Exhibit $1$

FLINDER VALVES AND CONTROLS INC.

Balance Sheet as of December $31,2007,$ for Flinder Valves and Controls Inc.

$($dollars in thousands$)$

Assets

Cash $$1,884$

U$.$S$.$ Treasury tax notes and other Treasury obligations $9,328$

Due from U$.$S$.$ government $868$

$\_$ftn$12,316$

$\_$ftn$26,888$

Other current assets $116$

Total current assets $$21,400$

Investments $1,768$

$\_$ftn$392$

Buildings $6,240$

Equipment $18,904$

Less: allowance for depreciation $7,056$

Total plant, property, and equipment$$gross $18,180$

Construction in process $88$

Total plant, property, and equipment$$net$*18,268$

Patents $156$

Cash value of life insurance $376$

Deferred assets $156$

Total assets $42,124$

Liabilities and Stockholders$$ Equity

Accounts payable $2,016$

Wages and salaries accrued $504$

Employees$$ pension cost accrued $208$

Tax accrued $72$

Dividends payable $560$

Provision for federal income tax $1,200$

Total current liabilities $4,560$

Deferred federal income tax $800$

Common stock at par $($shares authorized and outstanding $2,440,000$ shares$)1,220$

Capital surplus $7,180$

Earned surplus $28,364$

Total equity $36,764$

Total liabilities and stockholders$$ equity $42,124$

$\_$ftnref$3$Exhibit $2$

FLINDER VALVES AND CONTROLS INC.

Summary of Earnings and Dividends for Flinder Valves and Controls Inc.

$($dollars in thousands$)$

$($Unaudited$)$

Three months ended $3/30$

$2003200420052006200720072008$

Sales $$36,312$ $$34,984$ $$35,252$ $$45,116$ $$49,364$ $$11,728$ $$14,162$

Cost of goods sold $25,92424,20024,30031,58037,0448,73010,190$

Gross profit $10,38810,78410,95213,53612,3202,9983,972$

Selling, general, and administrative $2,0202,1002,2522,6282,936668896$

Other income$$net $925721087222814198$

Income before taxes $8,4609,2568,80810,9809,6122,3443,274$

Taxes $3,2763,9813,6204,7214,0371,0091,391$

Net income $5,1845,2755,1886,2595,5751,3351,883$

Cash dividends $1,6802,0082,0162,3042,304576753$

Depreciation $7849241,0881,2801,508364394$

Capital expenditures $1,4861,8262,0112,2132,433580640$

Working capital needs $1,8993,492-1,2004,2894,7571,1301,365$

Ratio analysis

Sales $100\mathrm{.}0100\mathrm{.}0100\mathrm{.}0100\mathrm{.}0100\mathrm{.}0100\mathrm{.}0100\mathrm{.}0$

Cost of goods sold $71\mathrm{.}469\mathrm{.}268\mathrm{.}970\mathrm{.}075\mathrm{.}074\mathrm{.}472\mathrm{.}0$

Gross profit $28\mathrm{.}630\mathrm{.}831\mathrm{.}130\mathrm{.}025\mathrm{.}025\mathrm{.}628\mathrm{.}0$

Selling, general, and administrative $5\mathrm{.}66\mathrm{.}06\mathrm{.}45\mathrm{.}85\mathrm{.}95\mathrm{.}76\mathrm{.}3$

Other income$$net $0\mathrm{.}31\mathrm{.}60\mathrm{.}30\mathrm{.}20\mathrm{.}50\mathrm{.}11\mathrm{.}4$

Income before federal taxes

Read the case. Use the data in the case, and combine it with the confidential information in this sheet. To assist you, Professor Trombley has uploaded an Excel file that contains the exhibits in the case.

Do the following tasks:

List your name, and what side you are representing in the case $(10\%$ of points$)$

Report your opening offer in dollars per share. $(10\%$ of points, full points awarded for putting a valid number$)$

Report your walk$-$away price in dollars per share. This is the price beyond which you will abandon the negotiations. $(5\%$ of points, full points awarded for putting a valid number$)($note $-$ in a later question you will have to show how you arrived at this number$)$

Report what you think your opponent's walk away price is$.(5\%$ of points$)($note $-$ in a later question you will have to show how you arrived at this number$)$

Put your answers for #$1,$ #$2,$ and #$3$ into the Qualtrics survey $($see ReggieNet for the link$)(10\%$ of points$)$

List your three most important negotiation objectives $($non$-$monetary goals$).$ DO NOT LIST PRICE AS A GOAL, and DO NOT LIST NEGOTIATING STRATEGIES AS A GOAL. Hint: a good goal must be a$)$ measurable, b$)$ achievable, and c$)$ provide a tangible benefit. If it doesn$$t provide a measurable benefit to your side in the negotiation, it$$s not a good goal. $(20\%$ of points$)$

For each goal, state a$)$ why it will benefit you, and b$)$ how you will measure your success at achieving the goal.

Note: You need to phrase your goals in such a way that an outside observer will be able to determine whether or not you have achieved them.

Justify your walk$-$away price of RSE in #$3,$ i$.$e$.$ the break$-$even price, i$.$e$.$ the valuation of the deal to your firm. For simplicity, assume the deal is for $100\%$ cash. Show the full calculations that you used to arrive at this number. This should include a pro forma analysis. $(20\%$ of points$)$

Calculate what you think the walk$-$away price of RSE is for your opponent $($RSE$),$ based on the information available to you. For simplicity, assume the deal is for $100\%$ stock. This should include a full pro$-$forma analysis $(20\%$ of points$)$