,canada ,cu/oms                       #a
& ,rev5ue ,ag5cy

            ,9=m,n ,circul>
    
,subject3 ,policy ,/ate;t on ,busi;s
  ,equ;y ,valu,ns
,numb]3 #hi-c
,date3 ,augu/ #be1 #aihi

                ,purpose
    
#a4 ,? ,9=m,n ,circul> \tl9es ! valu,n
  pr9ciples1 practices & policies t !
  ,de"p;t g5],y 3sid]s & foll[s 9 !
  valu,n ( securities & 9tangi# prop]ty
  ( closely-held corpor,ns = 9come tax
  purposes4

                  ,law
    
#b4 ,all valu,ns %d 2 made 9 a3ord.e )!
  provi.ns (! ,canadian ,9come ,tax ,act
  &! ,9come ,tax ,regul,ns4
                                      #a
               ,def9i;ns             a#a
    
#c4
  7a7 ,fair m>ket value is ! hi<e/
    price1 express$ 9 t]ms ( m"oy or
    m"oy's wor?1 obta9a# 9 an op5 &
    unre/rict$ m>ket 2t "kl$gea#1 9=m$ &
    prud5t "pies act+ at >m's l5g?1 nei
    "py 2+ "u any -pul.n 6transact4
  7b7 ,value1 z f.d 9 p>agraph
    #g7#a77a71 is g5],y 9t]pret$ 0!
    ,de"p;t 6m1n fair m>ket value4
  7c7 ,a closely-held corpor,n is a
    corpor,n ^: %>es >e [n$ 0a
    relatively limit$ numb] ( %>ehold]s4
    ,"! is no e/abli%$ m>ket = s* %>es1
    9 t !y >e sold 9frequ5tly4
  
           ,valu,n ,approa*es
    
#d4 ,! ,circul> 4cusses1 9 g5]al1 !
  approa*es applica# 6closely-held or
  private corpor,ns1 recogniz+ t ! facts
  & circum/.es ( ea* case w 2
  det]m9ative ( fair m>ket value4     #b
                 #hi-c               b#a
  ,! valuator m/ use r1sona# judg;t &
  objectiv;y 9 ! selec;n & analysis (!
  relevant facts ( ea* valu,n4
--------------------------------------#b
                ,factors
    
#e4 ,:5 d1l+ )! valu,n ( %>es ( closely-
  held corpor,ns &( 9tangi# assets1 !
  e6ect on value (a numb] ( funda;tal
  factors1 s* z ! foll[+1 %d 2 3sid]$ &
  analyz$3
  7a7 ,! nature (! busi;s1 & hi/ory (!
    busi;s f xs 9cep;n4
  7b7 ,! g5]al \tlook1 ! specific \tlook
    & 3di;n (! "picul> 9du/ry &! -pany's
    posi;n 9 ! 9du/ry4
  7c7 ,! bal.e %eet1 ! f9ancial 3di;n &!
    capital /ructure (! "picul> -pany4
  7d7 ,! -pany's e>n+s record & xs e>n+s
    p[]4
  7e7 ,! divid5d-pay+ capac;y (!
    specific -pany4
  7f7 ,! exi/;e ( gdwill &/or o!r
    9tangi# assets4                   #c
                 #hi-c               a#b
  7g7 ,sales (! -pany's /ock4
  7h7 ,! size (! specific %>ehold+ 6be
    valu$4
  7i7 ,! /ock m>ket prices ( -p>a# /ocks
    ( r1sonably simil> corpor,ns 9 !
    same l9e ( busi;s1 ": ^! %>es >e
    actively trad$ 9 an op51 unre/rict$
    & public m>ket4
  7j7 ,! value (! corporate assets "uly+
    ! %>es4
#f4 ,"! >e al num]\s factors & issues
  relevant 6! valu,n ( specific
  %>ehold+s1 a"p f ! funda;tal factors
  3sid]$ 9 valu+ ! 5t]prise z a :ole4
  ,^! 9clude ! exi/;e (
  7a7 op;ns1 o!r buy-sell agree;ts or
    o!r 3tractual "rs or oblig,ns2
  7b7 3trol or m9or;y %>ehold] 9t]e/s2
  7c7 ! "rs & privileges (! v>i\s
    classes ( %>es "u ! -pany's lrs
    pat5t1 bylaws1 or memor&um (
    associ,n2 &
  7d7 corporate-[n$ life 9sur.e4
                                      #d
       ,wei<t+ ( ,v>i\s ,factors     b#b
    
