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To: Lizzie Tudor who wrote (63621)	4/19/2003 2:45:55 PM
From: GVTucker	Read Replies (1) \| Respond to of 77400

Lizzie, RE: It was only when I found out the proposal on the table was this nutty Black Scholes method, which obviously was created for short term, publicly traded options. Calling Black Scholes "nutty" is absurd. And saying that it was created for short term, publicly traded options says to me that you really don't understand the model. Black Scholes is used every day for options, regardless of maturity. Options trading firms use Black Scholes for privately issued options. And the vast history of data that exists now for the Black Scholes pricing model (or its subsequent derivatives, such as Cox/Rubenstein) verifies that it does an excellent job pricing options. Every single reliable options model developed since then is based upon Black Scholes. And when you stop to consider that the model is three decades old, Messrs. Black and Scholes obviously were on to something.

To: Lizzie Tudor who wrote (63621)	4/19/2003 7:38:20 PM
From: Don Lloyd	Respond to of 77400

Lizzie, If I were in favor of options expensing here I would drop black Scholes and come up with a proposal that made dilution highly visible to shareholders, It is stock buybacks that both mask the degree of dilution and injure shareholders beyond the injury caused by the dilution itself when the company expressly buys back shares without worrying about the price paid in shareholder funds. As a suggestion, a company should not be allowed to reduce its diluted share count by buybacks unless the company's price to cash ratio is less than 10, for example. Regards, Don