Sunbelt Clothing Company, Inc., f.k.a. Unprinted T-Shirt Warehouse, Inc. - Page 8

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          addition, Mr. Sokol oversaw petitioner's inventory operations at            
          six separate warehouse locations.  Mr. Sokol worked full time for           
          petitioner, as well as many weekends and late nights.                       
               On August 9, 1991, petitioner redeemed all of Mr. Sokol's              
          stock, leaving Mr. Bennett as the sole shareholder.  There was no           
          connection between the redemption of Mr. Sokol's stock and the              
          compensation previously paid to Mr. Bennett and Mr. Sokol during            
          the years in issue.  The purpose of the redemption was to allow             
          Mr. Sokol to retire.  Nevertheless, after the redemption, he                
          remained as a part-time employee of petitioner working                      
          significantly reduced hours, taking more vacations, and receiving           
          less pay, all at his own initiative.  Mr. Sokol worked for                  
          petitioner until his death on November 26, 1993.                            
               In 1988, petitioner entered into a continuing guaranty with            
          Texas Commerce Bank-San Antonio for $3 million.  Mr. Bennett                
          personally guaranteed petitioner's obligation.  In 1989, Mr.                
          Sokol agreed to guarantee personally petitioner's line-of-credit.           
          In 1990, petitioner's credit line was amended and increased to              
          $6.5 million.  In 1991, the line-of-credit was increased again to           
          $11.5 million, and Mr. Sokol was removed as a guarantor.                    
               Petitioner prospered under the leadership of Messrs. Bennett           
          and Sokol.  The following chart reflects the yearly increases in            

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