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Huber operates a diversified business with annual sales in excess
of $500 million during the years in question. Huber is a
privately held corporation, but its governance structure strives
to emulate public companies by maintaining a high level of
communications with its shareholders. During the relevant
taxable years, there were approximately 250 shareholders, who
were generally Huber family members, as permitted by Huber’s
bylaws. There were also 3,000 to 5,000 employees, most of whom
were not related to the Huber family. Huber is governed by its
board of directors (the board), the majority of whom are not
members of the Huber family. Huber’s CEO, president and
chairman, Peter Francis, was one of petitioners’ principal
witnesses. Mr. Francis has been president of Huber since 1994
and chairman since 1993. He is the great-grandson of J.M. Huber.
Pursuant to Huber’s bylaws, there is no public market for
Huber shares. Since 1993, Huber has retained Ernst & Young (E&Y)
to annually appraise the Huber shares. However, shareholders may
seek waivers from the board to transfer Huber stock to nonprofit
organizations, which are then allowed to hold the shares or sell
them to permitted shareholders under Huber’s bylaws. The shares
of Huber are held by members of the Huber family, the Huber
Foundation (a nonprofit charitable organization), and various
independent nonprofit organizations, including universities.
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Last modified: May 25, 2011