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To: GVTucker who wrote (165126)	5/14/2002 1:40:02 PM
From: The Duke of URL©	Read Replies (1) \| Respond to of 186894

Thank you. But, aren't these the disclosures that were outlined by the "Watkins Memo" of transactions that should have been disclosed up to two or three YEARS earlier? This certainly as you suggest is in some sense "disclosure" but was it reflected in prior years stated diluted shares? Those were years that the transactions were arguable not disclosed at all and when the stock was trading at 80. As the truth "leaked out" the stock then proceeded down to zero. You are correct that there was some mention in middle 2001, after the fact, but the argument could be made, not by me certainly, but that this "disclosure" was more of an attempt to obfuscate rather than to disclose. True disclosure might have been, "that this transaction(s) resulted in 1.2 Billion in excess income and that this may have been the sole purpose of the transaction" or words to that effect? The only way I could excuse my negligence for not spotting this language it that I must have examined the 10's that were simultaneous to determine whether there was disclosure, and I probably ignored the subsequent 10's. GV, were you following this company at the time??? Thank you again for your excellent research. Duke.

To: GVTucker who wrote (165126)	5/16/2002 4:25:10 AM
From: Amy J	Read Replies (5) \| Respond to of 186894

Hi GV, what does Enron's fraudulent behavior of hiding debt (that you listed in your post) have to do with employee stock options that Greenspan wants to attack? I find it ironic that Greenspan's proposed cure for Enron-style fraud and the dotcom utopia is to penalize innocent employees. "some of the unsustainable euphoria that surrounded dot-com investing at its peak may have been exacerbated... " and "substantial capital arguably was wasted on a number of enterprises whose prospects appeared more promising than they turned out to be." --- And how is that the employees' fault? If anyone is guilty for the dotcom utopia, it's the VCs and founders, not the employees. So, let's look at the components of the pie: Founders get shares, aside from evergreen provisions. VCs get shares. Only employees get the bulk in options. So, yeah, let's penalize the employees and their options, the folks who aren't even responsible for this problem in the first place. What kind of logic is that? Regarding Enron, rather than fixing the book-keeping rules around disclosures of debt through intermediary parties, he's proposing to penalize employees? Huh? federalreserve.gov AG: "Clearly, most high-tech executives believe otherwise. How else does one explain their vociferous negative reaction" Very simply so: If Greenspan negatively impacts stock options, he negatively impacts motivation. Stock options = motivation. Motivation is an intangible, something that's difficult for Economists to measure, so they dismiss it because they can't measure it. Never mind it's the most important ingredient for business success, innovation, and enhancing this country's GDP. AG: "employed..capital misused." His focus on penalizing innocent employees, rather than penalizing fraudulent behavior, is bizarre. Are Silicon Valley execs really going to roll over and die on this issue and let AG get away with creating a policy that'll have a negative long-term impact on this country's growth by hurting employees' motivation? Excessively taxing SOPs will negatively impact motivation, innovation, and growth. It should be mandatory for government economists to work a few years at a Silicon Valley company, where the ingredients (particularly the intangible variables) to innovation are well-understood. Regards, Amy J