Albert J. Henry - Page 13

                                       - 13 -                                         

          Federal income tax return for the cost of purchasing the options.           
          However, Warner-Lambert reduced the offer for IMED from $480                
          million to $465 million.                                                    
               During the final negotiations, the officers and directors of           
          IMED met with the law firm Skadden, Arps, Slate, Meagher & Flom             
          (Skadden, Arps), which represented Warner-Lambert in New York               
          City.  After a meeting with the attorneys from Skadden, Arps in             
          Manhattan, Monaghan informed Henry that he had structured the               
          options as long-term capital gain.  Subsequently, Monaghan told             
          Boynton, in response to Boynton's question, that the option                 
          proceeds would be treated as long-term capital gain.                        
               On July 8, 1982, the Swiss trust that held the 1981 options            
          was dissolved.  The assets of the trust, the 1981 options,                  
          reverted to IMED.  In August 1982, Warner-Lambert purchased all             
          of the outstanding stock of IMED for approximately $163 per                 
          paired share of stock in IMED and International.  Warner-Lambert            
          paid a total of $465 million for all of the outstanding stock               
          plus the extant stock options belonging to employees of IMED.               
               Warner-Lambert, through IMED, issued Henry a 1982 Form W-2             
          that was filed as part of petitioners' 1982 Federal income tax              
          return declaring $92,874.60 as income.  Neither Warner-Lambert              
          nor IMED provided Henry with another Form W-2 or 1099 or other              
          form or statement that declared his stock option proceeds as                
          income.                                                                     
          Robert E. Douglas                                                           



Page:  Previous  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  Next

Last modified: May 25, 2011