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Although Huber has no formal stock buy-back program, its
bylaws authorize it to redeem stock from Huber shareholders. The
board is empowered to authorize redemptions and set the price at
which such redemptions are offered. During the years 1996 to
2000, the board authorized 14 redemptions. In 1996, Huber bought
back shares at the E&Y value. For redemptions in the years 1997
to 2000, the redemptions were at the E&Y price less 5 percent.
These redemptions were from Huber family shareholders who wished
to liquidate their shares and from nonprofit organizations that
have received donations of shares, which include the
Massachusetts Institute of Technology, Dartmouth College,
Hitchcock Medical, Hamilton College, the Nature Conservancy, and
the Family Planning Organization. Each of these transactions
used the E&Y value to determine the redemption price.
Huber’s bylaws provide the corporation the right of first
refusal to purchase shares offered outside the Huber family at a
price specified in the bylaws. The bylaws provide that if any
shareholder attempts to sell his shares to a buyer not authorized
by the bylaws, Huber has the irrevocable option to purchase the
shares at the lower of the offer price, the book value, or the
formula price set by the bylaws.3 The bylaws authorize sale of
Huber shares to Huber family members, including lineal
3The formula prices set by Huber’s bylaws was $60.57,
$77.87, $42.38, and $85.13 per share for the taxable years 1997
to 2000, respectively.
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Last modified: May 25, 2011