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executed a Stockholders’ Restrictive Agreement (corporate buy-
sell agreement), which provided that if a stockholder died or
otherwise wished to sell stock, the remaining stockholders would
purchase it in amounts directly proportional to their preexisting
holdings. The purchase price was to be the book value of the
stock at the end of the preceding fiscal year, less any dividends
paid to stockholders within 2-1/2 months immediately following
the fiscal yearend. The corporate buy-sell agreement stated that
it was binding upon the heirs and executors of a deceased
stockholder. It did not include an active participation
requirement because David L. True was still in college when the
agreement was executed.
Effective August 1, 1973, Dave True gave each of his
children an 8-percent interest in True Oil and in True Drilling.
At that time, the True children ranged from approximately 23 to
33 years of age. As a result of these gifts, the new partners
made the following identical amendments (among others) to both
companies’ partnership agreements (partnership buy-sell
agreements):
5. No partner shall in any way attempt to dispose of,
sell, encumber, or hypothecate his interest in the
partnership except in accordance with the provisions of
the Partnership Agreement relating to withdrawal or
death of a partner, or, except in the normal course of
business, any of the assets thereof.
6. If any partner shall resign, become legally
disabled or bankrupt, assign his interest in the
partnership for the benefit of his creditors, or
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