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descendants of J.M. Huber, their spouses, their children, trusts
whose beneficiaries are such persons, and the Huber Foundation.
The bylaws also authorize shareholders to sell to independent
nonprofit organizations after obtaining a waiver from the board.
E&Y Report
Since 1993, Huber has retained E&Y to prepare a valuation of
Huber, and its determination is reviewed each year by the chair
of Huber’s audit committee. E&Y does not perform any other
auditing functions for Huber. E&Y has used a consistent
methodology for valuing Huber shares, which is comparing Huber to
comparable publicly traded companies. E&Y applies a 50-percent
lack of marketability discount from the freely traded value of
the shares. Although shareholders are not generally sent copies
of the E&Y reports, the reports are available for inspection by
Huber shareholders. The E&Y reports were used for the following
valuation purposes by Huber and its shareholders: (1) Valuing
gifts of Huber shares made to nonprofit organizations; (2)
valuing both the grant and exercise of stock options issued to
Huber’s CEO; (3) fixing the compensation of Huber’s board
members; (4) evaluating the performance of Huber as a whole; and
(5) valuing shares that are bought back by Huber from its
shareholders. No one at Huber ever indicated what value or
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Last modified: May 25, 2011