Mr. McPHETERS. New York. Mr. REDDAN. It's a New York corporation? Mr. McPHETERS. Yes, sir. Mr. REDDAN. Its offices are where? Mr. McPHETERS. In my home. Mr. HARDY. How much of the capital stock of that corporation do you own? Mr. McPHETERS. Fifty percent. Mr. REDDAN. How much does your wife own? Mr. McPHETERS. Fifty percent. Mr. HARDY. So between the two of you, you own the entire corporation? Mr. McPHETERS. Yes, sir. Mr. REDDAN. You said you had another corporation? Mr. McPHETERS. Yes, sir. I have an interest in the-well, let us say my wife has an interest in another corporation. Mr. REDDAN. These are corporations now through which you carry on your business? Is that correct? Mr. McPHETERS. That is correct. Mr. REDDAN. What is the name of the other corporation? Mr. McPHETERS. Framak Service Corp. Mr. REDDAN. When was that formed? Mr. McPHETERS. That was formed in, I believe, August of 1956. Mr. REDDAN. What was the purpose of forming that corporation? Mr. McPHETERS. That corporation was formed because of some business that was pending and contemplated, a great deal of business, pending between the Axelrod Co. and myself. Mr. REDDAN. The Axelrod Co.? Mr. McPHETERS. Company. And myself. Mr. McPHETERS. A. F. Axelrod Co., Inc. Mr. REDDAN. Where are they located? Mr. McPHETERS. 274 Madison Avenue, New York. Mr. HARDY. One minute. What is the extent of your stockholding in the Framak Corp. and your wife's stockholding in that corporation? Mr. McPHETERS. My wife has a 50-percent interest in the company. And Mr. Axelrod's daughter has a 50-percent interest in the company. Mr. REDDAN. Who are the officers of that company? Mr. McPHETERS. Mr. Axelrod is the president. I am the vice president. My wife is the secretary. And Miss Axelrod is the treasurer. Mr. REDDAN. Now, are there any other corporations through which you conduct this business that you've been telling us about? Mr. McPHETERS. Well, I have bought and sold for companies that I worked for. Mr. REDDAN. No, I— Mr. MCPHETERS. You mean in which I have an equity? Mr. REDDAN. That's right. Mr. McPHETERS. No, sir. Mr. REDDAN. I will show you a copy of what purports to be the minutes of the Witmac Corp., Mr. McPheters, and ask you if you can identify it as such. Mr. McPHETERS. They appear to be the corporate minutes. Mr. REDDAN. Is that the minute book that you turned over to Mr. Walton Woods of the committee staff? 44 Mr. McPHETERS. My wife turned this over to him. Mr. REDDAN. I see. Mr. McPHETERS. I was not Mr. REDDAN. All right. Mr. McPheters, if you will turn to page Mr. McPHETERS. Yes, sir. Mr. REDDAN. What minutes appear on page 44? Mr. McPHETERS. Shall I start reading the Mr. REDDAN. Just give us the date. Mr. McPHETERS (reading): Minutes, Special Meeting of Directors. A special meeting of the Board of Directors of the Witmac Corporation was held at the office of Abraham L. Levenson, 551 Fifth Avenue, New York, New York, on the 10th day of May 1056 at 2:30 o'clock in the afternoon. Present: Mr. William H. McPheters, Mrs. Beatrice McPheters, Mr. Abraham L. Levenson. Mr. Levenson presided as chairman. He advised Mr. REDDAN. Excuse me, Mr. McPheters. In the interest of brevity, the only part that I am interested in other than the identification of the minutes is the entry which appears in those minutes on page 44. Mr. McPHETERS. Oh. All right. You mean where it's marked down here? Mr. REDDAN. Yes, sir. If you will just identify that as to the paragraph number on that page. I believe it's paragraph 3. Mr. McPHETERS (reading): The chairman then presented to the meeting the actual contract which had been entered into on April 27, 1956, between the corporation and the said Martha M. McPheters and further presented to the meeting a proposed contract between the Corporation and the A. L. Dougherty Company. Mr. REDDAN. Are those contracts in the minute book? Mr. McPHETERS. One item identified as 14A is with Miss Martha McPheters. Mr. HARDY. Is that a contract between the Witmac Corp. and Mrs. Martha McPheters? Mr. McPHETERS. Miss Martha McPheters. Mr. HARDY. Miss Martha McPheters? Mr. McPHETERS. Yes, sir. Mr. REDDAN. May we have the contract with Miss Martha McPheters marked "exhibit 14A," please? Mr. HARDY. Without objection, so ordered. (The document referred to was introduced into the record as exhibit 14A and follows:) EXHIBIT 14A.