#g4 ,dep5d+ on ! nature (! corpor,n's
  busi;s1 c]ta9 (! relevant factors may
  2 a3ord$ grt] wei<t4 ,9 "s busi;ses1
  e>n+s may 2 ! prim>y det]m9ant (
  value1 :ile 9 o!rs x may 2 asset
  value4 ,! valuator m/ 3sid] a di6]5t
  -b9,n ( factors 9 ea* case 9 det]m9+
  fair m>ket value4

                ,me?ods
    
#h4 ,! e>n+s & asset value me?ods >e !
  two mo/ g5],y a3ept$ bases = det]m9+
  value4 ,! e>n+s me?od is ( prim>y 3c]n
  :5 valu+ %>es ( op]at+ -panies t
  manufacture or m>ket products or
  s]vices4
--------------------------------------#c
#i4 ,asset value me?ods >e use;l ":3
  7a7 ,a r1sona# & via# alt]native 6buy+
    an exi/+ busi;s is 6/>t "o f scrat*1
    s* z small 3/ruc;n subcontractors
    op]at+ on -petitive bids1 auto    #e
                 #hi-c               a#c
    body repair %ops1 ma*9e %ops1 "s
    retail \tlets4
  7b7 ,a busi;s sells l>gely on an asset
    basis1 t is1 x derives xs 9come
    l>gely f ! assets1 ei tangi# or
    9tangi#1 r ?an f ! p]sonal ef=ts (!
    [n]s & p]sonnel1 e4g41 r1l e/ate
    hold+ -panies1 equip;t l1s+ or
    9ve/;t -panies1 fran*ise or d1l]%ip
    op],ns4
  
               ,approa*es
    
#aj4 ,g5],y sp1k+1 ! fair m>ket value (a
  busi;s is usu,y ! grt] (
  7a7 xs liquid,n value1 &
  7b7 xs go+ 3c]n value4
#aa4 ,! liquid,n value approa* is g5],y
  us$ ":
  7a7 ! busi;s is n a via# ongo+ op],n &
    is 3sequ5tly suita# only = liquid,n2
  7b7 ! busi;s is a go+ 3c]n1 b xs value
    is relat$ 6! liquid,n value (!
    -pany's "uly+ assets2 &           #f
                 #hi-c               b#c
  7c7 x is an aid 9 ! det]m9,n ( fair
    m>ket value on a go+ 3c]n basis1 z 9
    det]m9+ risk4
#ab4 ,! go+ 3c]n value approa* is norm,y
  us$ ": ! busi;s is a 3t9u+ 5t]prise )!
  pot5tial = e>n+ a r1sona# return on
  9ve/;t4 ,": "! is adequate pot5tial
  e>n+ p[] 9 ! =m ( economic future
  pr(its or 4cre;n>y ca% fl[s1 !
  det]m9,n ( go+ 3c]n value dep5ds on !
  am.t & qual;y (! e>n+s or ca% fl[s1 &!
  busi;s & f9ancial risk t ^! e>n+s or
  ca% fl[s c 2 a*iev$ & su/a9$4

