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Agreement. One of the limitations provided that until the full
purchase price was paid, the buyers could not "declare or pay any
dividends or make any distributions" relating to the stock
without written permission of the sellers, the fathers.
Scott, Brent, Robert, and Gary all were funeral directors at
the time of the purchase. They were trained and taught the
mortuary business at Russon Brothers. They qualified themselves
to operate the mortuary business through schooling and while
working at Russon Brothers. On December 23, 1985, Russon
Brothers, as the Company, Scott, Brent, Robert, and Gary, as
Buying Shareholders, and Milton, Leo and Dale, as Selling
Shareholders, entered into a Stock Purchase Agreement. On
December 23, 1985, Milton, Leo, Dale, Brent, and Gary were
elected directors of Russon Brothers. The new directors then
elected Robert as president, Brent as vice president, and Scott
as secretary-treasurer of Russon Brothers.
At the time the stock was purchased Milton and Leo retired
from Russon Brothers. Dale continued as a full-time employee for
a few months in order "to receive his maximum Social Security
benefits allowable to him for retirement at age 62". Scott,
Brent, Robert, and Gary purchased the Russon Brothers stock from
their fathers so that they could manage, operate, conduct, and
participate full time in the mortuary business and earn a living
continuing a business started and developed by their fathers.
Scott did not have a substantial investment motive when he
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