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To: portage who wrote (109061)	6/16/2001 2:27:55 PM
From: Don Lloyd	Respond to of 436258

Portage - ...What amount of influence did this have over the entire effect - I don't know, and am not inclined to spend my time looking up the studies. I don't necessarily object to options per se, but I do think they had gotten all out of proportion and had deleterious effects in a number of ways, except for the lucky few beneficiaries. Then, removing the perceived risk by repricing them when they drop to retain employees does little to comfort the shareholder who has no such alternative. I mostly have no major disagreement with this POV, but the shareholder whose stock price has dropped HAS benefited by all the cash salary that has not been paid because employees accepted options that turned to be worthless instead. In effect, the granting of options represents a reduction in volatility of the value of stock held by the stockholders. Lower downside risk and lower upside reward, all with at least the legality of shareholder approval. Are options overdone? Probably in most cases. Regards, Don