Reed Smith Shaw & MClay, William J. Smith, Tax Matters Partner - Page 27

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                  We disagree with the tax matters partner that the                   
             contribution agreement and ratification effect the transfer              
             of legal title to the Saztec stock to the partnership and                
             then to the trust.  First, as we read it, the contribution               
             agreement is not an unconditional assignment and transfer                
             of the underlying stock.  Under its terms, it operates only              
             to the extent that the partnership is obligated to make                  
             contributions to the plan and Mr. Stein is obligated to                  
             reimburse the partnership for those contributions.                       
             However, as quoted above, section 8.2 of the plan document               
             states that the plan is entirely voluntary on the part of                
             the partnership and further states that "its continuance                 
             and the payment of contributions hereunder are not assumed               
             as contractual obligations of the Firm [partnership] and                 
             the Plan shall have no cause of action against the Firm."                
             We note that the partnership may be subject to excise tax                
             under section 4971 if there is an accumulated funding                    
             deficiency for a plan year computed as of the end of the                 
             plan year.  Secs. 412(a), 4971(a).  However, the disclaimer              
             further states that "The fact that the Firm becomes subject              
             to any tax or penalty by having failed to make a                         
             contribution shall not give rights under or to this Plan to              
             require contributions."  In light of this disclaimer by the              







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Last modified: May 25, 2011