Wechsler & Co., Inc. - Page 19

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         in November 1999, and petitioner redeemed the common shares owned            
         by Mr. Glickman and Mr. Zeeman’s estate on November 30, 1999,                
         paying him and the estate $97,286.59 a share for the stock, plus             
         accrued interest from May 31, 1997.  On November 30, 1999,                   
         petitioner purchased the preferred shares that previously had                
         been owned by Mr. Glickman and Mr. Zeeman at a price equal to the            
         sum of those shares’ redemption value of $1,000 a share, plus                
         accumulated accrued dividends as of May 31, 1997, plus accrued               
         interest from May 31, 1997.                                                  
              After November 30, 1999, Mr. Wechsler owned all 160                     
         outstanding common shares of stock in petitioner.  Following                 
         petitioner’s redemption of Gilbert’s 1,055 preferred shares on               
         December 7, 2000, discussed supra, Mr. Wechsler owned all the                
         outstanding preferred shares of stock in petitioner.                         
         Compensation Paid to Upper Level Managers and Employees in the               
         Financial Industry and Petitioner’s Payments of Compensation to              
         Mr. Wechsler, Mrs. Wechsler, Gilbert, and Others During Years in             
         Issue                                                                        
              In the financial industry, upper level managers and                     
         employees at investment and trading companies typically receive a            
         substantial part of their annual compensation from bonuses that              
         are based upon their company’s earnings or profits for that year.            
         In particular, principal managers of companies that enjoy highly             
         profitable years often may be paid bonuses that are a number of              
         times the amounts of their annual salaries.                                  







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