Joyce M. and Thomas J. Hamm - Page 11

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          days of unsuccessfully seeking another position within IBM,                 
          petitioner signed up for the ITO II program and executed the                
          release and the Pre-Retirement Leave of Absence Agreement.  The             
          foregoing sequence of events supports our conclusion that the ITO           
          payment was severance pay to petitioner.                                    
               Additionally, we find support in the ITO II program                    
          documents5 for our conclusion that the ITO payment was severance            
          pay.  Paragraph 6 of the release provides the terms for repaying            
          the ITO payment in case of rehire by IBM and states:  "The amount           
          of repayment will be based on the number of weeks off the IBM               
          payroll compared with the number of weeks' salary used to                   
          calculate your payment."  (Emphasis added.)  The fact that the              
          number of weeks of petitioner's salary was used in calculating              
          petitioner's ITO payment makes the ITO payment appear to be                 
          severance pay and not damages for personal injuries.  Moreover,             
          the Pre-Retirement Leave of Absence Agreement provides:  "Your              
          leave will begin 08/01/92 and will end 12/31/00.  Based on your             
          committed plan to retire immediately following your leave, your             
          effective date of retirement will be 12/31/00.  Once your leave             
          begins, the committed retirement date may not be changed to a               

          5    The ITO II program documents in the instant case include an            
          apparently complete set of documents related to the ITO II                  
          program (with an unsigned release and unsigned Pre-Retirement               
          Leave of Absence Agreement) that was submitted by petitioners               
          with their trial memorandum, and the executed release and                   
          executed Pre-Retirement Leave of Absence Agreement that were                
          submitted by respondent in the affidavit supporting the instant             

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