is the surviving corporation), the number of Warrant Shares
purchasable upon exercise of this Warrant shall be adjusted so that the
Warrantholder shall be entitled to receive the kind and number of Warrant
Shares or other securities of the Company which he would have owned or have
been entitled to receive after the happening of any of the events described
above, had this Warrant been exercised immediately prior to the happening of
such event or any record date with respect thereto. An adjustment made
pursuant to this paragraph (a) shall become effective immediately after the
effective date of such event retroactive to the record date, if any, for such
event.
(b) In case the Company shall:
(i) issue rights, options or warrants to all holders of its
outstanding Common Stock, without any charge to such holders,
entitling them to subscribe for or purchase shares of Common
Stock at a price per share which is lower at the record date for
the determination of stockholders entitled to receive such
rights, options or warrants than the then current market price
per share of Common Stock, or
6
<PAGE>
(ii) distribute to all holders of its shares of Common Stock
evidences of its indebtedness or assets (excluding cash dividends
or distributions payable out of consolidated earnings or earned
surplus and dividends or distributions referred to in paragraph
(a) of this Section 5.1) or rights, options or warrants, or
convertible or exchangeable securities, containing the right to
subscribe for or purchase shares of Common Stock,
appropriate adjustments shall be made to the number of Warrant Shares
purchasable upon the exercise of the Warrant and/or the Exercise Price in order
to preserve the relative rights and interests of the Warrantholders, such
adjustments to be made by the good faith determination of the Board of Directors
of the Company.
5.2 VOLUNTARY ADJUSTMENT BY THE COMPANY. The Company may, at its
option, at any time during the term of the Warrants, reduce the then current
Exercise Price to any amount, consistent with applicable law, deemed appropriate
by the Board of Directors of the Company.
5.3 NOTICE OF ADJUSTMENT. Whenever the number of Warrant Shares or
the Exercise Price of such Warrant Shares is adjusted, as herein provided, the
Company shall promptly mail first class, postage prepaid, to all Warrantholders,
notice of such adjustment.
5.4 NO ADJUSTMENT FOR CASH DIVIDENDS. No adjustment in respect of
any cash dividends shall be made during the term of this Warrant or upon the
exercise of this Warrant.
5.5 PRESERVATION OF PURCHASE RIGHTS UPON MERGER, CONSOLIDATION, ETC.
In case of any consolidation of the Company with or merger of the Company into
another corporation or in case of any sale, transfer or lease to another
corporation of all or substantially all of the property of the Company, the
Company or such successor or purchasing corporation, as the case may be, shall
execute with the Warrantholders an agreement that the Warrantholders shall have
the right thereafter upon payment of the Exercise Price in effect immediately
prior to such action to purchase upon exercise of this Warrant the kind and
amount of shares and other securities and property which such holder would have
owned or have been entitled to receive after the happening of such
consolidation, merger, sale, transfer or lease had this Warrant been exercised
immediately prior to such action; PROVIDED, HOWEVER, that no adjustment in
respect of cash dividends, interest or other income on or from such shares or
other securities and property shall be made during the term of this Warrant or
upon the exercise of this Warrant. Such agreement shall provide for
adjustments, which shall be as nearly equivalent as practicable to the
adjustments provided for in this Section 5. The provisions of this Section 5.5
shall apply similarly to successive consolidations, mergers, sales, transfers or
leases.
7
<PAGE>
6. REGISTRATION RIGHTS OF WARRANT SHARES ON FORM S-8
On or prior to September 30, 1999, the Company shall file a
registration statement covering the Warrant Shares on a Form S-8, which
registration statement shall be effective upon the filing thereof. The
Company shall use its best efforts to keep such Form S-8 current and
effective until the earlier of the Expiration Date or the date this Warrant
has been exercised in full. The Company shall use its best efforts to list
the Warrant Shares on any securities exchange (or on the Nasdaq National
Market) on which other shares of Common Stock are listed.
7. MISCELLANEOUS.
7.1 ENTIRE AGREEMENT. This Warrant constitutes the entire
agreement between the Company and the Warrantholder with respect to this
Warrant and the Warrant Shares.
7.2 BINDING EFFECTS; BENEFITS. This Warrant shall inure to the
benefit of and shall be binding upon the Company, the Warrantholder and
holders of Warrant Shares and their respective heirs, legal representatives,
successors and assigns. Nothing in this Warrant, expressed or implied, is
intended to or shall confer on any person other than the Company, the
Warrantholders and holders of Warrant Shares, or their respective heirs,
legal representatives, successors or assigns, any rights, remedies,
obligations or liabilities under or by reason of this Warrant or the Warrant
Shares.
7.3 AMENDMENTS AND WAIVERS. This Warrant may not be modified or
amended except by an instrument in writing signed by the Company and
Warrantholders that hold Warrants entitling them to purchase at least 50% of
the Warrant Shares. The Company, any Warrantholder or holder of Warrant
Shares may, by an instrument in writing, waive compliance by the other party
with any term or provision of this Warrant on the part of such other party
hereto to be performed or complied with. The waiver by any such party of a
breach of any term or provision of this Warrant shall not be construed as a
waiver of any subsequent breach.
7.4 SECTION AND OTHER HEADINGS. The section and other headings
contained in this Warrant are for reference purposes only and shall not be
deemed to be a part of this Warrant or to affect the meaning or
interpretation of this Warrant.
7.5 FURTHER ASSURANCES. Each of the Company, the Warrantholders
and holders of Warrant Shares shall do and perform all such further acts and
things and execute and deliver all such other certificates, instruments
and/or documents (including without limitation, such proxies and/or powers of
attorney as may be necessary or appropriate) as any party hereto may, at any
time and from time to time, reasonably request in connection with the
performance of any of the provisions of this Warrant.
8
<PAGE>
7.6 NOTICES. All demands, requests, notices and other
communications required or permitted to be given under this Warrant shall be
in writing and shall be deemed to have been duly given if delivered
personally or sent by United States certified or registered first class mail,
postage prepaid, to the parties hereto at the following addresses or at such
other address as any party hereto shall hereafter specify by notice to the
other party hereto:
(a) if to the Company, addressed to:
F.Y.I. Incorporated
3232 McKinney Avenue
Suite 900
Dallas, Texas 75204
Attention: Ed H. Bowman, Jr.
(b) if to any Warrantholder or holder of Warrant Shares, addressed to
the address of such person appearing on the books of the Company.
Except as otherwise provided herein, all such demands, requests,
notices and other communications shall be deemed to have been received on the
date of personal delivery thereof or on the third Business Day after the
mailing thereof.
7.7 SEPARABILITY. Any term or provision of this Warrant which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable any other term or provision of this
Warrant or affecting the validity or enforceability of any of the terms or
provisions of this Warrant in any other jurisdiction.
7.8 FRACTIONAL SHARES. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. With
respect to any fraction of a share called for upon any exercise hereof, the
Company shall pay to the Warrantholder an amount in cash equal to such
fraction multiplied by the current market price (as determined as of the date
of exercise, and with reference to the applicable trading market, in
accordance with paragraph (d) of Section 5.1) of a share of such stock as of
the date of such exercise.
7.9 RIGHTS OF THE HOLDER. The Warrantholder shall not, solely by
virtue of this Warrant, be entitled to any rights of a stockholder of the
Company, either at law or in equity.
7.10 GOVERNING LAW. This Warrant shall be deemed to be a contract
made under the laws of the State of Delaware and for all purposes shall be
governed by and construed in accordance with the laws of such State
applicable to contracts made and performed in Delaware.
9
<PAGE>
7.11 EFFECT OF STOCK SPLITS, ETC. Whenever any rights under this
Agreement are available only when at least a specified minimum number of Warrant
Shares is involved, such number shall be appropriately adjusted to reflect any
stock split, stock dividend, combination of securities into a smaller number of
securities or reclassification of stock.
10
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
by its duly authorized officer.
F.Y.I. INCORPORATED
By:
----------------------------------
Name: Ed H. Bowman, Jr.
Title: President and
Chief Executive Officer
Dated: May 19, 1999
11
<PAGE>
EXERCISE FORM
(To be executed upon exercise of this Warrant)
The undersigned, the record holder of this Warrant, hereby
irrevocably elects to exercise the right, represented by this Warrant, to
purchase __________ of the Warrant Shares and herewith tenders payment for
such Warrant Shares to the order of F.Y.I. INCORPORATED, in the amount of
$_______ in accordance with the terms of this Warrant. The undersigned
requests that a certificate for such Warrant Shares be registered in the name
of _________________________________ and that such certificate be delivered
to _________________________ whose address is
______________________________________________.
Date _________________ Signature _________________________
12
<PAGE>
Exhibit 4.9
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF NOR ANY
INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE SOLD, ASSIGNED, PLEDGED,
HYPOTHECATED, ENCUMBERED OR IN ANY OTHER MANNER TRANSFERRED OR DISPOSED OF
EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT OF 1933, AS AMENDED, AND THE TERMS
AND CONDITIONS HEREOF. THE HOLDER OF THIS WARRANT AND THE SECURITIES ISSUABLE
UPON EXERCISE HEREOF ARE SUBJECT TO THE RESTRICTIONS HEREIN SET FORTH.
VOID AFTER 5:00 P.M. NEW YORK CITY TIME, MAY 19, 2009
****************************************
No. 21
WARRANT
to
PURCHASE COMMON STOCK
of
F.Y.I. INCORPORATED
****************************************
This certifies that, for good and valuable consideration, F.Y.I.
Incorporated, a Delaware corporation (the "Company"), grants to Thomas C. Walker
or permitted registered assigns (the "Warrantholder" or "Warrantholders"), the
right to subscribe for and purchase from the Company, at $26.75 per share (the
"Exercise Price"), Twenty Two Thousand (22,000) shares of the Company's Common
Stock, par value $0.01 per share (the "Common Stock"), subject to the provisions
and upon the terms and conditions herein set forth. The Exercise Price and the
number of Warrant Shares are subject to adjustment from time to time as provided
in Section 5.
<PAGE>
1. DURATION AND EXERCISE OF WARRANT; LIMITATION EXERCISE PAYMENT
OF TAXES.
a. DURATION AND EXERCISE OF WARRANT.
(a) This Warrant may be exercised as to 100% of the underlying
shares at any time following the date of receipt by the Compensation
Committee of the Board of Directors of the Corporation's audited financial
statements showing the Corporation's actual earnings per share for the year
ended December 31, 2000 ("fiscal 2000"), provided that such earnings are not
less than $1.93 per share. The Company shall use its best efforts to deliver
to the Compensation Committee the audited financial statements showing the
Corporation's actual fiscal 2000 earnings per share by March 5, 2001. If the
Corporation's actual 2000 fiscal earnings is less than $1.93 per share, then
this Warrant shall be exercisable as to 100% of the underlying shares at any
time following the date of receipt by the Compensation Committee of the Board
of Directors of the Corporation's audited statements showing the
Corporation's actual earnings per share for the year ended December 31, 2001
("fiscal 2001"), provided that such earnings are not less than $2.39 per
share. The Company shall use its best efforts to deliver to the Compensation
Committee the audited financial statements showing the Corporation's the
actual fiscal 2001 earnings by March 5, 2002. However, in any case, this
Warrant shall vest as to 100% of the underlying shares on March 5, 2008. The
date this Warrant is first exercisable is hereinafter referred to as the
"Exercise Date". The Company shall give prompt notice to the Warrantholder
of the Exercise Date in accordance with Section 7.6. This Warrant expires at
5:00 P.M., New York City time on May 19, 2009 (the "Expiration Date"). In
addition, in the event of a Change in Control of the Company, the right to
exercise 100% of the underlying shares shall immediately vest. A "Change in
Control" shall be deemed to have occurred if:
(i) any person, other than the Company or an employee benefit plan of
the Company, acquires directly or indirectly the Beneficial Ownership (as
defined in Section 13(d) of the Securities and Exchange Act of 1934, as
amended (the" Exchange Act")) of any voting security of the Company and
immediately after such acquisition such Person is, directly or indirectly,
the Beneficial Owner of voting securities representing 50% or more of the
total voting power of all of the then-outstanding voting securities of the
Company;
(ii) the individuals (A) who, as of the closing date of the Initial
Public Offering, constitute the Board (the "Original Directors") or (B) who
thereafter are elected to the Board and whose election, or nomination for
election, to the Board was approved by a vote of at least two-thirds (2/3)
of the Original Directors then still in office (such directors becoming
"Additional Original Directors" immediately following their election) or
(C) who are elected to the Board and whose election, or nomination for
election, to the Board was approved by a vote of at least two-thirds (2/3)
of the Original Directors and Additional Original Directors then still in
office (such directors also
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becoming "Additional Original Directors" immediately following their
election) (such individuals being the "Continuing Directors"), cease
for any reason to constitute a majority of the members of the Board;
(iii) the stockholders of the Company shall approve a merger,
consolidation, recapitalization, or reorganization of the Company, a
reverse stock split of the outstanding voting securities of the Company, or
consummation of any such transaction if stockholder approval is not sought
or obtained, other than any such transaction which would result in at least
75% of the total voting power represented by the voting securities of the
surviving entity outstanding immediately after such transaction being
Beneficially Owned by at least 75% of the holders of the outstanding voting
securities of the Company immediately prior to the transaction, with the
voting power of each such continuing holder relative to other such
continuing holders not substantially altered in the transaction; or
(iv) the stockholders of the Company shall approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by
the Company of all or a substantial portion of the Company's assets (i.e.,
50% or more of the total assets of the Company).
(b) The rights represented by this Warrant may be exercised by the
Warrantholder of record, in whole, or from time to time in part, by (a)
surrender of this Warrant, accompanied by either the Exercise Form annexed
hereto, or if the Warrantholder decides to exercise the Warrant pursuant to
the broker-assisted cashless exercise program instituted by the Company, an
applicable exercise form provided by the Company (the "Exercise Form") duly
executed by the Warrantholder of record and specifying the number of Warrant
Shares to be purchased, to the Company at the office of the Company located
at 3232 McKinney Avenue, Suite 900, Dallas, Texas 75204 (or such other office
or agency of the Company as it may designate by notice to the Warrantholder
at the address of such Warrantholder appearing on the books of the Company)
during normal business hours on any day (a "Business Day") other than a
Saturday, Sunday or a day on which the New York Stock Exchange is authorized
to close or on which the Company is otherwise closed for business (a
"Nonbusiness Day") on or after 9:00 A.M. New York City time on the Exercise
Date but not later than 5:00 P.M., New York City time, on the Expiration Date
(or 5:00 P.M., New York City time, on the next succeeding Business Day, if
the Expiration Date is a Nonbusiness Day), (b) delivery of payment to the
Company in cash or by certified or official bank check in New York Clearing
House Funds, of the Exercise Price for the number of Warrant Shares specified
in the Exercise Form (such payment may be made by the Warrantholder directly
or by a designated broker pursuant to the broker-assisted cashless exercise
program instituted by the Company) and (c) such documentation as to the
identity and authority of the Warrantholder as the Company may reasonably
request. Such Warrant Shares shall be deemed by the Company to be issued to
the Warrantholder as the record holder of such Warrant Shares as of the close
of business on the date on which this Warrant shall have been surrendered and
payment made
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for the Warrant Shares as aforesaid. Certificates for the Warrant Shares
specified in the Exercise Form shall be delivered to the Warrantholder (or
designated broker, as the case may be) as promptly as practicable, and in any
event within 10 business days, thereafter. The stock certificates so
delivered shall be in denominations of at least 1,000 shares each or such
other denomination as may be specified by the Warrantholder and agreed upon
by the Company, and shall be issued in the name of the Warrantholder or such
other name as shall be designated in the Exercise Form. If this Warrant shall
have been exercised only in part, the Company shall, at the time of delivery
of the certificates for the Warrant Shares, deliver to the Warrantholder (or
designated broker, as the case may be) a new Warrant evidencing the rights to
purchase the remaining Warrant Shares, which new Warrant shall in all other
respects be identical with this Warrant. No adjustments or payments shall be
made on or in respect of Warrant Shares issuable on the exercise of this
Warrant for any cash dividends paid or payable to holders of record of Common
Stock prior to the date as of which the Warrantholder shall be deemed to be
the record holder of such Warrant Shares.
(c) With the consent of the Compensation Committee, and subject at
all times to, and only to the extent, if any, permitted under and in
accordance with, laws and regulations and other binding obligations or
provisions applicable to the Company, the Company may make a loan to the
Warrantholder with respect to the exercise of the Warrant, including the
payment by the Warrantholder of any or all federal, state and local income or
other taxes due in connection with any exercise. The interest on such loan
shall be the Company's cost of money plus an additional 0.5% at the time the
loan is made and such loan shall be made with recourse against the
Warrantholder. The Compensation Committee shall have the full authority to
determine any other terms and provisions of such a loan.
1.2 VESTING AND EXERCISE. This Warrant may be vested and, once
vested, may be exercised whether or not, at the time of such vesting or
exercise, as the case may be, Mr. Walker is an Employee of the Company. If
this Warrant is not exercised prior to 5:00 P.M. on the Expiration Date (or
the next succeeding Business Day, if the Expiration Date is a Nonbusiness
Day), this Warrant, or any new Warrant issued pursuant to Section 1.1, shall
cease to be exercisable and shall become void and all rights of the
Warrantholder hereunder shall cease. This Warrant shall not be exercisable,
and no Warrant Shares shall be issued hereunder, prior to 9:00 A.M., New York
City time, on the Exercise Date.
1.3 PAYMENT OF TAXES. The issuance of certificates for Warrant
Shares shall be made without charge to the Warrantholder for any stock
transfer or other issuance tax in respect thereto; PROVIDED, HOWEVER, that
the Warrantholder shall be required to pay any and all taxes which may be
payable in respect to any transfer involved in the issuance and delivery of
any certificates for Warrant Shares in a name other than that of the then
Warrantholder as reflected upon the books of the Company.
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1.4 DIVISIBILITY OF WARRANT. This Warrant may be divided into
warrants representing one Warrant Share or multiples thereof, upon surrender
at the principal office of the Company on any Business Day, without charge to
any Warrantholder, except as provided below. The Warrantholder will be
charged for reasonable out-of-pocket costs incurred by the Company in
connection with the division of this Warrant into Warrants representing fewer
than one thousand (1,000) Warrant Shares. Upon any such division, the
Warrants may be transferred of record to a name other than that of the
Warrantholder of record; PROVIDED, HOWEVER, that the Warrantholder shall be
required to pay any and all transfer taxes with respect thereto.
