- 33 -
and neither requesting nor reading any of the literature on the
plan.
Lakewood established the Lakewood Plan under the SC VEBA on
December 28, 1990, effective January 1, 1990. The only employees
covered by the plan during the subject years were Drs.
Hirshkowitz, Desai, Sobo, McManus, and Sankhla.19 During the
respective years from 1990 through 1993, Lakewood paid Dr. Desai
compensation of $318,020, $308,279, $297,452, and $275,270, it
paid Dr. Sobo compensation of $330,030 $354,277, $329,185, and
$203,640, it paid Dr. McManus compensation of $218,821, $368,708,
$340,376, and $333,204, and it paid Dr. Sankhla compensation of
$50,000, $127,500, $142,500, and $147,500. During the respective
years from 1990 through 1992, Lakewood paid Dr. Hirshkowitz
compensation of $327,691, $181,994, and $204,918.
Under the terms of the Lakewood Plan, as in effect through
December 31, 1992, a covered employee received a death benefit
equal to 2.5 times his or her prior-year compensation. Lakewood
amended its plan as of January 1, 1993, effective January 1,
1990, to increase the death benefit to 8.15 times prior-year
compensation. Drs. Hirshkowitz, Desai, and McManus each elected
on January 1, 1993, not to accept this additional coverage.
19 Drs. Bharat Patel and Chadru Jain were also employees of
Lakewood. The record indicates that they joined the Lakewood
Plan after the subject years.
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