Ferdinand A. & Marla Morabito, et al. - Page 4

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               from the Age Discrimination in Employment Act of 1967,                 
               as amended, Title VII of the Civil Rights Act of 1964,                 
               as amended, and any other federal or state law dealing                 
               with discrimination in employment on the basis of sex,                 
               race, national origin, religion, disability, or age.                   
               You also agree that this release includes claims based                 
               on theories of contract or tort, whether based on                      
               common law or otherwise.  * * *                                        
                         *    *    *    *    *    *    *                              
               You acknowledge and agree that:                                        
               1.  The benefits provided pursuant to the ITO II                       
               Program constitute consideration for this release, in                  
               that there are benefits to which you would not have                    
               been entitled had you not signed this release.                         
                          *    *    *    *    *    *    *                             
               3.  This release does not waive any claims you may have                
               which arise after the date you sign this release.                      
          None of the petitioners filed a claim of any type against IBM               
          either prior to signing the Release or at any other time.                   
               Section 104(a)(2) provides that "gross income does not                 
          include * * * the amount of any damages received (whether by suit           
          or agreement and whether as lump sums or as periodic payments) on           
          account of personal injuries or sickness".  Sec. 1.104-1(c),                
          Income Tax Regs. explains that the term "damages received" "means           
          an amount received * * * through prosecution of a legal suit or             
          action based upon tort or tort type rights, or through a                    
          settlement agreement entered into in lieu of such prosecution."             
          Petitioners' "Oppositions" do not allege, nor does the record               
          otherwise show, that any petitioner ever made any formal or                 
          informal claim against IBM.  It therefore appears that there were           

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