2. RESERVATION AND LISTING OF SHARES, ETC.
All Warrant Shares which are issued upon the exercise of the rights
represented by this Warrant shall, upon issuance and payment of the Exercise
Price, be validly issued, fully paid and nonassessable and free from all
taxes, liens, security interests, charges and other encumbrances with respect
to the issue thereof other than taxes in respect of any transfer occurring
contemporaneously with such issue. During the period within which this
Warrant may be exercised, the Company shall at all times have authorized and
reserved, and keep available free from preemptive rights, a sufficient number
of shares of Common Stock to provide for the exercise of this Warrant, and
shall at its expense use its best efforts to procure such listing thereof
(subject to official notice of issuance) as then may be required on all stock
exchanges on which the Common Stock is then listed or on the Nasdaq National
Market. The Company shall, from time to time, take all such action as may be
required to assure that the par value per share of the Warrant Shares is at
all times equal to or less than the then effective Exercise Price.
3. EXCHANGE, LOSS OR DESTRUCTION OF WARRANT.
If permitted by Section 1.4 and in accordance with the provisions
thereof, upon surrender of this Warrant to the Company with a duly executed
instrument of assignment and funds sufficient to pay any transfer tax, the
Company shall, without charge, execute and deliver a new Warrant of like
tenor in the name of the assignee named in such instrument of assignment and
this Warrant shall promptly be canceled. Upon receipt by the Company of
evidence satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant, and, in the case of loss, theft or destruction, of such bond or
indemnification as the Company may reasonably require, and, in the case of
such mutilation, upon surrender and cancellation of this Warrant, the Company
will execute and deliver a new Warrant of like tenor. The term "Warrant" as
used herein includes any Warrants issued in substitution or exchange of this
Warrant.
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4. OWNERSHIP OF WARRANT.
The Company may deem and treat the person in whose name this
Warrant is registered as the holder and owner hereof (notwithstanding any
notations of ownership or writing hereon made by anyone other than the
Company) for all purposes and shall not be affected by any notice to the
contrary, until presentation of this Warrant for registration of transfer as
provided in Section 1.1 or in Section 3.
5. CERTAIN ADJUSTMENTS.
The Exercise Price at which Warrant Shares may be purchased
hereunder, and the number of Warrant Shares to be purchased upon exercise
hereof, are subject to change or adjustment as follows:
5.1 The number of Warrant Shares purchasable upon the exercise of
this Warrant and the Exercise Price shall be subject to adjustment as follows:
(a) In case the Company shall (i) pay a dividend in shares of
Common Stock or make a distribution in shares of Common Stock (ii) subdivide
its outstanding shares of Common Stock into a greater number of shares of
Common Stock, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock or (iv) issue by reclassification of
its shares of Common Stock other securities of the Company (including any
such reclassification in connection with a consolidation or merger in which
the Company is the surviving corporation), the number of Warrant Shares
purchasable upon exercise of this Warrant shall be adjusted so that the
Warrantholder shall be entitled to receive the kind and number of Warrant
Shares or other securities of the Company which he would have owned or have
been entitled to receive after the happening of any of the events described
above, had this Warrant been exercised immediately prior to the happening of
such event or any record date with respect thereto. An adjustment made
pursuant to this paragraph (a) shall become effective immediately after the
effective date of such event retroactive to the record date, if any, for such
event.
(b) In case the Company shall:
(i) issue rights, options or warrants to all holders of its
outstanding Common Stock, without any charge to such holders,
entitling them to subscribe for or purchase shares of Common
Stock at a price per share which is lower at the record date for
the determination of stockholders entitled to receive such
rights, options or warrants than the then current market price
per share of Common Stock, or
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(ii) distribute to all holders of its shares of Common Stock
evidences of its indebtedness or assets (excluding cash dividends
or distributions payable out of consolidated earnings or earned
surplus and dividends or distributions referred to in paragraph
(a) of this Section 5.1) or rights, options or warrants, or
convertible or exchangeable securities, containing the right to
subscribe for or purchase shares of Common Stock,
appropriate adjustments shall be made to the number of Warrant Shares
purchasable upon the exercise of the Warrant and/or the Exercise Price in
order to preserve the relative rights and interests of the Warrantholders,
such adjustments to be made by the good faith determination of the Board of
Directors of the Company.
5.2 VOLUNTARY ADJUSTMENT BY THE COMPANY. The Company may, at its
option, at any time during the term of the Warrants, reduce the then current
Exercise Price to any amount, consistent with applicable law, deemed
appropriate by the Board of Directors of the Company.
5.3 NOTICE OF ADJUSTMENT. Whenever the number of Warrant Shares
or the Exercise Price of such Warrant Shares is adjusted, as herein provided,
the Company shall promptly mail first class, postage prepaid, to all
Warrantholders, notice of such adjustment.
5.4 NO ADJUSTMENT FOR CASH DIVIDENDS. No adjustment in respect of
any cash dividends shall be made during the term of this Warrant or upon the
exercise of this Warrant.
5.5 PRESERVATION OF PURCHASE RIGHTS UPON MERGER, CONSOLIDATION,
ETC. In case of any consolidation of the Company with or merger of the
Company into another corporation or in case of any sale, transfer or lease to
another corporation of all or substantially all of the property of the
Company, the Company or such successor or purchasing corporation, as the case
may be, shall execute with the Warrantholders an agreement that the
Warrantholders shall have the right thereafter upon payment of the Exercise
Price in effect immediately prior to such action to purchase upon exercise of
this Warrant the kind and amount of shares and other securities and property
which such holder would have owned or have been entitled to receive after the
happening of such consolidation, merger, sale, transfer or lease had this
Warrant been exercised immediately prior to such action; PROVIDED, HOWEVER,
that no adjustment in respect of cash dividends, interest or other income on
or from such shares or other securities and property shall be made during the
term of this Warrant or upon the exercise of this Warrant. Such agreement
shall provide for adjustments, which shall be as nearly equivalent as
practicable to the adjustments provided for in this Section 5. The
provisions of this Section 5.5 shall apply similarly to successive
consolidations, mergers, sales, transfers or leases.
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6. REGISTRATION RIGHTS OF WARRANT SHARES ON FORM S-8
On or prior to September 30, 1999, the Company shall file a
registration statement covering the Warrant Shares on a Form S-8, which
registration statement shall be effective upon the filing thereof. The
Company shall use its best efforts to keep such Form S-8 current and
effective until the earlier of the Expiration Date or the date this Warrant
has been exercised in full. The Company shall use its best efforts to list
the Warrant Shares on any securities exchange (or on the Nasdaq National
Market) on which other shares of Common Stock are listed.
7. MISCELLANEOUS.
7.1 ENTIRE AGREEMENT. This Warrant constitutes the entire
agreement between the Company and the Warrantholder with respect to this
Warrant and the Warrant Shares.
7.2 BINDING EFFECTS; BENEFITS. This Warrant shall inure to the
benefit of and shall be binding upon the Company, the Warrantholder and
holders of Warrant Shares and their respective heirs, legal representatives,
successors and assigns. Nothing in this Warrant, expressed or implied, is
intended to or shall confer on any person other than the Company, the
Warrantholders and holders of Warrant Shares, or their respective heirs,
legal representatives, successors or assigns, any rights, remedies,
obligations or liabilities under or by reason of this Warrant or the Warrant
Shares.
7.3 AMENDMENTS AND WAIVERS. This Warrant may not be modified or
amended except by an instrument in writing signed by the Company and
Warrantholders that hold Warrants entitling them to purchase at least 50% of
the Warrant Shares. The Company, any Warrantholder or holder of Warrant
Shares may, by an instrument in writing, waive compliance by the other party
with any term or provision of this Warrant on the part of such other party
hereto to be performed or complied with. The waiver by any such party of a
breach of any term or provision of this Warrant shall not be construed as a
waiver of any subsequent breach.
7.4 SECTION AND OTHER HEADINGS. The section and other headings
contained in this Warrant are for reference purposes only and shall not be
deemed to be a part of this Warrant or to affect the meaning or
interpretation of this Warrant.
7.5 FURTHER ASSURANCES. Each of the Company, the Warrantholders
and holders of Warrant Shares shall do and perform all such further acts and
things and execute and deliver all such other certificates, instruments
and/or documents (including without limitation, such proxies and/or powers of
attorney as may be necessary or appropriate) as any party hereto may, at any
time and from time to time, reasonably request in connection with the
performance of any of the provisions of this Warrant.
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7.6 NOTICES. All demands, requests, notices and other
communications required or permitted to be given under this Warrant shall be
in writing and shall be deemed to have been duly given if delivered
personally or sent by United States certified or registered first class mail,
postage prepaid, to the parties hereto at the following addresses or at such
other address as any party hereto shall hereafter specify by notice to the
other party hereto:
(a) if to the Company, addressed to:
F.Y.I. Incorporated
3232 McKinney Avenue
Suite 900
Dallas, Texas 75204
Attention: Ed H. Bowman, Jr.
(b) if to any Warrantholder or holder of Warrant Shares, addressed to
the address of such person appearing on the books of the Company.
Except as otherwise provided herein, all such demands, requests,
notices and other communications shall be deemed to have been received on the
date of personal delivery thereof or on the third Business Day after the
mailing thereof.
7.7 SEPARABILITY. Any term or provision of this Warrant which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable any other term or provision of this
Warrant or affecting the validity or enforceability of any of the terms or
provisions of this Warrant in any other jurisdiction.
7.8 FRACTIONAL SHARES. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. With
respect to any fraction of a share called for upon any exercise hereof, the
Company shall pay to the Warrantholder an amount in cash equal to such
fraction multiplied by the current market price (as determined as of the date
of exercise, and with reference to the applicable trading market, in
accordance with paragraph (d) of Section 5.1) of a share of such stock as of
the date of such exercise.
7.9 RIGHTS OF THE HOLDER. The Warrantholder shall not, solely by
virtue of this Warrant, be entitled to any rights of a stockholder of the
Company, either at law or in equity.
7.10 GOVERNING LAW. This Warrant shall be deemed to be a contract
made under the laws of the State of Delaware and for all purposes shall be
governed by and construed in accordance with the laws of such State
applicable to contracts made and performed in Delaware.
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7.11 EFFECT OF STOCK SPLITS, ETC. Whenever any rights under this
Agreement are available only when at least a specified minimum number of
Warrant Shares is involved, such number shall be appropriately adjusted to
reflect any stock split, stock dividend, combination of securities into a
smaller number of securities or reclassification of stock.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be
signed by its duly authorized officer.
F.Y.I. INCORPORATED
By:
------------------------------
Name: Ed H. Bowman, Jr.
Title: President and
Chief Executive Officer
Dated: May 19, 1999
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EXERCISE FORM
(To be executed upon exercise of this Warrant)
The undersigned, the record holder of this Warrant, hereby
irrevocably elects to exercise the right, represented by this Warrant, to
purchase __________ of the Warrant Shares and herewith tenders payment for
such Warrant Shares to the order of F.Y.I. INCORPORATED, in the amount of
$_______ in accordance with the terms of this Warrant. The undersigned
requests that a certificate for such Warrant Shares be registered in the name
of _________________________________ and that such certificate be delivered
to _________________________ whose address is
______________________________________________.
Date _________________ Signature _________________________
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Exhibit 4.10
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF NOR ANY
INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE SOLD, ASSIGNED, PLEDGED,
HYPOTHECATED, ENCUMBERED OR IN ANY OTHER MANNER TRANSFERRED OR DISPOSED OF
EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT OF 1933, AS AMENDED, AND THE
TERMS AND CONDITIONS HEREOF. THE HOLDER OF THIS WARRANT AND THE SECURITIES
ISSUABLE UPON EXERCISE HEREOF ARE SUBJECT TO THE RESTRICTIONS HEREIN SET
FORTH.
VOID AFTER 5:00 P.M. NEW YORK CITY TIME, MAY 19, 2009
****************************************
No. 22
WARRANT
to
PURCHASE COMMON STOCK
of
F.Y.I. INCORPORATED
****************************************
This certifies that, for good and valuable consideration, F.Y.I.
Incorporated, a Delaware corporation (the "Company"), grants to Ed H. Bowman,
Jr. or permitted registered assigns (the "Warrantholder" or "Warrantholders"),
the right to subscribe for and purchase from the Company, at $26.75 per share
(the "Exercise Price"), Sixty Five Thousand (65,000) shares of the Company's
Common Stock, par value $0.01 per share (the "Common Stock"), subject to the
provisions and upon the terms and conditions herein set forth. The Exercise
Price and the number of Warrant Shares are subject to adjustment from time to
time as provided in Section 5.
<PAGE>
1. DURATION AND EXERCISE OF WARRANT; LIMITATION EXERCISE PAYMENT
OF TAXES.
a. DURATION AND EXERCISE OF WARRANT.
(a) This Warrant may be exercised as to 100% of the underlying
shares at any time following the date of receipt by the Compensation
Committee of the Board of Directors of the Corporation's audited financial
statements showing the Corporation's actual earnings per share for the year
ended December 31, 2000 ("fiscal 2000"), provided that such earnings are not
less than $1.93 per share. The Company shall use its best efforts to deliver
to the Compensation Committee the audited financial statements showing the
Corporation's actual fiscal 2000 earnings per share by March 5, 2001. If the
Corporation's actual 2000 fiscal earnings is less than $1.93 per share, then
this Warrant shall be exercisable as to 100% of the underlying shares at any
time following the date of receipt by the Compensation Committee of the Board
of Directors of the Corporation's audited statements showing the
Corporation's actual earnings per share for the year ended December 31, 2001
("fiscal 2001"), provided that such earnings are not less than $2.39 per
share. The Company shall use its best efforts to deliver to the Compensation
Committee the audited financial statements showing the Corporation's the
actual fiscal 2001 earnings by March 5, 2002. However, in any case, this
Warrant shall vest as to 100% of the underlying shares on March 5, 2008. The
date this Warrant is first exercisable is hereinafter referred to as the
"Exercise Date". The Company shall give prompt notice to the Warrantholder
of the Exercise Date in accordance with Section 7.6. This Warrant expires at
5:00 P.M., New York City time on May 19, 2009 (the "Expiration Date"). In
addition, in the event of a Change in Control of the Company, the right to
exercise 100% of the underlying shares shall immediately vest. A "Change in
Control" shall be deemed to have occurred if:
(i) any person, other than the Company or an employee benefit plan of
the Company, acquires directly or indirectly the Beneficial Ownership (as
defined in Section 13(d) of the Securities and Exchange Act of 1934, as
amended (the" Exchange Act")) of any voting security of the Company and
immediately after such acquisition such Person is, directly or indirectly,
the Beneficial Owner of voting securities representing 50% or more of the
total voting power of all of the then-outstanding voting securities of the
Company;
(ii) the individuals (A) who, as of the closing date of the Initial
Public Offering, constitute the Board (the "Original Directors") or (B) who
thereafter are elected to the Board and whose election, or nomination for
election, to the Board was approved by a vote of at least two-thirds (2/3)
of the Original Directors then still in office (such directors becoming
"Additional Original Directors" immediately following their election) or
(C) who are elected to the Board and whose election, or nomination for
election, to the Board was approved by a vote of at least two-thirds (2/3)
of the Original Directors and Additional Original Directors then still in
office (such directors also
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becoming "Additional Original Directors" immediately following their
election) (such individuals being the "Continuing Directors"), cease
for any reason to constitute a majority of the members of the Board;
(iii) the stockholders of the Company shall approve a merger,
consolidation, recapitalization, or reorganization of the Company, a
reverse stock split of the outstanding voting securities of the Company, or
consummation of any such transaction if stockholder approval is not sought
or obtained, other than any such transaction which would result in at least
75% of the total voting power represented by the voting securities of the
surviving entity outstanding immediately after such transaction being
Beneficially Owned by at least 75% of the holders of the outstanding voting
securities of the Company immediately prior to the transaction, with the
voting power of each such continuing holder relative to other such
continuing holders not substantially altered in the transaction; or
(iv) the stockholders of the Company shall approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by
the Company of all or a substantial portion of the Company's assets (i.e.,
50% or more of the total assets of the Company).
(b) The rights represented by this Warrant may be exercised by the
Warrantholder of record, in whole, or from time to time in part, by (a)
surrender of this Warrant, accompanied by either the Exercise Form annexed
hereto, or if the Warrantholder decides to exercise the Warrant pursuant to
the broker-assisted cashless exercise program instituted by the Company, an
applicable exercise form provided by the Company (the "Exercise Form") duly
executed by the Warrantholder of record and specifying the number of Warrant
Shares to be purchased, to the Company at the office of the Company located
at 3232 McKinney Avenue, Suite 900, Dallas, Texas 75204 (or such other office
or agency of the Company as it may designate by notice to the Warrantholder
at the address of such Warrantholder appearing on the books of the Company)
during normal business hours on any day (a "Business Day") other than a
Saturday, Sunday or a day on which the New York Stock Exchange is authorized
to close or on which the Company is otherwise closed for business (a
"Nonbusiness Day") on or after 9:00 A.M. New York City time on the Exercise
Date but not later than 5:00 P.M., New York City time, on the Expiration Date
(or 5:00 P.M., New York City time, on the next succeeding Business Day, if
the Expiration Date is a Nonbusiness Day), (b) delivery of payment to the
Company in cash or by certified or official bank check in New York Clearing
House Funds, of the Exercise Price for the number of Warrant Shares specified
in the Exercise Form (such payment may be made by the Warrantholder directly
or by a designated broker pursuant to the broker-assisted cashless exercise
program instituted by the Company) and (c) such documentation as to the
identity and authority of the Warrantholder as the Company may reasonably
request. Such Warrant Shares shall be deemed by the Company to be issued to
the Warrantholder as the record holder of such Warrant Shares as of the close
of business on the date on which this Warrant shall have been surrendered and
payment made
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for the Warrant Shares as aforesaid. Certificates for the Warrant Shares
specified in the Exercise Form shall be delivered to the Warrantholder (or
designated broker, as the case may be) as promptly as practicable, and in any
event within 10 business days, thereafter. The stock certificates so
delivered shall be in denominations of at least 1,000 shares each or such
other denomination as may be specified by the Warrantholder and agreed upon
by the Company, and shall be issued in the name of the Warrantholder or such
other name as shall be designated in the Exercise Form. If this Warrant shall
have been exercised only in part, the Company shall, at the time of delivery
of the certificates for the Warrant Shares, deliver to the Warrantholder (or
designated broker, as the case may be) a new Warrant evidencing the rights to
purchase the remaining Warrant Shares, which new Warrant shall in all other
respects be identical with this Warrant. No adjustments or payments shall be
made on or in respect of Warrant Shares issuable on the exercise of this
Warrant for any cash dividends paid or payable to holders of record of Common
Stock prior to the date as of which the Warrantholder shall be deemed to be
the record holder of such Warrant Shares.
