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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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Last modified: May 25, 2011