RE: How many worthless stock options do yo

["Susan W. Gallagher" <SGallagher -at- akonix -dot- com>]

It's time for a positive POV on stock options, so I'll
chime in.

Stock options are *incentives* and should not be viewed
as a replacement for a decent salary. They are a gamble;
there are no guarantees. But they are not all worthless
by any means.

In general, an option is granted with a vesting period,
usually of four years. After one year, 1/4 of the option
grant vests. Thereafter, 1/12 of 1/4 of the entire grant
vest monthly.

The price for your options is based on the current stock
price for a publicly traded company; for a start-up, the
value is usually ridiculously low (usually under $1).

Unless you are an officer of the corporation, you do not
need permission to cash in your options, but you do need
to notify the company of your intent to do so. And when you
do exercise:
  a) if you do a same-day buy-and-sell, you are responsible
     for payroll taxes on the proceeds
  b) if you keep the stock for more than one day and less
     than one year, your are responsible for short-term
     capital gains taxes
  c) if you keep the stock for more than one year, you are
     responsible for long-term capital gains taxes
  d) In some cases, it may be to your advantage to pay
     Alternative Minimum Tax

I have had stock options in five different companies. The first
time, I did not exercise as the stock fell between the time my
options were granted and when they vested. The second time, I
cleared about $24k. The third time, the company sold and swapped
options for a change-of-ownership bonus of about $10k. The next
time I exercised and cleared about $16k. I have high hopes for
the options I hold now.

A friend, a technical writer who works for Cisco in Orange County 
CA, payed off her house and bought two new cars for cash last year.

Stock options are not a replacement for salary; but they say that
a company respects me and the work I do because they treat me the
same as they do all their *key* employees. Management assumes that 
because I have a stake in the company's success I will work hard 
to make the company succeed. It's just my little secret that I
would do so anyway.

MTC, YMMV
-Sue Gallagher
sgallagher -at- akonix -dot- com

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

A landmark hotel, one of America's most beautiful cities, and 
three and a half days of immersion in the state of the art:
IPCC 01, Oct. 24-27 in Santa Fe.  http://ieeepcs.org/2001/

  +++  Miramo -- Database/XML publishing automation.  See us at  +++
  +++  Seybold SFO, Sept. 25-27, in the Adobe Partners Pavilion  +++
  +++ More info: http://www.axialinfo.com  http://www.miramo.com +++

---
You are currently subscribed to techwr-l as: archive -at- raycomm -dot- com
To unsubscribe send a blank email to leave-techwr-l-obscured -at- lists -dot- raycomm -dot- com
Send administrative questions to ejray -at- raycomm -dot- com -dot-  Visit 
http://www.raycomm.com/techwhirl/ for more resources and info.