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Technology Stocks : Nortel Networks (NT) -- Ignore unavailable to you. Want to Upgrade?

To: larry pollock who wrote (10327)	3/17/2001 12:11:19 PM
From: larry pollock	Read Replies (1) \| Respond to of 14638

Nortel Networks' Stock Options Creating Problems, Paper Says Toronto, March 16 (Bloomberg) -- Nortel Networks Corp., the biggest maker of fiber-optic equipment, may be facing bitter relations with its investors and employees over the stock options program the company uses to attract and keep executives, the Globe and Mail reported, citing industry analysts. A large proportion of stock options the company issued are currently worthless because shares in Brampton, Ontario-based Nortel fell more than 70 percent in the last year. That means they are useless as an incentive and key personnel may end up leaving if they see their options can't be exercised, the Globe said. The options value is determined by the difference between the price they're issued at and the share value when the employee becomes eligible to cash them in. Nortel's annual report shows the options were issued at prices ranging from $16.13 to $90, with an average of $32.37, the Globe said. Nortel shares closed at $15.90 in New York yesterday. Re-pricing the options to reflect the lower share price is prohibitively expensive from a tax standpoint, under U.S. accounting rules, the paper said. Issuing new option is unpopular with investors because it dilutes their holdings, the Globe said. (Globe and Mail, 3/16, B1) (For the Globe and Mail Web site see {GBLM } Story illustration: To compare the recent performance of Nortel shares with relevant indexes see, {NT US COMP D } Company news: NT US CN NT CN CN Industry news: NI CANADA NI US NI COS NI STK NI PAY NI FIBER NI TEL NI TLS NI TEC NI SUM -0- (BN ) Mar/16/2001 14:30 GMT Access More Information and Services Above