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To: Glenn D. Rudolph who wrote (118250)	2/21/2001 8:30:30 AM
From: Gary Korn	Read Replies (1) \| Respond to of 164685

Glenn, Regarding the exercise of stock options, according to my reading a problem that has developed is that many people in the valley did not sell their options immediately after exercise (as did the wise Dalzell). This has caused bad tax implications. Apparently, many people from various companies exercised their options when the stocks were trading in, say, the 40s, 50s or higher. This results in an immediate capital gain, being the difference between the option exercise price and the stock price on the day of exercise. However, those unlike Dalzell who did not immediately exercise/sell then saw their underlying holdings drop. From the 40s and 50s to the 10s or lower. This left them with, in some cases, a huge tax bill (on the gain between, say, a $2 exercise price and the price at time of exercise of $40), yet with actual assets LESS than the tax bill itself (i.e., if the stock dropped back down to $2, there really is no paper gain at all, but the tax is still due). Ouch! Gary Korn