Damron Auto Parts, Inc. - Page 3

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                                   Year        Amount                                 
                                   1993      $9,108,625                               
                                   1994      10,552,652                               
                                   1995      11,355,749                               
                                   1998      13,000,000                               
          II.  Operations                                                             
               Mr. Damron upgraded petitioner’s business from a basic                 
          salvage yard to a modern state-of-the-art showroom.  Under his              
          leadership, petitioner purchased wrecked cars from insurance                
          companies and auctions, dismantled the cars, tested and cleaned             
          the parts, indexed the parts in a computer data base, and shelved           
          the parts for sale.  Thus, the parts could be sold to customers             
          without employees’ scavenging the salvage yard.                             
               From 1984 through 1995, Mr. Damron typically worked 90 to              
          100 hours per week, did not go out for lunch, and took only three           
          vacations of a few days each.  Mr. Damron attended the auctions,            
          purchased wrecked cars, priced all the parts, determined when to            
          crush dismantled vehicles, arranged the sale of crushed hulks,              
          negotiated with vendors, reviewed accounts receivable and                   
          payable, and designed petitioner’s facility.                                
               During the years in issue, petitioner had 40 to 60                     
          employees.  Mr. Damron interviewed, hired, evaluated, and                   
          terminated the employees; trained and supervised the dismantlers;           
          and was responsible for employee benefits, health plans, bonuses,           
          workers’ compensation, insurance, employee safety, and hazardous            
          waste disposal.                                                             

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