Nathan P. and Geraldine V. Morton - Page 13

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             business over the time it managed the company.  Dubin Clark              
             intended to take SWI public when sales reached $250 to $300              
             million, which they expected to take about 3 years.                      
                  An important aspect of Dubin Clark's plan to expand                 
             SWI was hiring experienced management.  In accordance with               
             this aspect of its plan, SWI approached petitioner in                    
             March 1989 and offered him a position overseeing the                     
             company's expansion.  Dubin Clark believed that                          
             petitioner's expertise in assembling management teams,                   
             building corporate infrastructure, and establishing plans                
             to facilitate corporate growth was essential to its plan to              
             expand SWI.                                                              
                  Petitioner originally rejected Dubin Clark's offer                  
             because he did not agree with its plan to make SWI a                     
             dominant regional retailer.  Rather, petitioner believed                 
             that SWI would be most competitive if it expanded into a                 
             variety of geographical markets.  Dubin Clark eventually                 
             agreed with petitioner's assessment and offered him the                  
             position of president and chief operating officer of SWI.                
                  Petitioner accepted Dubin Clark's offer in April 1989,              
             but did not join the company immediately because he had                  
             previously committed to assist Home Depot in a debt                      
             offering.  Although he provided consulting services for a                
             short time before his actual starting date and attended the              
             opening of SWI's third store in Houston, Texas in April,                 

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