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Technology Stocks : Amazon.com, Inc. (AMZN)

AMZN 243.37

+1.0%

10:50 AM EST

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To: Lizzie Tudor who wrote (145446)	8/14/2002 3:34:27 AM
From: GST	of 164684

Liz -- understanding the basics of expensing options is extremely simple -- all options (all options) are priced based on a premium. A buyer pays the premium and then hopes for the best. A seller collects the premium -- pretty simple really. If, as in your case, you end up with worthless compensation options you would have been better off to be paid in cash -- but nobody makes any adjustments after you have taken the options in lieu of cash compensation -- nobody says, "gosh, that is too bad, here is the cash instead". Same thing if I buy a contract on the open market. If I buy a contract that expires out of the money I don't get the premium refunded (wouldn't that be great!) Sorry if you can't follow this. Expensing options simply requires a formula to calculate the premium and a decision as to the timing of the expense. I would explain the timing issue but it seems you are completely disoriented on this whole matter -- simple as it is.

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