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consisted of Mr. Arnold, Mr. Lombardi, Joseph Zelazny, and Vince
Ciccarello.4
Mr. Arnold was the chairman and a member of the board of
directors of Norcom since its acquisition.5 He also served as
Norcom’s secretary from September 1988 to June 1992. Mr. Arnold
did not keep an office at Norcom’s facilities and was not
actively involved in Norcom’s day-to-day management. Norcom did
not compensate Mr. Arnold for his work until he began receiving a
salary in 1991.
Norcom’s day-to-day management was largely handled by Mr.
Lombardi, a CPA who possessed significant management experience.
He served as CEO, treasurer, and assistant secretary of Norcom
from the time it was acquired in 1987, and in September 1988 also
became president of Norcom. Mr. Lombardi was responsible for all
aspects of Norcom’s operations, including strategic planning,
budgeting, negotiating with lenders, manufacturing, sales and
marketing, acquiring equipment, and hiring personnel. Mr.
Lombardi was compensated each year of his employment at Norcom
until he resigned in April 1992.
4 Mr. Ciccarello was the vice president of sales and
marketing. In August 1993, he was replaced by Ted Crews III.
The sales and marketing responsibilities are not material to this
case and are not discussed further.
5 Mr. Arnold was the sole member of Norcom’s board of
directors at the times Norcom made the two disallowed payments.
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