Vitamin Village, Inc. - Page 27

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          further develop and expand its business.  Petitioner stated in              
          its memoranda of consent to corporate action that it would                  
          reimburse Mr. Reeves for past underpayment and pay bonuses for              
          the extraordinary services he provided when petitioner became               
          more profitable.                                                            
               Petitioner was a very profitable company in the fiscal years           
          at issue and paid Mr. Reeves and its other employees bonuses.               
          The bonuses paid were not awarded under a structured, formal, or            
          consistently applied program but were paid under petitioner’s               
          plan to award a bonus for present hard work and prior years’ lack           
          of compensation when it became more profitable.                             
               F.   Conclusion                                                        
               Mr. Reeves, petitioner’s sole executive officer and manager,           
          was the driving force behind petitioner’s success.  His vision              
          and hard work resulted in petitioner’s realizing sales of                   
          $12,501,980, and $5,709,686, with a shareholders return on equity           
          of 93 percent and 25 percent in the respective fiscal years at              
          issue.  The averages of the methods used to determine reasonable            
          compensation were $1,448,201 and $1,009,852 in the respective               
          fiscal years at issue, and taking into consideration the $547,350           
          Mr. Reeves was underpaid as of December 31, 1995, the Court finds           

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