Salvatore J. D'Amico and Shirley E. D'Amico - Page 18




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          covenants and obligations to which Mr. D’Amico agreed,7 on the              
          record before us, we find that petitioners have failed to estab-            
          lish that any such portion was paid by the Company on account of            
          a tort or tort type claim by Mr. D’Amico alleging personal                  
          injuries or sickness.                                                       
               We turn now to the $23,255 payment that, pursuant to the               
          settlement agreement, the Company made to purchase the leased               
          automobile, the ownership of which it transferred to Mr. D’Amico.           
          On the instant record, we find that petitioners have failed to              
          establish that the $23,255 payment was made by the Company on               
          account of a tort or tort type claim by Mr. D’Amico alleging                
          personal injuries or sickness.  In fact, the record shows that              
          the Company considered the $23,255 payment to be wage type                  
          compensation to Mr. D’Amico, which it reflected in the Form W-2             

               7Under sec. 9 of the settlement agreement, Mr. D’Amico                 
          agreed to keep strictly confidential and not to disclose any                
          information concerning the settlement or the facts and                      
          circumstances that led to his termination of employment by the              
          Company and the settlement agreement, except for disclosure of              
          the settlement agreement to the Internal Revenue Service or any             
          state taxing agency for the purpose of supporting and defending             
          Mr. D’Amico’s tax position and/or in any administrative or                  
          judicial proceeding where it became relevant.                               
                                                                                     
               Under sec. 17 of the settlement agreement, Mr. D’Amico                 
          agreed, as a further material inducement to the Company to enter            
          into the settlement agreement, to indemnify and hold the Company            
          and its affiliates harmless from and against any and all loss,              
          cost, damages, or expenses that they incurred arising out of a              
          breach of the settlement agreement or the fact that any                     
          representation made by Mr. D’Amico in the settlement agreement              
          was false when made.                                                        





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