Opinion ID: 782841
Heading Depth: 2
Heading Rank: 5

Heading: Value of the Warrants

Text: 19 In valuing the warrants, the district court also made a determination as to how long OGSI would have held the warrants before exercising them. The court noted that since April 1996, Michael Shaoul, OGSI's Chief Operating Officer, was primarily responsible for implementing OGSI's warrants practices. Shaoul testified that he closely followed 4D stock from the day he was employed by OGSI until the BMC tender offer was consummated in April 1999. Shaoul also stated that OGSI would have held the 4D warrants for at least fourteen (14) months after the initial exercise date of January 1, 1998 — just about the time of the BMC tender offer. The district court credited Shaoul's conclusion that the 4D warrants were a particularly suitable security to hold for long term appreciation. 20 Based largely on the testimony of Michael Shaoul, the district court concluded that OGSI would have held the warrants for the longest term possible. The district court determined that April 9, 1999 was [t]he appropriate date to fix the value of OGSI's 11.53% share of the warrants [because this date] is the most likely date on which OGSI would have exercised the warrants. On April 9, 1999, the date of the BMC tender offer, the warrants were valued at $52.50. Thus, the district court determined the value of OGSI's 11.53% interest to be $151,357.50. 21 As to the remaining 88.47% interest in the warrants, the district court determined that there was little or no evidence as to when any of the individual assignees would have sought to exercise their warrants. The court set the date for determining the value of the remaining 88.47% of the warrants at the reasonable `intermediate' date of January 1, 1998 — the first date on which the individuals would have been able to exercise the warrants. The market price on January 1, 1998 was $19.25, and the individual warrant value was $14.95. The value of 88.47% of 25,000 warrants was therefore $330,664.10. 22 The district court found that there was little or no evidence to support Hollander's assertion that he would have exercised the buy-back provision of the Engagement Letter before it expired on February 5, 1999.