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guaranteed buyer and price (which, in the event of any change in
control, would approximate the per-share price paid for the
controlling interest), the conservator also secured a hedge
against the risk decedent bore in holding a minority interest in
a closely held bank. The conservator was also concerned about
liquidity in decedent's estate, which included a number of
valuable illiquid assets, as decedent's estate tax liability was
expected to be substantial. Concluding that the 1991 Agreement
was in decedent's best interest, the district court approved the
conservator's application to enter into it.
The 1994 Agreement
Sometime in 1994 Mr. Hill agreed to sell his controlling
interest in Agri, as well as two other banks, to FABG. As
consideration, Mr. Hill received book value for his Agri shares
(which were exchanged for FABG shares at a ratio reflecting the
banks' respective book values), book value for the shares of the
other two banks, a 5-year employment contract at $218,000 per
year, a $314,000 signing bonus, retirement of certain capital
notes held by one of his other banks ($1.6 million), and an
option (FACC option) to exchange his FABG stock, 5 years hence,
for all of the stock in First American Credit Corp. (FACC), an
operating loan subsidiary of FABG. FABG's initial capital
funding of FACC exceeded $10.5 million, and Mr. Hill's FACC
option agreement required that FABG fund FACC with qualified
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