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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: Jim Mullens who wrote (125872)	12/5/2002 6:03:23 PM
From: carranza2	Read Replies (3) \| Respond to of 152472

>>>>I'm still having trouble with this. What is the actual "out of pocket cost" to the company? Did the company go out on the open market and by these options to give to their employees? <<<< As I appreciate it (I'm no options expert, by the way), there is no cost per se to the company when it issues options. The cost to it takes place when they are exercised and the company has to sell the employee a share of stock worth, say, $50, in the open market for the theoretical option price of $10. In order to meet its obligation, the company either sells treasury stock worth $50 a share for $10 or goes into the open market to buy the needed $50 shares. In my view, this is when the expense is incurred, but I'm certain it's a bit more complicated than that.