     ,factors 9 ,capitaliz,n ,rate
                ,selec;n
    
#ac4 ,! risk1 express$ 9 a go+ 3c]n
  value calcul,n z ! capitaliz,n rate1
  relates 6a numb] ( factors 9 ! busi;s1
  am;g : may be3
  7a7 ,! tangi# asset back+4
  7b7 ,! liquid,n value4
                                      #g
                 #hi-c               c#c
  7c7 ,! nature & hi/ory (! busi;s
    op],ns4
  7d7 ,! g5]al economic1 m"oy & /ock
    m>ket 3di;ns & \tlook4
--------------------------------------#d
  7e7 ,specific 9du/ry & m>ket -p>isons4
  7f7 ,! f9ancial 3di;n (! specific
    busi;s 2+ valu$4
  7g7 ,! qual;y (! busi;s op],ns1 9clud+
    s* factors z xs manage;t dep?1 xs
    m>ket+1 rese>* & develop;t
    capabilities1 ! -posi;n ( xs lab\r
    =ce & product mix1 &! exi/;e ( major
    3tracts4
  7h7 ,! impact ( 9fl,n & =eign ex*ange
    fluctu,ns4
  7i7 ,! specific risk z relat$ 6!
    /abil;y or irregul>;y (! ma9ta9a#
    level ( e>n+s or ca% fl[s (! "picul>
    busi;s4
  7j7 ,! g5]al & specific political
    5viron;t4
  7k7 ,opportunities = gr[? z relat$ 6!
    social 5viron;t (! busi;s4        #h
                 #hi-c               a#d
  7l7 ,! exi/;e & import.e ( -petitors4
  7m7 ,! co/ or ease ( 5try 96! "picul>
    9du/ry 2+ review$4
  7n7 ,! *oice (& rates ( return on
    alt]nate 9ve/;ts4
  
  ,x %d 2 not$ t ! =ego+ li/ is n
  exhau/ive4

  ,! valuator m/ ex]cise judg;t 9
  det]m9+ ! ext5t 6: ^! & o!r pot5tial
  ext]nal & 9t]nal factors >e relevant 9
  ! quantific,n (a capitaliz,n rate4
#ad4 ,! g5]al approa*1 appropriate
  me?ods & relevant factors >e applica#
  6! det]m9,n ( fair m>ket value ( any
  type ( busi;s 9t]e/1 9corporat$ or
  un9corporat$ &( 9tangi# assets1 =
  9come tax purposes4




                                      #i
               ,proc$ures            b#d
    
#ae4 ,! organiz,n (! de"p;tal busi;s
  equ;y valu,n func;n is \tl9$ 9 !
  curr5t v].n ( ,9=m,n ,circul> #gb-be4
#af4 ,! ,regional ,valu,n ,(fic] may ask
  = docu;ts1 /ate;ts or o!r 9=m,n1
  9clud+ ! foll[+3
  7a7 ,details &! basis ( values fil$1 =
    ,valu,n ,"d or any o!r dates4
  7b7 ,a bal.e %eet ) support+ /ate;ts1
    s*$ules & notes z at ! date (
    valu,n4
  7c7 ,copies ( any appraisals (! fix$
    assets &/or r1l e/ate4
  7d7 ,f9ancial /ate;ts =! five mo/
    rec5t fiscal p]iods prior 6! valu,n
    date1 or s9ce ! -m;e;t ( op],ns1
    :i*"e repres5ts ! %ort] p]iod4
--------------------------------------#e
  7e7 ,if ! busi;s has be5 op]at+ = five
    ye>s or less1 ! f9ancial /ate;ts %d
    9clude an op5+ bal.e %eet4
  
