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To: Moominoid who wrote (19235)	5/22/2002 1:57:32 AM
From: Raymond Duray	Respond to of 74559

Re: Maybe this is like a worse solution than the problem it is solving, but that would be very transparent. I'll assure you, transparent is the last thing the connivers who came up with the options scams had in mind. The whole raison d'etre of the stock options compensation swindles in America was to pull the wool over the eyes of the public investor and the tax collector. Now that the cat is out of the hat, the smart crowd at E&Y, KPMG and the last green-eye shady character standing is to find a new gimmick. They call this "financial innovation". You gotta love it. We haven't created a world class symphony since 1823, but we sure can create financial crescendos of corruption decade after decade.

To: Moominoid who wrote (19235)	5/22/2002 3:21:18 AM
From: Don Lloyd	Read Replies (1) \| Respond to of 74559

David, But if the company buys back the same number of shares as they issue for exercising options you won't see any dilution. But there is still a cost to shareholders which is seen in the equity account if the firm buys back shares high and issues cheap. Now if my suggestion that the firm should have to buy back at the same time as granting the option was the case the cost to shareholders would be the opportunity cost of that cash which could have been used for other purposes. This will depress profits... Maybe this is like a worse solution than the problem it is solving, but that would be very transparent. It would be rare that the very best use of shareholder cash would be to buy back stock of the one company that happens to be under consideration, especially if it cannot use the cash itself for its normal line of business. Give the money back to shareholders in a dividend so that they can choose themselves which company, if any, to invest in. Especially in the case of tax deferred accounts where taxation of dividends is not an issue. Regards, Don