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corporation, formed a trust with a Swiss corporation as trustee.4
The Swiss trustee was entitled to exercise stock options (the
1981 options) on behalf of certain enumerated individuals
designated as the "Beneficiaries". The 1981 options were
allocated as follows:
Number of
Name1 Paired Shares Exercise Price
Cramer 50,000 $100
100,000 200
Boynton 50,000 100
Henry 50,000 100
Monaghan 25,000 100
1 There are two other beneficiaries who were members of
IMED's board, but they are not part of these cases, and hence,
need not be identified.
The trust agreement was signed by Cramer, as chairman of both
IMED and International. Subsequently, Henry was informed by
Cramer that he would receive additional stock options. Henry did
not sign or receive certificates or documents with respect to the
1981 options.
On May 27, 1981, Monaghan wrote to Hendrickson, noting that
stock options in IMED had been granted to certain employees, and
requesting that the aforementioned individuals sign section 83(b)
elections and file them by June 17, 1981.
On October 28, 1981, Stine, of Arthur Young, sent both
Monaghan and Hendrickson a letter which stated:
4 On Oct. 3, 1980, the outstanding shares of IMED and
International were "paired" so that the stock of neither company
could be issued or sold without the simultaneous issuance or sale
of an equal number of shares of the other company.
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