- 15 -
Noncompete Secrecy Total
Taxable Year Agreement Agreement Deductions
1990 $100,000 $50,000 $150,000
1991 400,000 200,000 600,000
1992 400,000 200,000 600,000
1993 400,000 200,000 600,000
1994 400,000 200,000 600,000
1995 300,000 150,000 450,000
TOTAL 2,000,000 1,000,000 3,000,000
On June 29, 1990, Scherer filed a Form 10-K, pursuant to
section 13 or 15(d) of the Securities Exchange Act of 1934, with
the Securities and Exchange Commission (SEC), for the 1990
taxable year. 15 U.S.C. secs. 78m(a), 78o(d) (1994). The Form
10-K specified that, by 1990, Scherer had disposed of all of its
diversified health care products and services businesses, except
one specific company, Paco Pharmaceutical Services, Inc. Also,
in an undated memorandum entitled "Corporate Development: Status
and Strategy", Scherer delineated its general marketing
strategies.6 Among other things, the aforementioned memorandum
discussed Scherer's goal, in 1990 and beyond, to acquire
companies that contributed a certain amount of money, and
possessed "high growth potential in major market areas". The
memorandum describes Old Lorvic's acquisition process as part of
its "opportunistic diversification" strategy.
6The record indicates that Richard Nemanick obtained the
memorandum in 1987.
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