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To: Amy J who wrote (176317)	12/30/2003 5:54:43 AM
From: rkral	Read Replies (2) \| Respond to of 186894

OT ... Amy, re "You can structure accounting any way you want, but if China has a better option policy than your country ... " While granting options is a policy, expensing options is not IMHO. Assuming a policy of granting options remains unchanged, the consequences of beginning to expense them would not be as far-reaching as you seem to believe. The strength, and the worth, of a company would be unchanged IMO. Cash flow? Net net cash flow (net CFFO + net CFFF + net CFFI) would be unchanged. Balance sheet? Assets, liabilities, and stockholders' equity would also remain unchanged. Income statement? Here lies the only significant change. Existing stockholders, i.e., those who were stockholders at the beginning of the accounting period, would be able to see .. *in the EPS alone* .. the impact of an options policy. If net income is $1.20 per old share, but shares outstanding increases 20% due to non-cash compensation .. then net income is $1 per new share. This is the share dilution that everyone knows about, and seems to agree with. But this POV only covers *additions to stockholders' equity. Without expensing, the EPS does not reflect the impact on existing stockholders' equity, i.e., the equity that existed at the beginning of the accounting period. re "are you an INTC investor?" My only position is long INTC in my trading account. But that's irrelevant, as I was neutral 60 days ago and expect to be so again 60 days hence. What is your* INTC position? re "I didn't interpret [ed: Craig Barrett} as implying there was an association between [ed: California regulations and expensing options]" Really? He stated each was harmful. IMHO he clearly meant for the listener to infer that expensing options would be as harmful as recent California regulations. But that's just my opinion. re "And the VCs have followed the entrepreneurs. 50% of capital is out of the USA - this is shocking and has never happened before until now. " Fifty percent of what capital? U.S. capital? Global capital? Do you have a link for that datapoint? Regards, Ron

To: Amy J who wrote (176317)	12/31/2003 1:06:53 AM
From: hueyone	Read Replies (1) \| Respond to of 186894

but if China has a better option policy than your country and is attracting more entrepreneurs and engineers as a result Hi Amy. I am still waiting for you to explain how China or India's stock option policy is better than ours, and is attracting more engineers and engineers as a result. So far you haven't illuminated anything related to stock option compensation in those countries that would allow us to begin to make some comparisons. The one link you provided didn't even mention stock options. Regardless of what China and India do, however, I don't believe failing to expense option compensation and inflating profits is a long term solution to our economic problems. JMO, Huey