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Technology Stocks : Apple Inc.

AAPL 273.67

+0.5%

Dec 19 9:30 AM EST

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To: nommedeguerre who wrote (12268)	4/28/1998 9:37:00 AM
From: Bill Jackson	Read Replies (1) of 213177

Norm. Options are paper and are usually granted at the current market price, minus a strictly limited discount(which varies from jurisdiction to jurisdiction, some use a weighted 10 day average and no discount) The person who has the option has the right to buy the stock at the option price for some period, usually a few years. Right now we would have options at $27 and if Apple goes to $40 he can sell at $40 and buy at $27, making a $13 taxable profit. If Apple goes to $20 the options are worthless. They are usually called an incentive stock option plan. New companies often have a bank of options set at the original low price to reward employees after so many months of employment they get these options at the low-low set price, and they become 'vested'. Apple made a few millionaires this way in the 80's. Currently I think the options will be at or close to market and the getters will be rewarded only if we are rewarded at the same time by higher stock prices. If there is any error in the options set price for Apple, please comment, anyone. Bill

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