Obnoxious job situation - your thoughts?

[Weetabix]

In 2010, my company made me a 10% owner. The company had been founded by a truly great guy, and when I got another job offer I was considering, he gave me and another guy 10% (OG). Up until then, the company had been owned in the majority by the founder, and in minority by his wife and two brothers (W2B).

The founder died in 2012, and his wife became the majority owner. In the interim, OG and I have been told that we're equal to everyone else, but W2B basically make all the decisions, including making substantial payments to themselves outside of normal payments to everyone else which they also participate in.

Now, I know it started as a family business. I know that W2B represents 80% of voting stock.

The thing that's riling me is that last year, I asked them quite clearly and respectfully to call it what it was and quit telling me that I'm fully involved and equal to everyone else. This discussion would apply to OG, too, who wants the same thing. But they won't quit being disingenuous with us about various things (tax status of the company and its effects, shareholder rights, etc).

The continued lack of veracity was tedious, but bearable, but now, after having given us shares in 2010, they've presented us with a shareholder agreement with the ostensible intent of making share transfers easier in the event of a shareholder death. They want to revise the draft we received into a separate agreement with each shareholder "for convenience of getting everything signed" even though the agreement has provisions for counterparts. It has a 5-year non-compete clause that they didn't mention when meeting with us to explain what the agreement did. That clause would only affect me and OG. It also is states that shares have to go back to the corporation in the event of retirement but conveniently does not tie that to share price (would affect OG). If it's not one agreement, I feel pretty sure that either OG and I will be the only ones with agreements or the agreements for W2B (which we'll never see) will be significantly different from ours.

Basically, W2B views me and OG as tools or commodities. I'm OK with that since I know it - I can choose to stay or go. It bothers me that they keep saying otherwise, though I'm mostly over that, too, except for continually have to deal with their lack of probity. They seem to think we're stupid, though why they'd hire stupid licensed professionals and rely on them seems odd. I think they just don't understand how our minds work.

At any rate, the job itself is fine. Pay is fine. I'm not going to sign a shareholder agreement with a non-compete in it. It was their mistake to give us shares before a shareholder agreement instead of after. I think my strategy will be to ignore it until they send the new one, then refuse to sign it with a non-compete.

If I get a new one back, I'll then quibble about separate agreements when the original had counterparts acceptable. I'm betting that my and OG's agreement would read significantly differently from W2B's. I'll ask that we all have the same agreement and that any paragraphs that only apply to specific people be noted that way. I'll even tell them that I have no problem with their giving themselves highly favorable terms that don't apply to me. I just want to know what all the terms are for everyone, and I don't want harmful terms in there for me. For example, if Brother 2 wants to sell to the company and his stock is valued at $250,000 and mine would be valued at $0 if I sold? Great! But just write it down so everyone knows.

If I get more after that, I'll quibble with one point at a time in order of importance until it's satisfactory.

What I basically want to do is stretch this out as long as possible while being not quite annoying enough to piss them off. For reference, I think it would be very difficult to fire me without a huge and longlasting disruption to revenue - not because of anything I'd do, but because of the way they've set things up.

I don't want to leave. I don't think they'll ever be straight with me. I don't want to fight for shareholder rights I don't care about - the ownership was free, and my ownership (being purely nominal) holds no excitement for me.

I just don't want to be a) shackled or mistreated (non-compete) or b) continually having to deal diplomatically with misrepresentations. I think foot dragging will eventually get me a) and slow down b).

What do you guys think? Am I shooting myself in the foot? Any better way to accomplish this?

[skb12172]

Consult a lawyer. Stat! Sounds like they may be breaking several laws. Whether or not you are angry enough to see them fry, you don't want to be "a nice guy" and end up with criminal charges as an accessory.

[skb12172]

Also, only a fool leaves money on the table. That's you if you don't insist and get full value for your ownership, whether or not it was "free."

[BobbyK]

Weet: consult with a competent business attorney. There are three words that W2B do not EVER want to have uttered in the same sentence: minority shareholder lawsuit. Based on what you've described, they've been failing in their duty to the shareholders, which include you.

[Baja boy]

Ask around or even go out of town for an experienced business attorney. If you don't stand up to them now , you will regret it down the road.

[Netpackrat]

Furthermore, your shares were not free. You received them in return for passing up an opportunity.

[Weetabix]

*sigh* What a pain in the ass.

We have actually consulted an attorney, but we're employed in one state, and the corporation is domiciled in another state, so he kept qualifying his answers. That was expected, but not as helpful as answers from an attorney in the domicile state would be.

The other thing is, I don't want to kill the gilded goose. Pushing too hard could do that. W2B like the money, but I don't think any of them need it. W (60%) has some bats and spiders in her head, so she's unpredictable and emotional.

I'm pretty sure I need to move somewhat slowly/carefully to see how amicably (from their perspective) I can get it resolved since I don't really want to jump or sink the ship.

(mixed metaphors free! )

[Greg]

What value exactly do W2B add?

If you left, where would the customers go?

And no, the ownership share wasn't 'free', it was a retention bonus. From what you say, an audit of the books seems in order. Skimming is skimming.

[skb12172]

Whatever, man. You know your situation better than us. Just remember...there are victims and there are volunteers.

[First Shirt]

Like the man said, if you're sitting at a poker table and you can't tell who the sucker is, it's you. Sounds like they're screwing you and the other guy, and ya'll ain't even getting dinner and a movie out of it.

You don't have to get all Hairy Thunderer about it, but do, please, find an attorney who will give you straight answers.

Of course, free advice is usually worth about what you paid for it.