interest, if any, of defendant Prentice Hall, Inc. in its publication. Upon information and belief, defendant Casey delivered the the exact

ing fi October 10

original manuscript to the defendant Prentice Hall
time of which plaintiff 18 unableant
XXXYČKXKÜXXXXuetxxxxb256: în October 10, 1956, R.H. Krieger,

General Manager of the Specialties Division of defendant Prentice
Hall Inc. wrote to the plaintiff expressing great interest in
the plaintiff's mnuscript, "Employee Pay, Benefits and Taxes"
as an "interesting and more important useful piece of work"

and stating that he had turned the atter over to r. Alan Willia "who handles our tax books". On October 16, 1956 r. Alan Williams Associate Editor of the Mail Crder Book department of the defandar Prentice Hall Inc. wrote to the plaintiff saying that he expected to find time to read the plaintiff's manuscript, which had been turned over to him by R.H. Krieger, of the Specialties division and dayong "I expect to find time within the next week or so to go over your manuscript carefully with my associates on our Editorial Staff, and you will be hearing from me just as soon as I am able t pass on our reactions concerning possible publication by Prentice Hall. We apprecitate very much your thinking of Prentice-Hall in connection with your project."

On November 1, 1956, Alan Williams, Associate Editor of Mail Order books of defendant, Prentice Hall, Ino. wrote to plaintiff, saying in substance that although the material is well prepared and constructide, Prentice Hall would not be able to work it into its current program in Mail Order books and that defendant Casey, in the Institute for Business Planning Section informed said Williams" that the subject matter was too closely associated with one of their forthcoming publications to enable them to use On November 13, 1956, defendant Casey wrote to plaintiff telling him that his manuscript had been sendobaɖobeen "sent to the book publishing department. I don't know what's happened to 1 there, but I am sure you will hear." The original manuscript was thereafter returned to the pl in ti ff.

Plaintiff asserts that the foregoing facts contain the

facts, details and circumstances by means of which the defendants and each of them procured in trust and confidence from the plaintiff his manuscript as alleged in paragraphs TWENFTH AND THIR TEENTH of the complaint and the plaintiff has revealed the identity of each of the defendants and their respective officers or authorized agents who participated in the procurement thereof

As to Interrogatory 5 of the defendants Prentice Hall, Ine and Institute for Business Planning Inc. Plaintiff cannot state in detail the dates, times, places and circumstances wherein and whereby defendant William J. Casey directed unauthorized use of plaintiff's material by employees of defendants Prentice Hall, Inc. and Institute for Business Planning, Inc. Plaintiff asserts that such use vas made thereof as appears from the comparative material contained in Exhibits "A" xxxdub hereto attached and that only the defendants themselves have direct knowledge as to the dates, times, places and circumstances of such unauthorized use, which facts will have to be ascertained by an examination of the defendants. Plaintiff is of the belief and therefore states on information and belief that the corporate defendants themselves caused the copying of the plaintiff's manuscript independently of the defendant Casey but that they also utilized the materials taken in substance or verbatim from the plaintiff' manuscript as set forth inExhibits "A" xnxx hereto attached. Further answe to the above interrogatory is found in the answers to Interrogatory 5 and 6 of the defendant Casey, hereinafter set forth.

As to the Interrogatories 5 and 6 of the defendant Casey. The cts or means by which the defendent Casey procured the plaintiff's manuscript and the pretense or representation that it would be transmitted by him to the corporate defendants are set forth fully in the answer to interrogatory 4, hereinabove set forth.

The details as to the

approximatedates, time and place

of the meetings between plaintiff and defendant Casey are set forth in the answer to interrogatory no. 4. hereinabove. The substance of the oral communication is set forth therein also. The sole written communication from the defendant

William J. Casey

to the plaintiff was a letter written on

November 13, 1956 to plaintiff as follows prior to the use there

I regret the long delay in writing you as I promised I would. I just got lost in the press of other things and I'm afraid that it would not be practical for us to work together over a distance of 3,000 miles. I am sure it wouldn't work out as a regular thing and it can only work out on an assignment basis. If you have Some material you think would be useful for pay plans and would like to rebare it on a fixed fee basis I would be happy to experiment.