                                     #aj
                 #hi-c               a#e
  7f7 ,copies ( all op;n1 buy-sell or
    o!r %>ehold] agree;ts or "pn]%ip
    agree;ts4
  7g7 ,-plete details ( all acquisi;ns &
    4posi;ns (! taxpay]'s 9t]e/ 9 !
    5t;y1 propos$ or -plet$4
  7h7 ,copies ( any >m's l5g? (f]s =
    sub/anti,y all ( ei ! -pany's %>es
    or xs fix$ assets4
  7i7 ,= small closely-held -panies1 a
    li/ ( %>ehold]s \tl9+ ! numb] ( %>es
    held & any family rel,n%ips4
  7j7 ,= l>ge closely-held -panies &
    public -panies1 a li/ ( major
    %>ehold]s1 \tl9+ ! numb] ( %>es held
    & any family rel,n%ips1 if applica#4
  7k7 ,= "pn]%ips1 a li/ (! "pn]s \tl9+
    _! pr(it & capital-%>+ ratios4
  7l7 ,if ! prop]ty is a bond or o!r
    oblig,n1 details (! s]ies1 face
    value1 9t]e/ rate & matur;y date4
  7m7 ,copies ( extracts f ! corporate
    lrs pat5t1 memor&um ( associ,n1 or
    by-laws detail+ ! "rs &          #aa
                 #hi-c               b#e
    privileges atta*+ 6all classes (
    %>es4
  7n7 ,) reg>d 6-panies1 details ( any
    rec5t sales ( simil> securities4
  7o7 ,a brief hi/ory (! busi;s op],n1
    9clud+ ! >ea x s]ves1 xs rel,n 6xs
    -petitors 9 ! same 9du/ry1 &!
    specific \tlook & 3di;n (! "picul>
    9du/ry4
  7p7 ,any p]t95t facts or op9ions 3c]n+
    s* issues z ! dep5d;e (! -pany on
    key p]sonnel1 suppli]s or cu/om]s1 !
    taxpay]'s role 9 ! -pany1 ! -pany's
    pot5tial = gr[?1 ! adequacy ( xs
    facilities1 &! exi/;e ( 3tracts or
    l1ses4
  7q7 ,details ( life 9sur.e policies
    [n$ 0a corpor,n or "pn]%ip on !
    lives ( xs key p]sonnel4
  7r7 ,details (& -;ts on ! adequacy (
    sal>ies &/or o!r b5efits pd or
    cr$it$ 6! pr9cipal %>ehold]s1 "pn]s
    or proprietor & _! families4
                                     #ab
                 #hi-c               c#e
  ,x %d 2 not$ t ! =ego+ li/ is n
  exhau/ive4
--------------------------------------#f
               ,policies
    
