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Whitacre Partnership v. Biosignia2/6/2004
"or any other future name" of FHT, concerning the 2,000,000 shares issued to Whitacre. By its terms, the agreement is binding on the "parties . . . themselves, their successors and their assigns." The RSA states that the company "hereby provides [Whitacre] 2,000,000 shares of its common stock . . . upon [Whitacre's] joining the company . . . and for his continued employment as an officer of the Company or one of its subsidiaries/or joint ventures subject to the options and restrictions as specified below." After expressing the parties' desire to "restrict the sale, disposition, or other transfer" of Whitacre's shares, it defines "Restricted Shares" to include "all outstanding Provided Shares" and defines "Provided Shares" as "the 2,000,000 Shares provided to [Whitacre] upon joining the Company . . . and for his continued employment as an officer of the Company or one of its subsidiaries/or joint ventures for a period of five years in order to be fully vested."
On 4 March 1997, thirteen days after Biomar had accepted Whitacre's resignation from FHT, T. Nelson Campbell and Whitacre executed an addendum to the 23 October 1995 RSA. In its entirety, the addendum provides as follows:
On March 4, 1997 this agreement was reached among the Principals of Biomar International, Inc. that Dr. Mark E. Whitacre would become the CEO/President of a subsidiary of Biomar to establish a joint venture company that will provide biostatistical services to pharmaceutical companies and HMOs. In this position, 1.25 million shares of stock (including the shares used to pay attorneys) will be maintained in the Whitacre Limited Partnership. 50% of the 1.25 million shares will be vested in 1.5 years from the above date (3/4/97), and 100% within four years. Defendants claim that this addendum to the vesting schedule originally laid out in the October 1995 RSA controls the disposition of this case.
On 11 September 1997, the Whitacres filed a voluntary petition for discharge of their debts under Chapter 7 of the United States Bankruptcy Code. In the course of their bankruptcy filings and statements before the bankruptcy trustee, the Whitacres made the following factual representations, which defendant maintains plaintiff is now estopped to contradict.
First, on the statutorily mandated "Schedule B" disclosure of their personal property, the Whitacres appeared to acknowledge that the stock in question was subject to the 23 October 1995 RSA. Under the heading "Stock and interest in incorporated and unincorporated businesses," the Whitacres listed "1.25 million shares of Biomar Stock maintained in Whitacre Limited Partnership conditioned on October 23, 1995 restricted stock agreement." There is no corresponding entry for this stock in the "value" column. In the subsequent paragraph, titled "Interest in partnerships or joint ventures," the Whitacres stated, "Debtors are general partners in Whitacre Limited Partnership with right to receive 1% each for administration. Management Company known as W.P. Management Company. Currently not funded." The market value of this asset is listed as "UNKNOWN."
Second, during the statutorily mandated "341 Meeting" between debtors, creditors, and the bankruptcy trustee, Whitacre made additional statements, under oath, that appeared to acknowledge that the stock was subject to the 4 March 1997 Addendum to the RSA and that, given Whitacre's resignation from the company, it could never vest in interest. The relevant portion of the transcript from that meeting reads as follows:
Mr. Yaeger [bankruptcy trustee]: You had a restricted stock agreement - and have provided me a copy of that - related to your employment as a chief executive officer where y
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