Corrections or additions?

This article by Michael Schumacher was prepared for the February

28, 2001 edition of U.S. 1 Newspaper. All rights reserved.

Stock Options: Still Enticing

In the final days of the last millennium many dot com

employees became paper millionaires overnight thanks to payments of

stock options rather than hard cash. While many of those options are

now worthless, it’s not surprising that employees in all industries

now find this method of payment attractive, or at least want it as

part of their compensation package.

"Employees are becoming more sophisticated and demanding more

than just a salary from their employers," says Ken Zuerlis,

chief financial officer of Enzon Inc. Zuerlis leads a panel on


Options: Legal and Accounting Perspectives" on Tuesday, March

6, at 4 p.m. at the New Jersey Technology Council’s CFO Peer Network

at the East Brunswick Hilton. Cost: $70, plus a $20 surcharge for

walk-ins. Register by fax at 856-787-9800 or online at

Joining Zueblis in a panel discussion of stock options are Charles

A. Coleman, partner, Arthur Andersen, who will present an overview

of general accounting issues related to stock options including


rules, proposed rule changes, common pitfalls and the effects of stock

options on pooling of interest transactions; Joel Horowitz,

partner, Pepper Hamilton, who will discuss planning for exercising

stock options; and Rosina B. Dixon, of the National Association

of Corporate Directors, who will provide an overview of corporate

compensation issues related to stock options and the use of options

as an integral part of employee retention and compensation practices.

"Joel will talk about what we should worry about once we have

stock options," says Zueblis. "There are lots of tax issues,

and often the one getting the options is forced into suddenly becoming

a financial planner."

According to Zuerblis, one of the hottest issues facing companies

today is the re-pricing of stock options and Security and Exchange

Commission rules. "This can be very complicated and


says Zuerblis, and should be tackled carefully. "This will be

part of Coleman’s discussion, which will examine all the options from

`can you re-price’ to `will you be better off canceling options.’

"What’s great about events such as this one," says Zuerblis,

"is that everyone can benefit from the discussion, whether is

a start-up company or those longer in business."

There are reasons beyond demand by employees for companies to offer

stock options, says Zuerblis. Here are three:

1.) Stock options create long-term incentives; they tie

employees to shareholders.

2.) The vesting period — the time before a person

become eligible to exercise stock options — creates greater


that employees will remain with a company for a longer period of time.

3.) Stock options align the interests of employees with

the success of the company. Employees get a sense that their jobs

help stock prices grow.

One thing is certain, says Zuerblis. "Companies today need

to put stock options in their compensation packages. It’s something

employees look for."

— Michael Schumacher

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