Compaq Computer Corporation and Subsidiaries - Page 9




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          petitioner to demonstrate its financial ability to pay under the            
          applicable margin rules.  The $16,866,571 was transferred back to           
          petitioner that same day at 1:39 p.m.                                       
               Pursuant to the regular settlement rules, the resale cross-            
          trades were settled between petitioner and Gallagher on                     
          September 21, 1992.  The total selling price credited to                    
          petitioner's account with Bear Stearns was $868,412,129 (before             
          commissions and fees).  Expenses incurred by petitioner with                
          respect to the purchase and resale trades included:  SEC fees of            
          $28,947, interest of $457,846, a margin writeoff of $37, and                
          commissions of $998,929.  Petitioner had originally agreed to pay           
          Twenty-First commissions of $1,000,000, but Twenty-First adjusted           
          its commissions by $1,070.55 to offset computational errors in              
          calculating some of the purchase trades.                                    
               Due to the different settlement dates, petitioner was the              
          shareholder of record of 10 million Royal Dutch ADR's on the                
          dividend record date and was therefore entitled to a dividend of            
          $22,545,800.  On October 2, 1992, Royal Dutch paid the declared             
          dividend to shareholders of record as of September 18, 1992,                
          including petitioner.  Contemporaneously with the dividend, a               
          corresponding payment was made to the Netherlands Government                
          representing withholding amounts for dividends paid to U.S.                 
          residents within the meaning of the United States-Netherlands Tax           
          Treaty, Convention With Respect to Taxes on Income and Certain              





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