- 10 -
stock. This entry was subsequently amended to reflect the
allocation to a covenant not to compete.
At the time he sold his interest in Sharewell, Wagner wanted
some respite from the rigors of the day-to-day operations of the
company. Both Forest and Fraser believed that Wagner wanted to
retire. Wagner was 56 years old and in fair health. He had been
diagnosed with a muscle disease 14 years earlier in 1976, but
this condition was controlled by medication to the extent that he
had at all times maintained a normal work schedule. After
leaving Sharewell, Wagner did not experience any significant
decline in health. Wagner had substantial personal relationships
with important clients of Sharewell, many of whom had been
brought in as customers by Wagner, and extensive contacts
throughout the drilling industry. At least one such customer
indicated he would patronize Wagner if the latter started his own
business. Wagner did not attempt to re-enter the drilling
business during the period proscribed by the Noncompete
Agreement.
On his 1990 Federal income tax return, Wagner reported $1.3
million of consideration received from Sharewell, minus basis of
$400, as capital gain.
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Last modified: May 25, 2011