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several job responsibilities. David Pedigo was shocked by his
removal from the board and by the major changes to his employment
responsibilities and income, but he did not retaliate and did not
threaten to quit.
Liquid Assets
Petitioner sustained increases in the amount of its retained
earnings and profits, during the years in issue, as follows:
Retained Increase
Year Earnings & Profits in Amount
1995 $6,450,910 $243,273
1996 6,644,238 193,328
1997 6,804,671 160,433
Petitioner’s short-term investments were primarily
certificates of deposit and money market funds. Petitioner’s
cash on hand and short-term investments were $1,976,779,
$1,599,756, and $2,038,430 at yearend 1995, 1996, and 1997,
respectively.
Petitioner historically and as a matter of corporate policy
maintained high levels of liquidity. Petitioner also had a
policy of not incurring substantial amounts of debt.
Petitioner’s liquid assets available for 1995 through 1997 were
as follows:
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