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Home Interiors & Gifts, Inc. v. Commissioner, supra at 1146.
Exacto maintains that Mr. Heitz’ efforts were of great value to
the corporation, and we agree.
Mr. Heitz has contributed to the success of Exacto in
several ways. First, he was instrumental in improving the
overall efficiency and quality of Exacto's production process.
Mr. Heitz regularly makes adjustments to Exacto's automated line
of spring-making machines to improve the efficiency of the line
and to reduce the percentage of rejected springs. Mr. Heitz also
contributes significantly in the area of shipping and product
assembly, having invented several new types of spring packaging.
Perhaps the most valuable service that Mr. Heitz provided to
Exacto was in sales and marketing. He was very successful at
targeting clients and marketing Exacto's services. He was
personally responsible for 65 to 70 percent of Exacto's sales
during the years at issue. From FY 1991 to FY 1994, the period
when Mr. Heitz had assumed sole responsibility for the
administration and operation of the company, Exacto's gross sales
increased from $8,923,374 to $16,162,119. Mr. Heitz’ efforts to
solicit clients played a key role in Exacto's success, and Exacto
was substantially dependent on him. However, Mr. Heitz was also
being compensated for his sales efforts, in part, by Hickory. He
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