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To: J.N.N. who wrote (12130)	4/7/2000 6:39:00 PM
From: JimC1997	Respond to of 18366

Options are granted at or above the market price on the date of the grant. (Granting a price less than market would result in an immediate tax liability.) Mary, your explanation on options is essentially correct. I wrote a note about this subject last year and again this past February when these sales took place. All non-qualified options cause an immediate tax liability on the date they are exercised equal to the difference between the grant price and the exercise price. A 20% withholding tax is due and payable on that gain (with the balance of the tax due, at ordinary income tax rates, on the same day as the normal tax filing deadline.) Most corporate officers are forced to sell some of the exercised shares (especially when the stock is not marginable) in order to come up with the tax payment. The insider really hasn't released any cash until the shares sold exceed the the total tax liability (remember that California has a high state income tax as well). It doesn't look to me that either Fred or Robert sold much beyond that required for the taxes due. JimC