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FOH capital stock was split at the rate of one share for every
three shares outstanding. At the same time, FOH declared a
distribution in the form of a dividend of two shares of class B
capital stock for every one share of class A capital stock
outstanding on October 15, 1993. The effect of the amendment,
split, and dividend was to convert each three existing shares of
FOH capital stock into one share of class A capital stock and two
shares of class B capital stock. As a consequence of the
recapitalization of FOH, except as set forth below, all rights to
vote were exclusively vested in the class A capital stock. The
holders of class B capital stock were entitled to vote separately
as a class only with respect to designated issues. In addition,
the trusts were prohibited from selling any of the class B
capital stock for a 2-year period at a price of less than $7.00
per share.
Subsequently, the coexecutors undertook efforts to sell the
FOH stock that was held by the trusts in order to raise funds for
the payment of Federal estate tax and to provide funds for the
required distributions. Accordingly, pursuant to a stock
purchase agreement dated January 12, 1994, the FOH Employee Stock
Ownership Plan (FOH ESOP) purchased 357,143 shares of FOH class A
capital stock from the Harriett trust for $4.20 per share, a
30-percent discount from the closing price of such stock on the
New York Stock Exchange (NYSE) on January 10, 1994. In
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