Albert J. Henry - Page 11

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               IMED currently takes the position that its stock                       
               options are governed by Section 83 and therefore the                   
               present tax treatment is * * * no income to the                        
               employee on grant or exercise and no compensation                      
               deduction to IMED.  However, Regulation 1.83-7 states                  
               that an option must have a "readily ascertainable fair                 
               market value" before Section 83 will apply.  Since the                 
               definition of "readily ascertainable fair market value"                
               is virtually impossible to meet, IMED's present                        
               position is subject to challenge.  * * *                               
               On November 12, 1981, Monaghan informed Hendrickson that               
          certain IMED employees had obtained options on IMED stock, but              
          that the options "should not be delivered to the holders until              
          their Section 83 elections have been prepared and are ready to              
          file."                                                                      
               In an undated form letter from Robert Reiss, president of              
          IMED, employees participating in the stock option plan were                 
          informed that the section 83(b) elections were "necessary to                
          provide for capital gain treatment upon ultimate stock sale by              
          you".  This document further states that the recipient has "no              
          income to report at this time, as the [section 83(b)] election is           
          protective only."                                                           
          IMED's Sale                                                                 
               In early 1982, Cramer, along with the majority of IMED's               
          stockholders, met with investment bankers to proceed with the               
          sale of IMED.  Henry was always present with Cramer when                    
          prospective purchasers came to perform due diligence                        
          investigations with respect to IMED.                                        






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