Richard D. Waters - Page 4




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          the termination of petitioner's employment.                                 
               On March 16, 1993, an action was filed in the U.S. District            
          Court for the District of Iowa against PayLess by three of its              
          former employees for themselves and on behalf of other present              
          and former employees of PayLess.  The complaint alleged that the            
          purpose of the action was to recover on behalf of the class of              
          employees unpaid overtime compensation, liquidated damages,                 
          attorney's fees, and costs under section 16(b) of the Fair Labor            
          Standards Act of 1938, ch. 676, 52 Stat. 1069, currently codified           
          at 29 U.S.C. secs. 201-209 (1994).  Petitioner was not one of the           
          plaintiffs instituting the action; however, petitioner qualified            
          for participation as a member of the class of employees for whom            
          the action was filed.  Petitioner never elected to be excluded              
          from the class, nor did petitioner ever claim or institute any              
          separate action against PayLess.  The class action did not                  
          proceed to trial but was settled.  PayLess agreed to pay $5                 
          million for the benefit of all qualifying members of the class,             
          including petitioner.  As part of the settlement, the plaintiffs            
          in the class action executed a written Settlement Agreement and             
          Release (the Settlement Agreement) effective January 25, 1995, in           
          consideration for payment of the $5 million by PayLess.  The                
          Settlement Agreement included a release by the plaintiffs of                
          PayLess that was embodied as section 3 and provided in pertinent            
          part:                                                                       





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