Shedco, Inc. - Page 10

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          was a disqualified person because Mr. Estes had an indirect                 
          ownership interest in Estes Co. through his interest in WE 7 and            
          its interest in Guardian Construction Co., and he also served as            
          a trustee of the plan.  Estes Co. agreed to file Forms 5330,                
          Return of Excise Taxes Related to Employee Benefit Plans, pay the           
          excise taxes under section 4975 applicable to the prohibited                
          transactions, and repay the loans.                                          
          The Loan to Estes Co. From the Plan During 1986                             
               Sometime during 1986, Mr. Shedd approached Mr. Grove, who at           
          the time was executive vice president of Estes Co., and suggested           
          that Estes Co. borrow money from the plan.  Subsequently, on                
          December 25, 1986, the plan lent $2,250,000 to Estes Co. (the               
          loan).                                                                      
               On behalf of Estes Co., Mr. Grove signed a promissory note             
          relating to the loan dated December 25, 1986 (the note), and                
          payable to Mr. Shedd as trustee of the plan.  The note was                  
          payable on demand and bore interest on the unpaid balance,                  
          payable monthly commencing January 25, 1987, at the rate of                 
          seven-eights of 1 percent above the prime rate charged by the               
          Wells Fargo Bank of California (Wells Fargo).  The interest rate            
          on the loan on its face was somewhat higher than Estes Co. was              
          paying commercial banks, but the rate nonetheless was slightly              
          advantageous to Estes Co. on an overall basis because the banks             
          charged Estes Co. additional fees which the plan did not charge.            
          The combined effect of the loan's rate of interest and lack of              



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