- 12 -
1986 1 1 29,923
1987 1 1 37,409
1988 $40,249 $21,694 61,944
1989 41,937 21,897 63,835
1990 50,000 54,027 104,027
1991 72,529 -- 72,529
1No breakdown between salary and bonus is available.
On June 17, 1988, petitioner's directors adopted two
separate formulas for determining the respective annual bonuses
to be paid to Mr. Crispe and Mike. Minutes of the June 17, 1988,
board of directors meeting state, in pertinent part:
5. Bonus to Gerald A. Crispe. The directors
ratified and approved a bonus formula for Gerald A.
Crispe for his services as Executive Vice President of
the corporation, effective as of September 1, 1987.
Mr. Crispe is to receive a bonus equal to 10% of the
"net income" of the corporation. Net income for
purposes of calculating Mr. Crispe's bonus is the
income the corporation would have after deducting all
taxes that would be incurred on the corporation's
income before paying any executive bonuses. Mr.
Crispe's bonus is payable annually, although advances
against the bonus may be made more frequently.
6. Bonus to Mike Martin. The directors ratified
and approved a bonus formula for Mike Martin for his
services as Production Manager, effective January 1,
1988. His annual bonus shall be equal to 1/10th of 1%
of the company's annual gross profits times the factor
obtained by dividing the corporation's costs of goods
sold by total sales. Mike's bonus is payable annually,
although advances against the bonus may be paid more
frequently.
Mr. Crispe and Mike received annual bonuses for 1988 through
1990 based on the above bonus formulas. In 1990, petitioner
further paid to Mike an additional special bonus of $44,027, thus
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