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Technology Stocks : Zitel-ZITL What's Happening
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To: Marconi who wrote (13130)11/28/1997 2:46:00 PM
From: Biomaven  Read Replies (2) of 18263
 
Marconi:

It is not correct that the tax liability is due only at the end of the quarter. The spread on exercise is compensation, and the company is required to withhold, just as if they were wages. This means there should be at least 28% withholding on the Federal side (the supplemental rate), although people often chose to withhold at their real rate.

My guess is that he did clear some dollars, but most of the sale was to pay for the exercise price and taxes. Most executives that exercise options sell the whole amount on the same day, although sometimes with expiring options people do like Mr King did and actually end up holding more shares.

My bottom line here: The release was a little deceptive but no big deal, and his actions were actually slightly bullish, or he's trying to hold up the share price.

Peter
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