(c) With the consent of the Compensation Committee, and subject at
all times to, and only to the extent, if any, permitted under and in
accordance with, laws and regulations and other binding obligations or
provisions applicable to the Company, the Company may make a loan to the
Warrantholder with respect to the exercise of the Warrant, including the
payment by the Warrantholder of any or all federal, state and local income or
other taxes due in connection with any exercise. The interest on such loan
shall be the Company's cost of money plus an additional 0.5% at the time the
loan is made and such loan shall be made with recourse against the
Warrantholder. The Compensation Committee shall have the full authority to
determine any other terms and provisions of such a loan.
1.2 VESTING AND EXERCISE. This Warrant may be vested and, once
vested, may be exercised whether or not, at the time of such vesting or
exercise, as the case may be, Mr. Bowman is an Employee of the Company. If
this Warrant is not exercised prior to 5:00 P.M. on the Expiration Date (or
the next succeeding Business Day, if the Expiration Date is a Nonbusiness
Day), this Warrant, or any new Warrant issued pursuant to Section 1.1, shall
cease to be exercisable and shall become void and all rights of the
Warrantholder hereunder shall cease. This Warrant shall not be exercisable,
and no Warrant Shares shall be issued hereunder, prior to 9:00 A.M., New York
City time, on the Exercise Date.
1.3 PAYMENT OF TAXES. The issuance of certificates for Warrant
Shares shall be made without charge to the Warrantholder for any stock
transfer or other issuance tax in respect thereto; PROVIDED, HOWEVER, that
the Warrantholder shall be required to pay any and all taxes which may be
payable in respect to any transfer involved in the issuance and delivery of
any certificates for Warrant Shares in a name other than that of the then
Warrantholder as reflected upon the books of the Company.
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1.4 DIVISIBILITY OF WARRANT. This Warrant may be divided into
warrants representing one Warrant Share or multiples thereof, upon surrender
at the principal office of the Company on any Business Day, without charge to
any Warrantholder, except as provided below. The Warrantholder will be
charged for reasonable out-of-pocket costs incurred by the Company in
connection with the division of this Warrant into Warrants representing fewer
than one thousand (1,000) Warrant Shares. Upon any such division, the
Warrants may be transferred of record to a name other than that of the
Warrantholder of record; PROVIDED, HOWEVER, that the Warrantholder shall be
required to pay any and all transfer taxes with respect thereto.
2. RESERVATION AND LISTING OF SHARES, ETC.
All Warrant Shares which are issued upon the exercise of the rights
represented by this Warrant shall, upon issuance and payment of the Exercise
Price, be validly issued, fully paid and nonassessable and free from all
taxes, liens, security interests, charges and other encumbrances with respect
to the issue thereof other than taxes in respect of any transfer occurring
contemporaneously with such issue. During the period within which this
Warrant may be exercised, the Company shall at all times have authorized and
reserved, and keep available free from preemptive rights, a sufficient number
of shares of Common Stock to provide for the exercise of this Warrant, and
shall at its expense use its best efforts to procure such listing thereof
(subject to official notice of issuance) as then may be required on all stock
exchanges on which the Common Stock is then listed or on the Nasdaq National
Market. The Company shall, from time to time, take all such action as may be
required to assure that the par value per share of the Warrant Shares is at
all times equal to or less than the then effective Exercise Price.
3. EXCHANGE, LOSS OR DESTRUCTION OF WARRANT.
If permitted by Section 1.4 and in accordance with the provisions
thereof, upon surrender of this Warrant to the Company with a duly executed
instrument of assignment and funds sufficient to pay any transfer tax, the
Company shall, without charge, execute and deliver a new Warrant of like
tenor in the name of the assignee named in such instrument of assignment and
this Warrant shall promptly be canceled. Upon receipt by the Company of
evidence satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant, and, in the case of loss, theft or destruction, of such bond or
indemnification as the Company may reasonably require, and, in the case of
such mutilation, upon surrender and cancellation of this Warrant, the Company
will execute and deliver a new Warrant of like tenor. The term "Warrant" as
used herein includes any Warrants issued in substitution or exchange of this
Warrant.
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4. OWNERSHIP OF WARRANT.
The Company may deem and treat the person in whose name this
Warrant is registered as the holder and owner hereof (notwithstanding any
notations of ownership or writing hereon made by anyone other than the
Company) for all purposes and shall not be affected by any notice to the
contrary, until presentation of this Warrant for registration of transfer as
provided in Section 1.1 or in Section 3.
5. CERTAIN ADJUSTMENTS.
The Exercise Price at which Warrant Shares may be purchased
hereunder, and the number of Warrant Shares to be purchased upon exercise
hereof, are subject to change or adjustment as follows:
5.1 The number of Warrant Shares purchasable upon the exercise of
this Warrant and the Exercise Price shall be subject to adjustment as follows:
(a) In case the Company shall (i) pay a dividend in shares of
Common Stock or make a distribution in shares of Common Stock (ii) subdivide
its outstanding shares of Common Stock into a greater number of shares of
Common Stock, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock or (iv) issue by reclassification of
its shares of Common Stock other securities of the Company (including any
such reclassification in connection with a consolidation or merger in which
the Company is the surviving corporation), the number of Warrant Shares
purchasable upon exercise of this Warrant shall be adjusted so that the
Warrantholder shall be entitled to receive the kind and number of Warrant
Shares or other securities of the Company which he would have owned or have
been entitled to receive after the happening of any of the events described
above, had this Warrant been exercised immediately prior to the happening of
such event or any record date with respect thereto. An adjustment made
pursuant to this paragraph (a) shall become effective immediately after the
effective date of such event retroactive to the record date, if any, for such
event.
(b) In case the Company shall:
(i) issue rights, options or warrants to all holders of its
outstanding Common Stock, without any charge to such holders,
entitling them to subscribe for or purchase shares of Common
Stock at a price per share which is lower at the record date for
the determination of stockholders entitled to receive such
rights, options or warrants than the then current market price
per share of Common Stock, or
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(ii) distribute to all holders of its shares of Common Stock
evidences of its indebtedness or assets (excluding cash dividends
or distributions payable out of consolidated earnings or earned
surplus and dividends or distributions referred to in paragraph
(a) of this Section 5.1) or rights, options or warrants, or
convertible or exchangeable securities, containing the right to
subscribe for or purchase shares of Common Stock,
appropriate adjustments shall be made to the number of Warrant Shares
purchasable upon the exercise of the Warrant and/or the Exercise Price in
order to preserve the relative rights and interests of the Warrantholders,
such adjustments to be made by the good faith determination of the Board of
Directors of the Company.
5.2 VOLUNTARY ADJUSTMENT BY THE COMPANY. The Company may, at its
option, at any time during the term of the Warrants, reduce the then current
Exercise Price to any amount, consistent with applicable law, deemed
appropriate by the Board of Directors of the Company.
5.3 NOTICE OF ADJUSTMENT. Whenever the number of Warrant Shares
or the Exercise Price of such Warrant Shares is adjusted, as herein provided,
the Company shall promptly mail first class, postage prepaid, to all
Warrantholders, notice of such adjustment.
5.4 NO ADJUSTMENT FOR CASH DIVIDENDS. No adjustment in respect of
any cash dividends shall be made during the term of this Warrant or upon the
exercise of this Warrant.
5.5 PRESERVATION OF PURCHASE RIGHTS UPON MERGER, CONSOLIDATION,
ETC. In case of any consolidation of the Company with or merger of the
Company into another corporation or in case of any sale, transfer or lease to
another corporation of all or substantially all of the property of the
Company, the Company or such successor or purchasing corporation, as the case
may be, shall execute with the Warrantholders an agreement that the
Warrantholders shall have the right thereafter upon payment of the Exercise
Price in effect immediately prior to such action to purchase upon exercise of
this Warrant the kind and amount of shares and other securities and property
which such holder would have owned or have been entitled to receive after the
happening of such consolidation, merger, sale, transfer or lease had this
Warrant been exercised immediately prior to such action; PROVIDED, HOWEVER,
that no adjustment in respect of cash dividends, interest or other income on
or from such shares or other securities and property shall be made during the
term of this Warrant or upon the exercise of this Warrant. Such agreement
shall provide for adjustments, which shall be as nearly equivalent as
practicable to the adjustments provided for in this Section 5. The
provisions of this Section 5.5 shall apply similarly to successive
consolidations, mergers, sales, transfers or leases.
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6. REGISTRATION RIGHTS OF WARRANT SHARES ON FORM S-8
On or prior to September 30, 1999, the Company shall file a
registration statement covering the Warrant Shares on a Form S-8, which
registration statement shall be effective upon the filing thereof. The
Company shall use its best efforts to keep such Form S-8 current and
effective until the earlier of the Expiration Date or the date this Warrant
has been exercised in full. The Company shall use its best efforts to list
the Warrant Shares on any securities exchange (or on the Nasdaq National
Market) on which other shares of Common Stock are listed.
7. MISCELLANEOUS.
7.1 ENTIRE AGREEMENT. This Warrant constitutes the entire
agreement between the Company and the Warrantholder with respect to this
Warrant and the Warrant Shares.
7.2 BINDING EFFECTS; BENEFITS. This Warrant shall inure to the
benefit of and shall be binding upon the Company, the Warrantholder and
holders of Warrant Shares and their respective heirs, legal representatives,
successors and assigns. Nothing in this Warrant, expressed or implied, is
intended to or shall confer on any person other than the Company, the
Warrantholders and holders of Warrant Shares, or their respective heirs,
legal representatives, successors or assigns, any rights, remedies,
obligations or liabilities under or by reason of this Warrant or the Warrant
Shares.
7.3 AMENDMENTS AND WAIVERS. This Warrant may not be modified or
amended except by an instrument in writing signed by the Company and
Warrantholders that hold Warrants entitling them to purchase at least 50% of
the Warrant Shares. The Company, any Warrantholder or holder of Warrant
Shares may, by an instrument in writing, waive compliance by the other party
with any term or provision of this Warrant on the part of such other party
hereto to be performed or complied with. The waiver by any such party of a
breach of any term or provision of this Warrant shall not be construed as a
waiver of any subsequent breach.
7.4 SECTION AND OTHER HEADINGS. The section and other headings
contained in this Warrant are for reference purposes only and shall not be
deemed to be a part of this Warrant or to affect the meaning or
interpretation of this Warrant.
7.5 FURTHER ASSURANCES. Each of the Company, the Warrantholders
and holders of Warrant Shares shall do and perform all such further acts and
things and execute and deliver all such other certificates, instruments
and/or documents (including without limitation, such proxies and/or powers of
attorney as may be necessary or appropriate) as any party hereto may, at any
time and from time to time, reasonably request in connection with the
performance of any of the provisions of this Warrant.
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7.6 NOTICES. All demands, requests, notices and other
communications required or permitted to be given under this Warrant shall be
in writing and shall be deemed to have been duly given if delivered
personally or sent by United States certified or registered first class mail,
postage prepaid, to the parties hereto at the following addresses or at such
other address as any party hereto shall hereafter specify by notice to the
other party hereto:
(a) if to the Company, addressed to:
F.Y.I. Incorporated
3232 McKinney Avenue
Suite 900
Dallas, Texas 75204
Attention: Ed H. Bowman, Jr.
(b) if to any Warrantholder or holder of Warrant Shares, addressed to
the address of such person appearing on the books of the Company.
Except as otherwise provided herein, all such demands, requests,
notices and other communications shall be deemed to have been received on the
date of personal delivery thereof or on the third Business Day after the
mailing thereof.
7.7 SEPARABILITY. Any term or provision of this Warrant which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable any other term or provision of this
Warrant or affecting the validity or enforceability of any of the terms or
provisions of this Warrant in any other jurisdiction.
7.8 FRACTIONAL SHARES. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. With
respect to any fraction of a share called for upon any exercise hereof, the
Company shall pay to the Warrantholder an amount in cash equal to such
fraction multiplied by the current market price (as determined as of the date
of exercise, and with reference to the applicable trading market, in
accordance with paragraph (d) of Section 5.1) of a share of such stock as of
the date of such exercise.
7.9 RIGHTS OF THE HOLDER. The Warrantholder shall not, solely by
virtue of this Warrant, be entitled to any rights of a stockholder of the
Company, either at law or in equity.
7.10 GOVERNING LAW. This Warrant shall be deemed to be a contract
made under the laws of the State of Delaware and for all purposes shall be
governed by and construed in accordance with the laws of such State
applicable to contracts made and performed in Delaware.
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7.11 EFFECT OF STOCK SPLITS, ETC. Whenever any rights under this
Agreement are available only when at least a specified minimum number of
Warrant Shares is involved, such number shall be appropriately adjusted to
reflect any stock split, stock dividend, combination of securities into a
smaller number of securities or reclassification of stock.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be
signed by its duly authorized officer.
F.Y.I. INCORPORATED
By:
----------------------------------
Name: Thomas C. Walker
Title: Chairman and
Chief Development Officer
Dated: May 19, 1999
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EXERCISE FORM
(To be executed upon exercise of this Warrant)
The undersigned, the record holder of this Warrant, hereby
irrevocably elects to exercise the right, represented by this Warrant, to
purchase __________ of the Warrant Shares and herewith tenders payment for
such Warrant Shares to the order of F.Y.I. INCORPORATED, in the amount of
$_______ in accordance with the terms of this Warrant. The undersigned
requests that a certificate for such Warrant Shares be registered in the name
of _________________________________ and that such certificate be delivered
to _________________________ whose address is
______________________________________________.
Date _________________ Signature _________________________
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Exhibit 4.11
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF NOR ANY
INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE SOLD, ASSIGNED, PLEDGED,
HYPOTHECATED, ENCUMBERED OR IN ANY OTHER MANNER TRANSFERRED OR DISPOSED OF
EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT OF 1933, AS AMENDED, AND THE
TERMS AND CONDITIONS HEREOF. THE HOLDER OF THIS WARRANT AND THE SECURITIES
ISSUABLE UPON EXERCISE HEREOF ARE SUBJECT TO THE RESTRICTIONS HEREIN SET
FORTH.
VOID AFTER 5:00 P.M. NEW YORK CITY TIME, MAY 19, 2009
****************************************
No. 24
WARRANT
to
PURCHASE COMMON STOCK
of
F.Y.I. INCORPORATED
****************************************
This certifies that, for good and valuable consideration, F.Y.I.
Incorporated, a Delaware corporation (the "Company"), grants to Joe A. Rose
or permitted registered assigns (the "Warrantholder" or "Warrantholders"),
the right to subscribe for and purchase from the Company, at $26.75 per share
(the "Exercise Price"), Twenty Thousand (20,000) shares of the Company's
Common Stock, par value $0.01 per share (the "Common Stock"), subject to the
provisions and upon the terms and conditions herein set forth. The Exercise
Price and the number of Warrant Shares are subject to adjustment from time to
time as provided in Section 5.
<PAGE>
1. DURATION AND EXERCISE OF WARRANT; LIMITATION EXERCISE PAYMENT
OF TAXES.
a. DURATION AND EXERCISE OF WARRANT.
(a) This Warrant may be exercised as to 25% from and after 9:00
A.M. New York City time on May 19, 2001 (the "Initial Exercise Date") and the
remaining 75% of the underlying shares on May 19, 2002 (the "Second Exercise
Date"). The Initial Exercise Date or the Second Exercise Date, as
applicable, is hereinafter referred to as the "Exercise Date". This Warrant
expires at 5:00 P.M., New York City time on May 19, 2009 (the "Expiration
Date"). In addition, in the event of a Change in Control of the Company, the
right to exercise 100% of the underlying shares shall immediately vest. A
"Change in Control" shall be deemed to have occurred if:
(i) any person, other than the Company or an employee benefit plan of
the Company, acquires directly or indirectly the Beneficial Ownership (as
defined in Section 13(d) of the Securities and Exchange Act of 1934, as
amended (the" Exchange Act")) of any voting security of the Company and
immediately after such acquisition such Person is, directly or indirectly,
the Beneficial Owner of voting securities representing 50% or more of the
total voting power of all of the then-outstanding voting securities of the
Company;
(ii) the individuals (A) who, as of the closing date of the Initial
Public Offering, constitute the Board (the "Original Directors") or (B) who
thereafter are elected to the Board and whose election, or nomination for
election, to the Board was approved by a vote of at least two-thirds (2/3)
of the Original Directors then still in office (such directors becoming
"Additional Original Directors" immediately following their election) or
(C) who are elected to the Board and whose election, or nomination for
election, to the Board was approved by a vote of at least two-thirds (2/3)
of the Original Directors and Additional Original Directors then still in
office (such directors also becoming "Additional Original Directors"
immediately following their election) (such individuals being the
"Continuing Directors"), cease for any reason to constitute a majority of
the members of the Board;
(iii) the stockholders of the Company shall approve a merger,
consolidation, recapitalization, or reorganization of the Company, a
reverse stock split of the outstanding voting securities of the Company, or
consummation of any such transaction if stockholder approval is not sought
or obtained, other than any such transaction which would result in at least
75% of the total voting power represented by the voting securities of the
surviving entity outstanding immediately after such transaction being
Beneficially Owned by at least 75% of the holders of the outstanding voting
securities of the Company immediately prior to the transaction, with the
voting power of each
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such continuing holder relative to other such continuing holders not
substantially altered in the transaction; or
(iv) the stockholders of the Company shall approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by
the Company of all or a substantial portion of the Company's assets (i.e.,
50% or more of the total assets of the Company).
