Barium & Chemicals, Inc. - Page 9

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               with the amount of the checks and withholdings                         
               immediately upon issuing the same.                                     
          On April 16, 1997, the Court of Common Pleas modified the                   
          April 4, 1997, order as follows:                                            
               With respect to the Order of April 4, 1997, the same is                
               hereby amended NUNC PRO TUNC to include the                            
               clarification that the payment of money to Virginia                    
               Exley by Albert Pavlik, Jr., is not to be interpreted                  
               in any way as modifying the settlement agreement as it                 
               applies to Virginia Exley and with respect to whether                  
               or not she is an employee of Barium and Chemicals, Inc.                
               Albert Pavlik, Jr. has been paying Virginia Exley over                 
               the objection of the Naylors because of the Naylors’                   
               position that she is not an employee of the                            
               corporation.  The authorization by the Court that                      
               Albert Pavlik, Jr., may continue to pay Virginia Exley                 
               is not now nor was it ever intended to modify or change                
               in any way the positions of the respective parties.                    
                                       OPINION                                        
               Whether an employer-employee relationship exists in a                  

          particular situation is a factual question.  Weber v.                       
          Commissioner, 103 T.C. 378, 386 (1994), affd. per curiam 60 F.3d            
          1104 (4th Cir. 1995).  For the purposes of employment taxes, the            
          term "employee" includes "any individual who, under the usual               
          common law rules applicable in determining the employer-employee            
          relationship, has the status of an employee".  Secs. 3121(d)(2),            
          3306(i).  Section 31.3121(d)-1(c)(2), Employment Tax Regs.,                 
          defines the common law employer-employee relationship as follows:           
                    (2) Generally such relationship exists when the                   
               person for whom services are performed has the right to                
               control and direct the individual who performs the                     
               services, not only as to the result to be accomplished                 
               by the work but also as to the details and means by                    
               which that result is accomplished.  That is, an                        





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