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during the 1-year period following decedent's death, to purchase
all of decedent's Agri stock at the same prices.10
Finally, the 1991 Agreement prohibited Mr. Hill from selling
his controlling interest to a third party unless decedent were
offered the opportunity to sell her Agri stock to the same third
party for the same consideration per share (Hill Rights). For
this purpose, "consideration" included the value of any
noncompete, consulting, or similar arrangements or payments
providing financial benefit to Mr. Hill. In addition, if the
prospective third-party purchaser of Mr. Hill's controlling
interest were to condition the purchase of Mr. Hill's interest
upon the right to acquire decedent's shares as well, the 1991
Agreement required decedent to sell her Agri shares (for the
prescribed consideration).
One of the conservator's principal considerations in
negotiating the 1991 Agreement was to avoid any sale of
decedent's stock before her death, after which the basis of that
stock would be stepped up to fair market value. By securing a
10 The 1991 Agreement also gave the conservatorship and
Agri reciprocal put and call options, respectively, for the sale
of all of decedent's Agri-Bank preferred stock at par plus unpaid
dividends. These options commenced 1 year after the date of the
agreement, and expired 1 year after decedent's death. At some
point after the 1-year waiting period and before the appointment
of a successor conservator (Boatmen's) in 1993, the put option
was exercised with respect to decedent's Agri-Bank preferred
shares. The conservatorship kept the proceeds received from the
sale in segregated accounts.
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Last modified: May 25, 2011