(b) The rights represented by this Warrant may be exercised by the
Warrantholder of record, in whole, or from time to time in part, by (a)
surrender of this Warrant, accompanied by either the Exercise Form annexed
hereto, or if the Warrantholder decides to exercise the Warrant pursuant to
the broker-assisted cashless exercise program instituted by the Company, an
applicable exercise form provided by the Company (the "Exercise Form") duly
executed by the Warrantholder of record and specifying the number of Warrant
Shares to be purchased, to the Company at the office of the Company located
at 3232 McKinney Avenue, Suite 900, Dallas, Texas 75204 (or such other office
or agency of the Company as it may designate by notice to the Warrantholder
at the address of such Warrantholder appearing on the books of the Company)
during normal business hours on any day (a "Business Day") other than a
Saturday, Sunday or a day on which the New York Stock Exchange is authorized
to close or on which the Company is otherwise closed for business (a
"Nonbusiness Day") on or after 9:00 A.M. New York City time on the Exercise
Date but not later than 5:00 P.M., New York City time, on the Expiration Date
(or 5:00 P.M., New York City time, on the next succeeding Business Day, if
the Expiration Date is a Nonbusiness Day), (b) delivery of payment to the
Company in cash or by certified or official bank check in New York Clearing
House Funds, of the Exercise Price for the number of Warrant Shares specified
in the Exercise Form (such payment may be made by the Warrantholder directly
or by a designated broker pursuant to the broker-assisted cashless exercise
program instituted by the Company) and (c) such documentation as to the
identity and authority of the Warrantholder as the Company may reasonably
request. Such Warrant Shares shall be deemed by the Company to be issued to
the Warrantholder as the record holder of such Warrant Shares as of the close
of business on the date on which this Warrant shall have been surrendered and
payment made for the Warrant Shares as aforesaid. Certificates for the
Warrant Shares specified in the Exercise Form shall be delivered to the
Warrantholder (or designated broker, as the case may be) as promptly as
practicable, and in any event within 10 business days, thereafter. The stock
certificates so delivered shall be in denominations of at least 1,000 shares
each or such other denomination as may be specified by the Warrantholder and
agreed upon by the Company, and shall be issued in the name of the
Warrantholder or such other name as shall be designated in the Exercise Form.
If this Warrant shall have been exercised only in part, the Company shall, at
the time of delivery of the certificates for the Warrant Shares, deliver to
the Warrantholder (or designated broker, as the case may be) a new Warrant
evidencing the rights to purchase the remaining Warrant Shares, which new
Warrant shall in all other respects be identical with this Warrant. No
adjustments or payments shall be made on or in respect of Warrant Shares
issuable on the exercise of this Warrant for any cash dividends paid or
payable to holders of
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record of Common Stock prior to the date as of which the Warrantholder shall
be deemed to be the record holder of such Warrant Shares.
(c) With the consent of the Compensation Committee, and subject at
all times to, and only to the extent, if any, permitted under and in
accordance with, laws and regulations and other binding obligations or
provisions applicable to the Company, the Company may make a loan to the
Warrantholder with respect to the exercise of the Warrant, including the
payment by the Warrantholder of any or all federal, state and local income or
other taxes due in connection with any exercise. The interest on such loan
shall be the Company's cost of money plus an additional 0.5% at the time the
loan is made and such loan shall be made with recourse against the
Warrantholder. The Compensation Committee shall have the full authority to
determine any other terms and provisions of such a loan.
1.2 LIMITATION ON EXERCISE. This Warrant may only be vested if,
at the time of such vesting, Mr. Rose is an Employee of the Company, except
as provided in Section 1.3. If this Warrant is not exercised prior to 5:00
P.M. on the Expiration Date (or the next succeeding Business Day, if the
Expiration Date is a Nonbusiness Day), this Warrant, or any new Warrant
issued pursuant to Section 1.1, shall cease to be exercisable and shall
become void and all rights of the Warrantholder hereunder shall cease. This
Warrant shall not be exercisable, and no Warrant Shares shall be issued
hereunder, prior to 9:00 A.M., New York City time, on the Exercise Date.
1.3 EXERCISE UPON TERMINATION. Upon termination of Mr. Rose's
employment with the Company, this Warrant may be exercised during the three
month period following such termination of employment, but only to the extent
that this Warrant was exercisable immediately prior to such termination of
employment. Notwithstanding the foregoing, if such termination is for cause,
the right to exercise this Warrant shall terminate upon such termination. In
no event shall this Warrant be exercisable for more than the maximum number
of shares that the Warrantholder was entitled to purchase at the date of
termination of the relationship with the Company. Subject to the foregoing,
in the event of Mr. Rose's death, this Warrant may be exercised by Mr. Rose's
legal representative through the Expiration Date.
1.4 PAYMENT OF TAXES. The issuance of certificates for Warrant
Shares shall be made without charge to the Warrantholder for any stock
transfer or other issuance tax in respect thereto; PROVIDED, HOWEVER, that
the Warrantholder shall be required to pay any and all taxes which may be
payable in respect to any transfer involved in the issuance and delivery of
any certificates for Warrant Shares in a name other than that of the then
Warrantholder as reflected upon the books of the Company.
1.5 DIVISIBILITY OF WARRANT. This Warrant may be divided into
warrants representing one Warrant Share or multiples thereof, upon surrender
at the principal office of
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<PAGE>
the Company on any Business Day, without charge to any Warrantholder, except
as provided below. The Warrantholder will be charged for reasonable
out-of-pocket costs incurred by the Company in connection with the division
of this Warrant into Warrants representing fewer than one thousand (1,000)
Warrant Shares. Upon any such division, the Warrants may be transferred of
record to a name other than that of the Warrantholder of record; PROVIDED,
HOWEVER, that the Warrantholder shall be required to pay any and all transfer
taxes with respect thereto.
2. RESERVATION AND LISTING OF SHARES, ETC.
All Warrant Shares which are issued upon the exercise of the rights
represented by this Warrant shall, upon issuance and payment of the Exercise
Price, be validly issued, fully paid and nonassessable and free from all
taxes, liens, security interests, charges and other encumbrances with respect
to the issue thereof other than taxes in respect of any transfer occurring
contemporaneously with such issue. During the period within which this
Warrant may be exercised, the Company shall at all times have authorized and
reserved, and keep available free from preemptive rights, a sufficient number
of shares of Common Stock to provide for the exercise of this Warrant, and
shall at its expense use its best efforts to procure such listing thereof
(subject to official notice of issuance) as then may be required on all stock
exchanges on which the Common Stock is then listed or on the Nasdaq National
Market. The Company shall, from time to time, take all such action as may be
required to assure that the par value per share of the Warrant Shares is at
all times equal to or less than the then effective Exercise Price.
3. EXCHANGE, LOSS OR DESTRUCTION OF WARRANT.
If permitted by Section 1.5 and in accordance with the provisions
thereof, upon surrender of this Warrant to the Company with a duly executed
instrument of assignment and funds sufficient to pay any transfer tax, the
Company shall, without charge, execute and deliver a new Warrant of like
tenor in the name of the assignee named in such instrument of assignment and
this Warrant shall promptly be canceled. Upon receipt by the Company of
evidence satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant, and, in the case of loss, theft or destruction, of such bond or
indemnification as the Company may reasonably require, and, in the case of
such mutilation, upon surrender and cancellation of this Warrant, the Company
will execute and deliver a new Warrant of like tenor. The term "Warrant" as
used herein includes any Warrants issued in substitution or exchange of this
Warrant.
4. OWNERSHIP OF WARRANT.
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The Company may deem and treat the person in whose name this
Warrant is registered as the holder and owner hereof (notwithstanding any
notations of ownership or writing hereon made by anyone other than the
Company) for all purposes and shall not be affected by any notice to the
contrary, until presentation of this Warrant for registration of transfer as
provided in Section 1.1 or in Section 3.
5. CERTAIN ADJUSTMENTS.
The Exercise Price at which Warrant Shares may be purchased
hereunder, and the number of Warrant Shares to be purchased upon exercise
hereof, are subject to change or adjustment as follows:
5.1 The number of Warrant Shares purchasable upon the exercise of
this Warrant and the Exercise Price shall be subject to adjustment as follows:
(a) In case the Company shall (i) pay a dividend in shares of
Common Stock or make a distribution in shares of Common Stock (ii) subdivide
its outstanding shares of Common Stock into a greater number of shares of
Common Stock, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock or (iv) issue by reclassification of
its shares of Common Stock other securities of the Company (including any
such reclassification in connection with a consolidation or merger in which
the Company is the surviving corporation), the number of Warrant Shares
purchasable upon exercise of this Warrant shall be adjusted so that the
Warrantholder shall be entitled to receive the kind and number of Warrant
Shares or other securities of the Company which he would have owned or have
been entitled to receive after the happening of any of the events described
above, had this Warrant been exercised immediately prior to the happening of
such event or any record date with respect thereto. An adjustment made
pursuant to this paragraph (a) shall become effective immediately after the
effective date of such event retroactive to the record date, if any, for such
event.
(b) In case the Company shall:
(i) issue rights, options or warrants to all holders of its
outstanding Common Stock, without any charge to such holders,
entitling them to subscribe for or purchase shares of Common
Stock at a price per share which is lower at the record date for
the determination of stockholders entitled to receive such
rights, options or warrants than the then current market price
per share of Common Stock, or
(ii) distribute to all holders of its shares of Common Stock
evidences of its indebtedness or assets (excluding cash dividends
or distributions payable out of consolidated earnings or earned
surplus and dividends or distributions referred to in paragraph
(a) of this Section 5.1) or rights,
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<PAGE>
options or warrants, or convertible or exchangeable securities,
containing the right to subscribe for or purchase shares of
Common Stock,
appropriate adjustments shall be made to the number of Warrant Shares
purchasable upon the exercise of the Warrant and/or the Exercise Price in
order to preserve the relative rights and interests of the Warrantholders,
such adjustments to be made by the good faith determination of the Board of
Directors of the Company.
5.2 VOLUNTARY ADJUSTMENT BY THE COMPANY. The Company may, at its
option, at any time during the term of the Warrants, reduce the then current
Exercise Price to any amount, consistent with applicable law, deemed
appropriate by the Board of Directors of the Company.
5.3 NOTICE OF ADJUSTMENT. Whenever the number of Warrant Shares
or the Exercise Price of such Warrant Shares is adjusted, as herein provided,
the Company shall promptly mail first class, postage prepaid, to all
Warrantholders, notice of such adjustment.
5.4 NO ADJUSTMENT FOR CASH DIVIDENDS. No adjustment in respect of
any cash dividends shall be made during the term of this Warrant or upon the
exercise of this Warrant.
5.5 PRESERVATION OF PURCHASE RIGHTS UPON MERGER, CONSOLIDATION,
ETC. In case of any consolidation of the Company with or merger of the
Company into another corporation or in case of any sale, transfer or lease to
another corporation of all or substantially all of the property of the
Company, the Company or such successor or purchasing corporation, as the case
may be, shall execute with the Warrantholders an agreement that the
Warrantholders shall have the right thereafter upon payment of the Exercise
Price in effect immediately prior to such action to purchase upon exercise of
this Warrant the kind and amount of shares and other securities and property
which such holder would have owned or have been entitled to receive after the
happening of such consolidation, merger, sale, transfer or lease had this
Warrant been exercised immediately prior to such action; PROVIDED, HOWEVER,
that no adjustment in respect of cash dividends, interest or other income on
or from such shares or other securities and property shall be made during the
term of this Warrant or upon the exercise of this Warrant. Such agreement
shall provide for adjustments, which shall be as nearly equivalent as
practicable to the adjustments provided for in this Section 5. The
provisions of this Section 5.5 shall apply similarly to successive
consolidations, mergers, sales, transfers or leases.
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<PAGE>
6. REGISTRATION RIGHTS OF WARRANT SHARES ON FORM S-8
On or prior to September 30, 1999, the Company shall file a
registration statement covering the Warrant Shares on a Form S-8, which
registration statement shall be effective upon the filing thereof. The
Company shall use its best efforts to keep such Form S-8 current and
effective until the earlier of the Expiration Date or the date this Warrant
has been exercised in full. The Company shall use its best efforts to list
the Warrant Shares on any securities exchange (or on the Nasdaq National
Market) on which other shares of Common Stock are listed.
7. MISCELLANEOUS.
7.1 ENTIRE AGREEMENT. This Warrant constitutes the entire
agreement between the Company and the Warrantholder with respect to this
Warrant and the Warrant Shares.
7.2 BINDING EFFECTS; BENEFITS. This Warrant shall inure to the
benefit of and shall be binding upon the Company, the Warrantholder and
holders of Warrant Shares and their respective heirs, legal representatives,
successors and assigns. Nothing in this Warrant, expressed or implied, is
intended to or shall confer on any person other than the Company, the
Warrantholders and holders of Warrant Shares, or their respective heirs,
legal representatives, successors or assigns, any rights, remedies,
obligations or liabilities under or by reason of this Warrant or the Warrant
Shares.
7.3 AMENDMENTS AND WAIVERS. This Warrant may not be modified or
amended except by an instrument in writing signed by the Company and
Warrantholders that hold Warrants entitling them to purchase at least 50% of
the Warrant Shares. The Company, any Warrantholder or holder of Warrant
Shares may, by an instrument in writing, waive compliance by the other party
with any term or provision of this Warrant on the part of such other party
hereto to be performed or complied with. The waiver by any such party of a
breach of any term or provision of this Warrant shall not be construed as a
waiver of any subsequent breach.
7.4 SECTION AND OTHER HEADINGS. The section and other headings
contained in this Warrant are for reference purposes only and shall not be
deemed to be a part of this Warrant or to affect the meaning or
interpretation of this Warrant.
7.5 FURTHER ASSURANCES. Each of the Company, the Warrantholders
and holders of Warrant Shares shall do and perform all such further acts and
things and execute and deliver all such other certificates, instruments
and/or documents (including without limitation, such proxies and/or powers of
attorney as may be necessary or appropriate) as any party hereto may, at any
time and from time to time, reasonably request in connection with the
performance of any of the provisions of this Warrant.
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<PAGE>
7.6 NOTICES. All demands, requests, notices and other
communications required or permitted to be given under this Warrant shall be
in writing and shall be deemed to have been duly given if delivered
personally or sent by United States certified or registered first class mail,
postage prepaid, to the parties hereto at the following addresses or at such
other address as any party hereto shall hereafter specify by notice to the
other party hereto:
(a) if to the Company, addressed to:
F.Y.I. Incorporated
3232 McKinney Avenue
Suite 900
Dallas, Texas 75204
Attention: Ed H. Bowman, Jr.
(b) if to any Warrantholder or holder of Warrant Shares, addressed to
the address of such person appearing on the books of the Company.
Except as otherwise provided herein, all such demands, requests,
notices and other communications shall be deemed to have been received on the
date of personal delivery thereof or on the third Business Day after the
mailing thereof.
7.7 SEPARABILITY. Any term or provision of this Warrant which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable any other term or provision of this
Warrant or affecting the validity or enforceability of any of the terms or
provisions of this Warrant in any other jurisdiction.
7.8 FRACTIONAL SHARES. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. With
respect to any fraction of a share called for upon any exercise hereof, the
Company shall pay to the Warrantholder an amount in cash equal to such
fraction multiplied by the current market price (as determined as of the date
of exercise, and with reference to the applicable trading market, in
accordance with paragraph (d) of Section 5.1) of a share of such stock as of
the date of such exercise.
7.9 RIGHTS OF THE HOLDER. The Warrantholder shall not, solely by
virtue of this Warrant, be entitled to any rights of a stockholder of the
Company, either at law or in equity.
7.10 GOVERNING LAW. This Warrant shall be deemed to be a contract
made under the laws of the State of Delaware and for all purposes shall be
governed by and construed in accordance with the laws of such State
applicable to contracts made and performed in Delaware.
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<PAGE>
7.11 EFFECT OF STOCK SPLITS, ETC. Whenever any rights under this
Agreement are available only when at least a specified minimum number of
Warrant Shares is involved, such number shall be appropriately adjusted to
reflect any stock split, stock dividend, combination of securities into a
smaller number of securities or reclassification of stock.
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<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant to be
signed by its duly authorized officer.
F.Y.I. INCORPORATED
By:
--------------------------------
Name: Ed H. Bowman, Jr.
Title: President and
Chief Executive Officer
Dated: May 19, 1999
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<PAGE>
EXERCISE FORM
(To be executed upon exercise of this Warrant)
The undersigned, the record holder of this Warrant, hereby
irrevocably elects to exercise the right, represented by this Warrant, to
purchase __________ of the Warrant Shares and herewith tenders payment for
such Warrant Shares to the order of F.Y.I. INCORPORATED, in the amount of
$_______ in accordance with the terms of this Warrant. The undersigned
requests that a certificate for such Warrant Shares be registered in the name
of _________________________________ and that such certificate be delivered
to _________________________ whose address is
______________________________________________.
Date _________________ Signature _________________________
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<PAGE>
Exhibit 4.12
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF NOR ANY
INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE SOLD, ASSIGNED, PLEDGED,
HYPOTHECATED, ENCUMBERED OR IN ANY OTHER MANNER TRANSFERRED OR DISPOSED OF
EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT OF 1933, AS AMENDED, AND THE
TERMS AND CONDITIONS HEREOF. THE HOLDER OF THIS WARRANT AND THE SECURITIES
ISSUABLE UPON EXERCISE HEREOF ARE SUBJECT TO THE RESTRICTIONS HEREIN SET
FORTH.
VOID AFTER 5:00 P.M. NEW YORK CITY TIME, MAY 19, 2009
****************************************
No. 23
WARRANT
to
PURCHASE COMMON STOCK
of
F.Y.I. INCORPORATED
****************************************
This certifies that, for good and valuable consideration, F.Y.I.
Incorporated, a Delaware corporation (the "Company"), grants to Timothy J.
Barker or permitted registered assigns (the "Warrantholder" or
"Warrantholders"), the right to subscribe for and purchase from the Company, at
$26.75 per share (the "Exercise Price"), Ten Thousand (10,000) shares of the
Company's Common Stock, par value $0.01 per share (the "Common Stock"), subject
to the provisions and upon the terms and conditions herein set forth. The
Exercise Price and the number of Warrant Shares are subject to adjustment from
time to time as provided in Section 5.
<PAGE>
1. DURATION AND EXERCISE OF WARRANT; LIMITATION EXERCISE PAYMENT
OF TAXES.
a. DURATION AND EXERCISE OF WARRANT.
(a) This Warrant may be exercised as to 25% from and after 9:00 A.M.
