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Form 1040” (before considering limitations). Under the plan,
each participant is entitled to a maximum reimbursement of
$10,000 per year.
At a special meeting of the directors held on November 1,
1994, the board of directors of Waterfall Farms adopted a
resolution setting forth a repayment obligation similar to that
set forth in the bylaws. At that meeting, the directors also
adopted the following resolution:
RESOLVED that the Corporation’s officers and
employees shall be required to live at the worksite of
the Corporation to ensure security for the Corporation
property and operations. The officers and employees
shall be required to live on the worksite to supervise
the care and feeding of the livestock of the
corporation. The Corporation shall supply said
officers and employees all of their food and lodging
while living at said worksite. That all of the
officers and employees shall be considered “on duty”
when at the worksite and therefore entitled to such
benefits.
C. Farm Lease
During the years at issue, Waterfall Farms leased the Huber
farm to Mr. Huber under a “share-crop” arrangement. Under a
written agreement titled “Farm Lease”, dated December 1, 1994
(the 1995 lease), effective for 1 year (to November 30, 1995),
Mr. Huber agreed to pay Waterfall Farms $15,000 plus one-third of
the proceeds from the sale of all crops grown on the farm. Mr.
Huber was to receive the other two-thirds of the proceeds from
the sale of the crops, as well as all payments received under
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