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To: stockman_scott who wrote (170187)	7/15/2002 3:27:36 PM
From: OLDTRADER	Read Replies (1) \| Respond to of 176387

Shit man -hang um-all!

To: stockman_scott who wrote (170187)	7/15/2002 6:54:09 PM
From: Sr K	Read Replies (1) \| Respond to of 176387

True statement: We should prohibit loans from any public corporation to its corporate officers (but loans to directors are/were OK). Problem: If you had an option plan that was fair, and the managers were required to hold most of their shares from exercised options until they leave their employment (Citigroup requires holding 75% of the shares exercised, selling enough to pay taxes due), then (1) managers would want to exercise when the stock was undervalued, (2) loaning money to pay for the exercise would (or at least could) make sense, and (3) interests of the exercisers would be aligned with the long-run investors. Until we know the scope of a solution to option programs that give an incentive to boost share prices with spin (or worse) and to exercise at a high price, we really should think twice about the harm of loans to officers. But I can't think of a good reason to loan non-officer directors the money to exercise options or buy shares - too likely to be taking advantage of inside information.