- 10 - share values were used when the ESOP purchased BCC shares and when the BCC stock of ESOP participants was redeemed. BVS concluded that the value of 100 percent of BCC stock was $8,041,126 ($86.73/share) as of January 31, 1996, and $8,491,321 ($164.01/share) as of January 31, 1997.4 IV. Life Insurance and the Death of Mr. Jennings As part of succession planning, BCC obtained life insurance of approximately $3 million each on the lives of decedent and Mr. Jennings. Decedent also had BCC’s controller, Mr. Truono, prepare “pro forma” financial analyses showing the impact on BCC of the redemption of his and Mr. Jennings’s shares at different prices and under various assumptions. Mr. Jennings died on January 13, 1996, and BCC received $3,046,823 in life insurance proceeds. BCC redeemed Mr. Jennings’s shares in September 1996 for $2,990,791, the price being based on BCC’s book value of approximately $6.4 million at the preceding fiscal yearend, as required in the 1981 Agreement.5 BCC used $1,990,791 in cash and 4 Mr. Jennings died on Jan. 13, 1996, and his 43,080 shares were redeemed pursuant to the 1981 Agreement, see infra Pt. IV, on Sept. 4, 1996. The substantial difference in per-share value between the 1996 and 1997 BVS valuations reflects the redemption of Mr. Jennings’s shares that occurred between the two valuations. 5 Mr. Truono calculated BCC’s book value as of the preceding fiscal yearend (Jan. 31, 1995) and the resulting price for Mr. Jennings’s shares.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011