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To: GVTucker who wrote (65479)	5/14/2004 11:28:16 AM
From: Lizzie Tudor	Read Replies (1) \| Respond to of 77400

so you're saying that all the options issued to Juniper in 98/99 with strike prices of 250, when JNPR had double the number of current employees - that those expenses actually came to pass? I don't think so. I think most of the non senior management options issued to Juniper staff for the entire existance of the company expired worthless. And with JNPR being one of the most volitile stocks on the naz once, those expenses would have been high. In fact I remember buying JNPR options myself once or twice and the premium was outrageous. Maybe black scholes works in a vacuum. But when you start expensing employee options in the middle of a bubble at grant when there is no chance at exercising for one year and within that year the industry goes from boom to bust, its hard to see how it provides clarity for anyone.

To: GVTucker who wrote (65479)	5/14/2004 12:52:40 PM
From: Kirk ©	Read Replies (1) \| Respond to of 77400

Black Scholes works well for options in a liquid market like future, pork bellies and individual stocks but how do you adjust the formula to account for employees who can not sell their options to someone else? I own some vacation land and part of a home with many, many others in my family. As a total it has good value but the lack of liquidity makes it worth far, far less than if I had the ability to sell it without all the right of first refusals, etc. As far as I am concerned Black Scholes is just the wrong way to account for the cost of options but I am still in favor of stopping the CEO larceny so I usually vote for expensing options. Lizzie could get over the start-up problems by the companies using restricted stock grants. Start out the gate accounting for these as actual shares so there is no dillution when "exercised." Then if an employee quits before they can get their shares, they are returned to the treasury with some sort of adjustment to the books that reflects a transfer of value back to the shareholders. Kirk