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To: Don Lloyd who wrote (174)	3/17/2003 2:55:00 PM
From: TimF	Read Replies (1) \| Respond to of 445

The cost to the company can reasonably be considered to be 0, because the cost is really to the stockholders. The ownership of the company is split among more hands (or distributed differently among the same group of owners) but the company itself spends nothing. However for those who consider the cost to the investors to be a cost to the company (perhaps as a lost oportunity cost, if you consider that putting out these shares and options reduces the amount of options the company can issue later, or if you look at the practices of some companies like Intel where in effect the stock options that do turn in to actual shares are bought back by the company) then the effect on EPS should not be higher then if the same money was spent as cash. If you just expense the options you do get a situation where EPS goes down more then if the employees where compensated by giving them the same value in cash. That doesn't make sense to me. Tim