North Oaks Golf Club

“Members are broken out into 4 categories of members: golf members - stock holders social members - non-stockholders senior members - turn in stock for reduced dues deferred golf members - working to become stockholders”

“Golf members who own a share of stock may elect members of the governing body.”

“Changes to the bylaws require a majority vote. Borrowing of money in excess of $550,000 require a two-thirds vote of corporate golf members.”

“The return is prepared and provided to the governing body for approval.”

“The executive committee reviews the four key employee contracts. The general manager reviews all other non-contract department heads. They also utilize wage studies and surveys for basis.”

“The organization makes its governing documents, tax return, and financial statements available to the public upon request.”

“During the tax year, there was senior membership stock forfeitures of $3,500, and stock redemption payments of $33,000.”

“** footnote 1 ** schedule a computations: $ 231,357 unrelated bar/rest income-golf related activities 2,779,539 divided by total bar/restaurant income ----------- 8.324% =========== 3,127,927 total food and beverage cost of sales 8.324% multiplied by above allocation rate ----------- $ 260,355 =========== all expense allocations to ubi are based on the taxpayer's agreement with the internal revenue service dated july 10, 2002. Food and beverage (f&b) operations are separated between golf-related and stand-alone f&b operations. Direct expenses are allocated to golf-related activities based on the golf-related f&b ubi gross receipts to total f&b gross receipts. Indirect expenses are allocated to golf-related ubi activites as described below using the same ratio. In accordance with the taxpayer's agreement with the service, direct expenses are allocated to stand-alone f&b ubi activities in an amount not to exceed the gross receipts from such activities. No further expense allocation is allowed and losses will not be recognized. Golf activity expenses are allocated to golf ubi income based on the ratio of the number of ubi golf rounds to the total golf rounds played during the year. Expenses are distributed on a direct basis where appropriate. G&a expenses are allocated 50% to the f&b operations and 50% to golf activities based on management's continuing assessment of personnel involved and duties performed. ** footnote 2 ** clubhouse expenses are analyzed separately and are allocated 50% to the f&b operations and 50% to golf activities based on management's continuing assessment. ** footnote 3 ** form 990, part v - officers, directors, trustees and key employees all compensation information is based on the individuals reportable compensation (either form w-2 or form 1099) for the calendar year ending during the taxpayer's current fiscal year.”