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petitioners’ position that petitioner was the principal and RHB
was the agent.
The employment agreement demonstrates that the parties
intended to continue an employer-employee relationship after
petitioner became a shareholder. The employment agreement refers
to RHB as the employer and petitioner as the employee. The
employment agreement provides petitioner “accepts such employment
and agrees to perform all such duties of a nature consistent with
his training and experience which may be assigned to him by
* * * [RHB], and, subject always to fiduciary constraints and to
the direction and control of the Board of Directors of * * *
[RHB]”. The employment agreement also provides that petitioner:
shall devote his entire attention and energies
diligently and faithfully to * * * [RHB’s] business
* * *. Subject to fiduciary constraints, * * * [RHB]
shall determine the specific duties to be performed by
the * * * [petitioner], the means and manner by which
those duties shall be performed, and the extent by
which those duties shall be performed by other
Employees of * * * [RHB].
The employment agreement does not indicate that the parties
intended to establish a hybrid relationship. Instead, the
employment agreement indicates the parties intended to establish
an employer-employee relationship, particularly in regard to
petitioner’s performance of his fiduciary services.
This conclusion is supported by the manner in which RHB
treated petitioner. As described above, RHB exercised a
requisite level of control over petitioner. RHB paid petitioner
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