- 5 -
administration expenses). However, upon the closing of the
initial offer received from an executor, the Company was required
to pay in cash only that portion of the purchase price which did
not exceed the sum of: (1) Nondeferable Federal estate tax, (2)
one-tenth of the deferred estate tax which could have been paid
in installments pursuant to section 6166, (3) State inheritance
taxes, and (4) administrative expenses incurred as of the closing
date. The balance of the purchase price, if any, was to be paid
by delivery of a promissory note payable in nine equal annual
installments beginning on the first anniversary of the closing
date.
On July 31, 1986, the stock restriction agreements were
modified by a document entitled "Amendment to Shareholders'
Agreement and Voting Stock Agreement". These amendments did not
alter the terms of either the class B buy-sell agreement or the
voting stock buy-sell agreement that dealt with the obligations
of the Company and the stock transfer procedure triggered by the
death of a shareholder.
On August 23, 1988, the Company redeemed 1,960 shares of
decedent's class B nonvoting stock for $7,340,200 cash. In
August 1988, the Company also declared a 99 for 1 stock dividend
on class B nonvoting shares.
On September 27, 1988, decedent executed her last will and
testament, which was drafted by her attorney. Article IV of
decedent's will set out specific sources of funds for the payment
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