Howard E. Clendenen - Page 3

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          after July 15, 1983, and amended the ESOP effective June 30,                
          1985, and July 1, 1989.  Petitioner received favorable                      
          determination letters with respect to the ESOP and trust dated              
          December 8, 1983, March 24, 1986, and March 22, 1990.  The plan             
          year and limitation year of the ESOP and the trust are the fiscal           
          year ending June 30.                                                        
               The trust is and has been petitioner's sole shareholder                
          since petitioner's incorporation.  Petitioner issued shares of              
          its stock to the trust in payment of the contributions to the               
          trust and in exchange for cash.                                             
               Howard E. Clendenen (Mr. Clendenen) is and has been                    
          petitioner's president.  On June 28, 1986, petitioner's board of            
          directors resolved:                                                         
               That Howard E. Clendenen has advised the Corporation                   
               that he desires to forego [sic] one-half of his salary                 
               and bonuses for the fiscal year ended June 30, 1986                    
               with the understanding that said one-half of his salary                
               and bonuses shall be contributed to * * * [the trust].                 
               It is further understood that this transaction shall be                
               considered an employee contribution.                                   
          On June 29, 1987, petitioner's board passed a resolution                    
          identical to that of June 28, 1986, resolution except for the               
          1987 year.                                                                  
               The ESOP's records reflect the following contributions to              
          the trust allocated to petitioner's employees as shown:                     








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