New York City time on May 19, 2001 (the "Initial Exercise Date") and the
remaining 75% of the underlying shares on May 19, 2002 (the "Second Exercise
Date"). The Initial Exercise Date or the Second Exercise Date, as applicable,
is hereinafter referred to as the "Exercise Date". This Warrant expires at 5:00
P.M., New York City time on May 19, 2009 (the "Expiration Date"). In addition,
in the event of a Change in Control of the Company, the right to exercise 100%
of the underlying shares shall immediately vest. A "Change in Control" shall be
deemed to have occurred if:
(i) any person, other than the Company or an employee benefit plan of
the Company, acquires directly or indirectly the Beneficial Ownership (as
defined in Section 13(d) of the Securities and Exchange Act of 1934, as
amended (the" Exchange Act")) of any voting security of the Company and
immediately after such acquisition such Person is, directly or indirectly,
the Beneficial Owner of voting securities representing 50% or more of the
total voting power of all of the then-outstanding voting securities of the
Company;
(ii) the individuals (A) who, as of the closing date of the Initial
Public Offering, constitute the Board (the "Original Directors") or (B) who
thereafter are elected to the Board and whose election, or nomination for
election, to the Board was approved by a vote of at least two-thirds (2/3)
of the Original Directors then still in office (such directors becoming
"Additional Original Directors" immediately following their election) or
(C) who are elected to the Board and whose election, or nomination for
election, to the Board was approved by a vote of at least two-thirds (2/3)
of the Original Directors and Additional Original Directors then still in
office (such directors also becoming "Additional Original Directors"
immediately following their election) (such individuals being the
"Continuing Directors"), cease for any reason to constitute a majority of
the members of the Board;
(iii) the stockholders of the Company shall approve a merger,
consolidation, recapitalization, or reorganization of the Company, a
reverse stock split of the outstanding voting securities of the Company, or
consummation of any such transaction if stockholder approval is not sought
or obtained, other than any such transaction which would result in at least
75% of the total voting power represented by the voting securities of the
surviving entity outstanding immediately after such transaction being
Beneficially Owned by at least 75% of the holders of the outstanding voting
securities of the Company immediately prior to the transaction, with the
voting power of each
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<PAGE>
such continuing holder relative to other such continuing holders not
substantially altered in the transaction; or
(iv) the stockholders of the Company shall approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by
the Company of all or a substantial portion of the Company's assets (i.e.,
50% or more of the total assets of the Company).
(b) The rights represented by this Warrant may be exercised by the
Warrantholder of record, in whole, or from time to time in part, by (a)
surrender of this Warrant, accompanied by either the Exercise Form annexed
hereto, or if the Warrantholder decides to exercise the Warrant pursuant to
the broker-assisted cashless exercise program instituted by the Company, an
applicable exercise form provided by the Company (the "Exercise Form") duly
executed by the Warrantholder of record and specifying the number of Warrant
Shares to be purchased, to the Company at the office of the Company located
at 3232 McKinney Avenue, Suite 900, Dallas, Texas 75204 (or such other office
or agency of the Company as it may designate by notice to the Warrantholder
at the address of such Warrantholder appearing on the books of the Company)
during normal business hours on any day (a "Business Day") other than a
Saturday, Sunday or a day on which the New York Stock Exchange is authorized
to close or on which the Company is otherwise closed for business (a
"Nonbusiness Day") on or after 9:00 A.M. New York City time on the Exercise
Date but not later than 5:00 P.M., New York City time, on the Expiration Date
(or 5:00 P.M., New York City time, on the next succeeding Business Day, if
the Expiration Date is a Nonbusiness Day), (b) delivery of payment to the
Company in cash or by certified or official bank check in New York Clearing
House Funds, of the Exercise Price for the number of Warrant Shares specified
in the Exercise Form (such payment may be made by the Warrantholder directly
or by a designated broker pursuant to the broker-assisted cashless exercise
program instituted by the Company) and (c) such documentation as to the
identity and authority of the Warrantholder as the Company may reasonably
request. Such Warrant Shares shall be deemed by the Company to be issued to
the Warrantholder as the record holder of such Warrant Shares as of the close
of business on the date on which this Warrant shall have been surrendered and
payment made for the Warrant Shares as aforesaid. Certificates for the
Warrant Shares specified in the Exercise Form shall be delivered to the
Warrantholder (or designated broker, as the case may be) as promptly as
practicable, and in any event within 10 business days, thereafter. The stock
certificates so delivered shall be in denominations of at least 1,000 shares
each or such other denomination as may be specified by the Warrantholder and
agreed upon by the Company, and shall be issued in the name of the
Warrantholder or such other name as shall be designated in the Exercise Form.
If this Warrant shall have been exercised only in part, the Company shall, at
the time of delivery of the certificates for the Warrant Shares, deliver to
the Warrantholder (or designated broker, as the case may be) a new Warrant
evidencing the rights to purchase the remaining Warrant Shares, which new
Warrant shall in all other respects be identical with this Warrant. No
adjustments or payments shall be made on or in respect of Warrant Shares
issuable on the exercise of this Warrant for any cash dividends paid or
payable to holders of
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<PAGE>
record of Common Stock prior to the date as of which the Warrantholder shall
be deemed to be the record holder of such Warrant Shares.
(c) With the consent of the Compensation Committee, and subject at
all times to, and only to the extent, if any, permitted under and in
accordance with, laws and regulations and other binding obligations or
provisions applicable to the Company, the Company may make a loan to the
Warrantholder with respect to the exercise of the Warrant, including the
payment by the Warrantholder of any or all federal, state and local income or
other taxes due in connection with any exercise. The interest on such loan
shall be the Company's cost of money plus an additional 0.5% at the time the
loan is made and such loan shall be made with recourse against the
Warrantholder. The Compensation Committee shall have the full authority to
determine any other terms and provisions of such a loan.
1.2 LIMITATION ON EXERCISE. This Warrant may only be vested if,
at the time of such vesting, Mr. Barker is an Employee of the Company, except
as provided in Section 1.3. If this Warrant is not exercised prior to 5:00
P.M. on the Expiration Date (or the next succeeding Business Day, if the
Expiration Date is a Nonbusiness Day), this Warrant, or any new Warrant
issued pursuant to Section 1.1, shall cease to be exercisable and shall
become void and all rights of the Warrantholder hereunder shall cease. This
Warrant shall not be exercisable, and no Warrant Shares shall be issued
hereunder, prior to 9:00 A.M., New York City time, on the Exercise Date.
1.3 EXERCISE UPON TERMINATION. Upon termination of Mr. Barker's
employment with the Company, this Warrant may be exercised during the three
month period following such termination of employment, but only to the extent
that this Warrant was exercisable immediately prior to such termination of
employment. Notwithstanding the foregoing, if such termination is for cause,
the right to exercise this Warrant shall terminate upon such termination. In
no event shall this Warrant be exercisable for more than the maximum number
of shares that the Warrantholder was entitled to purchase at the date of
termination of the relationship with the Company. Subject to the foregoing,
in the event of Mr. Barker's death, this Warrant may be exercised by Mr.
Barker's legal representative through the Expiration Date.
1.4 PAYMENT OF TAXES. The issuance of certificates for Warrant
Shares shall be made without charge to the Warrantholder for any stock
transfer or other issuance tax in respect thereto; PROVIDED, HOWEVER, that
the Warrantholder shall be required to pay any and all taxes which may be
payable in respect to any transfer involved in the issuance and delivery of
any certificates for Warrant Shares in a name other than that of the then
Warrantholder as reflected upon the books of the Company.
1.5 DIVISIBILITY OF WARRANT. This Warrant may be divided into
warrants representing one Warrant Share or multiples thereof, upon surrender
at the principal office of
4
<PAGE>
the Company on any Business Day, without charge to any Warrantholder, except
as provided below. The Warrantholder will be charged for reasonable
out-of-pocket costs incurred by the Company in connection with the division
of this Warrant into Warrants representing fewer than one thousand (1,000)
Warrant Shares. Upon any such division, the Warrants may be transferred of
record to a name other than that of the Warrantholder of record; PROVIDED,
HOWEVER, that the Warrantholder shall be required to pay any and all transfer
taxes with respect thereto.
2. RESERVATION AND LISTING OF SHARES, ETC.
All Warrant Shares which are issued upon the exercise of the rights
represented by this Warrant shall, upon issuance and payment of the Exercise
Price, be validly issued, fully paid and nonassessable and free from all
taxes, liens, security interests, charges and other encumbrances with respect
to the issue thereof other than taxes in respect of any transfer occurring
contemporaneously with such issue. During the period within which this
Warrant may be exercised, the Company shall at all times have authorized and
reserved, and keep available free from preemptive rights, a sufficient number
of shares of Common Stock to provide for the exercise of this Warrant, and
shall at its expense use its best efforts to procure such listing thereof
(subject to official notice of issuance) as then may be required on all stock
exchanges on which the Common Stock is then listed or on the Nasdaq National
Market. The Company shall, from time to time, take all such action as may be
required to assure that the par value per share of the Warrant Shares is at
all times equal to or less than the then effective Exercise Price.
3. EXCHANGE, LOSS OR DESTRUCTION OF WARRANT.
If permitted by Section 1.5 and in accordance with the provisions
thereof, upon surrender of this Warrant to the Company with a duly executed
instrument of assignment and funds sufficient to pay any transfer tax, the
Company shall, without charge, execute and deliver a new Warrant of like
tenor in the name of the assignee named in such instrument of assignment and
this Warrant shall promptly be canceled. Upon receipt by the Company of
evidence satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant, and, in the case of loss, theft or destruction, of such bond or
indemnification as the Company may reasonably require, and, in the case of
such mutilation, upon surrender and cancellation of this Warrant, the Company
will execute and deliver a new Warrant of like tenor. The term "Warrant" as
used herein includes any Warrants issued in substitution or exchange of this
Warrant.
4. OWNERSHIP OF WARRANT.
The Company may deem and treat the person in whose name this
Warrant is registered as the holder and owner hereof (notwithstanding any
notations of ownership or writing hereon made by anyone other than the
Company) for all purposes and shall not be
5
<PAGE>
affected by any notice to the contrary, until presentation of this Warrant
for registration of transfer as provided in Section 1.1 or in Section 3.
5. CERTAIN ADJUSTMENTS.
The Exercise Price at which Warrant Shares may be purchased
hereunder, and the number of Warrant Shares to be purchased upon exercise
hereof, are subject to change or adjustment as follows:
5.1 The number of Warrant Shares purchasable upon the exercise of
this Warrant and the Exercise Price shall be subject to adjustment as follows:
(a) In case the Company shall (i) pay a dividend in shares of
Common Stock or make a distribution in shares of Common Stock (ii) subdivide
its outstanding shares of Common Stock into a greater number of shares of
Common Stock, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock or (iv) issue by reclassification of
its shares of Common Stock other securities of the Company (including any
such reclassification in connection with a consolidation or merger in which
the Company is the surviving corporation), the number of Warrant Shares
purchasable upon exercise of this Warrant shall be adjusted so that the
Warrantholder shall be entitled to receive the kind and number of Warrant
Shares or other securities of the Company which he would have owned or have
been entitled to receive after the happening of any of the events described
above, had this Warrant been exercised immediately prior to the happening of
such event or any record date with respect thereto. An adjustment made
pursuant to this paragraph (a) shall become effective immediately after the
effective date of such event retroactive to the record date, if any, for such
event.
(b) In case the Company shall:
(i) issue rights, options or warrants to all holders of its
outstanding Common Stock, without any charge to such holders,
entitling them to subscribe for or purchase shares of Common
Stock at a price per share which is lower at the record date for
the determination of stockholders entitled to receive such
rights, options or warrants than the then current market price
per share of Common Stock, or
(ii) distribute to all holders of its shares of Common Stock
evidences of its indebtedness or assets (excluding cash dividends
or distributions payable out of consolidated earnings or earned
surplus and dividends or distributions referred to in paragraph
(a) of this Section 5.1) or rights, options or warrants, or
convertible or exchangeable securities, containing the right to
subscribe for or purchase shares of Common Stock,
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<PAGE>
appropriate adjustments shall be made to the number of Warrant Shares
purchasable upon the exercise of the Warrant and/or the Exercise Price in
order to preserve the relative rights and interests of the Warrantholders,
such adjustments to be made by the good faith determination of the Board of
Directors of the Company.
5.2 VOLUNTARY ADJUSTMENT BY THE COMPANY. The Company may, at its
option, at any time during the term of the Warrants, reduce the then current
Exercise Price to any amount, consistent with applicable law, deemed
appropriate by the Board of Directors of the Company.
5.3 NOTICE OF ADJUSTMENT. Whenever the number of Warrant Shares
or the Exercise Price of such Warrant Shares is adjusted, as herein provided,
the Company shall promptly mail first class, postage prepaid, to all
Warrantholders, notice of such adjustment.
5.4 NO ADJUSTMENT FOR CASH DIVIDENDS. No adjustment in respect of
any cash dividends shall be made during the term of this Warrant or upon the
exercise of this Warrant.
5.5 PRESERVATION OF PURCHASE RIGHTS UPON MERGER, CONSOLIDATION,
ETC. In case of any consolidation of the Company with or merger of the
Company into another corporation or in case of any sale, transfer or lease to
another corporation of all or substantially all of the property of the
Company, the Company or such successor or purchasing corporation, as the case
may be, shall execute with the Warrantholders an agreement that the
Warrantholders shall have the right thereafter upon payment of the Exercise
Price in effect immediately prior to such action to purchase upon exercise of
this Warrant the kind and amount of shares and other securities and property
which such holder would have owned or have been entitled to receive after the
happening of such consolidation, merger, sale, transfer or lease had this
Warrant been exercised immediately prior to such action; PROVIDED, HOWEVER,
that no adjustment in respect of cash dividends, interest or other income on
or from such shares or other securities and property shall be made during the
term of this Warrant or upon the exercise of this Warrant. Such agreement
shall provide for adjustments, which shall be as nearly equivalent as
practicable to the adjustments provided for in this Section 5. The
provisions of this Section 5.5 shall apply similarly to successive
consolidations, mergers, sales, transfers or leases.
6. REGISTRATION RIGHTS OF WARRANT SHARES ON FORM S-8
On or prior to September 30, 1999, the Company shall file a
registration statement covering the Warrant Shares on a Form S-8, which
registration statement shall be effective upon the filing thereof. The
Company shall use its best efforts to keep such Form S-8 current and
effective until the earlier of the Expiration Date or the date this Warrant
has been exercised in full. The Company shall use its best efforts to list
the Warrant Shares on any
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<PAGE>
securities exchange (or on the Nasdaq National Market) on which other shares
of Common Stock are listed.
7. MISCELLANEOUS.
7.1 ENTIRE AGREEMENT. This Warrant constitutes the entire
agreement between the Company and the Warrantholder with respect to this
Warrant and the Warrant Shares.
7.2 BINDING EFFECTS; BENEFITS. This Warrant shall inure to the
benefit of and shall be binding upon the Company, the Warrantholder and
holders of Warrant Shares and their respective heirs, legal representatives,
successors and assigns. Nothing in this Warrant, expressed or implied, is
intended to or shall confer on any person other than the Company, the
Warrantholders and holders of Warrant Shares, or their respective heirs,
legal representatives, successors or assigns, any rights, remedies,
obligations or liabilities under or by reason of this Warrant or the Warrant
Shares.
7.3 AMENDMENTS AND WAIVERS. This Warrant may not be modified or
amended except by an instrument in writing signed by the Company and
Warrantholders that hold Warrants entitling them to purchase at least 50% of
the Warrant Shares. The Company, any Warrantholder or holder of Warrant
Shares may, by an instrument in writing, waive compliance by the other party
with any term or provision of this Warrant on the part of such other party
hereto to be performed or complied with. The waiver by any such party of a
breach of any term or provision of this Warrant shall not be construed as a
waiver of any subsequent breach.
7.4 SECTION AND OTHER HEADINGS. The section and other headings
contained in this Warrant are for reference purposes only and shall not be
deemed to be a part of this Warrant or to affect the meaning or
interpretation of this Warrant.
7.5 FURTHER ASSURANCES. Each of the Company, the Warrantholders
and holders of Warrant Shares shall do and perform all such further acts and
things and execute and deliver all such other certificates, instruments
and/or documents (including without limitation, such proxies and/or powers of
attorney as may be necessary or appropriate) as any party hereto may, at any
time and from time to time, reasonably request in connection with the
performance of any of the provisions of this Warrant.
7.6 NOTICES. All demands, requests, notices and other
communications required or permitted to be given under this Warrant shall be
in writing and shall be deemed to have been duly given if delivered
personally or sent by United States certified or registered first class mail,
postage prepaid, to the parties hereto at the following addresses or at such
other address as any party hereto shall hereafter specify by notice to the
other party hereto:
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(a) if to the Company, addressed to:
F.Y.I. Incorporated
3232 McKinney Avenue
Suite 900
Dallas, Texas 75204
Attention: Ed H. Bowman, Jr.
(b) if to any Warrantholder or holder of Warrant Shares, addressed to
the address of such person appearing on the books of the Company.
Except as otherwise provided herein, all such demands, requests,
notices and other communications shall be deemed to have been received on the
date of personal delivery thereof or on the third Business Day after the mailing
thereof.
7.7 SEPARABILITY. Any term or provision of this Warrant which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable any other term or provision of this Warrant
or affecting the validity or enforceability of any of the terms or provisions of
this Warrant in any other jurisdiction.
7.8 FRACTIONAL SHARES. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. With
respect to any fraction of a share called for upon any exercise hereof, the
Company shall pay to the Warrantholder an amount in cash equal to such fraction
multiplied by the current market price (as determined as of the date of
exercise, and with reference to the applicable trading market, in accordance
with paragraph (d) of Section 5.1) of a share of such stock as of the date of
such exercise.
7.9 RIGHTS OF THE HOLDER. The Warrantholder shall not, solely by
virtue of this Warrant, be entitled to any rights of a stockholder of the
Company, either at law or in equity.
7.10 GOVERNING LAW. This Warrant shall be deemed to be a contract
made under the laws of the State of Delaware and for all purposes shall be
governed by and construed in accordance with the laws of such State applicable
to contracts made and performed in Delaware.
7.11 EFFECT OF STOCK SPLITS, ETC. Whenever any rights under this
Agreement are available only when at least a specified minimum number of Warrant
Shares is involved, such number shall be appropriately adjusted to reflect any
stock split, stock dividend, combination of securities into a smaller number of
securities or reclassification of stock.
