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To: Mike Buckley who wrote (24893)	5/17/2000 9:06:00 AM
From: John Stichnoth	Respond to of 54805

Mike, Re: "The need never arises for the successful ones." That's a little over-broad, I think. When the market tanks in general, the good will go down (temporarily) with the bad. And I believe I've seen some otherwise-good companies revalue their employee options. (That's the nit-picking part). I do agree with your general point. I really don't think employee options are correctly structured. Why should a manager be rewarded with lots of stock just because the market is in a doubling kind of mood? Outperformance should be rewarded, not underperformance in a bull market. Another point is that stock price shouldn't be the sole indicator of success. We know that sometimes it can take a long time for the market to realize value being created within a company. It would be appropriate to condition a lot of option grants on the success in achieving internal, departmental goals. Best, JS

To: Mike Buckley who wrote (24893)	5/17/2000 10:20:00 AM
From: saukriver	Read Replies (1) \| Respond to of 54805

Repricing Stock Options Can't do anymore under accounting rules without taking a hit to earnings. So, companies that do not want to take the hit grant new options (which must be entirely unrelated to the old) in order to retain people if their stock tanks. I believe MSFT issued another passel of options at around 68 to its employees in April, shortly after Rick Sherlund of Goldman said not to expect barnburner growth going forward and drove the share price down from 80. If the stock go back up, employees get the spread between 68 and the price of their new options and perhaps more if their old options go ITM. saukriver