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To: Boca_PETE who wrote (64534)	9/14/2003 5:28:28 PM
From: RetiredNow	Read Replies (1) \| Respond to of 77400

Pete, financial statement were created for one purpose and that is to provide an accounting of how shareholder wealth is being used. Every transaction that affects shareholder wealth should have a financial statement impact. Giving away stock options impact shareholder wealth, as such they should be expensed on the income statement. No one who has owned a company before would every argue against expensing stock options. Owners like to know where their money is going and don't often lie to themselves and hide expenses from themselves. If they did, they'd go out of business very quickly. What confuses everyone is that they forget that the owners are you and me, as shareholders. We should demand the same accounting within the financial statements as if we owned 100% of the company. Anything less is self-delusion, which will lead to loss of our own wealth.

To: Boca_PETE who wrote (64534)	9/15/2003 1:27:51 AM
From: PerryA	Read Replies (1) \| Respond to of 77400

True only when that value is COMPANY VALUE. A company can only give what is theirs to give. such options have ZERO VALUE at the date they "are given" to employees. You are way, way off on this one. Have you ever purchased an at-the-money option? they are NON TRANSFERABLE (cannot be sold), from the date of grant through the date of exercise. Because of this latter issue, assigning a "value' to them based upon the model used to value options that are freely traded is a farce in my opinion. I am pleased to say I agree completely. A discount would be required due to the restrictions. To record an expense on the company's books for an outlay that is not made by the company and never will be is a distortion - a fiction - a farce. You are confusing cash with expense and financing activity with operating activity. Recording options which have value as compensation expense would affect the income statement; but since an options grant also involves financing activity, it would not affect the cash flow statement (bottom line, I mean). WHO PAYS THAT COMPENSATION to me IS THE CRUCIAL FACTOR Shareholders do not grant options. You are still confusing the financing part of an options grant with the compensation part. I have been a shareholder of many companies and have never as a shareholder been involved in the granting of options. If the company sold the options (as a public offering) and gave the cash proceeds to the employees instead of the options, there would be absolutely no difference to the company. Net effect on cash flow is zero -- same. Net effect on potential dilution -- same. Yet, having given cash to the employees, they would have an expense. Think about it. Regards, PerryA

To: Boca_PETE who wrote (64534)	9/17/2003 7:42:03 AM
From: rkral	Read Replies (1) \| Respond to of 77400

OT ... Pete, re "Because the exercise price of granted company stock options must be equal to the company stock market value at date of grant, such options have ZERO VALUE " Contrary to your premise, the exercise price of a non-qualified stock option can be as low as $0. There is no "must equal the market price". That requirement is for tax-qualified stock options, for which there is no tax benefit to the company. myoptionvalue.com Contrary to your conclusion, options -- granted with exercise price equal to market price on grant date -- have a non-zero value. Total option value equals the sum of intrinsic value and time value. The intrinsic value of such options equals $0 on grant date, but not the total value. investorwords.com re "Moreover, by their terms, they are NON TRANSFERABLE (cannot be sold), from the date of grant through the date of exercise. Because of this latter issue, assigning a "value' to them based upon the model used to value options that are freely traded is a farce in my opinion." I agree non-transferability reduces the value, relative to a similar option traded on an exchange -- so feel free to discount, as you are, the value given by an option model. But discounting all the way to $0 is illogical to me. See the FASB 123 footnotes in 10-Ks and calculate the fair value of options for yourself. You'll see that many, if not most, companies use the Black-Scholes option model -- *exactly*. cboe.com Opinion: John Shannon and GVTucker are not option-challenged. PerryA seems to have it figured out too. I suggest you read their posts carefully, and allow for the possibility that another's methodology might not be a farce -- and that perhaps it is your viewpoints that are farcical instead. Ron