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Strategies & Market Trends : Maximum Investing

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To: Robert Scott who wrote (41)	11/12/2002 8:52:15 AM
From: Howard Bennett	Read Replies (1) of 81

I understand the expensing of stock options -- and it is this: Companies get a tax break JUST for exercising options...i.e. they are encouraged to do so. I'll demonstrate my point by an example (and I have many): (Note MXIM's tac benefit is much larger -- $30mil -- than the expense itself $10m). excerpt from Maxim Integrated Products most recent 10-k filing with the SEC... biz.yahoo.com LIQUIDITY AND CAPITAL RESOURCES The Company’s primary sources of funds for the three months ended September 28, 2002 were from net cash generated from operating activities of $125.4 million and proceeds from the issuance of 1.5 million shares of the Company’s common stock in the amount of $10.7 million associated with the Company’s stock option programs. Another source of cash from the Company’s stock option programs is the tax deductions that arise from exercise of options. These tax benefits amounted to $29.6 million in the three months ended September 28, 2002.

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