-5-
the fact that petitioner did not pay Mr. Leonard any compensation
in 1985 or 1986.3
3 The minutes of the board meeting stated, in pertinent
part:
1. The President, through his efforts as early as
1984 and resultant personal and business contacts
acquired from those efforts, was able to have the
corporation placed on the bidding list for All American
Pipeline Company.
2. The President[,] having acquired expertise in the
coating and insulation of pipe in Saudi Arabia during
1978 through to 1980[,] was able to develop a new
insulation process starting in 1984, which process was
ultimately successful in securing the All American
contract (the “contract”).
3. The corporation, notwithstanding the successful
insulating process, would have been unable to complete
the contract without the financial backing of a public
corporation or a joint venture partner with financial
backing. The President, through his thirty years
association with the President of the Permanent
Concrete Ltd., was able to secure a financially strong
joint venture partner for the corporation, which
partner secured for the joint venture Five Million
Dollars ($5,000,000) of financing and obtained
approximately Twenty-Three Million Dollars
($23,000,000) of bonding. This was accomplished
without giving up more than fifty percent of the
participation which would have otherwise been the case.
4. The President personally guaranteed the
corporation’s share of the bank financing and
indemnified the joint venture partner, Anchor Wate, a
subsidiary of Permanent Concrete Ltd., in respect of
the bonding and further pledged his assets in support
of the guarantee.
5. The President has received no compensation from
the corporation for 1985 and 1986. In addition, the
corporation was unable to pay compensation to its
President in those years due to Royal Bank of Canada
credit line restrictions, which credit line was also
(continued...)
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