Pulsar Components International, Inc. - Page 11

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          industry, and that any underpayment in a year would be made up              
          when petitioner had the available resources.3                               
               On November 1, 1982, petitioner's board of directors met and           
          resolved that the "compensation for the next three (3) years for            
          Mr. Peter Woll and Mr. Thomas Laviano, should be set at $650,000            
          per year."4                                                                 
               c. Amounts Claimed by Petitioner as Officers' Compensation             
               The Officers served as officers of petitioner during each of           
          its taxable years ended July 31, 1983, through July 31, 1985.               


          3 Par. 4(e) of the principal officer employment agreements                  
          states:                                                                     
               during some fiscal years of the Corporation, available                 
               cash may not allow compensation of the Employee to the                 
               extent of immediate and long term effects of his                       
               efforts upon the profitability of the Corporation.                     
               *        *        *      *         *        *       *                  
               it is acknowledged between the Employee and the                        
               Corporation that full compensation for all Employee’s                  
               services may not be possible, from a cash standpoint                   
               during years in which there has been a downturn or                     
               recession in the semiconductor market. Therefore, the                  
               Corporation shall, in setting compensation for the                     
               Employee in later more profitable fiscal periods, take                 
               into account previously uncompensated services arising                 
               at former, less profitable years. * * *                                
          4 Petitioner's contracts with the Officers also entitled                    
          them to benefits including:  (1) Automobiles (2) financial                  
          counseling, (3) disability benefits, (4) any benefits (including            
          pension, retirement, profit sharing, insurance, and medical                 
          benefits) provided by petitioner to its employees in general,               
          (5) apartments and vacation condominiums, (6) reimbursement for             
          expenses incurred on behalf of petitioner, and (7) reimbursement            
          for club dues and expenses.                                                 




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