Amdahl Corporation and Consolidated Subsidiaries - Page 10

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          When an assigned sale closes, the RSC pays the employee the                 
          difference between the equity payment and the net sales price               
          from the third-party sale.                                                  
               In a regular sale, the RSC lists the residence for sale                
          through a real estate broker.  The RSC recommends repairs,                  
          improvements, and maintenance that would expedite the residence's           
          sale. Petitioner must authorize the repair or improvement, and              
          the RSC makes the appropriate arrangements.  The RSC also advises           
          petitioner of its activities in connection with the sale of the             
          residences and informs petitioner of any offers that it receives.           
          Petitioner's contract with the RSC gives the RSC authority to               
          reject or accept any bona fide third-party offer.  Petitioner               
          must approve any offers that are below a specified percentage               
          (either 92 or 94 percent) of the appraised value.  In practice,             
          however, the RSC consults with petitioner and follows                       
          petitioner's recommendations regarding all third-party offers.              
               In general, the RSC sends the net sales proceeds from the              
          third-party sale to petitioner when the sale closes.  If a third            
          party purchases the residence at a price below the appraised                
          value, the RSC charges the loss from the sale to petitioner's               
          account.  Conversely, the RSC credits a gain from a third-party             
          sale to petitioner.  Petitioner then pays the gain to the                   
          employee who owns the residence.                                            
               Petitioner reimburses the RSC for the equity payments and              
          for all costs that the RSC incurs in connection with the                    

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Last modified: May 25, 2011