-CONTRACT BETWEEN WITMAC CORP. AND MARTHA M. MCPHETERS, APRIL 27, 1956 THIS AGREEMENT, made this 27th day of April 1956, by and between the WITMAC CORPORATION, a New York corporation, with its office and principal place of business at 301 East 21st Street, in the Borough of Manhattan, City of New York, hereinafter designated as "Witmac"; and MARTHA M. MCPHETERS, of Stillwater, Oklahoma, hereinafter designated as "Agent." WITNESSETH: Whereas Witmac has been inactive for some years, but is desirous of reestablishing itself in the machinery business in which it had been originally engaged; and Whereas the Agent has represented unto Witmac that she is closely affiliated, on a friendly basis, with one A. L. Dougherty, who is the operator of a company bearing his own name in Whiting, Indiana, and has further represented that the said A. L. Dougherty Company is possessed of substantial amounts of machinery which it is desirous of selling and that she will be able to introduce Witmac unto Dougherty and will exert her best efforts in order to persuade Dougherty to retain the services of Witmac as selling agent; Now, therefore, in consideration of the premises and the mutual promises and covenants herein contained, it is hereby agreed as follows: FIRST: Immediately after the making of this Agreement, the Agent agrees to introduce Witmac unto the A. L. Dougherty Company, of Whiting, Indiana, agrees to exert her best efforts towards inducing the said A. L. Dougherty Company to retain the services of Witmac whom she will recommend as having the ability to sell and dispose of the machinery and heavy equipment possessed by the A. L. Dougherty Company, at prices which would represent a fair return in the existing market. SECOND: In consideration for such services as aforementioned, and in the event as a result of such introduction and recommendation, a contract eventuates between Witmac and the said A. L. Dougherty Company or any of the latter's subsidiaries or affiliates, which results in Witmac earning commissions, then and under such circumstances Witmac does hereby agree to pay unto the Agent a sum of money equivalent to one-third (%) of the net proceeds received by Witmac from the A. L. Dougherty Company or any of its subsidiaries or affiliates. THIRD: The term of the agency hereunder shall be until December 31st, 1957. FOURTH The parties hereto hereby agree that the maximum sum which Witmac shall be obligated to pay unto the Agent during the term of this Agreement as aforestated, shall be Ten Thousand ($10,000) Dollars. In other words, if the net proceeds earned by Witmac shall be Thirty Thousand ($30,000) Dollars or greater, then and under such circumstances the rate shall not apply, but the commissions due and payable unto the Agent shall be said sum of $10,000. FIFTH This Agreement shall be binding upon the parties hereto and their respective heirs, executors and/or assigns. SIXTH This Agreement cannot be modified or extended without another Agreement in writing signed by each of the parties hereto. IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and seals the day and year first above written. WITMAC CORP., By W. H. MCPHETERS, President. Mr. HARDY. Do you have another contract there? A contract between whom? Mr. McPHETERS. A contract between Witmac Corp. and A. L. Dougherty Co. Mr. REDDAN. What is the date of that contract? Mr. McPHETERS. Tenth of May 1956. Mr. HARDY. That is the contract that was referred to in the minutes that you just read? Mr. MCPHETERS. Yes, sir. I assume so. Mr. REDDAN. May we have that marked "14B," please? Mr. HARDY. Without objection, so ordered. (The document referred to was introduced into the record as exhibit 14B and follows:) EXHIBIT 14B-CONTRACT BETWEEN WITMAC CORP. AND A. L. DOUGHERTY Co., MAY 10, 1956 THIS AGREEMENT, between the A. L. DOUGHERTY COMPANY, of Whiting, Indiana, hereinafter referred to as "Dougherty"; and WITMAC CORPORATION, a New York corporation, with its office and principal place of business at 301 East 21st Street, in the Borough of Manhattan, City of New York, hereinafter designated as "Witmac", this 10th day of May 1956. WITNESSETH: Whereas Dougherty is a contractor owning substantial quantities of heavy machinery and equipment which it is desirous of selling; and Whereas Witmac has been engaged in the business of selling similar heavy equipment and represents that it will exert its best efforts to sell such equipment amongst its contacts within the United States and also abroad; and Whereas Dougherty is desirous of retaining the services of Witmac with respect to the sale of such equipment and Witmac is desirous of rendering such services under an exclusive basis for a fixed period of time; and Where the parties are desirous of specifying in writing the terms of their arrangements: Now, therefore, in consideration of the premises and the mutual promises and covenants herein contained, it is hereby agreed as follows: FIRST: Dougherty does hereby give Witmac a six (6) month option, on an exclusive basis, to sell the following equipment: 20 Caterpillar Tractors, Model D8. 10 Caterpillar Motor Graders, Model No. 12. 