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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Bill Jackson who wrote (72869)	9/23/1999 6:08:00 PM
From: Elmer	Read Replies (2) \| Respond to of 1571414

Re: "Burt, If the employee has options at $1 and the SP is $100 and an employee has 1000 options. He gives Intel $1000 and gets 1000 shares and then sells them in the market. Intel gets $1000 and the employee gets $100,000, less his $1000= $99,000. If intel buys those shares(from the general pool of shares on the market) They pay $100,000 and have received $1000 from the employee, for a net cost of $99,000. The employee has been enriched by 99K and Intel deriched by 99K, shares outstanding are the same. If the options are above market price then the employee would lose money and Intel be enriched...so he would not use his options, cheaper in the market." Let's try it another way. Intel sells a put and gets a premium. The low ball puts get assigned on a dip and Intel buys the shares at say $60. Next April, Intel grants those same shares to employees at the new fair market value of $80. Some time later, the value goes up and the employee exercises the options. Does the option exercise sale get reported as profit that quarter? Seems to me Intel makes money. EP