9
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
by its duly authorized officer.
F.Y.I. INCORPORATED
By:
------------------------------------
Name: Ed H. Bowman, Jr.
Title: President and
Chief Executive Officer
Dated: May 19, 1999
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EXERCISE FORM
(To be executed upon exercise of this Warrant)
The undersigned, the record holder of this Warrant, hereby
irrevocably elects to exercise the right, represented by this Warrant, to
purchase __________ of the Warrant Shares and herewith tenders payment for
such Warrant Shares to the order of F.Y.I. INCORPORATED, in the amount of
$_______ in accordance with the terms of this Warrant. The undersigned
requests that a certificate for such Warrant Shares be registered in the name
of _________________________________ and that such certificate be delivered
to _________________________ whose address is
______________________________________________.
Date _________________ Signature _________________________
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Exhibit 10.52
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") by and between F.Y.I. Incorporated,
a Delaware corporation (the "Company"), and Timothy J. Barker ("Employee") is
hereby entered into and effective as of October 1, 1999. This Agreement hereby
supersedes any other employment agreements or understandings; written or oral,
between the Company and Employee.
R E C I T A L S
The following statements are true and correct:
As of the date of this Agreement, the Company is engaged primarily in the
business of providing document management services.
Employee is employed hereunder by the Company in a confidential relationship
wherein Employee, in the course of his employment with the Company, has and will
continue to become familiar with and aware of information as to the Company's
customers, specific manner of doing business, including the processes,
techniques and trade secrets utilized by the Company, and future plans with
respect thereto, all of which has been and will be established and maintained at
great expense to the Company; this information is a trade secret and constitutes
the valuable goodwill of the Company.
Therefore, in consideration of the mutual promises, terms, covenants and
conditions set forth herein and the performance of each, it is hereby agreed as
follows:
A G R E E M E N T S
1. EMPLOYMENT AND DUTIES.
(a) The Company hereby employs Employee as Senior Vice President and Chief
Financial Officer. As such, Employee shall have responsibilities, duties and
authority reasonably accorded to and expected of a Senior Vice President and
Chief Financial Officer and will report directly to the Chief Executive Officer
of the Company. Employee hereby accepts this employment upon the terms and
conditions herein contained and, subject to paragraph 1(b), agrees to devote his
working time, attention and efforts to promote and further the business of the
Company.
<PAGE>
(b) Employee shall not, during the term of his employment hereunder, be
engaged in any other business activity pursued for gain, profit or other
pecuniary advantage except to the extent that such activity (i) does not
interfere with Employee's duties and responsibilities hereunder and (ii) does
not violate paragraph 3 hereof. The foregoing limitations shall not be
construed as prohibiting Employee from serving on the boards of directors of
other companies or making personal investments in such form or manner as will
require his services, other than to a minimal extent, in the operation or
affairs of the companies or enterprises in which such investments are made nor
violate the terms of paragraph 3 hereof.
2. COMPENSATION. For all services rendered by Employee, the Company
shall compensate Employee as follows:
(a) BASE SALARY. The base salary payable to Employee shall be $225,000
per year, payable on a regular basis in accordance with the Company's standard
payroll procedures but not less than bi-monthly. On at least an annual basis,
the Board of Directors of the Company (the "Board") will review Employee's
performance and may make increases to such base salary if, in its discretion,
any such increase is warranted. Such recommended increase would, in all
likelihood, require approval by the Board or a duly constituted committee
thereof.
(b) INCENTIVE BONUS PLAN. For 1999 and subsequent years, it is the
Company's intent to develop a written Incentive Bonus Plan setting forth the
criteria under which Employee and other officers and key employees will be
eligible to receive year-end bonus awards. Employee shall be eligible for a
bonus opportunity of up to 50% of his base salary in accordance with this
Incentive Bonus Plan. The award of any bonus shall be based on the total
performance of the Company, but shall be related to the earnings per share
growth of the Company and shall be payable in various increments based on the
performance of the Company versus targeted goals. The incremental payments and
the Company's targeted performance shall be determined by the Board or the
compensation committee thereof.
(c) EXECUTIVE PERQUISITES, BENEFITS AND OTHER COMPENSATION. Employee
shall be entitled to receive additional benefits and compensation from the
Company in such form and to such extent as specified below:
(i) Payment of all premiums for coverage for Employee and his
dependent family members under health, hospitalization, disability, dental,
life and other employee benefit plans that the Company may have in effect
from time to time, with benefits provided to Employee under this clause to
include coverage for all pre-existing conditions and not less favorable
than the benefits provided to other Company executives.
(ii) Reimbursement for all business travel and other out-of-pocket
expenses reasonably incurred by Employee in the performance of his services
pursuant to this Agreement. All reimbursable expenses shall be
appropriately documented in reasonable
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detail by Employee upon submission of any request for reimbursement, and
in a format and manner consistent with the Company's expense reporting
policy.
(iii) Four (4) weeks paid vacation for each year during the period of
employment or such greater amount as may be afforded officers and key
employees generally under the Company's policies in effect from time to
time (pro rated for any year in which Employee is employed for less than
the full year).
(iv) An automobile allowance in the amount of $500 per month.
(v) The Company shall provide Employee with other executive
perquisites as may be available to or deemed appropriate for Employee by
the Board and participation in all other Company-wide employee benefits as
available from time to time, which will include participation in the
Company's 1995 Long-Term Incentive Compensation Plan.
(vi) The Company shall establish a 401(k) Plan and Non-Qualified
Savings Plan and the Employee may participate in this 401(k) Plan and
Non-Qualified Savings Plan. The terms of such Plan shall be approved by
the Board or by the compensation committee thereof.
(vii) The Company shall pay for Employee's attendance at continuing
education seminars to maintain Certified Public Accounting certification to
the extent that Employees' schedule allows and reimburse Employee for (a)
any registration fee and (b) travel and lodging to the extent such seminars
are not available in Dallas, Texas, and (c) fees for AICPA and other state
and local CPA associations.
(viii) The Company shall cover Employee under its Director and Officer
Insurance Policy at the same level of coverage as other comparably situated
executives and will purchase appropriate riders to such policy to cover
malpractice claims.
(ix) The Company shall provide Employee with such other compensation
as may be determined by the Board or compensation committee.
3. NON-COMPETITION AGREEMENT.
(a) Subject to Section 5(d), Employee will not, during the period
of his employment by or with the Company, and for a period of two (2) years
immediately following the termination of his employment under this Agreement,
for any reason whatsoever, directly or indirectly, for himself or on behalf of
or in conjunction with any other person, persons, company, partnership,
corporation or business of whatever nature:
(i) engage, as an officer, director, shareholder, owner,
partner, joint venturer, or in a managerial capacity, whether as an
employee, independent
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<PAGE>
contractor, consultant or advisor, or as a sales representative, in
any business selling any products or services in direct competition
with the Company, within 100 miles of (i) the principal executive
offices of the Company or (ii) any place to which the Company
provides products or services or in which the Company is in the
process of initiating business operations during the term of this
covenant (the "Territory");
(ii) call upon any person who is, at that time, within the
Territory, an employee of the Company (including the subsidiaries
thereof) in a managerial capacity for the purpose or with the intent
of enticing such employee away from or out of the employ of the
Company (including the subsidiaries thereof), provided that Employee
shall be permitted to call upon and hire any member of his immediate
family;
(iii) call upon any person or entity which is, at that time, or
which has been, within one (1) year prior to that time, a customer of
the Company (including the subsidiaries thereof) within the Territory
for the purpose of soliciting or selling products or services in
direct competition with the Company within the Territory;
(iv) call upon any prospective acquisition candidate, on
Employee's own behalf or on behalf of any competitor, which candidate
was either called upon by the Company (including the subsidiaries
thereof) or for which the Company made an acquisition analysis, for
the purpose of acquiring such entity; or
(v) disclose customers, whether in existence or proposed,
of the Company (or the Subsidiaries thereof) to any person, firm,
partnership, corporation or business for any reason or purpose
whatsoever.
Notwithstanding the above, the foregoing covenant shall not be deemed to
prohibit Employee from acquiring as an investment not more than three percent
(3%) of the capital stock of a competing business, whose stock is traded on a
national securities exchange or over-the-counter.
(b) Because of the difficulty of measuring economic losses to the Company
as a result of a breach of the foregoing covenant, and because of the immediate
and irreparable damage that could be caused to the Company for which it would
have no other adequate remedy, Employee agrees that the foregoing covenant may
be enforced by the Company in the event of breach by his by injunctions and
restraining orders.
(c) It is agreed by the parties that the foregoing covenants in this
paragraph 3 impose a reasonable restraint on Employee in light of the activities
and business of the Company (including the Company's subsidiaries) on the date
of the execution of this Agreement and the current plans of the Company
(including the Company's subsidiaries); but it is also the intent of the Company
and Employee that such covenants be construed and enforced in accordance with
the changing activities, business and locations of the Company (including the
Company's subsidiaries) throughout the term
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<PAGE>
of this covenant, whether before or after the date of termination of the
employment of Employee, subject to the following paragraph. For example, if,
during the term of this Agreement, the Company (including the Company's
subsidiaries) engages in new and different activities, enters a new business
or established new locations for its current activities or business in
addition to or other than the activities or business enumerated under the
Recitals above or the locations currently established therefore, then
Employee will be precluded from soliciting the customers or employees of such
new activities or business or from such new location and from directly
competing with such new business within 100 miles of its then-established
operating location(s) through the term of this covenant.
It is further agreed by the parties hereto that, in the event that
Employee shall cease to be employed hereunder, and shall enter into a business
or pursue other activities not in competition with the Company (including the
Company's subsidiaries), or similar activities or business in locations the
operation of which, under such circumstances, does not violate clause (i) of
this paragraph 3, and in any event such new business, activities or location are
not in violation of this paragraph 3 or of Employee's obligations under this
paragraph 3, if any, Employee shall not be chargeable with a violation of this
paragraph 3 if the Company (including the Company's subsidiaries) shall
thereafter enter the same, similar or a competitive (i) business, (ii) course of
activities or (iii) location, as applicable.
(d) The covenants in this paragraph 3 are severable and separate, and the
unenforceability of any specific covenant shall not affect the provisions of any
other covenant. Moreover, in the event any court of competent jurisdiction
shall determine that the scope, time or territorial restrictions set forth are
unreasonable, then it is the intention of the parties that such restrictions be
enforced to the fullest extent which the court deems reasonable, and the
Agreement shall thereby be reformed.
(e) All of the covenants in this paragraph 3 shall be construed as an
agreement independent of any other provision in this Agreement, and the
existence of any claim or cause of action of Employee against the Company,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of such covenants. It is specifically
agreed that the period of two (2) years stated at the beginning of this
paragraph 3, during which the agreements and covenants of Employee made in this
paragraph 3 shall be effective, shall be computed by excluding from such
computation any time during which Employee is in violation of any provision of
this paragraph 3.
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4. PLACE OF PERFORMANCE.
(a) Employee understands that he may be again requested by the Board to
relocate from his present residence to another geographic location in order
to more efficiently carry out his duties and responsibilities under this
Agreement or as part of a promotion or other increase in duties and
responsibilities. In the event that Employee is requested to relocate and
agrees to do so, the Company will pay all relocation costs to move Employee,
his immediate family and their personal property and effects. Such costs may
include, by way of example, but are not limited to, pre-move visits to search
for a new residence, investigate schools or for other purposes; temporary
lodging and living costs prior to moving into a new permanent residence;
duplicate home carrying costs; all closing costs on the sale of Employee's
present residence and on the purchase of a comparable residence in the new
location; and added income taxes that Employee may incur, as a result of any
payment hereunder, to the extent any relocation costs are not deductible for
tax purposes. The general intent of the foregoing is that Employee shall not
personally bear any out-of-pocket cost as a result of the relocation, with an
understanding that Employee will use his best efforts to incur only those
costs which are reasonable and necessary to effect a smooth, efficient and
orderly relocation with minimal disruption to the business affairs of the
Company and the personal life of Employee and his family.
(b) Notwithstanding the above, if Employee is requested by the Board to
relocate and Employee refuses, such refusal shall not constitute "good cause"
for termination of this Agreement under the terms of paragraph 5(c).
5. TERM; TERMINATION; RIGHTS ON TERMINATION. The term of this
Agreement shall begin on the date hereof and continue through December 31,
2001 (the "Initial Term"), and, unless terminated sooner as herein provided,
shall continue to automatically renew for an additional two years on every
December 31st, on the same terms and conditions contained herein. This
Agreement and Employee's employment may be terminated in any one of the
following ways:
(a) DEATH. The death of Employee shall immediately terminate the
Agreement with no severance compensation due to Employee's estate.
(b) DISABILITY. If, as a result of incapacity due to physical or
mental illness or injury, Employee shall have been absent from his
full-time duties hereunder for four (4) consecutive months, then thirty
(30) days after receiving written notice (which notice may occur before
or after the end of such four (4) month period, but which shall not be
effective earlier than the last day of such four (4) month period), the
Company may terminate Employee's employment hereunder provided Employee
is unable to resume his full-time duties at the conclusion of such
notice period. Also, Employee may terminate his employment hereunder if
his health should become impaired to an extent that makes the continued
performance of his duties hereunder hazardous to his physical or mental
health or his life, provided that Employee shall have furnished the
Company with a written statement
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<PAGE>
from a qualified doctor to such effect and provided, further, that, at
the Company's request made within thirty (30) days of the date of such
written statement, Employee shall submit to an examination by a doctor
selected by the Company who is reasonably acceptable to Employee or
Employee's doctor and such doctor shall have concurred in the conclusion
of Employee's doctor. In the event this Agreement is terminated as a
result of Employee's disability, Employee shall receive from the
Company, in a lump-sum payment due within ten (10) days of the effective
date of termination, the base salary at the rate then in effect for
whatever time period is remaining under the Initial Term of this
Agreement or for one (1) year, whichever amount is greater.
(c) GOOD CAUSE. The Company may terminate the Agreement ten (10)
days after written notice to Employee for good cause, which shall be: (1)
Employee's material and irreparable breach of this Agreement; (2)
Employee's gross negligence in the performance or intentional
nonperformance (continuing for ten (10) days after receipt of the written
notice) of any of Employee's material duties and responsibilities
hereunder; (3) Employee's dishonesty, fraud or misconduct with respect to
the business or affairs of the Company which materially and adversely
affects the operations or reputation of the Company; (4) Employee's
conviction of a felony crime; or (5) chronic alcohol abuse or illegal drug
abuse by Employee. In the event of a termination for good cause, as
enumerated above, Employee shall have no right to any severance
compensation.
(d) WITHOUT CAUSE. At any time after the commencement of
employment, the Company may, without cause, terminate this Agreement and
Employee's employment, effective thirty (30) days after written notice is
provided to the Employee. Should Employee be terminated by the Company
without cause, Employee shall receive from the Company, in a lump-sum
payment due on the effective date of termination, the base salary at the
rate then in effect for two (2) years ("Severance Pay"). Further, any
termination without cause by the Company shall operate to shorten the
period set forth in paragraph 3(a) and during which the terms of paragraph
3 apply to one (1) year from the date of termination of employment.
(e) CHANGE IN CONTROL. Refer to paragraph 12 below.
(f) TERMINATION BY EMPLOYEE FOR GOOD REASON. The Employee may
terminate his employment hereunder for "Good Reason." As used herein,
"Good Reason" shall mean the continuance of any of the following after 10
days' prior written notice by Employee to the Company, specifying the
basis for such Employee's having Good Reason to terminate this Agreement:
(i) the assignment to Employee of any duties materially and
adversely inconsistent with the Employee's position as specified in
paragraph 1 hereof (or such other position to which he may be
promoted), including status, offices,
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responsibilities or persons to whom the Employee reports as
contemplated under paragraph 1 of this Agreement, or any other
action by the Company which results in a material and adverse change
in such position, status, offices, titles or responsibilities;
(ii) Employee's removal from, or failure to be reappointed
or reelected to, Employee's position under this Agreement, except as
contemplated by paragraphs 5(a), (b), (c) and (e); or
(iii) any other material breach of this Agreement by the
Company, including the failure to pay Employee on a timely basis the
amounts to which he is entitled under this Agreement.
In the event of any termination by the Employee for Good Reason, as determined
by a court of competent jurisdiction or pursuant to the provisions of paragraph
16 below, the Company shall pay all amounts and damages to which Employee may
be entitled as a result of such breach, including interest thereon and all
reasonable legal fees and expenses and other costs incurred by Employee to
enforce his rights hereunder, provided, that Employee need not seek any such
determination prior to terminating his employment for Good Reason and receiving
the Severance Pay set forth in the following sentence. In addition, Employee
shall be entitled to receive Severance Pay for two (2) years. Further, none of
the provisions of paragraph 3 shall apply in the event this Agreement is
terminated by Employee for Good Reason.
(g) TERMINATION BY EMPLOYEE WITHOUT CAUSE. If Employee resigns or
otherwise terminates his employment without Good Reason pursuant to
paragraph 5(f), Employee shall give a minimum of thirty (30) days written
notice to the Company and shall receive no severance compensation.
Upon termination of this Agreement for any reason provided in clauses (a)
through (g) above, Employee shall be entitled to receive all compensation
earned and all benefits vested and reimbursements due through the effective
date of termination. Additional compensation subsequent to termination, if
any, will be due and payable to Employee only to the extent and in the manner
expressly provided above or in paragraph 16. All other rights and
obligations of the Company and Employee under this Agreement shall cease as
of the effective date of termination, except that the Company's obligations
under paragraph 9 herein and Employee's obligations, if any, under paragraphs
3, 6, 7, 8 and 10 herein shall survive such termination in accordance with
their terms.
6. RETURN OF COMPANY PROPERTY. All records, designs, patents, business
plans, financial statements, manuals, memoranda, lists and other property
delivered to or compiled by Employee by or on behalf of the Company or its
representatives, vendors or customers which pertain to the business of the
Company shall be and remain the property of the Company and be subject at all
times to its discretion and control. Likewise, all correspondence, reports,
records, charts, advertising materials and other similar data pertaining to the
business, activities or future plans of the Company
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which is collected by Employee shall be delivered promptly to the Company
without request by it upon termination of Employee's employment.