     ,op;ns & ,buy-,sell ,agree;ts
    
#ag4 ,op;ns & buy-sell agree;ts a6ect
  fair m>ket value det]m9,n z requir$
  0s"eal sec;ns (! ,9come ,tax ,act1
  notably sec;n #fi & subsec;n #gj7#e74
#ah4 ,9 a closely-held corpor,n1 fair
  m>ket value m/ 2 det]m9$ 0ref]r+ 6%>e
  "rs & re/ric;ns1 :e!r f.d 9 ! -pany's
  >ticles1 by-laws or valid 3tracts 2t
  %>ehold]s4 ,^! "rs or re/ric;ns c h an
  appreciatory or a depreciatory e6ect
  on ! price a will+ pur*as] wd pay =!
  %>es 9 ! no;nal m>ket4
#ai4 ,": ^! "rs _c 2 *ang$ )\t 9curr+ !
  possibil;y ( m9or;y %>ehold] c\rt or
  br1* ( 3tract ac;n1 ": s* "rs limit !
  am.t t c 2 r1liz$ at ! date ( valu,n &
  require ! %>es 6be 4pos$ (=a       #ac
                 #hi-c               a#f
  /ipulat$ am.t1 _! value m/ 2 det]m9$
  ac 6! provi.ns ( s* agree;t or >ticle4
  ,9 ^! circum/.es1 o!r relevant factors
  norm,y 3sid]$ 9 valu+ %>es may n 2
  relevant4
#bj4 ,on ! o!r h&1 ": a major;y %>ehold]
  holds %>es subject 6"rs & re/ric;ns &
  c modify ^! same "rs & re/ric;ns )\t
  9curr+ ! possibil;y ( adv]se m9or;y
  ac;n1 ! value ( ^! %>es %d n 2
  re/rict$ 6! am.t prescrib$ 0! t]ms (!
  >range;t4
#ba4 ,x m/ 2 not$ t an >range;t t
  re/ricts ! value (! %>es subject 6x m/
  2 bona fide 9 nature4 ,t is1 "! m/ 2
  "s prim>y legitimate busi;s purpose1
  s* z ! ord]ly su3es.n ( manage;t1
  3trol ov] ! 9flux ( \tsid]s & cre,n (
  an \tside m>ket =! %>es4
#bb4 ,9 a4i;n1 =! provi.ns ( any
  >range;t 6be 3sid]$ relevant 6! valu,n
  ( %>es1 ! 3tractual agree;t m/ 2
  validly 3/itut$ & b9d+ 7i4e41 a leg,y
  5=cea# >range;t71 & "! m/ 2 a      #ad
                 #hi-c               b#f
  r1sona# e/imate ( fair m>ket value
  made4
#bc4 ,! foll[+ two types ( re/ric;ns w n
  r5d] ! agree;t det]m9ative ( fair
  m>ket value3
  7a7 ,": a re/ric;n on transf] is "o
    only ( 3s5t 0%>ehold]s &/or
    directors1 : does n /ipulate a price
    at : %>es c 2 transf]r$ or does n
    specify ev5ts "u : an oblig,n
    6transf] or op;n 6pur*ase %>es
    >ises1 x w n 2 det]m9ative ( fair
    m>ket value4 ,h["e1 ! re/ric;n may 2
    a depreciatory factor 63sid] 9 valu+
    ! %>es subject 6! >range;t4
--------------------------------------#g
  7b7 ,": a re/ric;n is m]ely a "r ( f/
    refusal at a /ipulat$ price1 x w n 2
    det]m9ative ( fair m>ket value1 al?
    x may 2 ano!r depreciatory factor
    63sid]4
#bd4 ,9 ! situ,n ": %>es >e subject 6a
  bona fide -m]cial op;n at a specifi$
  or =mula price at ! "t ( valu,n1   #ae
                 #hi-c               a#g
  ! op;n price w likely repres5t ! l[e/
  7or 8floor07 price : a prospective &
  will+ pur*as] wd pay &a will+ v5dor wd
  a3ept4 ,6be a bona fide -m]cial op;n1
  x m/ 2 a leg,y 5=cea# 3tract )a
  legitimate busi;s purpose4 ,s* an op;n
  wd h a depreciatory e6ect on ! fair
  m>ket value (! %>es4
