Jean W. Lange and Jeanne P. Lange - Page 5

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               In 1985, Elmer tried to equalize ownership of the Madison              
          preferred stock.  His accountant informed him that, to equalize             
          their ownership positions, Madison could issue 1,200 additional             
          shares to petitioner or Elmer could sell 600 of his shares to               
          petitioner.  Petitioner and Elmer agreed that it would be easier            
          to have Elmer sell 600 shares of his preferred stock to peti-               
          tioner.  This transaction never occurred, however, due to                   
          concerns over the Bank's financial stability.                               
               Elmer died on May 6, 1990.  Elmer's widow, Beth, was                   
          appointed executrix of his estate.  Beth soon discovered the                
          disparity in petitioner and Elmer's preferred stock ownership.              
          After some discussions between the respective families, an                  
          agreement was drafted which acknowledged the disparity and                  
          provided for a transfer of 600 shares of Madison preferred stock            
          to petitioner from Elmer's Estate in exchange for $60,000.  This            
          agreement was signed by petitioner and his family, but Elmer's              
          heirs refused to sign.  Shortly thereafter, Elmer's heirs                   
          expressed a desire to retain majority ownership in Madison.                 
               When petitioner realized that Elmer's heirs intended to                
          retain majority control, he became concerned that this would                
          adversely impact the management of the Bank.  In February 1991,             
          petitioner passed a corporate resolution whereby Madison                    
          attempted to redeem 1,500 shares of preferred stock and 1,054               

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