Transport Labor Contract/Leasing, Inc. & Subsidiaries - Page 15

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                    Lessor shall indemnify Lessee against all liabil-                 
               ity and loss in connection with and shall assume full                  
               responsibility for payment of all federal, state and                   
               local employee taxes or contributions imposed or re-                   
               quired under unemployment insurance, social security                   
               and income tax laws with respect to Lessor’s employees                 
               engaged in the performance of the Agreement.                           
                  *       *       *       *       *       *       *                   
                                      EXHIBIT A                                       
                                COMPENSATION SCHEDULE                                 
                    Lessee shall compensate Lessor via certified bank                 
               funds for the services provided by Lessor’s drivers by                 
               the following methods.  (By cents per mile, an hourly                  
               wage, a percentage of Lessees gross revenue produced by                
               Lessor’s employees or by any other method agreed to or                 
               described below.)  Any of the below which are directly                 
               attributable to services performed for the Lessee by                   
               the Lessor’s employee.  (See addendum A).                              
               The above compensation multiplied by (See addendum B),                 
               surcharge or charge currently or retroactively charged                 
               the Lessor and other charges attributable to services                  
               performed.  The rate is subject to change based upon                   
               federal and state tax changes and unemployment and                     
               workers compensation rates throughout the year, PLUS                   
               Lessor’s portion of health insurance costs for Lessor’s                
               employees assigned to Lessee (used or not), and charges                
               to Lessee by Lessor for Lessee’s operation expense                     
               (such as fuel, tire repair, other expenses for Lessee,                 
               and charges for truck expense advances) multiplied at                  
               the rate of ONE HUNDRED (100%) percent.[10]  [Reproduced               

               10None of the exclusive lease agreements into which TLC and            
          a trucking company client entered prior to calendar year 1993               
          contained addendum A and addendum B.  Instead, such exclusive               
          lease agreements contained Exhibit A, which set forth the same              
          type of information as that set forth in Addendum A and Addendum            
          B that were included as part of each exclusive lease agreement              
          into which TLC and a trucking company client entered during the             
          taxable years at issue.  Addendum A listed the type of trucking             
          company (i.e., over-the-road or local) and the method used to               
          compute the gross amount that TLC was to pay each driver-employee           
          whom it leased to a trucking company client.  Addendum B listed             
                                                             (continued...)           





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Last modified: May 25, 2011