#be4 ,! facts (a case wd det]m9e :at
  am.t1 if any1 a pur*as] wd pay 9
  excess ( t 8floor0 price & wd dep5d on
  a numb] ( factors 9clud+1 :5 ! op;n is
  ex]cisa#2 ! likelihood t ! op;n w 2
  ex]cis$2 :e!r ! op;n price is fix$1
  subject 6p]iodic 9cr1ses1 or bas$ on a
  =mula : a6ects an 9cr1se 9 price z !
  -pany su3e$s2 &1 ! size (! "picul>
  %>ehold+4
#bf4 ,an agree;t may provide =a numb] (
  9t] vivos ev5ts : w give rise 6ei an
  op;nal or a m&atory sale at a specific
  price1 s* z retire;t1 resign,n1 or
  4abil;y4 ,s* re/ric;ns may h a
  depreciatory e6ect on %>e value4   #af
                 #hi-c               b#g
  ,": ! t]ms (! agree;t /ipulate a
  m&atory sale :5 ! %>ehold] wants 6sell
  8 %>es1 ! price /ipulat$ 9 ! agree;t
  %d acly limit ! value pursuant
  6subsec;n #gj7#e71 2c a prospective
  pur*as] wd n 2 will+ 6pay any m =!
  %>es ?an he/%e wd 2 a# 6rcv "u !
  provi.ns (! agree;t4
#bg4 ,if ! re/ric;ns 3ta9$ 9 agree;ts >e
  n 3sid]$ det]m9ative ( fair m>ket
  value1 normal valu,n approa*es w 2 us$
  6det]m9e ! fair m>ket value (! %>es 9
  "q4
#bh4 ,9 ord] =a buy-sell agree;t 6be
  3sid]$ det]m9ative ( value pursuant
  6subsec;n #gj7#e71 x m/ meet all !
  foll[+ require;ts3
  7a7 ,! agree;t m/ obligate ! e/ate
    6sell ! %>es at d1? ei "u a m&atory
    sales & pur*ase agree;t or at ! op;n
    (a designat$ pur*as]4
  7b7 ,! agree;t m/ re/rict ! %>ehold]'s
    "r 64pose ( his/h] %>es at any price
    dur+ his/h] life"t4              #ag
                 #hi-c               c#g
  7c7 ,! agree;t m/ fix a price =! %>es
    or set \ a me?od = det]m9+ ! price
    on a curr5t basis4
  7d7 ,! agree;t m/ repres5t a bona fide
    busi;s >range;t & n a device 6pass !
    dec$5t's %>es 6his/h] heirs = less
    ?an an adequate & full 3sid],n4
--------------------------------------#h
#bi4 ,if a buy-sell agree;t1 norm,y
  det]m9ative ( value1 is execut$ 2t
  "pies n act+ at >m's l5g?1 xs provi.ns
  %d 2 det]m9ative ( value1 z l;g z x
  meets ! foll[+ crit]ia3
  7a7 ,x is a bona fide busi;s >range;t4
  7b7 ,! /ipulat$ price or =mula price 9
    ! agree;t provides full & adequate
    3sid],n1 & repres5ts ! fair m>ket
    value ( %>es det]m9$ )\t ref];e 6!
    agree;t at ! "t x is execut$4
  7c7 ,x is a legal & b9d+ 3tract4
#cj4 ,9 ord] = an agree;t 6be 3sid]$
  bona fide1 "! m/ 2 no donative 9t5t 9
  ! agree;t4 ,9 o!r ^ws1 :ile ! "pies 6!
  agree;t may 2 relat$1 !y m/        #ah
                 #hi-c               a#h
  transact z !y wd at >m's l5g? )
  /rang]s4
#ca4 ,ea* case w 2 d1lt ) on ! basis (!
  relat$ facts4 ,^! facts w det]m9e :e!r
  a specific buy-sell or op;n agree;t is
  leg,y 5=cea# & :e!r xs provi.ns %d 2
  det]m9ative ( value or %d 2 "s (! _m
  relevant factors 6be 3sid]$ 9 >riv+ at
  fair m>ket value (! %>es subject 6!
  agree;t1 9 a3ord.e ) g5],y a3ept$
  valu,n pr9ciples4

