Walter E. Hess and Helen L. Hess - Page 4

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          for sales on these accounts after their transfer.  Mr. Myers                
          received payments (known as equity payments) equal to the sum of            
          (1) the commissions credited to his account for orders entered on           
          the transferred accounts in the year before their transfer to               
          petitioner and (2) the commissions credited to petitioner's sales           
          account during 1970 from accounts transferred to him before 1970.           
          The equity payments were made in five equal annual installments             
          by way of offsetting debits and credits that Balfour posted to              
          the commission accounts that it maintained for petitioner and               
          Mr. Myers.  Balfour did not include the debited commissions in              
          the commissions shown on petitioner's Forms W-2.                            
               Sometime during 1989 or 1990, petitioner and Balfour entered           
          into a dispute over petitioner's commissions.  The dispute                  
          centered mainly on petitioner's accounts with AT&T, Prudential,             
          and the New York Giants and on a $281,773 commission that Balfour           
          had mistakenly paid petitioner during 1990.  Petitioner also was            
          unhappy with the way Balfour manufactured and delivered its                 
          products to customers in his sales territory.                               
               During May 1991, petitioner talked to Robbins, Inc.                    
          (Robbins), a competitor of Balfour, about leaving Balfour to work           
          for Robbins.  One month later, on June 14, 1991, petitioner                 
          resigned from Balfour and began working for Robbins as a sales              
          representative.  Petitioner continued to work for Robbins through           

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