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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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