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To: JDN who wrote (67169)	10/22/1998 11:45:00 AM
From: greg s	Respond to of 186894

JDN, re: THIS is the very reason I am becoming negative on these overly generous stock option plans I understand your rationale, but the fact remains that stock options expire. Generally, an option does not become exercisable for, say, 4-5 years from the grant date. Then the clock starts ticking, and the employee has a set period (years) in which the option can be exercised (purchase and hold or purchase and sell). If you had a large block of shares as an option and could either purchase at a great price or allow it to expire worthless, what would you do? If the grantee was not allowed to exercise an option (and sell if they wanted to), what incentive would an option provide? Basically, the company keeps tacking on another year of options (at review time) to keep the employee's eye on stock performance while allowing them to exercise older options before they expire. Greg.

To: JDN who wrote (67169)	10/22/1998 12:38:00 PM
From: Paul Engel	Read Replies (3) \| Respond to of 186894

JDN - Re: "stock option plans are supposed to mean the executive RETAINS his shares proving he is working as well as he can to increase the value of the company. " Most stock option plans are set up so that a block of share OPTIONS is given which can be exercised (bought) in the future. Depending upon the particular type of program, the "vesting" time may be from 1 to say 4 or 5 years. Many option plans, for example, provide for X shares to be granted which can be exercised in 25% increments starting one year from the grant date with the second 25% being exercisable 2 years after the grant date, etc. Nearly all option plans contain a CUT-OFF date, indicating that ALL OPTIONS MUST BE EXERCISED WITHIN 10 YEARS FROM THE DAY OF THE GRANT. In that case, the options would EXPIRE 10 YEARS AFTER THE GRANT - and DISAPPEAR IF NOT EXERCISED by then. Don't you think 10 years is a long enough time ON THE JOB - for each such option - to insure the executive has performed for the shareholder ? And don't forget - key employees and executives are granted new option on a yearly basis whcih may not vest for 4 or 5 years into the future (and expire perhaps 8 or 10 years from the date of grant). That provides a CONTINUAL incentive for the employees to work for the betterment of the compnay and shareholders to INCREASE the value of these FUTURE options. Paul