Re: stock options

Subject: Re: stock options
From: karen_otto -at- agilent -dot- com
To: "TECHWR-L" <techwr-l -at- lists -dot- raycomm -dot- com>
Date: Mon, 25 Mar 2002 13:59:38 -0700

Stock options tend to follow these guidelines:
- for individual contributors, they are generally intended to give a small
amount of money after a reasonable amount of time. That number might be a
few thousand dollars after a couple of years.
- in large companies, I noticed that they seem to range from as low as 100
shares to a 1000 or more for a single award. Vesting windows are generally
minimum two years with a cancellation of the options after 10 years.
- run the numbers yourself: Value = Numshares*(value(t2) - value(t1))
If the offering company gives you 100 shares, and the price is currently
$50, when/if the price goes to $60, you can buy and sell them to make
100*(60-50) = $1000. That is, as long as the company's stock goes up that
much within the option's validity window. Minus, of course, the costs of
buying and selling.
It's not a natural thing for all companies to offer them to everyone who
joins. If you get them, consider it a compliment, but remember it is a
gamble, just like someone else said earlier. It's almost like giving someone
a high-probability lottery scratch card.

karen otto

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