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cash management, overall marketing, hiring of sales personnel,
capital improvements, and equipment purchases, and monitored
their overhead costs. Thus, he had ultimate responsibility for
them.
Mr. Munro's Compensation Arrangements
Since the 1970's, Attorney William Malis (Mr. Malis) has
known Mr. Munro and acted as a business adviser and general legal
counsel to UCIC, Alondra, and Edco. At some undisclosed time,8
Mr. Munro asked Mr. Malis to propose a fair and reasonable
compensation package. Mr. Malis looked at the last 4 years'
income tax returns for all the corporations and concluded that
average gross sales were something less than $5 million. He
therefore suggested that Mr. Munro should not be compensated
unless sales exceeded that base line and suggested
step-percentages above that amount. Further, because of Mr.
Munro's alleged expertise and negotiating skills in obtaining
price concessions and favorable payment terms from suppliers, Mr.
Malis thought that Mr. Munro should receive apparently modest
percentages of gross profits, again according to a scale of step-
percentages. Based on that reasoning, Mr. Malis drafted the
Business Consultant and Management Agreement (the Management
Agreement). The original Management Agreement included Alondra
8This time appears to be close to Jan. 2, 1978, when the
agreement about to be described was by its terms to commence.
This agreement is undated.
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