Nathaniel H. and Carol A. Garfield - Page 3

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          a shareholders’ agreement.  The shareholders’ agreement                     
          delineated the shareholders’ rights and restricted the transfer             
          of company stock.                                                           
               On October 10, 1970, the partnership and MPC executed an               
          assignment agreement, which assigned the rights to the expansible           
          fastener (i.e., for which a patent application was pending) from            
          the partnership to MPC.  In consideration of the transfer of                
          patent rights, MPC was obligated to make payments to the                    
          partnership of 4 percent of the gross proceeds from the sale of             
          expansible fasteners.                                                       
               On October 10, 1970, the partnership dissolved.  Thereafter,           
          Mr. McSherry owned 38 percent, and Mr. Garfield owned 36 percent            
          of MPC shares.  Pursuant to the dissolution agreement, all shares           
          of MPC owned by the partnership were distributed to Mr. McSherry            
          and Mr. Garfield.  The dissolution agreement further provided               
          that Mr. McSherry and Mr. Garfield would each receive 50 percent            
          of MPC’s payments due to the partnership.  In addition, the                 
          assignment agreement provided that, upon dissolution of the                 
          partnership, payments relating to the expansible fastener were to           
          be made directly to Mr. McSherry and Mr. Garfield.                          
               On March 28, 1972, the U.S. Patent Office granted the patent           
          for the expansible fastener, and, thereafter, Mr. McSherry and              
          Mr. Garfield began to collect royalty payments from the sales of            
          the device.  From 1978 through 1985, petitioner and Mr. McSherry            






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