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representatives a direct financial interest in the success of the
corporation.
On July 7, December 8, and December 31, 1989, incentive
stock options were granted to certain employees for $1.25, $2.25,
and $2.25 a share, respectively. All such options were to vest
over 5 years.
Public Offering
The corporation had an initial public offering of stock in
June 1990, at a price of $10 per share. The possibility of an
initial public offering was discussed at a meeting of the board
of directors of the corporation on August 24, 1989.
Technology Sharing Agreement
On June 9, 1986, the corporation entered into a 3-year
technology sharing agreement (the agreement) with Monolithic
Memories, Inc. (MMI). Among other things, the agreement accorded
MMI rights in certain present and future technology of the
corporation. In April 1987, Advanced Micro Devices (AMD)
acquired MMI and succeeded to MMI’s rights under the agreement.
In 1990, the agreement was terminated.
Respondent’s Expert
Respondent presented as her expert witness Herbert T. Spiro
(Spiro), who was accepted by petitioner as an expert and whose
written report was received in evidence as his direct testimony.
Spiro reached the conclusion, supported by his report, that the
aggregate fair market value of the shares, as of October 22,
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