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To: Chuzzlewit who wrote (138884)	8/11/1999 7:35:00 PM
From: stockman_scott	Read Replies (1) \| Respond to of 176387

~OT~ Chuzz: I thought you might appreciate this... Message 10912985 Here's an entertaining response that I received... techstocks.com Do you ever make any guest appearances on the Amazon thread <G>? Best Regards, Scott

To: Chuzzlewit who wrote (138884)	8/12/1999 10:50:00 AM
From: John Koligman	Respond to of 176387

OT Chuzzlewit - Thought you might be interested in this... Regards, John Accounting Regulators Kill Plan to Deduct Stock Options By ELIZABETH MACDONALD Staff Reporter of THE WALL STREET JOURNAL In a move expected to please corporations, U.S. accounting regulators killed a proposal that would have forced companies to deduct from earnings the value of stock options given to outside directors. Earlier this year, the Financial Accounting Standards Board proposed a rule that would have forced companies to charge these options to earnings. But numerous companies complained to the board that this accounting change would prevent them from keeping directors at their companies. "We have heard the argument that if you make me expense them, we're not going to be able to keep directors," said Tim Lucas, the FASB's top research official, who disagreed with the decision. "Financial reporting says you should be telling shareholders what you're spending the company's money on," he noted. But now, "companies can still give options to outside directors and not have to recognize any expense against earnings." Companies applauded the decision. "I'm sure it will please companies, but especially technology companies, which aggressively use stock options to compensate their directors," said Richard H. Wagner, president, Strategic Compensation Research Associates in New York, a compensation research and consulting firm. "If it had gone through, particularly for emerging technology companies, it could have caused wild swings in earnings," Mr. Wagner added. The move is expected to help the FASB push through another controversial accounting proposal that would force companies that reprice their employee stock options to write off against earnings any subsequent increases in the value of those options. Stock options can be exercised, and the shares sold, for a profit as long as the underlying shares are higher than the options' strike price. Increasingly, though, companies, particularly undercapitalized high-tech concerns, are repricing their employee stock options when their underlying stocks drop below the strike price. The company's rationale is, repriced options can help to halt an exodus of managers and professionals. Mr. Lucas said the FASB isn't backing down from its proposal forcing companies to deduct from earnings the difference between an option's new lower strike price and any subsequent increase in the underlying share price. Companies would also be required to deduct those expenses from earnings for every year that the share price remains higher than the unexercised repriced option. The FASB's attempt at changing the accounting for stock options comes about four years after it lost a battle to force companies to deduct the cost of all stock options from earnings because of heavy opposition from Congress and corporations.