RE: Subject: stock options

Subject: RE: Subject: stock options
From: "Lisa Wright" <liwright -at- earthlink -dot- net>
To: "TECHWR-L" <techwr-l -at- lists -dot- raycomm -dot- com>
Date: Tue, 26 Mar 2002 06:40:48 -0800


There are a couple of other tricks to look out for as well. One is the
"reverse-split," wherein the board decides to reduce the outstanding
number of shares by a certain ratio (e.g., divide the total shares,
including options, by 5). In theory this multiplies the value of each
share, but I had one experience where the board later re-valued the
option price to the original pre-split value, so they effectively simply
stripped us of options.

One can also end up in situation that I believe is similar to
bankruptcy, where the board decides that all shares in a class are
worthless and reissues a new class of stock to a few key people.
Employees who had options are left with nothing.

It's all play money anyway--if you ultimately get something out of
options, that's fantastic. But don't plan your life around it.

Lisa


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References:
RE: Subject: stock options: From: Jane Carnall

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