Charles B. and Teresa A. Thompson, et al. - Page 21

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               b.  Petitioners' Expert                                                
               Petitioners' expert, Mark L. Mitchell, is a principal in               
          Business Valuation Services, Inc.  He holds a master of business            
          administration degree in finance and bachelor of science degrees            
          in mathematical sciences and economics and systems analysis, all            
          from Southern Methodist University.  He is a member of the                  
          Association for Investment Management and Research, a member of             
          the Dallas Association of Investment Analysts, and a senior                 
          member of the American Society of Appraisers.                               
               Mr. Mitchell utilized a discounted cash-flow model to                  
          determine the value of State Supply assuming the presence of the            
          noncompete agreements.  He concludes that State Supply is worth             
          $8,516,931.  Both parties' experts agree on the value of State              
          Supply with the covenants in place.4                                        
               To value the noncompete agreements, Mr. Mitchell calculated            
          the value of State Supply without them and subtracted that value            
          from the previously determined value of State Supply with the               
          noncompete agreements.  In order to calculate the value of State            
          Supply without the noncompete agreements, Mr. Mitchell made                 
          assumptions concerning the impact that competition from Holliday            
          and Beaurline would have and the probability of that competition            


               4  By using the bank's base level of return number of                  
          $850,000 (a number the bank calculated assuming the existence of            
          the noncompete agreements), respondent's expert has, perhaps                
          inadvertently, valued State Supply with the noncompete agreements           
          in place.                                                                   





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