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To: JGoren who wrote (114534)	2/26/2002 6:44:19 PM
From: gdichaz	Respond to of 152472

JGoren: <<Remember, the point of the long term options and vesting is to encourage the employee to do great things, stay with the company and look to the long term value of the stock. >> Options are far superior to cash as a motivator. Options are a win/win for the employee and the company. They help make the interest in the future growth of the company a common interest. All the discussion of the way options are accounted for misses the key point - their positive advantages. And by increasing the possibilities of the company's success over time - the advantage of that for the shareholder/investor. Best. Chaz

To: JGoren who wrote (114534)	2/26/2002 6:51:38 PM
From: sea_biscuit	Respond to of 152472

They don't want all their eggs in one basket, so they receive new options, exercise and sell their shares and pay their tax (which is at ordinary income tax rates). Unfortunately, it is only the foot soldiers who tend to put all their eggs in the same basket, and almost never cash out their options (or at least do not cash out a sizable amount of their options to make a difference). The bigwigs, who know exactly how the Ponzi scheme works, also know that the good times (and the deception) won't last forever, and consequently, sell their shares, pay their taxes and funnel their money into other, more secure investments. As far as I know there is no cure for this "disease" that the foot soldiers are afflicted with... (Edit : other than a multi-year bear market).

To: JGoren who wrote (114534)	2/27/2002 2:42:06 AM
From: engineer	Respond to of 152472

Not to mention the HOPE that there may be a cut in cap gains/income taxes sometime soon.....

To: JGoren who wrote (114534)	2/27/2002 9:48:30 AM
From: carranza2	Read Replies (3) \| Respond to of 152472

We need some clarity on the options issues. Here are a few questions which if answered by someone with knowledge would really help: 1.- Assuming that the stock price at which the option is exercised is the measure of the income tax liability, why wouldn't the employee want to exercise while the price is low? Seems a good tax tactic. After the option is exercised and the (relatively low) basis for capital gains taxes is established, it seems tax efficient to pay cap. gains on the ultimate higher price instead of exercising at a higher price, and paying income taxes on that higher price. If tax considerations suggest that the option should rationally be exercised while the price is low, the effect John Shannon complains about should be less. 2.- Do options expire other than when the employee leaves the company? 3.- Do any options simply not get exercised, for whatever reason? Seems unlikely, but you never know.