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an option to purchase 18,158 shares of Joseph's common stock in
JM at $1 per share. The option could be exercised only within 90
days after Joseph's death. Cyril also held various options to
purchase 7,185 shares of JM common and 11,850 shares of JM
preferred stock owned by Edward R. and Mae C. Nichols, which were
granted by four agreements dated between April 4, 1941, and May
6, 1943 (the Nichols options).4 Joseph was a party to the May 6
agreement, which had granted the option to purchase most of the
Nicholses' JM stock (i.e., 7,185 shares of common and 10,000
shares of preferred stock).
The preamble to the 1951 Agreement set forth the following
premises:
WHEREAS the parties hereto are the owners of the
majority of the issued and outstanding stock of JOSEPH
MAGNIN COMPANY, INC., a California Corporation, and
SPECIALTY SHOPS, INC., a Nevada Corporation,
hereinafter called "said corporations"; and
WHEREAS the parties hereto have over many years
last past mutually controlled the operation and
management of said corporations in the best interests
of said corporations and the stockholders thereof; and
WHEREAS Cyril Magnin desires that upon the death
of Joseph Magnin, the control of said corporations
shall be vested in Cyril Magnin for the term of his
life; and
WHEREAS Joseph Magnin is willing under and subject
to the terms and conditions hereinafter set forth, to
4In May 1960, Cyril assigned his rights in the Nichols
options to the testamentary trust established by Joseph's will of
which he was the trustee. On June 3, 1960, Cyril exercised the
options on behalf of the trust.
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