Dennis O. Fultz and Linda G. Fultz - Page 4

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          such stock could be held only by producers of agricultural                  
          products “who reside in the territory served”.  “Producers”                 
          referred to persons “actually engaged in the production of one or           
          more of the agricultural products handled” by MCP.  Producers of            
          agricultural products eligible for membership and having acquired           
          a minimum of 5 shares of common stock of MCP were recognized as             
          members.                                                                    
               a.  Units of Equity Participation                                      
               Mr. and Mrs. Fultz collectively purchased 30,000 shares of             
          stock in MCP in approximately August 1982 when MCP was first                
          organized.  Both petitioners held enough shares of MCP stock to             
          qualify as members of MCP.  As members, they were able to                   
          purchase additional “units of equity participation” (units) in              
          MCP.  Petitioners collectively purchased an additional 5,000                
          units in December 1992.  From October 1983 to December 1995, Mr.            
          Fultz individually purchased a total of 40,000 units.  Mrs. Fultz           
          individually purchased 65,000 units in October 1983.  Each unit             
          represented one potential bushel of corn that the member might              
          agree to supply to MCP.                                                     
               In order to supply corn to MCP, a producer was required to             
          hold at least 5,000 units.  Corn producers who wished to supply             
          corn to MCP were also required annually to execute a uniform                
          marketing agreement (UMA).  The producer was obligated to deliver           








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