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and prerequisites received by the class A voting shareholders12 and
examined J.R. Simplot Co.'s policy of not paying dividends and the
absence of any foreseeable sale or liquidation of, or public
offering by, J.R. Simplot Co.
Mr. Much first studied 14 transactions involving the
sale/merger/acquisition of publicly traded companies listed on the
stock exchange involving dual class securities. These transactions
involved a pro rata allocation of the sale proceeds (based upon
equal prices paid to both the voting and nonvoting shares). (Mr.
Much noted that in a hypothetical sale of J.R. Simplot Co.'s assets
or a liquidation of the Company, the maximum value a class A
shareholder would receive would be based on a pro rata share
allocation with the other class A and class B shareholders.)
Second, Mr. Much reviewed daily trading market data of public
companies with dual classes of voting and nonvoting shares,
determining that the relative proportion of the equity represented
12 The following is a review of the compensation and
perquisites of J. R. Simplot Co.'s class A voting shareholders:
Name Class A Shares 1991 1992 1993
Gordon C. Smith --- $562,721 $769,890 $722,005
J.R. Simplot --- 314,780 314,519 314,311
Don 18 246,385 314,628 235,972
Decedent 18 222,730 200,801 79,785
Scott 22.445 122,301 17,140 ---
Gay 18 --- --- ---
According to Mr. Much, an independent third-party purchaser
of decedent's 18 class A voting shares on a stand-alone basis
would lack the power of control. Thus, the purchaser would look
to other economic benefits in making an investment decision.
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