Clayton W. Plotkin - Page 4




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               a participant extends a non-home loan having a five                    
               year or less repayment term beyond five years, the                     
               balance of the loan at the time of the extension is a                  
               taxable distribution to the participant.                               
               During November of 1994, petitioner sought to borrow against           
          his accrued benefit under the plan.  Pursuant to Edberg’s                   
          recommendation, petitioner authorized the loan transaction on               
          behalf of the corporation’s board of directors as well as the               
          shareholders.  The minutes of the board and shareholders meeting,           
          held on November 16, 1994, provide as follows:                              
                    The meeting was held because the Pension Plan                     
               Administrators (Edberg’s people) indicate that there                   
               must be corporate approval in order for Clayton W.                     
               Plotkin to borrow from the Pension Plan.  According to                 
               Annie at Edberg’s office, Plotkin is able to borrow up                 
               to $50,000 but he only wants to borrow $25,000.  The                   
               loan must be secured, must be payable at least                         
               quarterly of principal and interest, it can be                         
               amortized over any length but it must be paid off at                   
               five years with a balloon payment balance, and interest                
               should be prime plus one or two percent.  If there have                
               been no other loans or changes Plotkin can borrow again                
               at the end of the five years in the amount needed to                   
               pay off the balance of the loan.                                       
                          *    *    *    *    *    *    *                             
                    RESOLVED that Clayton W. Plotkin, be allowed to                   
                    borrow $25,000 from the Pension and that there be                 
                    a note with a deed of trust secured to Plotkin’s                  
                    house * * *.  The interest rate on the loan is to                 
                    be 9% with monthly payments of principal and                      
                    interest of $253.57.  Payments are to be due the                  
                    1st day of the month and will be late if not                      
                    received by the 15th day of the month.  Payments                  
                    start 01/01/95.  The loan payments will be based                  
                    on a 15 year payment with a balloon payment due                   
                    when the loan is supposed to be paid off.  If he                  
                    is able Plotkin may borrow from the Pension Plan                  
                    to pay off the balance due but must meet the                      
                    requirements at that time.  We will get a schedule                





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Last modified: May 25, 2011