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the amount of compensation petitioner was entitled to under the
separation agreement, then petitioner was required to return the
excess to NHP.
As part of its August 1991 job offer to petitioner, NHP
agreed to lend $60,000 to petitioner at 10 percent annual
interest, repayable over 3 years. Pursuant to the separation
agreement, NHP forgave the outstanding principal balances and all
accrued and unpaid interest on the loans, which totaled about
$44,000.
The separation agreement also required NHP to lend $15,000
(hereinafter sometimes referred to as the new loan) to petitioner
at 10 percent annual interest. The new loan was to be repaid
through payroll withholdings in the principal amount of $1,000
per payroll period together with interest thereon, beginning with
the payroll check issued on September 23, 1994. The proceeds of
the new loan were to be used principally to pay petitioner’s
medical bills. The separation agreement further provided that on
the date petitioner exercised any or all of his option for NHP
common stock, petitioner would immediately resell to NHP “at
least the number of such shares equal in value to the outstanding
principal balance and accrued interest on the New Loan.” The
separation agreement further provided that petitioner’s option
for 1,200 shares of NHP common stock had vested as of March 1,
1994. It required petitioner to exercise this option at $264.05
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