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of BI dated June 19, 1991, Mr. Schoenecker's annual base salary
of $500,000, and a bonus equal to 12 percent of corporate net
income before taxes of GSI and subsidiaries, was ratified for the
prior year, the fiscal year 1990. Corporate net income was
defined as net income of GSI and subsidiaries before income taxes
and before Mr. Schoenecker's bonus. By action of the sole
director of BI dated June 19, 1991, Mr. Schoenecker's annual base
salary of $500,000 and a bonus equal to 12 percent of corporate
net income before taxes of GSI and subsidiaries was ratified for
its fiscal year 1991. Corporate net income was defined in the
same way as it was defined for BI's fiscal year 1990. For BI's
fiscal years here in issue, 1988 through 1991, Mr. Schoenecker's
bonus was computed as a percentage of the book income before
taxes of BI, and not the book income of GSI and subsidiaries,
which for each of these years was less than the book income of
BI. In some years prior to those here in issue Animal Fair had
profits, and, in those years, book income of GSI and subsidiaries
would for that reason have been greater than book income of BI
alone.
Mr. Schoenecker participated in all employee fringe benefits
of BI in the same manner as all employees of the corporation.
During the years here in issue BI had a section 401(k) plan, a
group health insurance plan, and a group life insurance plan in
which Mr. Schoenecker participated. BI paid a portion of Mr.
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