Eric D. Fultz and Sandra A. Fultz - Page 4

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          products “who reside in the territory served”.  “Producers”                 
          referred to persons “actually engaged in the production of one or           
          more of the agricultural products handled” by MCP.  Producers of            
          agricultural products eligible for membership and having acquired           
          a minimum of 5 shares of common stock of MCP were recognized as             
          members.                                                                    
               a.  Units of Equity Participation                                      
               Mr. Fultz purchased shares of stock in MCP in approximately            
          August 1982 when MCP was first organized.  Subsequently, before             
          June 1995, Mrs. Fultz also acquired stock in MCP.  Both                     
          petitioners held enough shares of MCP stock in 1995 to qualify as           
          members of MCP.  As members, they were able to purchase                     
          additional “units of equity participation” (units) in MCP.                  
          Between July 1984 and June 1992, Mr. Fultz purchased a total of             
          20,000 units.  During the years in issue, Mr. Fultz purchased               
          10,000 units in June 1994 and 5,000 units in December 1995.  In             
          addition, Mr. Fultz executed a subscription agreement in January            
          1995 in which he agreed to pay for an additional 10,000 units               
          with a 10-percent downpayment immediately and the remainder due             
          in two later installments.  The record does not indicate whether            
          this transaction was completed.  Mrs. Fultz purchased 2,000 units           
          in June 1995 and 2,500 units in December 1995.  Each unit                   
          represented one potential bushel of corn that the member might              
          agree to supply to MCP.                                                     






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