Choate Construction Co. - Page 6

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                  2.    Petitioner's Manuals, Documents, and Procedures                                  
                  Choate wrote petitioner's business plans for 1991, 1992, and                           
            1993.  He wrote petitioner's training and procedural manuals and                             
            manuals for project superintendents and managers, fast track                                 
            projects, program scheduling, preliminary cost reports, project                              
            controls, site analyses, and estimating procedures.  He also                                 
            wrote petitioner's employees' handbook for 1990 and 1991.  Choate                            
            wrote petitioner's internal control documents, procedures for job                            
            site meetings, subcontractor safety, checklists for estimating                               
            bids for office buildings, check voucher forms, credit reports,                              
            daily reports, expense reports, and employment applications.  The                            
            procedures Choate developed worked in concert with petitioner's                              
            computer, scheduling, and accounting systems.                                                
                  Petitioner rarely hired an attorney.  Choate negotiated                                
            contracts for petitioner.  He drafted and reviewed contracts,                                
            purchase orders, corporate resolutions, stock sale agreements,                               
            shareholders' agreements, promissory notes, profit-sharing plans,                            
            and deferred compensation agreements.  Choate handled claims from                            
            subcontractors.  No subcontractor claims against petitioner                                  
            reached arbitration until 1995.                                                              
                  Choate authorized petitioner to issue section 1244 stock on                            
            July 27, 1989.                                                                               









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Last modified: May 25, 2011