Transport Labor Contract/Leasing, Inc. & Subsidiaries - Page 5

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          driver-employees to approximately 100 trucking company clients.8            
          By the end of taxable year 1996, TLC was leasing driver-employees           
          to approximately 300 trucking company clients.  Although most of            
          TLC’s trucking company clients were located in Minnesota,                   
          Montana, or Pennsylvania, by the end of taxable year 1996 TLC had           
          trucking company clients in 31 states.  As of the time of trial             
          in this case, TLC leased a total of 5,563 driver-employees to a             
          total of 453 trucking company clients.                                      
               TLC’s trucking company clients were engaged principally in             
          the over-the-road trucking industry.  As of the beginning of                
          taxable year 1993, approximately 90 percent of TLC’s trucking               
          company clients were over-the-road carriers, while the remaining            
          10 percent were local carriers.  By the end of taxable year 1996,           
          approximately 65 percent of TLC’s trucking company clients were             
          over-the-road carriers, and 35 percent were local carriers.                 
               In an attempt to attract clients, TLC’s sale representatives           
          used a variety of sales techniques, including (1) newspaper                 
          advertisements, (2) face-to-face meetings with, and other presen-           
          tations to, trucking company owners, (3) brochures, (4) form                
          letters, and (5) other promotional mailings.  Two of the bro-               
          chures that TLC provided to prospective clients were entitled               
          “The Fact Book” (Fact Book) and “Your Trucks/Our Drivers” (Your             


               8The number of truck drivers that each trucking company                
          client leased from TLC ranged from 1 to 50.                                 





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