Opinion ID: 1153554
Heading Depth: 1
Heading Rank: 4

Heading: Termination of Baker and negotiations for purchase of his stock.

Text: During the fiscal year 1969-1970, according to Siler, business was terrible and although sales increased by $50,000, labor costs increased even more. During that same year, as a result of the organization of Dorpat and the leasing of larger quarters from it, payments for rent, insurance, taxes, moving in expenses, and other items were increased. The profit for the fiscal year ending June 30, 1970, dropped to $269.52. Also, according to both Siler and Baker, the relationship between them deteriorated in early 1970. Siler testified that Baker made only one small sale while he was with the company and that he was not getting out and calling on the trade or spending as much time as he should for the company. [5] Baker testified, however, that Siler told him not to contract large companies, such as the telephone company, because any resulting orders would be too large for the small business to handle and that relations deteriorated because Siler wanted him to sell out and because Siler thought that a Mr. Ahern could do more for the business than Baker could. In early May 1970, Mr. Ahern tried to talk to Baker about purchasing his stock, but Baker refused to talk to him about a price for the sale of his stock. According to Baker, he was then offered $20,000 for his stock by Siler, who intimated that if Baker didn't sell he would get no profits from the business. Siler denied that statement and denied making an offer to Baker for his stock, but said that Ahern also wanted to buy Siler's stock and had offered to pay $45,000 for it, because 51% was worth much more than 49%, and that Siler told Baker that if he sold out the purchaser might operate the business in such a way that it would show no profits. Siler also testified that he told Baker, apparently on another occasion, that Ahern would pay Baker $22,500 for his stock; that he talked to Baker about that offer; that Baker said he didn't know what to do, and that he told Baker that if Baker didn't sell to Ahern, Siler was going to do so. In addition, Siler testified that he tried to get Baker to buy him out, but that Baker would not do so and would not tell Ahern whether or not he would sell out to him. On June 25, 1970, after these negotiations failed, Baker was terminated as a salesman because of unsatisfactory work performance. According to Siler, this was done because Baker had made no sales and because Siler decided that Baker was not doing the company any good. On July 10, 1970, Baker and his wife were voted out as directors and officers. After that date no notices were sent to Baker of any further stockholders' meetings and he was not consulted by Siler thereafter about the business. Baker also testified that he was also not permitted to see the company books and that he had to get legal redress in order to do so. This was denied by Siler. Also, at the meeting on July 10, 1970, Siler's salary was increased to $1,800 per month and his wife's salary was increased to $500. There were no subsequent salary increases and no bonuses were paid to Siler or to his wife, however, either at the end of the 1969-70 fiscal year or at any later date. [6] During the period of the years from 1967 to 1970, prior to Baker's termination, he was paid $7,975 in salary for his services for one day each week, plus $2,500 in bonuses, for a total of $10,475, not including the value of medical insurance and the use of a company car at a somewhat nominal rental. As previously stated, he was offered $22,500 for the stock, for which he had paid $14,210. As also previously noted, Baker also had given Siler a $5,000 note payable from the proceeds of the corporation, on which he subsequently paid $1,000 to Siler.