I understand that Dick Creager(sic) did not feel he cold use your material inthe Prentice Hall specialty program and that he sent it to the book publishing department. I don't know what's happened to it there, but I am sure you will hear.

It was a pleasure to meet you in San Francisco and I hope you will look me up when you get to New York.

Sincerely yours,

Bill /s/ "

While each of the defendants was pretending to be

disinterested in the publication of the plaintiff's manuscript all of them jointly conspired to make unauthorized use thereof by copying verbatim large portions of it and using large portions by paraphrase throughout their written publications as is set for

in Exhibit "A" attached hereto. Defendant Casey pretended that one John Cuddahy clippedportions of plaintiff's manuscript but Cuddahy has asserted in writing that the use which he de of plaintiff's manuscript was with the consent andunder the directions of his employer, defendant Casey. -6

On this day of January, 1960, in the City of Indianapolis, State of Indiana, the plaintiff Harry R. Fields, being duly sworn did depose and say, that he has read the

foregoing answers to interrogatories and knows the contents thereof; that the same are true to his own knowledge except as to matters therein stated to be alleged on infornation and belief and that as to those matters he believes them to be true.

MR his

Harry 3. Fields.

To understand the limitations of the nonqualified plou and the importance of carefully designing it to provide practical assurauco of its serving its limited usefulness, it is necessary to understand the general statutory pattern. Sections 401 to 404, inclusive, of the Internal Revenue Code, prescribe special tax rules which govern the taxation status of ALL deferred pay plan, whether qualified or nonqualified. Section 401 prescribes the requirements for qualification of a plan. Section 402 governs the taxability of employees under trusteed plans, qualified and nonqualified. Section 403 governs the taxability of employees under nontrustoed annuity plans, qualified and nonqualified. Section 404 provides the rules which allow or disallow the employer's deductions under qualified and nonqualified plans. These sections are very favorable to qualified plans. (See "What the Qualified Plan Can Do", sheet above.) They are, however, unfavorable to nonqualified plans, as is explained below, and result in the following practical suggestions for designing such plans where the qualified plan will not serve the purposes.

(1)

.

NONQUALIFIED PLANS SHOULD NOT BE FUNDED. A funded plan, under the Code pattern, means either a trusteed plan or a nontrusteed annuity pian. The tax status of funded nonqualified plans is outlined in Tax Summary #4, on sheet Sections 402(b), 403(b) and 401(a) (5), when read together, are to the effect that if the employee's rights are nonforfeitable (vested) when the employer's contribution, or the comporsation, is paid, the employer is allowed a deduction at that time but the empicyce is also taxable at that time. If the plan is funded, this destroys the plan's tax value to the employee. In fact, it is worse than a current pay plan, for he is currently taxable, but receives no funds to pay the tax until the time for distributions under the plan. Also, from the employer's viewpoint, some provision for forfeitures is usually desirable as strengthening the employment relationship and as furnishing some brake upon employee turnover.

On the other hand, if the employee's rights are forfeitable when the employer's contributions are paid, taxation of the employee is deferred, but the employer is allowed no deduction for any year. (Regs. Sec. 1.404(a)-12) Obviously, employers cannot afford to sacrifice their deductions in order to defer taxation of their employees. (This reasoning does not apply to tax-exempt employers. See subsection (u), below.) Thus, whether the employoe's rights are currently forfeitable or vested, the funded nonqualified plan is impractical and should be avoided.

(2) UNFUNDED NONQUALIFIED PLANS SHOULD BE CAREFULLY DESIGNED WITH CERTAIN TAX PRINCIPLES IN VIEW. Only the unfunded nonqualified plan is, therefore, practical. This also has many disadvantages as comparod with qualified plans. But it can, it seems, achieve deferral of the employco's taxation without loss of the employer's deduction. The dcductions are, however, deferred until the benefits actually are paid. (Sec.