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its fiduciary duties, corporate laws, and the Employee Retirement
Income Security Act of 1974, Pub. L. 93-406, 88 Stat. 829. The
parties discussed the general terms for separating Grecco from
petitioner at this meeting. The board of directors rehired
Grecco retroactive to June 16, 1988, and she resigned from
petitioner effective July 1, 1988. In exchange, the board of
directors offered Grecco a preliminary settlement package and
proposed to pay her about $125,000 for her stock and about
$300,000 for her agreement not to compete. The board of
directors approved the payment of bonuses (and retirement
contributions based on 7.326 percent of the bonus) for 1988 to
petitioner's employees: $73,000 to Colbert, $74,000 to
Tiedemann, and $71,000 to Grecco.
4. Redemption of Grecco's Stock
On December 23, 1988, petitioner and Grecco signed a
redemption agreement. Petitioner agreed to pay the Grecco Trust
$130,000 to redeem the stock owned by the trust. Petitioner
also agreed to pay to Grecco or on her behalf a $71,000 bonus,
severance pay of $45,000, a retirement plan contribution of
$30,000, and life and medical insurance premiums. Petitioner
also transferred to Grecco a life insurance policy on her life,
a 1984 BMW, and an athletic club membership in consideration for
her resignation as petitioner's president. Grecco agreed not to
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