7. INVENTIONS. Employee shall disclose promptly to the Company any and
all significant conceptions and ideas for inventions, improvements and valuable
discoveries, whether patentable or not, which are conceived or made by
Employee, solely or jointly with another, during the period of employment or
within one (1) year thereafter, and which are directly related to the business
or activities of the Company and which Employee conceives as a result of his
employment by the Company. Employee hereby assigns and agrees to assign all
his interests therein to the Company or its nominee. Whenever requested to do
so by the Company, Employee shall execute any and all applications, assignments
or other instruments that the Company shall deem necessary to apply for and
obtain Letters Patent of the United States or any foreign country or to
otherwise protect the Company's interest therein.
8. TRADE SECRETS. Employee agrees that he will not, during or after the
term of this Agreement with the Company, disclose the specific terms of the
Company's relationships or agreements with its significant vendors or customers
or any other significant and material trade secret of the Company, whether in
existence or proposed, to any person, firm, partnership, corporation or
business for any reason or purpose whatsoever, except as is disclosed in the
ordinary course of business, unless compelled by court order or upon advice of
counsel.
9. INDEMNIFICATION. In the event Employee is made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by the
Company against Employee), by reason of the fact that he is or was performing
services under this Agreement or is or was an officer of the Company, then
the Company shall indemnify Employee against all expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement, as
actually and reasonably incurred by Employee in connection therewith to the
fullest extent authorized by Delaware law. In the event that both Employee
and the Company are made a party to the same third-party action, complaint,
suit or proceeding, the Company agrees to engage competent legal
representation, and Employee agrees to use the same representation, provided
that if counsel selected by the Company shall have a conflict of interest
that prevents such counsel from representing Employee, Employee may engage
separate counsel and the Company shall pay all attorneys' fees of such
separate counsel. Further, while Employee is expected at all times to use
his best efforts to faithfully discharge his duties under this Agreement,
Employee cannot be held liable to the Company for errors or omissions made in
good faith where Employee has not exhibited gross, willful and wanton
negligence and misconduct or performed criminal and fraudulent acts which
materially damage the business of the Company.
10. NO PRIOR AGREEMENTS. Employee hereby represents and warrants to
the Company that the execution of this Agreement by Employee and his
employment by the Company and the performance of his duties hereunder will
not violate or be a breach of any agreement with a former employer, client or
any other person or entity. Further, Employee agrees to indemnify the
Company for any claim, including, but not limited to, attorneys' fees and
expenses of investigation, by any such
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third party that such third party may now have or may hereafter come to have
against the Company based upon or arising out of any non-competition
agreement, invention or secrecy agreement between Employee and such third
party which was in existence as of the date of this Agreement.
11. ASSIGNMENT; BINDING EFFECT. Employee understands that he has been
selected for employment by the Company on the basis of his personal
qualifications, experience and skills. Employee agrees, therefore, he cannot
assign all or any portion of his performance under this Agreement. Subject
to the preceding two (2) sentences and the express provisions of paragraph 12
below, this Agreement shall be binding upon, inure to the benefit of and be
enforceable by the parties hereto and their respective heirs, legal
representatives, successors and assigns.
12. CHANGE IN CONTROL.
(a) Unless he elects to terminate this Agreement pursuant to (c) below,
Employee understands and acknowledges that the Company may be merged or
consolidated with or into another entity and that such entity shall
automatically succeed to the rights and obligations of the Company hereunder.
(b) In the event of a pending Change in Control wherein the Company and
Employee have not received written notice at least fifteen (15) business days
prior to the anticipated closing date of the transaction giving rise to the
Change in Control from the successor to all or a substantial portion of the
Company's business and/or assets that such successor is willing as of the
closing to assume and agree to perform the Company's obligations under this
Agreement in the same manner and to the same extent that the Company is hereby
required to perform, then such Change in Control shall be deemed to be a
termination of this Agreement by the Company without cause and the applicable
portions of paragraph 5(d) will apply; however, under such circumstances, the
amount of the lump-sum severance payment due to Employee shall be two (2) years
of base pay and the non-competition provisions of paragraph 3 shall not apply
whatsoever.
(c) In any Change in Control situation in which Employee has received
written notice from the successor to the Company that such successor is willing
to assume the Company's obligations hereunder, Employee may nonetheless, at his
sole discretion, elect to terminate this Agreement by providing written notice
to the Company at least five (5) business days prior to the anticipated closing
of the transaction giving rise to the Change in Control. In such case, the
applicable provisions of paragraph 5(d) will apply as though the Company had
terminated the Agreement without cause; however, under such circumstances, the
amount of the lump-sum severance payment due to Employee shall be two (2) years
the amount calculated under the terms of paragraph 5(d) and the non-competition
provisions of paragraph 3 shall all apply for a period of one (1) year from the
effective date of termination.
(d) For purposes of applying paragraph 5 under the circumstances described
in (b) and (c) above, the effective date of termination will be the closing date
of the transaction giving rise to the Change in Control and all compensation,
reimbursements and lump-sum payments due Employee
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must be paid in full by the Company at or prior to such closing. Further,
Employee will be given sufficient time and opportunity to elect whether to
exercise all or any of his vested options to purchase Common Stock of the
Company, including any options with accelerated vesting under the provisions
of the Company's 1995 Stock Option Plan, such that he may convert the options
to shares of Common Stock of the Company at or prior to the closing of the
transaction giving rise to the Change in Control, if he so desires.
(e) A "Change in Control" shall be deemed to have occurred if:
(i) any person, other than the Company or an employee benefit plan
of the Company, acquires directly or indirectly the Beneficial Ownership
(as defined in Section 13(d) of the Securities Exchange Act of 1934, as
amended) of any voting security of the Company and immediately after such
acquisition such Person is, directly or indirectly, the Beneficial Owner
of voting securities representing 50% or more of the total voting power of
all of the then-outstanding voting securities of the Company;
(ii) the individuals (A) who, as of the effective date of the
Company's registration statement with respect to its initial public
offering, constitute the Board of Directors of the Company (the "Original
Directors") or (B) who thereafter are elected to the Board of Directors of
the Company and whose election, or nomination for election, to the Board
of Directors of the Company was approved by a vote of at least two-thirds
(2/3) of the Original Directors then still in office (such directors
becoming "Additional Original Directors" immediately following their
election) or (C) who are elected to the Board of Directors of the Company
and whose election, or nomination for election, to the Board of Directors
of the Company was approved by a vote of at least two-thirds (2/3) of the
Original Directors and Additional Original Directors then still in office
(such directors also becoming "Additional Original Directors" immediately
following their election), cease for any reason to constitute a majority
of the members of the Board of Directors of the Company;
(iii) the stockholders of the Company shall approve a merger,
consolidation, recapitalization, or reorganization of the Company, a
reverse stock split of outstanding voting securities, or consummation of
any such transaction if stockholder approval is not sought or obtained,
other than any such transaction which would result in at least 75% of the
total voting power represented by the voting securities of the surviving
entity outstanding immediately after such transaction being Beneficially
Owned by at least 75% of the holders of outstanding voting securities of
the Company immediately prior to the transaction, with the voting power of
each such continuing holder relative to other such continuing holders not
substantially altered in the transaction; or
(iv) the stockholders of the Company shall approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or a substantial portion of the
Company's assets (i.e., 50% or more of the total assets of the Company).
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<PAGE>
(f) Employee must be notified in writing by the Company at any time that
the Company or any member of its Board anticipates that a Change in Control may
take place.
(g) Employee shall be reimbursed by the Company or its successor for
any excise taxes and/or interest or penalties with respect to such excise
taxes that Employee incurs under Section 4999 of the Internal Revenue Code of
1986, as amended (or any similar tax that may hereafter be imposed), as a
result of any Change in Control. Such amount will be due and payable by the
Company or its successor within ten (10) days after Employee delivers a
written request for reimbursement accompanied by a copy of his tax return(s)
showing the excise tax actually incurred by Employee.
13. COMPLETE AGREEMENT. This Agreement is not a promise of future
employment. Employee has no oral representations, understandings or
agreements with the Company or any of its officers, directors or
representatives covering the same subject matter as this Agreement. This
written Agreement is the final, complete and exclusive statement and
expression of the agreement between the Company and Employee and of all the
terms of this Agreement, and it cannot be varied, contradicted or
supplemented by evidence of any prior or contemporaneous oral or written
agreements. This written Agreement may not be later modified except by a
further writing signed by a duly authorized officer of the Company and
Employee, and no term of this Agreement may be waived except by writing
signed by the party waiving the benefit of such term.
14. NOTICE. Whenever any notice is required hereunder, it shall be given
in writing addressed as follows:
To the Company: F.Y.I. Incorporated
3232 McKinney Avenue
Suite 900
Dallas, Texas 75204
Attn. Margot Lebenberg, General Counsel
with a copy to: Charles C. Reeder, Esq.
Locke Liddell & Sapp LLP
2200 Ross Avenue
Suite 2200
Dallas, Texas 75201
To Employee: Timothy J. Barker
358 Hearthstone Lane
Coppell, TX 75019
Notice shall be deemed given and effective three (3) days after the deposit
in the U.S. mail of a writing addressed as above and sent first class mail,
certified, return receipt requested, or when actually received. Either party
may change the address for notice by notifying the other party of such change
in accordance with this paragraph 14.
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<PAGE>
15. SEVERABILITY; HEADINGS. If any portion of this Agreement is held
invalid or inoperative, the other portions of this Agreement shall be deemed
valid and operative and, so far as is reasonable and possible, effect shall
be given to the intent manifested by the portion held invalid or inoperative.
The paragraph headings herein are for reference purposes only and are not
intended in any way to describe, interpret, define or limit the extent or
intent of the Agreement or of any part hereof.
16. ARBITRATION. Any unresolved dispute or controversy arising under
or in connection with this Agreement shall be settled exclusively by
arbitration, conducted before a panel of three (3) arbitrators in Dallas,
Texas, in accordance with the rules of the American Arbitration Association
then in effect. The arbitrators shall not have the authority to add to,
detract from, or modify any provision hereof nor to award punitive damages to
any injured party. The arbitrators shall have the authority to order
back-pay, severance compensation, vesting of options (or cash compensation in
lieu of vesting of options), reimbursement of costs, including those incurred
to enforce this Agreement, and interest thereon in the event the arbitrators
determine that Employee was terminated without disability or good cause, as
defined in paragraphs 5(b) and 5(c), respectively, or that the Company has
otherwise materially breached this Agreement. A decision by a majority of
the arbitration panel shall be final and binding. Judgment may be entered on
the arbitrators' award in any court having jurisdiction. The direct expense
of any arbitration proceeding shall be borne by the Company.
17. GOVERNING LAW. This Agreement shall in all respects be construed
according to the laws of the State of Delaware.
EMPLOYEE:
/s/ Timothy J. Barker
---------------------------------------------
F.Y.I. INCORPORATED
/s/ Ed H. Bowman, Jr.
---------------------------------------------
By: Ed H. Bowman, Jr.
Title: President and Chief Executive Officer
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<PAGE>
FOURTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
THIS FOURTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this
"AMENDMENT") is entered into to be effective as of November 10, 1999, by and
among F.Y.I. Incorporated, a Delaware corporation ("F.Y.I."), the Lenders (as
such term is defined in the Credit Agreement, as hereinafter defined) which are
parties hereto, Paribas, a bank organized under the laws of France acting
through its Chicago Branch, as agent for itself and the other Lenders (the
"AGENT"), and Bank of America, N.A., successor by merger to NationsBank, N.A.
and Bank One, Texas, N.A., as co-agents for themselves and the other Lenders
(the "CO-AGENTS").
RECITALS
A. F.Y.I., the Agent, the Co-Agents and certain of the Lenders entered
into that certain Amended and Restated Credit Agreement dated as of February 17,
1998 (as amended by a First Amendment thereto dated as of August 3, 1998, a
Second Amendment thereto dated as of April 13, 1999, and a Third Amendment
thereto dated August 13, 1999, the "CREDIT AGREEMENT"), pursuant to which, among
other things, the Lenders agreed to make certain loans available to F.Y.I. upon
the terms and conditions set forth therein;
B. F.Y.I. has informed the Agent that one of F.Y.I.'s Subsidiaries,
Computer Central Corporation, has dissolved and that all of its assets have been
distributed to its sole shareholder, which is Borrower (such transaction, the
"Dissolution").
C. In accordance with the Credit Agreement, F.Y.I. and the other Loan
Parties have requested that the Lenders consent to F.Y.I.'s departure from the
following provisions of the Credit Agreement (collectively, the "APPLICABLE
COVENANTS") to permit the Dissolution.
1. Section 8.2, which restricts F.Y.I.'s ability to dissolve any of
its Subsidiaries;
b. Section 9.3, which also restricts F.Y.I.'s ability to dissolve
any of its Subsidiaries; and
3. Section 9.4, which restricts F.Y.I.'s Subsidiaries' ability to
make distributions on account of shares of their Capital Stock.
D. F.Y.I., the Agent, the Co-Agents and the Lenders also desire to amend
the Credit Agreement to increase the aggregate principal amount of the
Commitments, to add SunTrust Bank, Atlanta ("NEW LENDER") as a Lender, and in
certain other respects as more fully set out herein.
AGREEMENT
NOW, THEREFORE, for and in consideration of the premises and other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
F.Y.I., the Lenders, the Agent and the Co-Agents hereby agree as follows:
1
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1. TERMS. All terms used herein which begin with an initial capital
letter shall, unless otherwise expressly defined herein, have the same
definitions assigned to such terms in the Credit Agreement, as modified by this
Amendment.
2. (a) CONSENT. Each of the Lenders hereby consents to F.Y.I's and
its Subsidiaries' non-compliance with the Applicable Covenants as specifically
described above solely for the purpose of allowing the Dissolution to occur and
agrees that such non-compliance with the Applicable Covenants (and only the
Applicable Covenants) will not result in an Event of Default under the Credit
Agreement.
(b) LIMITATION OF CONSENT. F.Y.I. and the other Loan Parties (by their
execution below) hereby agree with Agent and the Lenders that the approval
contained in clause (a) above shall not be deemed (i) an approval of the
departure from any Applicable Covenants with respect to any transaction other
than the Dissolution or (ii) a waiver of any other covenant or condition in any
Loan Document or (iii) a waiver of any Event of Default.
3. AMENDMENT TO THE COMMITMENT. Effective as of the date hereof, the
aggregate principal amount of the Commitments is increased from $125,000,000 to
$150,000,000. The amount set forth opposite the name of each Lender on the
signature pages hereto under the heading "Commitment" shall represent the
obligation of such Lender after giving effect to this Amendment and, in the case
of New Lender, as first established hereby.
4. DEFINITIONS.
(a) Effective as of the date hereof, the following definition appearing in
SECTION 1.1 of the Credit Agreement is hereby amended to read in its
entirety as follows:
"COMMITMENT" means, as to any Lender, the obligation of
such Lender to make or continue Loans and incur or
participate in Letter of Credit Liabilities hereunder in an
aggregate principal amount at any one time outstanding up to
but not exceeding the amount set forth opposite the name of
such Lender on the signature pages to the Fourth Amendment
to this Agreement under the heading "Commitment" or, if such
Lender is a party to an Assignment and Acceptance, the
amount set forth in the most recent Assignment and
Acceptance of such Lender, as the same may be reduced or
terminated pursuant to SECTION 2.13 or 11.2, and
"COMMITMENTS" means such obligations of all Lenders. As of
the date of the execution of the Fourth Amendment to this
Agreement, the aggregate principal amount of the Commitments
is $150,000,000.
"PLAN" means any employee benefit plan as defined in
Section 3(3) of ERISA, or any comparable plan of a
Governmental Authority, established or maintained or
contributed to by any Loan Party or any ERISA Affiliate,
including any Pension Plan.
2
<PAGE>
(b) Effective as of the date hereof, the following additional definitions
are added to SECTION 1.1 of the Credit Agreement to appear therein in its
proper alphabetical order and to read in its entirety as follows:
"DOMESTIC SUBSIDIARY" means any Subsidiary of F.Y.I.
which is organized under the laws of the United States or
one of the States thereof.
"FOREIGN SUBSIDIARY" means any Subsidiary of F.Y.I.
which is organized under the laws of a country or province
other than the United States or a State thereof.
"FOURTH AMENDMENT" means the Fourth Amendment to this
Agreement dated as of November 10, 1999.
5. AMENDMENT TO SECTION 5.3. Effective as of the date hereof, clauses
(a) and (b) in SECTION 5.3 of the Credit Agreement are hereby amended and
restated to read in their respective entirety as follows:
(a) grant or cause to be granted to the Agent for the benefit of
the Agent and the Lenders, (i) if the Subsidiary is a Domestic
Subsidiary, a perfected, first priority security interest in all
Capital Stock or other ownership interests in or indebtedness of such
Subsidiary owned by F.Y.I. or by any Subsidiary of F.Y.I. or, (ii) if
the Subsidiary is a Foreign Subsidiary, a perfected, first priority
security interest in sixty-six and two-thirds percent (66 2/3%) of
Capital Stock or other ownership interests in or indebtedness of such
Subsidiary owned by F.Y.I. or by any Subsidiary of F.Y.I. (to the
extent such Capital Stock or other ownership interests or indebtedness
are already not so pledged to the Agent);
(b) cause each Domestic Subsidiary to guarantee the payment and
performance of the Obligations by executing and delivering to the
Agent an appropriate Guaranty, substantially in the form of the
Guaranties delivered by other Subsidiaries of F.Y.I. on or about the
Closing Date, and which Guaranty also provides that such Subsidiary
agrees to comply with all of the covenants contained in this Agreement
applicable to it; and
6. AMENDMENT TO SECTION 5.4. Effective as of the date hereof, clause (a)
of SECTION 5.4 of the Credit Agreement is hereby amended by deleting the phrase
"1.75 to 1.00" wherever located therein and replacing it with the phrase "2.00
to 1.00".
7. AMENDMENT TO SECTION 8.11. Effective as of the date hereof, SECTION
8.11 of the Credit Agreement is hereby amended and restated to read in its
entirety as follows:
Section 8.11 ERISA; PLANS. F.Y.I. will, and will cause each of
its Subsidiaries and ERISA Affiliates to, comply with all minimum
funding requirements and all other
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<PAGE>
material requirements of ERISA or other comparable Governmental
Requirement, if applicable, so as not to give rise to any liability
thereunder.
