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Author: Goofyhoofy Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121427  
Subject: Re: Advice on stock options Date: 3/20/2008 1:42 PM
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I am assuming the company is Mrs. Goofy's employer.
You don't say whether these are "ISOs" (incentive stock options, a/k/a "qualified options" in the tax code,) or NSOs


I'm sorry, this would be easier if I gave enough information, wouldn't it? ;)

Yes, the company is Mrs. Goofy's employer. The options are ISO's.

For ISOs, it's a hit for AMT only, but it will make most people pay AMT, if they don't already.

We're already in AMT territory.

Now, it's a private company, so I don't know how you'd value it,

Yeah, that's the rub. The options are at $3. The most recent valuation is $9 (9 mos. ago) if certain markers and covenants were met. They haven't been.

Oh, and there's a recession, numbers are down, there's a management shakeup. Whispered conversations among two others in our situation: one is declaring $5 "value", the other isn't declaring anything. The company was buying shares back at $5, but has temporarily stopped. (Our 3rd party buyer is well aware of all the positive and the negative. We've been extremely forthright. We offered the shares to him at $6, doubling our strike price, and he jumped at it. I should also mention he's in a nominally allied business, a friend of ours, and is "friendly" with the CEO and other high mucks at the company, and probably has a net worth in the tens of millions, so this is not a big risk to him. The lack of liquidity and recession problems don't phase him at all.)

I have a call in to a tax attorney. Our accountant retired last year (and moved away), sold the business to someone we don't like, so we're floating a little bit at the moment, groping for advice. Any words would be appreciated.
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