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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 73.87

-0.1%

Jan 9 9:30 AM EST

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To: GVTucker who wrote (62969)	2/7/2003 12:23:42 AM
From: hueyone	of 77400

re: Amazon stock options Amazon has handily outperformed the market since they started to expense options. The world didn't end. Amazon didn't all of a sudden stop issuing options to employees. A small nitpick since Amazon is often mentioned here as an example for expensing stock options: Your point is well taken, but actually I think Amazon did indeed stop issuing employee stock options---just last quarter. However, I don't think it had anything to do with Amazon's previous decision to expense stock options. Well known fund manger Bill Miller, of Legg Mason Trust, talked Amazon into changing to restricted stock as its primary vehicle for employee equity compensation, and of course, restricted shares are also expensed. From Amazon's 3rd Quarter 10Q, page 15: Snip: Under this program, the Company will, commencing in the fourth quarter of 2002, award restricted stock units as its primary vehicle for employee equity compensation. Restricted stock units are measured at fair value on the date of grant based on the number of shares granted and the quoted price of the Company s common stock. Such value is recognized as an expense ratably over the corresponding service period. To the extent restricted stock units are forfeited prior to vesting, the corresponding previously recognized expense is reversed as an offset to Stock-based compensation. Regards, Huey

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