Textron Inc. and Subsidiary Companies - Page 7




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               Textron, the Trustee may instruct Avdel in writing to                  
               pay the cash dividends directly to Textron.                            
          Section 8(b) required the trustee to hold for the benefit of                
          Textron any shares of Avdel stock received as dividends.                    
          Section 8(c) provided that the trustee would receive all proceeds           
          of a sale or exchange of Avdel’s assets or stock and, after                 
          deducting the associated expenses, pay the amounts to Textron.              
          Section 8(d) provided that any other distributions with respect             
          to Avdel’s stock would be distributed to Textron.                           
               The order and voting trust agreement were in force from                
          their effective dates throughout the end of the period at issue             
          (the last day of petitioner’s 1992 taxable year).  The order and            
          voting trust agreement terminated pursuant to a decision and                
          order issued by the FTC on May 6, 1994.                                     
               During the period that the order and the voting trust                  
          agreement were in effect, Ms. Bailey, Textron, and Avdel complied           
          with the provisions of the order and the voting trust agreement.            
          In accordance with the voting trust agreement, the trustee                  
          surrendered to Avdel the Avdel stock received from Textron, and             
          Avdel issued new stock certificates registered in the name of Ms.           
          Bailey.  Ms. Bailey exercised the voting rights of the shares of            
          Avdel stock in accordance with the order and the voting trust               
          agreement.  Throughout the period at issue, Avdel had four                  
          directors, one of whom was Ms. Bailey.                                      







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Last modified: May 25, 2011