  ,ref];e %d al 2 made 6! curr5t v].n (
  ,,it-#adj4

         ,family & ,gr\p ,3trol
    
#cb4 ,! ,de"p;t recognizes t 9 c]ta9
  situ,ns ei a relat$ gr\p or an
  unrelat$ gr\p ( %>ehold]s may 3trol a
  corpor,n if !y [n$ am;g/ !mvs at l1/
  #ej@3p plus #a (! issu$ & \t/&+ vot+
  %>es (! corpor,n at ! same "t & if !y
  h hi/oric,y act$ 9 3c]t z a        #ai
                 #hi-c               b#h
  gr\p4 ,x is a rebutta# presump;n t a
  family gr\p has act$ 9 3c]t 63trol a
  corpor,n4

  ,an ass];n 0a m9or;y %>ehold] t he/%e
  is "p (a family 3trol gr\p m/ 2 3sid]$
  9 li<t ( all relevant factors1 9clud+
  ! "rs & re/ric;ns attributa# 6his/%e
  "picul> %>es4

  ,9 a situ,n ": ! exi/;e ( family 3trol
  is recogniz$1 ! ,de"p;t w employ a
  ratea# valu,n = ea* family gr\p
  memb]'s %>es4
#cc4 ,an ass];n ( gr\p 3trol 0family
  memb]s1 s* z ^? ref]r$ 6in subsec;n
  #bea7#f7 (! ,9come ,tax ,act1 w 2
  a3ept$1 provid$ "! is no 3tr>y evid;e
  t !y did n act 9 3c]t4 ,gr\ps (
  relatives o!r ?an ^? ref]r$ 6in
  subsec;n #bea7#f71 m/ provide pro( t
  !y 7 "p (a 3troll+ family gr\p & act$
  9 3c]t ) t gr\p4
                                     #bj
                 #hi-c                #i
#cd4 ,) reg>d 63trol 0a gr\p ( %>ehold]s
  d1l+ at >m's l5g?1 ! crit]ia nec =
  a3ept.e ( claims ( gr\p 3trol w 9clude
  7a7 a writt5 agree;t "u : all !
    %>ehold]s 9 ! gr\p rel9qui% _! "rs
    6vote & 6sell _! %>es 9dep5d5tly at
    all "ts2 or
  7b7 provi.n 9 ! corporate lrs pat5t1
    memor&um ( associ,n or ! bylaws
    re/rict+ 9dividual "rs 6vote & 6sell
    _! %>es 9dep5d5tly at all "ts2 or
  7c7 p]man5t rel1se (! 9dividual
    %>ehold]'s "rs 0giv+ ( an irrevoca#
    proxy 6a designat$ p]son 6vote &
    6sell ! %>es z he/%e sees fit on
    2half ( all ! %>ehold]s 9 ! gr\p2 or
  7d7 a patt]n ( 3duct 6demon/rate t !
    %>ehold]s act$ collusively 9 all
    matt]s relat+ 6! 3trol (! corpor,n4
#ce4 ,9 ord] 6det]m9e :e!r a c]ta9
  patt]n ( 3duct is 9dicative (
  collusive ac;n 9 all matt]s relat+
  63trol1 ! foll[+ ac;ns may 2 "utak5
  9dividu,y or 9 any -b9,n3          #ba
                 #hi-c               a#i
  7a7 ,%>ehold]s' & directors' m9utes
    may 2 exam9$ 6det]m9e ! ext5t (
    3sult,n am;g ! gr\p4
  7b7 ,a review ( remun],n may 2 made
    69sure t all memb]s (! gr\p 7 tr1t$
    fairly4
  7c7 ,9t]views ) memb]s (! gr\p may 2
    held 6det]m9e ! role play$ 0ea*
    memb]4
  7d7 ,details ( actual pur*ases &/or
    sales made 0! claimants may 2
    exam9$4
#cf4 ,": ! ,de"p;t is satisfi$ t !
  docu;t,n provid$ 9dicates a 3si/5t
  patt]n ( gr\p 3trol1 x w apply a
  ratea# valu,n = ea* memb]'s %>es1 & n
  apply a m9or;y 4c.t4
#cg4 ,! ,de"p;t al recognizes t e6ective
  3trol c exi/ 9 a public corpor,n ": an
  9dividual or gr\p has a l>ge block (
  %>es1 ": "? uncondi;nal proxies1 a
  major;y ( votes at any %>ehold]s'
  meet+ 3trols manage;t & ": ! rema9+
  %>es >e widely 4p]s$4 ,9 ^!        #bb
                 #hi-c               b#i
  cases1 satisfactory evid;e ( 3trol m/
  2 provid$4

