Gustafson's Dairy, Inc. - Page 19

               2.   The Super Trust                                                   
                    a.   Formation and Purpose                                        
               On March 31, 1988, E.S. Gustafson formed Gustafson's Dairy             
          Farm Super Trust (the Super Trust) to induce petitioner's                   
          shareholders to make some of their personal assets available to             
          petitioner to help meet petitioner's long-term financial needs              
          (i.e., 5 to 20 years in the future) and to hold petitioner's                
          voting stock.  E.S. Gustafson was the grantor and individual                
          trustee.  The Florida National Bank (later First Union National             
          Bank of Florida) was the corporate trustee.  Petitioner's board             
          authorized the creation of the Super Trust.  Tax considerations             
          were not a factor when petitioner established the Super Trust.              
               The Super Trust agreement charged the trustee of the Super             
          Trust with determining the highest and best use of petitioner's             
          8,000 acres and other land to be acquired by petitioner, deciding           
          the size of the dairy herd and whether to split the dairy herd              
          into smaller herds, and making decisions concerning the                     
          distribution of petitioner's products.  The Super Trust did not             
          manage petitioner and was not concerned with meeting petitioner's           
          short-term (5 years or less) needs.                                         

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Last modified: May 25, 2011