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Technology Stocks : Qualcomm Incorporated (QCOM)
QCOM 159.59-3.9%3:59 PM EST
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To: JGoren who wrote (114534)2/27/2002 9:48:30 AM
From: carranza2  Read Replies (3) of 152472
 
We need some clarity on the options issues. Here are a few questions which if answered by someone with knowledge would really help:

1.- Assuming that the stock price at which the option is exercised is the measure of the income tax liability, why wouldn't the employee want to exercise while the price is low? Seems a good tax tactic. After the option is exercised and the (relatively low) basis for capital gains taxes is established, it seems tax efficient to pay cap. gains on the ultimate higher price instead of exercising at a higher price, and paying income taxes on that higher price.

If tax considerations suggest that the option should rationally be exercised while the price is low, the effect John Shannon complains about should be less.

2.- Do options expire other than when the employee leaves the company?

3.- Do any options simply not get exercised, for whatever reason? Seems unlikely, but you never know.
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