9 Euclid Scrapers, Model TDT. 4 Northwest Shovels, Model 80D. 1 Manitowoc Drag Line, Model 4500. SECOND: Dougherty does hereby represent that it holds a free and unencumbered title to the foregoing items of machinery. THIRD: Witmac does hereby agree that it will exert its best efforts in attempting to sell such equipment during the said six months' period, representing the term of this Agreement. It is agreed between the parties that the prices at which such equipment is to be sold shall be no less than sixty per centum (60%) of today's replacement value, but Witmac shall in each instance exert its best efforts towards procuring a better price. In the event that Witmac may be unable to sell such equipment at the minimum price of 60% of today's replacement value, then Witmac shall not commit Dougherty towards any sale price less than such minimum without first submitting such price to Dougherty in writing and procuring Dougherty's written consent to such sale. FOURTH: The parties agree that in consideration of the exclusive authorization granted unto Witmac hereunder, that any and all traveling and selling expenses incurred by Witmac in the prosecution of its endeavors hereunder shall be borne by Witmac and shall not be chargeable to Dougherty. Further, Witmac agrees to render such services as may be necessary, by way of advice and directions, with respect to the rebuilding and refurbishing of such equipment as may require same in order that it may be put into a saleable condition. FIFTH: Any sale effectuated by Witmac in pursuance of this Agreement must be on a cash basis. If a sale be made to a foreign concern or party, then it is permissible to arrange such sale predicated upon a letter of credit being arranged with a United States bank, providing for payment in full for said machinery upon delivery of same to a shipping port. Witmac is hereby afforded the right to sell the said equipment piecemeal, or as a packaged unit. In the event that Witmac procure an offer for any or all of such items of machinery on a basis other than cash, then the written consent to such sale by Dougherty shall first be procured before Witmac shall be enabled to consummate a contract of sale. SIXTH In the event that Witmac shall consummate a sale of any or all of such machinery and equipment during the term of this Agreement, then it is agreed that Dougherty shall pay unto Witmac a commission of twelve and a balf per centum (12%) of the gross proceeds realized by such sale. In the event that Witmac be unable to consummate any such sale within the sixmonth term of this Agreement then this contract shall terminate and Dougherty shall be relieved of any and all responsibility unto Witmac, and shall thereafter be entirely free to dispose of such equipment under such terms and to whomsoever Dougherty may decide upon. In the event that Witmac shall not have consummated any such sale of said equipment during the said six-month option period, and further in the event and after the expiration of thirty (30) days from the date hereof Dougherty shall have procured an offer for such machinery and equipment in excess of the minimum price (60% of replacement value) hereinbefore specified, then and under such circumstances Dougherty shall be free to accept such offer, but Dougherty then shall pay unto Witmac a sum of money equivalent to seven and a half (72%) per centum of the gross proceeds procured. SEVENTH: This Agreement shall be binding upon the parties hereto and their respective heirs, executors and/or assigns. EIGHTH: This Agreement cannot be modified or extended without another Agreement in writing signed by each of the parties hereto. IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and seals the day and year first above written. A. L. DOUGHERTY COMPANY, President. Mr. REDDAN. Now, the contract which has been received in evidence as exhibit No. 14B is between the Witmac Corp. and the A. L. Dougherty Co., of Whiting, Ind.? Mr. McPHETERS. That is correct. Mr. REDDAN. And what was that contract for, Mr. McPheters? Mr. McPHETERS. That contract was an exclusive sales agreement between Mr. Dougherty's company and my company. Mr. REDDAN. To sell what? Mr. McPHETERS. To sell a large lot of equipment that he owned at that time or represented that he owned at that time. Mr. REDDAN. Is it enumerated in there? Is it set forth? Mr. McPHETERS. Yes. There is quite a large amount of equipment enumerated here. Some 20 Caterpillar tractors, Model D-8. Ten Caterpillar motor graders, Model No. 12. Twenty-five Euclid bottom dump wagons, Model FDT. Nine Euclid scrapers, Model TDT. Four Northwest shovels, Model 80-D. And one Manitowoc dragline, Model 4500. Mr. REDDAN. What was the date of that contract? Mr. MCPHETERS. May 10, 1956. Mr. REDDAN. You were appointed exclusive agent to sell that material? Mr. McPHETERS. That is correct. Mr. REDDAN. Now, what was the basis of the sale to be? Mr. McPHETERS. The basis of the sales was that I was to sell for the account of the company. Mr. REDDAN. Of the Mr. McPHETERS. Dougherty Co. Mr. REDDAN. That is a sole proprietorship? Mr. McPHETERS. I believe it to be. Mr. REDDAN. What is the name in the contract? Mr. McPHETERS. A. L. Dougherty Co. Mr. REDDAN. And what commission were you to receive: Mr. McPHETERS. I was to receive a commission of 72 percent of any equipment sold by the company and 121⁄2 percent on any equipment sold by me. Mr. REDDAN. You mean Mr. McPHETERS. Or by my company. Mr. REDDAN. You were to receive 12 percent if you or your com pany Mr. HARDY. Twelve and a half. Mr. REDDAN. Twelve and a half percent if you or your company sold the equipment? Mr. McPHETERS. That's right. |