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fair market value of common stock in Hastings. The purpose of
the A.G. Edwards' report was to establish the fair market value
of an approximate 3-percent interest in Hastings common stock
held by the ESOP plan. When ESOP plan participants purchased a
new home, needed money for a child's education, or terminated
employment, they had the right to direct the plan to sell shares
of Hastings stock back to Hastings at the then current fair
market value. This "put" option provided liquidity for small
blocks of stock in Hastings held by the ESOP.
Before any discount for lack of marketability, the A.G.
Edwards' report calculated the total value of Hastings as of
January of 1993 to be $100 million. The A.G. Edwards' report
then applied a 40-percent discount for lack of marketability that
would have reflected a value for Hastings stock of $35.45 per
share. However, due to the above-described liquidity of ESOP
plan shares provided by the put option, the A.G. Edwards' report
reduced the 40-percent lack-of-marketability discount in half to
20 percent and opined that the fair market value of Hastings
stock held by the ESOP was $47 per share.
In 1993, 18 separate transactions involving small blocks of
Hastings stock occurred between employees, officers, and other
individuals with an ongoing relationship with Hastings or
Western, cumulatively representing approximately 1 percent of the
total issued and outstanding shares of stock in Hastings. All
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