8. AMENDMENT TO SECTION 9.1. Effective as of the date hereof, clause (e)
of SECTION 9.1 of the Credit Agreement is hereby amended and restated to read
in its entirety as follows:
(e) Intercompany Debt between or among F.Y.I. and any of its
Wholly-Owned Subsidiaries incurred in the ordinary course of business,
subject to the requirement that any and all of the Debt permitted
pursuant to this SECTION 9.1(e) shall be unsecured, shall be evidenced
by instruments satisfactory to the Agent which will be pledged to the
Agent for the benefit of the Agent and the Lenders and shall be
subordinated to the Obligations pursuant to a subordination agreement
in form and substance satisfactory to the Agent (the foregoing being
referred to as "INTERCOMPANY DEBT"); PROVIDED ALSO that the aggregate
sum of (i) the outstanding principal amount of the loans, advances and
other extensions of credit made to Foreign Subsidiaries by F.Y.I. and
its Domestic Subsidiaries PLUS (ii) the Investments by F.Y.I. in any
Foreign Subsidiary (collectively, the "FOREIGN DEBT AND INVESTMENT")
shall not at any time exceed an amount equal to the product of the
book value of the total assets of F.Y.I. and its Subsidiaries, on a
consolidated basis in accordance with GAAP, MULTIPLIED by 5% (such
product herein the "MAXIMUM FOREIGN AMOUNT").
9. AMENDMENT TO SECTION 9.3. Effective as of the date hereof, clause
(ii) of SECTION 9.3 of the Credit Agreement is hereby amended and restated to
read in its entirety as follows:
(ii) any Subsidiary of F.Y.I. that is not a Foreign Subsidiary may
merge with and into F.Y.I. if F.Y.I. is the entity surviving such
merger and any Subsidiary of F.Y.I. that is not a Foreign Subsidiary
may merge with and into any Wholly-Owned Subsidiary of F.Y.I. that is
not a Foreign Subsidiary if such Wholly-Owned Subsidiary is the entity
surviving such merger and no consideration is given by the surviving
entity in such merger other than Capital Stock of the surviving entity
and such Capital Stock is pledged to the Agent, on behalf of the Agent
and the Lenders, as security for the Obligations pursuant to Section
9.6. The surviving entity in any such merger shall ratify the Security
Documents and other obligations of the non-surviving entity under the
Loan Documents.
10. AMENDMENT TO SECTION 9.5. Effective as of the date hereof, clause (g)
of SECTION 9.5 of the Credit Agreement is amended and restated to read in its
entirety as follows:
(g) (i) Investments by F.Y.I. and its Subsidiaries in its
Subsidiaries existing on the Closing Date, (ii) any Investments of
F.Y.I. in its Subsidiaries which represent amounts invested in such
Subsidiary to enable such Subsidiary (A) to pay all or a portion of
the purchase consideration for a Permitted Acquisition, (B) to make
Permitted Capital Expenditures, (C) to retire any Existing Debt, or
(D) to retire any Debt assumed in connection with a Permitted
Acquisition, and (iii) Investments by F.Y.I. in Wholly-Owned
Subsidiaries of F.Y.I.; PROVIDED, that the Foreign Debt and
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<PAGE>
Investments shall not at any time exceed an amount equal to the
Maximum Foreign Amount.
11. RELEASES.
(a) LENDER RELEASE. Agent and each Lender hereby release and discharge
each of F.Y.I.'s Foreign Subsidiaries from any and all obligations,
indebtedness, liability, claims, rights, causes of action or demands whatsoever,
whether known or unknown at the present time, suspected or unsuspected, which
Agent or any Lender ever had, now has, or claims to have against any of them
arising in any way from or relating to any Loan Document or the transactions
contemplated thereby and arising from the beginning of time through the date of
this Amendment.
(b) FOREIGN SUBSIDIARY RELEASE. Each Foreign Subsidiary now in existence
releases and discharges Agent and each Lender and their officers, directors,
employees, agents and attorneys (collectively, the "LENDER RELEASED PARTIES")
from any and all obligations, indebtedness, liability, claims, rights, causes of
action or demands whatsoever, whether known or unknown at the present time,
suspected or unsuspected, which any ever had, now has, or claims to have against
any Lender Released Party arising in any way from or relating to the Agreement,
any other Loan Document or the transactions contemplated thereby and arising
from the beginning of time through the date of this Amendment.
(c) GENERAL PROVISIONS RELATING TO RELEASES. Agent, each Lender and each
Foreign Subsidiary hereby represent that they have not assigned or transferred,
or purported to assign or transfer to any person or entity, any of the
obligations, indebtedness, liability, claims, rights, causes of action or
demands released pursuant hereto (the "CLAIMS") or any portion thereof or
interest therein and that it is the sole and rightful owner of any such Claims.
The parties hereto understand and agree (i) that the consideration for the
foregoing releases are contractual and not a mere recital; (ii) that neither
this Amendment, nor any part hereof, shall be used or construed as an admission
of liability on the part of any Foreign Subsidiary or any of the Lender Released
Parties; (iii) that the foregoing releases are knowing and voluntary and are
executed without reliance on any statement or representation concerning the
nature or extent of any claims, damages or legal liability therefor; (iv) that
each of Agent, each Lender and each Foreign Subsidiary has consulted with such
attorneys, accountants, financial advisors, and other advisors as they have
deemed necessary and appropriate in connection with the negotiation and
execution of this Amendment and are fully aware of the legal and financial
consequences of the execution of this Amendment.
12. CONDITIONS PRECEDENT. This Amendment shall be effective upon the
occurrence of each of the following:
(a) FOURTH AMENDMENT. The execution of this Amendment by each of
F.Y.I., the Agent, the Co-Agents, the Lenders and New Lender;
(b) CONSENTS. The execution of a consent to this Amendment by each
of the Loan Parties other than F.Y.I. in the form requested by the Agent,
which, among other things, shall reaffirm the Guaranty and Security
Agreement, if any, executed by each such Loan Party;
5
<PAGE>
(c) NOTE. A Note duly completed and executed by F.Y.I. and payable
to the order of New Lender in the principal amount of its Commitment.
(d) RESOLUTIONS. Resolutions of the board of directors of F.Y.I.
certified by its Secretary or an Assistant Secretary or other analogous
officer or representative which authorize the execution, delivery and
performance by the Loan Parties of this Amendment and such other Loan
Documents to be executed in connection herewith to which F.Y.I. or any
other Loan Party is to be a party;
(e) OFFICERS' CERTIFICATE. An officers' certificate of F.Y.I.
certifying as to the incumbency and signature of each officer of the Loan
Parties executing this Amendment and the other Loan Documents to be
executed in connection herewith, as to no changes to such Loan Parties'
articles or certificates of incorporation, other analogous constitutional
documents, or bylaws since the copies thereof most recently certified and
delivered to the Agent, and as to the continuing existence and good
standing of each Loan Party, such certificate to be dated as of a current
date and in form reasonably satisfactory to the Agent and its counsel;
(f) PAYMENT OF FEES AND EXPENSES. F.Y.I. shall have paid all fees
and expenses of or incurred by the Agent and its counsel to the extent
billed on or before the date hereof and payable pursuant to this Amendment;
(g) OPINIONS OF COUNSEL. A favorable opinion of Locke Liddell & Sapp
LLP, counsel for the Loan Parties, in form and substance satisfactory to
the Agent with respect to F.Y.I. and its Subsidiaries;
(h) NEW LENDER COMMITMENT FEES. F.Y.I. shall have paid all fees and
expenses to Agent on behalf of the New Lender as set forth in that certain
fee letter dated as of November 10, 1999, between Agent and F.Y.I.; and
(i) PROCEEDINGS SATISFACTORY. All matters and proceedings taken in
connection with this Amendment and the other Loan Documents to be delivered
in connection herewith shall be reasonably satisfactory to the Agent and
its counsel.
Borrower shall deliver, or cause to be delivered, to the Agent sufficient
counterparts of each agreement, document or instrument to be received by
the Agent under this SECTION 12 to permit the Agent to distribute a copy of
the same to each Lender.
13. REPRESENTATION AND WARRANTIES. F.Y.I. represents and warrants to the
Agent and each Lender that:
(a) the representations and warranties made by F.Y.I. in the Loan
Documents, as the same are amended hereby, are true and correct at the time
this Amendment is executed and delivered, except to the extent that such
representations and warranties are expressly by their
6
<PAGE>
terms made only as of the Closing Date or another specified date.
F.Y.I. further represents and warrants to the Agent and the Lenders
that: (i) the execution, delivery and performance of this Amendment and
any and all other Loan Documents executed and/or delivered in connection
herewith have been authorized by all requisite corporate action on the
part of F.Y.I. and the other Loan Parties, as appropriate, and will not
violate the articles of incorporation or bylaws of F.Y.I. or such other
Loan Parties; (ii) no Event of Default has occurred and is continuing
and no event or condition has occurred that with the giving of notice or
lapse of time or both would be an Event of Default; and (iii) F.Y.I. is
in full compliance with all covenants and agreements contained in the
Credit Agreement as amended hereby; and
(b) the Total Debt to EBITDA Ratio computed as of and for the twelve
calendar month period most recently ended is equal to or less than 2.00 to
1.00.
14. COSTS. F.Y.I. agrees to pay all reasonable costs incurred in
connection with the negotiation, preparation, execution and consummation of this
Amendment and the transactions preceding and contemplated by this Amendment
including, without limitation, the reasonable fees and expenses of Jenkens &
Gilchrist, P.C., counsel to the Agent.
15. MISCELLANEOUS.
(a) HEADINGS. Section headings are for reference only, and shall
not affect the interpretation or meaning of any provision of this
Amendment.
(b) NO WAIVER. No failure on the part of the Agent or the Lenders
to exercise, and no delay in exercising, and no course of dealing with
respect to, any right, power or privilege under the Loan Documents shall
operate as a waiver thereof, and no single or partial exercise of any
right, power or privilege under the Loan Documents shall preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege.
(c) EFFECT OF THIS AMENDMENT. The Credit Agreement, as amended by
this Amendment, shall remain in full force and effect except that any
reference therein, or in any other Loan Document, referring to the Credit
Agreement, shall be deemed to refer to the Credit Agreement, as amended by
this Amendment.
(d) GOVERNING LAW. EXCEPT TO THE EXTENT THAT THE CREDIT AGREEMENT
EXPRESSLY PROVIDES OTHERWISE, THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.
(e) COUNTERPARTS. This Amendment may be executed by the different
parties hereto on separate counterparts, each of which, when so executed,
shall be deemed an original, but all such counterparts shall be construed
as but one and the same Amendment.
(f) NO ORAL AGREEMENTS. THE CREDIT AGREEMENT, AS AMENDED BY THIS
AMENDMENT, TOGETHER WITH THE OTHER LOAN DOCUMENTS,
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REPRESENTS THE ENTIRE AGREEMENT AMONG THE PARTIES, AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG
THE PARTIES.
(Remainder of page intentionally left blank)
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective duly authorized officers as of the date first above
written.
F.Y.I.:
F.Y.I. INCORPORATED
By: /s/ Timothy J. Barker
------------------------------------
Timothy J. Barker
Senior Vice President
LENDERS:
Commitment: PARIBAS, as Agent and a Lender
$30,000,000
By: /s/ Clark C. King, III
------------------------------------
Name: Clark C. King, III
----------------------------------
Title: Managing Director
---------------------------------
By: /s/ Michael C. Colias
------------------------------------
Name: Michael C. Colias
----------------------------------
Title: Assistant Vice President
---------------------------------
Commitment: BANK OF AMERICA, N.A.,
$30,000,000 successor by merger to
NATIONSBANK, N.A.,
as Co-Agent and a Lender
By: /s/ Curtis L. Anderson
------------------------------------
Name: Curtis L. Anderson
----------------------------------
Title: Senior Vice President
---------------------------------
Commitment: BANK ONE, TEXAS, N.A.,
$30,000,000 as Co-Agent and a Lender
By: /s/ Fred Points
------------------------------------
Name: Fred Points
----------------------------------
Title: Vice President
---------------------------------
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Commitment: TEXAS CAPITAL BANK,
$10,000,000 NATIONAL ASSOCIATION, as a Lender
By: /s/ Russell Hartsfield
------------------------------------
Name: Russell Hartsfield
----------------------------------
Title: Senior Vice President
---------------------------------
Commitment: WELLS FARGO BANK (TEXAS),
$25,000,000 NATIONAL ASSOCIATION, as a Lender
By: /s/ Zach Johnson
------------------------------------
Name: Zach Johnson
----------------------------------
Title: Assistance Vice President
---------------------------------
Commitment: SUNTRUST BANK, ATLANTA,
$25,000,000 as a Lender and as New Lender
By: /s/ Daniel S. Komitor
------------------------------------
Name: Daniel S. Komitor
----------------------------------
Title: Vice President
---------------------------------
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Each of the undersigned hereby consents and agrees to this Amendment, and
each of the undersigned other than the Foreign Subsidiaries agrees that the
Guaranty and the Security Agreements (if any) executed by such Loan Party shall
remain in full force and effect and shall continue to be the legal, valid and
binding obligations of such Loan Party enforceable against such Loan Party in
accordance with its respective terms and agrees that the "Obligations," as
defined in the Credit Agreement, shall include all indebtedness under the Credit
Agreement as amended hereby.
LOAN PARTIES:
APS SERVICES ACQUISITION CORP.
ACADIAN CONSULTANTS CORP.
ADVANCED DIGITAL GRAPHICS, INC.
AMERICAN ECONOMICS GROUP ACQUISITION CORP.
AMERICAN ECONOMICS GROUP, INC.
ASSOCIATE RECORD TECHNICIAN SERVICES ACQUISITION
CORP.
B&B (BALTIMORE-WASHINGTON) ACQUISITION CORP.
CH ACQUISITION CORP.
CALIFORNIA MEDICAL RECORD SERVICE
ACQUISITION CORP.
CREATIVE MAILINGS, INC.
DATA ENTRY & INFORMATIONAL SERVICES ACQUISITION
CORP.
DATA ENTRY & INFORMATIONAL SERVICES, INC.
DPAS ACQUISITION CORP.
DEBARI ASSOCIATES ACQUISITION CORP.
DELAWARE MAJOR ACQUISITION CORP.
DELIVEREX ACQUISITION CORP.
DELIVEREX SACRAMENTO ACQUISITION CORP.
DISC ACQUISITION CORP.
DOCTEX ACQUISITION CORP.
EAGLE LEGAL SERVICES ACQUISITION CORP.
ECONOMIC RESEARCH SERVICES, INC.
EDLE ENTERPRISES OF PUERTO RICO, INC.
F.Y.I. CORPORATE ACQUISITION CORP.
F.Y.I. DIRECT INC.
F.Y.I. HEALTHSERVE INCORPORATED
F.Y.I. IMAGE INC.
F.Y.I. INPUT INC.
F.Y.I. INTEGRATION SOLUTIONS INC.
F.Y.I. PRINT INC.
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F.Y.I. RECORDS INC.
F.Y.I. STORAGE INC.
F.Y.I. INVESTMENTS, INC.
HEALTHSERVE V.C. CORP.
IMAGENT ACQUISITION CORP.
IMC MANAGEMENT, INC.
INFORMATION MANAGEMENT SERVICES ACQUISITION CORP.
INFORMATION MANAGEMENT SERVICES, INC.
INPUT MANAGEMENT, INC.
LIFO MANAGEMENT, INC.
LEONARD ARCHIVES ACQUISITION CORP.
NET DATA SERVICES, LTD.
MANAGED CARE PROFESSIONALS ACQUISITION CORP.
MANAGED CARE PROFESSIONALS, INC.
MAVRICC MANAGEMENT SYSTEMS, INC.
MMS ESCROW AND TRANSFER AGENCY, INC.
MMS SECURITIES, INC.
MEDICOPY ACQUISITION CORP.
MICRO PUBLICATION SYSTEMS, INC.
MICROFILM DISTRIBUTION SERVICES, INC.
MICROFILMING SERVICES, INC.
MINNESOTA MEDICAL RECORD SERVICE
ACQUISITION CORP.
NORTHERN MINNESOTA MEDICAL RECORD SERVICES
ACQUISITION CORP.
PENINSULA RECORD MANAGEMENT, INC.
PERMANENT RECORDS MANAGEMENT, INC.
PMI IMAGING SYSTEMS ACQUISITION CORP.
PMI IMAGING SYSTEMS, INC.
QUALITY DATA CONVERSIONS ACQUISITION CORP.
QUALITY DATA CONVERSIONS, INC.
PREMIER ACQUISITION CORP.
QCS INET ACQUISITION CORP.
QUALITY COPY ACQUISITION CORP.
RAC (CALIFORNIA) ACQUISITION CORP.
RESEARCHERS ACQUISITION CORP.
ROBERT A. COOK ACQUISITION CORP.
RECORDEX ACQUISITION CORP.
RUST CONSULTING ACQUISITION CORP.
RUST CONSULTING, INC.
T.C.H. GROUP, INC.
TCH MAILHOUSE, INC.
12
<PAGE>
THE RUST CONSULTING GROUP, INC.
ZIA INFORMATION ANALYSIS GROUP, INC. (formerly
known as ZIA ACQUISITION CORP.)
ZIP SHRED CANADA ACQUISITION CORP.
ZIPSHRED, INC.
By: /s/ Timothy J. Barker
-------------------------------------------
Timothy J. Barker, Authorized Officer for
each of the corporations above
INPUT OF TEXAS, L.P. (formerly known as Input of
Texas, Inc.)
By: Input Management, Inc., its general partner
By: /s/ Timothy J. Barker
----------------------------------------
Timothy J. Barker, Vice President
LIFO SYSTEMS, L.P. (formerly known as LIFO
Systems, Inc.)
By: LIFO Management, Inc., its general partner
By: /s/ Timothy J. Barker
----------------------------------------
Timothy J. Barker, Vice President
PERMANENT RECORDS, L.P. (successor, by merger, to
Texas Medical Record Service Acquisition
Corp. and Permanent Records Acquisition
Corp.)
By: Permanent Records Management, Inc., its
general partner
By: /s/ Timothy J. Barker
----------------------------------------
Timothy J. Barker, Vice President
IMC, L.P.
By: IMC Management, Inc., its general partner
By: /s/ Timothy J. Barker
----------------------------------------
Timothy J. Barker, Vice President
13
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