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Technology Stocks : Ascend Communications (ASND) -- Ignore unavailable to you. Want to Upgrade?

To: Greg h2o who wrote (32116)	1/26/1998 10:43:00 AM
From: username	Read Replies (1) \| Respond to of 61433

<When you were issued your options, were you aware there was a possibility they could expire worthless if there was a decline in the stock price?> This came up last week, and I am still not totally clear on it. Here is the way I understand it: employees are issued options on treasury stock, (which by definition is not part of the float). EPS is calculated without taking the treasury stock into account. The only way these options could expire worthless is if the company went belly up. These options are not the same thing as the products bought and sold on the CBOE. 5speed brought up the point that if the employee options are exercised, the float is diluted (and the EPS) to that degree, which I was not taking into account. The option excercise price of employee options is not limited to round numbers, and it is not called a "strike price", it is simply the number that the employee must pay per share to excercise his option and purchase the stock. If I am wrong or misinformed, PLEASE correct me. thanks, pete