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1981 Agreement provided that the purchase price of decedent’s
shares would have been equal to their book value as of January
31, 1996 (as opposed to the figure contained in Pro Forma 15), or
approximately $7.6 million, were he to die before February 1,
1997.9
In contrast to the 1981 Agreement, the 1996 Agreement was
one page in length and addressed only the purchase and sale of
decedent’s BCC shares at his death. The operative section was
entitled “Purchase Upon Death”, similar to the section covering
redemptions in the 1981 Agreement, and the language and
organization of that section tracked the corresponding section
found in the 1981 Agreement. The section covered the obligation
to buy and sell, the purchase price, and the payment terms.
Unlike the 1981 Agreement, which contained a formula for
adjusting the purchase price over time and allowed for payment of
the purchase price in installments, the 1996 Agreement set a
fixed purchase price of $4 million, without any provision for
future adjustment, to be paid in one lump sum.
9 This figure is calculated by dividing BCC’s book value of
$9,135,506, as of Jan. 31, 1996, by the 51,772 shares outstanding
as of November 1996 to derive a per-share value of $176.46, and
then multiplying that figure by decedent’s 43,080 shares. Had
the 1981 Agreement not been modified when decedent died in
September 1997 (i.e., after Jan. 31, 1997, but before Feb. 1,
1998), BCC’s book value as of Jan. 31, 1997, would have been used
to determine the purchase price of his shares.
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