V.R. DeAngelis M.D.P.C. & R.T. Domingo M.D.P.C., V. R. DeAngelis M.D.P.C., Tax Matters Partner, et al. - Page 23

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          aggregate a greater voting interest than the person.  The                   
          adoption agreement stated that the eligible employees were Drs.             
          DeAngelis, Domingo, Durante, and Capizzi, and Ms. Quinn, and that           
          Dr. Borrero was an employee who was excluded.11  The adoption               
          agreement defined the term “compensation” as “Total Compensation            
          paid during the applicable period, including wages, bonuses and             
          over time [sic], etc., but not including deferred compensation              
          other than compensation deferred pursuant to Code Section 401(k).           
          Compensation shall also include salary reduction contributions              
          excludable from gross income pursuant to Code Section 125.”                 
               C.  Other Relevant Provisions                                          
               According to the STEP plan, a covered employee was                     
          purportedly eligible to receive a severance benefit from the plan           
          upon termination of employment (except for termination for cause)           
          under the following circumstances:  “dismissal; any termination             
          of employment unless such termination constitutes a ‘voluntary              
          separation without good cause’ within the meaning of New York               
          State Unemployment Insurance Law; total disability; or death.12             
          The STEP plan stated that benefits would normally start on the              
          first day of the second month after approval of the claim for               

               11 As noted above, Dr. Capizzi subsequently decided not to             
          participate in the STEP plan.  Ms. Quinn was the only employee of           
          VRD/RTD who was covered by the STEP plan.                                   
               12 In operation, the STEP plan paid benefits to participants           
          even though the covered employee did not fall within one of these           

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