Sweeney

A stipulation of facts was filed herein which discloses, among other things, that defendant’s business was operated in two separate divisions: automotive and radio. Both television and radio activities were conducted by the latter.

In 1944, defendant, as owner of radio station KECA, made verbal agreements with key employees of both divisions: that they would receive specified percentages of the net profits derived from both divisions. The “arrangements were not limited to any profits over any fixed base.” Upon sale of station KECA these employees were paid their percentages of the capital gain on the sale, in addition to other net profits.

In 1947, the verbal agreements were replaced by written contracts with key personnel. A typical form of such contract is attached to the stipulation and marked Exhibit A. Nineteen of these were in effect in the years 1950 and 1951. They specifically excluded capital gains and losses in figuring net profits.

Plaintiff testified that he became a full-time employee of defendant on June 1, 1948, as sales manager of radio station KFI, with the understanding that when KFI-TV came on the air he would be general sales manager of that station.

On…