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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 76.11

+0.9%

Nov 21 9:30 AM EST

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To: Stock Farmer who wrote (67243)	3/8/2005 3:23:30 AM
From: Elroy	Read Replies (3) of 77400

If you ask me companies like CSCO should be required to purchase all of their employee compensation options in the open market and then the "expense" would be crystal clear, whatever CSCO paid for them on the CBOE or wherever. People have said this would inhibit startups that lack cash from using options to attract employees - fine, but in CSCO's case (or EMC's, NTAP's, IBM's, SUNW's or most major large public corporations) its really not the issue. In fact, even if public companies are required to expense options starting in June 2005 it would still be more clear if CSCO just bought its compensation options from an exchange, and then reported that expense as incurred. That would remove the question of how to expense them on issuance, and remove the tax benefit on exercise (since the market maker for the options, not CSCO, would have to deliver the CSCO stock).

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