  ,ea* case w 2 d1lt ) on xs [n m]its4
-------------------------------------#aj
          ,/ock ,op;n ,b5efits
    
#ch4 ,! ,de"p;t's policy 3c]n+ b5efits
  rcvd 0employees "u /ock op;n plans
  pursuant 6sec;n #g (! ,9come ,tax ,act
  revolves >.d a few key ^ws 3ta9$ "!94

  ,) reg>d 6! phrase 8value (! %>es0
  5c.t]$ 9 p>agraph #g7#a77a71 ! ,de"p;t
  g5],y 9t]prets ! t]m 8value0 6m1n fair
  m>ket value1 z def9$ previ\sly4
#ci4 ,= purposes ( det]m9+ ! date ^u : !
  corpor,n's %>es >e 8acquir$0 pursuant
  6p>agraph #g7#a77a71 ! ,de"p;t 3sid]s
  t 6be ! date at : ! taxpay] acquires !
  "rs (a %>ehold] ) reg>d 6! pur*as$
  %>es subject 6! op;n4

                                     #bc
                 #hi-c              a#aj
  ,! factual circum/.es ( ea* case w
  det]m9e ! date at : a taxpay] obta9s
  legal [n]%ip or ! 9cid;e ( legal
  [n]%ip 9 & 6! %>es subscrib$1 & "!by
  acquires ! %>es4

  ,ref];e %d al 2 made 6! curr5t v].n (
  ,,it-#aac4

     ,corporate-,[n$ ,life ,9sur.e
    
#dj4 ,ac 6subsec;n #gj7#e.c71 9 det]m9+
  ! subsec;n #gj7#e7 value (a dec1s$'s
  %>es 7= d1?s o3urr+ af ,decemb] #a1
  #aihb71 ! value ( corporate [n$ life
  9sur.e is xs ca% surr5d] value4 ,?
  applies 6! dec1s$1 b ": "! >e two or m
  %>ehold]s & corporate-[n$ life 9sur.e
  is requir$ 6fund a /ock pur*ase
  agree;t1 "o m/ det]m9e ! value (!
  policies held 0! corpor,n on ! o!r
  %>ehold]s4

                                     #bd
                 #hi-c              b#aj
  ,! factors 6be 3sid]$ 9 det]m9+ !
  value ( s* policies held on ! lives (
  %>ehold]s o!r ?an ! dec1s$1 %d 9clude3
  7a7 ca% surr5d] value2
  7b7 ! policy's loan value2
  7c7 face value2
  7d7 ! /ate ( h1l? (! 9sur$ & his/h]
    life expectancy2
  7e7 3v].n privileges2
  7f7 o!r policy t]ms1 s* z t]m rid]s1
    d\# 9demn;y provi.ns2 &
  7g7 replace;t value4
  
  ,ref];e %d al 2 made 6! curr5t v].n (
  ,,it-#daf4
-------------------------------------#aa
#da4 ,if ! d1? ( "o (! %>ehold]s = :
  corporate life 9sur.e is [n$ is 3sid]$
  8imm95t0 & x is prop] 63sid] ? factor
  9 valu+ a policy1 ! value may 2 grt]
  ?an ! policy's ca% surr5d] value4
  ,h["e1 "o m/ al 3sid] ! foll[+
  factors3
                                     #be
                 #hi-c              a#aa
  7a7 ! possibil;y t ! 9sur$ w recov] &
    n die2
  7b7 ! e6ect t ! loss (a key p]son wd h
    on ! busi;s op],ns2
  7c7 :e!r ! %>e 9t]e/ 2+ valu$
    repres5ts a major;y or m9or;y (!
    \t/&+ %>es2 &
  7d7 ! import.e atta*$ 6factors o!r ?an
    asset value 9 ! circum/.es1 s* z !
    future e>n+s expect,ns &! prospects
    = divid5ds4












                                     #bf