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February 16, 1989, stock issuance to Dr. Gow was $2,142,313 ($2,678
per share), and the fair market value of the February 15, 1990,
stock issuance to Dr. Gow was $597,353 ($1,493 per share).
In determining the fair market value of the stock bonus, the
experts considered the VTA agreement and the fact that Dr. Gow, at
her election, could receive within 10 years up to 10,000 shares, at
a maximum of 1,000 shares per year. The experts believed that
before purchase an informed hypothetical buyer would require
protection against the potential dilution effect of the share
authorization, as well as the placing of the stock in a voting
trust.
C. Court’s Analysis and Conclusion
For ease of understanding, we have set forth in the appendices
hereto a comparison of Mr. Gampel’s and Ms. Maiden’s-Ms. Kalmar’s
valuations. Giving due consideration to the totality of the
evidence before us, and in particular the testimony and reports of
the expert witnesses, we find the analysis and conclusions of
respondent’s experts more persuasive than those of petitioners’
expert. Consequently, we accept, with modifications discussed
hereinafter, Ms. Maiden’s and Ms. Kalmar’s valuations.
We agree with respondent that Mr. Gampel’s report contains
fatal errors. These errors include: (1) His understatement of
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