Estate of James J. Renier, Deceased, Kent L. Renier and Dubuque Bank & Trust Company, Co-Executors - Page 5

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          selection than did Renier and included such stores as Wards, Wal-           
          Mart, K-Mart, Target, Radio Shack, and Sears.  Additional                   
          competition came from local independent businesses in Dubuque               
          that sold consumer electronic products.                                     
               The Dubuque area retail environment became more competitive            
          in the 1980's and early 1990's as large discount stores, chain              
          stores, and warehouse clubs increased product offerings and                 
          offered low prices to gain market share.  These larger businesses           
          purchased inventory at low prices due to volume purchases,                  
          utilized sophisticated inventory control systems to manage                  
          inventory, and effectively leveraged advertising expenditures due           
          to the operation of numerous retail outlets.                                
               Although Renier could not purchase inventory at the prices             
          available to the chains and discount stores, it was able to                 
          achieve some discounts through participation in a buying                    
          cooperative made up of independent retailers.  In addition,                 
          because Renier was not highly leveraged and maintained ample                
          working capital, it was further able to reduce its inventory                
          costs by taking advantage of prompt payment discounts offered by            
          many vendors.                                                               
               Renier computed its income for tax and financial reporting             
          purposes on the basis of a fiscal year ending June 30.  Renier’s            
          pretax profit margin from July 1, 1988, through the valuation               
          date substantially exceeded the national industry average for               
          retailers of consumer electronics.  However, no meaningful growth           

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