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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Franco Battista who wrote (54707)	10/26/2001 9:24:49 PM
From: Zeev Hed	Read Replies (1) \| Respond to of 70976

Franco, I think that the issue of buy backs and options are separate issues. I agree with you that some management abuse the options system, on the other ands, some companies have gotten the option plans to be "quite democratic", namely they get to all employees, not just the elite. In any event, it is rarely the case that the shares that are bought back are used to be given to employees exercising the options. Typically, most companies register the shares involved in option in new S-8 registrations, rather than take preregistered shares and distribute these. Often the shares are simply cancelled. I am not sure exactly how one can influence the more profligate abuses of the options system, but it surely is a separate issue not related to buy backs. Buy back are a tax evasion scheme, a big tax loophole which would disappear if dividends were not taxed, or if corporations had to pay income taxes on shares bought back as if these were dividends. Zeev