fate of Dorsey "Doss" Wallace's stock in the
family business, Wallace Electric Company, has caused a
remarkable amount of disagreement between Doss and his
brothers, Gary and Phillip Wallace. The parties offered
competing narratives in the case below about which agreement,
if any, governed the ownership of stock in Wallace Electric,
and about what the terms of those agreements would require.
The trial court ultimately concluded in a bench trial that
Doss should be paid $54, 200 for his stock. But because the
court correctly admitted that its order did not reach the
factual or legal conclusions required to resolve this case,
we vacate the order below and remand for proper consideration
of, and conclusions regarding, the legal questions at issue
in this case.
Electric Company was incorporated in 1959 by the parties'
father. In 1988, when all three brothers were working for
Wallace Electric, their father awarded Gary and Phillip each
a 25% share of stock in the company, awarded Doss a 16.67%
share, and kept a 33.33% share for himself. Their father
owned and managed the business until his death in 2000. After
their father's death, Gary and Phillip took over the
management of Wallace Electric. Doss, on the other hand, had
been employed at Wallace Electric sporadically until his
employment ended in 1994. The parties agree that the
ownership of stock in Wallace Electric was intended to be
reserved for employees of the company.
2011, following an apparent series of family disputes, Doss
filed a complaint for accounting and damages against Gary and
Phillip, alleging that they had deprived Doss of his lawful
interests as a shareholder of Wallace Electric. During discovery,
Doss filed a motion seeking a court-supervised accounting and
buyout of his minority shareholder interest in Wallace
Electric. Doss argued that the Wallace Electric Bylaws, which
were enacted in 1959, controlled the parties' dispute. He
alleged that the Bylaws restricted the retention, sale, and
disposition of a shareholder's stock, as outlined in the
[I]f the employment of any stockholder or officer is
terminated, for any reason, the corporation shall have the
right and duty to purchase all the stock of said employee or
officer and the former officer or employee shall be obligated
to sell his stock pursuant to these bylaws.
The purchase price, in any event, shall be the book value of
the stock (as of the time of said notice) as determined
according to accepted accounting practices, and shall be
binding upon the parties.
argued that Wallace Electric had a duty to make an offer and
purchase his stock after his employment ended, a duty that
the company did not fulfill. Moreover, Doss contended that
the Bylaws required that the price of the stock be determined
at the time the company offered to purchase his stock.
Therefore, Doss contended that the value of his stock should
be determined based on the date the company offered to
purchase it. He maintained that because Wallace Electric had
never offered him the "book value" of his stock, it
had not satisfied its duties under the Bylaws-and he,
therefore, was not obligated to sell. Accordingly, in his
view, the buyout should be calculated based on the
stock's "book value" at the time the litigation
admitted, however, that in 1988 the parties had entered into
a Buy-Sell Agreement that also addressed the disposition of
Wallace Electric stock. The Buy-Sell Agreement provided for
the sale of any shareholder's stock upon death, total
disability, or termination of employment. The Buy-Sell
Agreement also set out a method for determining the current
value of the stock in the event of a disagreement between the
parties at the time of sale. Doss, however, contended that
the Buy-Sell Agreement does not apply to the sale of his
stock because it expired on June 30, 2008, before his
brothers made any effort to purchase his stock.
on the other hand, argued that Doss was not entitled to
demand a buyout and had anticipatorily breached his duties
under the Buy-Sell Agreement by retaining his stock after his
employment with Wallace Electric ended in 1994. Gary offered
to purchase Doss's stock in 2003, Appellees claim, but
Doss continually refused to sell. Appellees maintain that the
Buy-Sell Agreement affirmatively required Doss to sell his
stock when his employment with Wallace Electric ended.
Appellees eventually amended their filings to explicitly
request that the court order Doss to resell his shares at
their 1994 value, in accordance with what they saw as the
terms of the Buy-Sell Agreement.
respect to the Bylaws, Appellees argued that they constituted
a shareholder agreement and had expired pursuant to OCGA
§ 14-2-732 (b) (3), a statute that sets out requirements
and limits for shareholder agreements and includes a 20-year
sunset provision for such agreements. Alternatively, the brothers
claimed that the Bylaws had been superseded by the
later-enacted Buy-Sell Agreement. The brothers also
maintained that because none of the parties owned stock when
the Bylaws were enacted in 1959, the Bylaws did not
constitute an executory contract between the parties.
Instead, they argued, the parties were bound by the terms of
the Buy-Sell Agreement, which was in effect and signed by the
parties in 1988. Specifically, Appellees cited the following
provisions of the Buy-Sell Agreement:
Upon the . . . termination of employment of a Shareholder,
such Shareholder . . . shall sell, and the Corporation shall
buy, all, but not less than all, of the stock owned by such
Shareholder for a purchase price equal to the current value.
. . . .
In the event of termination of employment of a Shareholder,
the Corporation shall purchase all of the stock owned by such
Shareholder within sixty (60) days after the date of
termination of employment.
maintained that the Agreement defined "current
value" as $1, 806.00 per share. Doss countered that the
Agreement expired in 2008 and that its expiration resulted in
a reversion to the Bylaws. He maintained that the Bylaws had
not expired and were not subject to ...