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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Ali Chen who wrote (39893)	10/22/1998 3:23:00 PM
From: kash johal	Respond to of 1579682

Ali, Yes, they can keep the stock but they will need to pay taxes on the gain. For a california resident that get pretty close to the 30-40% range (even with capital gains). And you must have heard of diversification? Even Mr. Engel has picked up some AMD recently. I suspect they may be getting ready to follow Pauls lead and buy AMD while it's real cheap. Regards, Kash

To: Ali Chen who wrote (39893)	10/22/1998 7:04:00 PM
From: Badger	Respond to of 1579682

When your options expire at Intel, you have several options. 1) You can instruct Merrill Lynch (Intel's chosen representative for these transactions) to do a 'cashless transfer' - the difference between the price of the option and the price of the stock is sent to you as a check. The price of the transaction is subtracted from the gain, and you owe both income and capital gains taxes on the whole amount. 2) You can write Merrill Lynch a check for the total price of your options and buy the stock outright. No taxes to pay here, but for most people that's a lot of money to come up with. 3) You can instruct Merrill Lynch to convert some of your options (a la #1), but only enough to pay to convert the rest of your options to stock (a la #2). In this case you only owe taxes on the amount you exercised. 4) You can let your options expire. A stupid idea if the stock has gone up at all. Not really a choice but a more of a circumstance, like those poor SOBs who got hired at Novell 3-5 years ago and got options at $30+. If your options are in the red when they expire, they're worthless - unless you want to pay more for a stock than it's worth, also a stupid idea. Badger