X. Big Employee, being first duly sworn, upon oath deposes and says:
I was employed by Big, as it was known when I left and other names prior thereto,
from May, 2002 through January, 2007.
I was employed as an account manager.
The company's marketing efforts were primarily
directed at accounting and law firms with clients large
enough to have multi-state operations and corporations large enough
to have multi-state operations, so that the company could serve with respect
to tax-related activities and as a regulatory consultant in a number of
states for a single client. No marketing effort was directed toward securing
start-up entities as clients.
If start-up entities would come in from
some other source than accounting firms, law firms or in-house counsel for
large corporations, they would be transferred over to NewBiz Corporation
("NB"), which was acquired because the company wanted to expand
its business in that area.
Care was taken to be sure that accounting
firms, law firms and large corporations did not contact NB,
or even know of the relationship, since the schedule of fees for accounting
firms, law firms and larger corporations was higher than NB's
schedule of fees and the business was thus more profitable.
During
the period prior to January, 2006, NB would advertise in the Wall Street
Journal, and I do not believe that the TaxHQ Newsletter was ever used
by NB because the company did not want to mix the two. I cannot say
for certain that NB did not ever give a copy of the TaxHQ Newsletter to
a prospective customer or to a customer, but I do know that I never handed
out the newsletter to try to get any start-up entity business.
I
never had an exact number with respect to the circulation of the
TaxHQ Newsletter, but my impression was always that it was somewhere between
500 and 1,000 copies. I did not use
the TaxHQ Newsletter, nor do I believe that anyone else did, to promote
the service of
providing tax services
with respect to choice of entity questions or the formation
of entities.